Reported Revenue Growth
Consolidated sales of $345 million, up 2% on a reported basis for Q1 FY2026; results benefited from a favorable foreign exchange tailwind of ~4.6%.
Improved Gross Margin and Stable Net Income
Gross margin expanded by 140 basis points to 65.1% (from 63.7%); net income was $43 million, up 2% year-over-year, and diluted EPS was $1.35, also up ~2%.
Top Brand and Portfolio Strength
Several major brands delivered strong growth: Coach +30%, Roberto Cavalli +32%, Montblanc +14%, GUESS +11%; the company's top 20 brand-region combinations (representing 86% of sales) grew 9%.
Direct-to-Retail Channel Momentum
Direct-to-retail (43% of sales) grew 16% in the quarter, contributing materially to higher gross margins despite higher SG&A exposure.
Cash Flow and Balance Sheet Discipline
Cash and short-term investments of $237 million; working capital ~ $700 million; inventories reduced to $370 million from $390 million (a 7-day reduction to 259 days); operating cash flow turned positive in the quarter versus a $7 million usage a year ago, supporting expectations for strong free cash flow in 2026.
Maintained Full-Year Guidance
Company reaffirmed full-year guidance: roughly $1.48 billion in sales and diluted EPS of $4.85 (guidance excludes potential tariff refunds of ~ $17 million).
Travel Retail and Channel Diversification
Travel retail remains a steady channel at ~7% of net sales, with strong early performance from brands such as Roberto Cavalli, GUESS, and Coach in Europe; company is leaning into e-commerce and marketplaces like Amazon and TikTok.
ESG Progress
Third consecutive MSCI rating increase to BBB, with the company targeting an A rating; ESG investments cited as improving supply chain visibility and regulatory responsiveness.