Margin PressureMargins declined, and fourth-quarter gross margin was guided below as tariffs made their mark.
Outlook ChallengesDespite management being impressive under current conditions, the impact of tariffs and the hit to margins make it hard to adopt a bullish outlook.
Tariff ImpactTariffs are expected to impact the third quarter significantly, as evidenced by the gross margin guide being in the low-to-mid-30% range due to higher-cost/tariff-impacted goods.