CEO Transition and Leadership Strategy: Michael Fiddelke has been unanimously elected as the next CEO, set to officially take over at the start of the 2026 fiscal year. The leadership change signifies a renewed commitment to accelerate growth and improve performance amidst recent challenges.

Q2 Performance Improvement: The second quarter showed significant sequential improvement with comparable sales down only 1.9%, a nearly 2 percentage point improvement from Q1. Digital channel sales were particularly strong, increasing by 4.3%. This suggests a stabilization in sales trends as store traffic also improved.

Challenges with Tariffs and Merchandise Costs: While the company has managed inventory adjustments to mitigate tariff-related costs, the overall gross margin rate fell by 1 percentage point compared to last year, mainly due to merchandising pressures and higher inventory adjustment costs. Expectations for inventory management remain cautious in light of ongoing tariff uncertainties.