focus, and talent continue to drive our progress. Now Tyler will take us through our first quarter results and guidance in more detail.

Thank you, John, and good morning, everyone. Our first quarter performance reflects the progress we are making to build a stronger and more profitable business. We improved the quality of our sales, generated gross margin and operating margin expansion and grew earnings per share while continuing to invest in our brands. We delivered revenue, operating income, and earnings per share above our expectations driven by better-than-anticipated results at both Michael Kors and Jimmy Choo. These results are beginning to position Capri Holdings for more profitable growth. Looking at our first quarter results in more detail, total company revenue of $769 million decreased 3.5% on a reported basis and 4.1% in constant currency compared to the prior year. Looking at revenue performance by brand, Michael Kors' revenue of $590 million decreased 7.1% on a reported basis and 7.6% in constant currency compared to the prior year. Revenue was above our expectation, partially due to the timing of wholesale shipments, more than offsetting modestly softer than anticipated retail performance. Our retail results were impacted by softening trends in EMEA at the end of the quarter and by our continued quality of sales initiatives, including a larger than expected impact from our strategic decision to reduce Marktown inventory levels. Additionally, store closures negatively impacted retail sales in the low single-digit range, similar to prior quarters. As a result, global retail sales declined high single digits. Looking at total Michael Kors revenue by geography, revenue in the Americas decreased 10%, reflecting a sequential improvement relative to the fourth quarter aided by earlier than anticipated wholesale shipments. In EMEA, revenue declined 5% as retail trends slowed toward the end of the quarter. In Asia, trends remained positive with revenue increasing 6%. Turning to Jimmy Choo, revenue of $179 million increased 10.5% on a reported basis and 9.3% in constant currency compared to the prior year. Global retail sales increased low double digits versus prior year with particular strength in the Americas. Wholesale revenue also increased low double digits, reflecting strong demand for the brand. Looking at total Jimmy Choo revenue by geography, sales increased across all regions with the Americas up 26%, EMEA up 5%, and Asia increasing 3%. Now, looking at total company margin performance, gross margin of 65% increased 200 basis points versus last year, driven primarily by higher full-price sell-throughs, as well as lower tariff rates versus the first quarter of fiscal 26. By brand, Michael Kors gross margin of 63.9 percent increased 280 basis points versus last year, driven primarily by higher full price sell-throughs and lower tariff rates, partially offset by channel mix. Jimmy Choo gross margin of 68.7 percent compared to 70.4 percent last year, lower primarily due to channel mix. Total company operating expenses decreased $10 million due primarily to cost savings initiatives more than offsetting inflationary cost pressures. As a percent of revenue, operating expense was 61.4 percent compared to 60.5 percent last year, reflecting expense deleverage on lower revenue. Total company operating income of $28 million represented operating margin expansion of 110 basis points to 3.6 percent ahead of our expectations. Looking at operating margin by brand, Michael Kors operating margin of 9.3% was slightly above our expectations. Compared to last year, operating margin declined 60 basis points with higher gross margins more than offset by expense deleverage on lower revenue. Jimmy Choo operating margin of 7.3% was above our expectations and increased 480 basis points compared to the prior year, primarily driven by expense leverage on better than anticipated revenue and cost containment actions. Net income was $76 million, or 67 cents per diluted share. Now turning to our balance sheet and cash flows, our balance sheet remains strong, and we ended the quarter with cash of $114 million and debt of $338 million, resulting in net debt of $224 million, down from approximately $1.5 billion last year. During the quarter, we extended our revolving credit facility through 2031. We also executed against our commitment to return cash to shareholders, repurchasing approximately $50 million worth of shares during the quarter. We have an additional $871 million of availability remaining under our share repurchase authorization. Inventory at quarter end was $624 million, a 20% decline year-over-year. This decrease reflected an approximately 25% decline at Michael Kors, driven by a planned reduction in markdown inventory levels, as well as in-transit delays. Second quarter inventory is now expected to decline high single digits, reflecting continued delays. We are taking actions to accelerate inventory receipts, including increased use of air freight, and we expect inventory trends to normalize and build through the back half of the year to support our revenue growth. Turning to guidance, we are taking a more conservative view of our revenue outlook for the remainder of fiscal 2027 and now anticipate revenue of approximately $3.4 billion. By brand, we now expect Michael Kors' revenue of approximately $2.765 billion, dollars impacted by $50 million from lower than anticipated second quarter revenue due to later than planned arrival of inventory receipts, $50 million from softer trends in EMEA, and $35 million from foreign currency headwinds. We still expect revenue to return to growth in the second half of the year, supported by new product introductions, increased marketing investments and as promotional level comparisons begin to normalize. At Jimmy Choo, we anticipate revenue of approximately $635 million. For the year, we now anticipate gross margin of approximately 64% compared to 62.3% last year. Our guidance now assumes 10% to 12.5% tariff rates on product imported into the United States as of July 24th, and we continue to monitor the evolving tariff situation. We now expect operating expenses of approximately $2 billion. This is a $70 million reduction versus our prior outlook, reflecting our disciplined approach to expense management. Accordingly, we now expect full-year operating income to be approximately $170 million, a 40% increase over last year. By brand, we continue to anticipate Michael Kors operating margin to be in the low double-digit range, and Jimmy Choo returning to profitability with operating margin in the low single-digit range. Turning to our expectations around certain non-operating items, we now expect net interest and other income of approximately $100 million. We continue to anticipate an effective tax rate in the low teens range, with fluctuations in quarterly tax rates due to our valuation allowance position. We now anticipate weighted average shares outstanding of approximately $110 million, assuming share repurchases of $200 million during fiscal 2027. Based on these assumptions, we continue to expect to generate diluted earnings per share of approximately $2.15, representing 40% growth over the prior year. Turning to second quarter guidance, we now expect total company revenue of approximately $780 million. By brand, we anticipate Michael Kors' revenue of approximately $645 million. Our revised outlook now reflects several factors, including an estimated $50 million reduction in revenue resulting from the lower than anticipated inventory levels, $15 million from softer than previously anticipated trends in EMEA, $10 million from foreign currency headwinds relative to our prior expectations and $10 million related to the timing shift of wholesale shipments that benefited the first quarter. We anticipate Jimmy Choo revenue of approximately $135 million driven by continued brand momentum and the early positive response to our autumn collection. We expect second quarter operating income of approximately $10 million. In terms of operating margin by brand, we anticipate Michael Kors operating margin in the high single-digit percent range and Jimmy Choo operating margin in the negative single-digit percent range. Turning to our expectations around certain non-operating items, we expect second quarter net interest and other income of approximately $25 million. We anticipate an effective tax rate in the mid-30 percent range and weighted average shares outstanding of approximately $112 million. As a result, we expect to generate diluted earnings per share of approximately $0.20, significantly above last year. In closing, we delivered meaningful progress in the first quarter, improving the quality of our sales, expanding gross margin, operating margin, and earnings per share, and continuing our share repurchase program. While near-term inventory delays are impacting our second quarter outlook, we expect revenue to return to growth in the second half of the year. As we move through fiscal 27, we remain focused on driving higher profitability while continuing to invest in our brands. We are confident that the actions we are taking today position us to deliver sustainable long-term value for our shareholders. Now we will open up the line for questions.

We will now be conducting a question and answer session. We ask that you please limit yourself to one question. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

One moment, please, while we pull for questions.

Our first question is from Matthew Boss with J.P. Morgan. please proceed with your question.

Great, thanks. So John, could you help break down the high single digit retail sales decline at Michael Kors this quarter? What was performance at full price versus outlet in the quarter that made up that high single digit decline? And then I guess my question is, what should we expect for second quarter retail sales and Michael Kors versus that high single decline in the first quarter? And for the back half, has anything at all in your Michael Kors retail sales outlook changed at full price versus outlet other than your view on EMEA macro?

Thank you, and good morning, Matt. So I want to first start out by saying we were pleased with the results in our first quarter. As I said in my prepared remarks, we are building a stronger and more profitable business, and I think the results indicated that. And we continue on our journey to first and foremost, look at the quality of sale in both Jimmy Choo and at Michael Kors. And I think we're making very, very strong strides forward in that area. Our full price sell throughs at both companies were up. Our AURs at both companies were up. And when I look at the health of the sale to the customer, it's getting better each quarter. So we think that that's a very strong indicator of what the future is for Kepri and for Jimmy Choo and Michael Kors. In terms of Michael Kors, the retail sales in our full price channel comped positively in both North America and in Asia, consistent with prior quarter. And unfortunately, in EMEA, we did see, as we move through the quarter, revenues start to be impacted by the conflict and the lack of tourism in the EMEA region. And then, of course, we do have a business, although that's licensed, in the territory itself in the Middle East, which has been significantly impacted and remains significantly impacted. And that's why we've taken a more cautious view to what that's going to mean for the balance of the year. So I would say that in our full price channel, we were pleased with how the results came out during the quarter, consistent with the progress we're making. We've shipped new product into that channel. We realigned our pricing architecture. Consumers are responding very positively to that. And I would also add that consistent with that, you heard us talk about our wholesale business turning positive at our retail partners. That's a very big moment for us. There's been, you know, three years, four years of decline in that business, and we're finally starting to see that turn. And then the last thing I would say is while still negative, our footwear business did start to see a sequential improvement. So some of the new product has begun to arrive in the store. Some of it was there for February, March, and we're starting to see some much better sell-throughs both in our own retail stores as well as our wholesale distribution. So we're very encouraged by what's happening with the full price part of our business and what we see, what we think we're going to see throughout the balance of the fiscal year. In our outlet business, I would say that trends were consistent, remained down, and we have not really seen any significant change there. And that was, as we've said before, due to the fact we really have limited new product into that channel. It's disappointing. We thought we would begin to have a little bit more, but in particular in the second quarter, we thought we would start to flow a significant amount of new product that will be here for the third quarter, we feel very confident that we'll be, as I've said previously, around 75%, in particular in the accessories world, a little, it's going to take us a little longer in the footwear side of things to get the product flowed into outlet. So we feel quite confident that when that new product arrives, we will have the ability to really start to see the same type of changes that we've seen in the full price business in the outlet channel. I want to remind you all that two things. Number one, and I had said this previously, in Q2, in our full price business, we are going to take one final step back on the clearance and markdown inventory. We are at historical lows for the company. The company has never owned this less amount of inventory in clearance and markdown, and that will have an impact on retail sales, both in full price and in outlet in Q2, and that's planned. We anticipated that, and that will be somewhat amplified by the fact that we will not have the amount of inventory in new full price product arriving as early as we had anticipated. So that will have an impact on that side of the business. But so I think we, you know, besides the inventory issue, feel that we are tracking on plan and the consumer is responding to the new product, to the new marketing initiatives, and we're getting the results that we had more or less anticipated.

So we're feeling that we're on track.

Our next question is from Paula Joes with Citigroup.

Please proceed with your question.

Hey, thanks, guys. I'm curious if you could talk a little bit more about the expense management that you're able to put in place to help hold the P&L together this year. Curious if we should think of that as more one-time adjustments or if we build that into the go-forward expense base, and then just a little bit more detail on the interest income and other line. Can you talk about what changed on that line? Thanks.

Yeah, happy to, Paul, and thanks. You know, when we look at our full-year SG&A, we are reducing our expectations for spend by $70 million relative to our prior guidance. We are taking targeted expense reduction actions across the SG&A pool in order to ensure that we are driving down our overall SG&A level. That said, we are protecting investments to support the business, including marketing, store refurbishments, as well as digital and IT investments. So we are ensuring that we're maintaining the investment in what is for the longer-term health of the brand. But we'll continue to evaluate opportunities to improve efficiency across the cost base in the longer term and continue to invest for the future growth. As it relates to interest income, we are just revising our interest income guidance on a full year basis, reflecting where we landed in the first quarter. And so this is just a slight change to our expectation for overall interest income for the year.

Our next question is from Simeon Siegel with Guggenheim Partners. Please proceed with your question.

Thanks. Hey, morning, everyone. Hope you're having a nice summer. Tyler, can you elaborate just a little bit more on the lower-than-anticipated inventory? Maybe discuss both what happened and the why within that inventory. How much of that is reduction in markdown versus full price? How much is seasonal sales that you'll lose with the delay versus maybe sales you expect to recoup once the product comes in, and then just higher level, John, kind of piggybacking on what you were just talking about, any way you could just help us frame where you think you sit on that quality of sales journey? I know you mentioned there's one more, but just what percent of the business is at full price now versus where that was historically? And just really any way to help us think about that timeframe. Thanks, guys.

Yeah, thanks, Samian. So inventory at Michael Kors is lower than we anticipated. Towards the end of the first quarter, we started to see receipts be delayed with longer transit times due primarily to congestion at certain ports in Asia. We are taking action to accelerate receipts where possible, including selective use of air freight, but ultimately we are landing lower than we anticipated, and that is impacting sales. This situation is temporary, and we expect inventory levels to normalize as we progress through the second quarter and into the beginning of the second half of the year, but it is going to impact our second quarter sales. We do anticipate that when we get back to the back half of the year and our inventory levels have normalized, that we will be able to deliver on our expectation of growth for both Michael Kors and Jimmy Chiu.

Simeon, thanks for your question. Let me start out. You had also asked about the difference between the lower inventory level as it relates to delays in delivery and how much of that was lower markdowns. And it's about a 50-50 split, and it comes in at about $50 million in lower markdown inventory, just to give you a size of the magnitude of the reduction in markdown inventory and i think it's a very important uh thing to highlight because that is intentional we've decided to to be less promotional facing to the customer uh and and that's everything from the types of promotions we're doing to the amount of discount we're offering and then to the amount of product and skus available for the customer to see that as you know um there have been other companies that have gone through this process, it takes time and you have to be patient. And we think it's important that we started on a journey and that we don't all of a sudden start to change that vision of where we want to be long term. Now, what I've said to you all on previous calls, we do anticipate Michael Kors to turn positive in the back half of the year, and that is both in full price and in outlet. Outlet might be up one or two points in Q3 or down a point or so, and then proceed to get a little bit better in Q4. So in general, we think that Q3 is a pretty significant inflection point for the company. The other part about that is, and I've said this to you on previous calls, around October, very early November, is when we lapse certain third-party sales that we were conducting out of our outlet stores. I think we said on the last earnings call that it amounted to approximately between that and some other third-party sales, about $150 million for us. So we will start to lapse that in our, and it's predominantly it will show up in our outlet channel. So I think that's when I would look at the timing. We're already seeing AURs climb. We're already seeing full price sales climb. So both of those parts of what we put in place, we have the evidence that is saying that the customer is responding. And I would say more importantly, to the design of the product and the excitement of the product. But you also heard me mention in my prepared remarks that the store renovation program is going really well, and we're seeing strong double-digit increases in the stores that we're renovating, and we're trying to move as fast as we possibly can on that because that's going to be another positive for us. I think we'll see a much bigger lift from that next fiscal year than we will this fiscal year, and hopefully we'll be able to, in the next call, start to talk about the amount of stores that we'll actually get in place. It's very limited right now. But as you know, we've said we have a plan to renovate over 300 of our own stores and a significant amount of department stores. and our partners in the department stores are also been very supportive about that. And so I think, again, you know, very disappointed about this situation around the second quarter, but we view that as a near-term headwind. We know we're going to be able to get through it. As Tyler mentioned, we are going to use some air freight to move some of that delivery up. We're working very closely with our freight forwarders to help us, you know, mitigate and get on faster vessels, et cetera, to get the product here. So I think we will be in a very good position in the third quarter. And, you know, based on some of the things that I've said to you, we're feeling still very, very constructive and positive on our ability to return to growth in the back half of the year. And then, of course, I want to mention, because this is a total capri, Jimmy Choo is positive again this quarter. That's the third consecutive quarter that Jimmy Choo has been positive, including comp stores. So we feel very, very good about what's happening at Jimmy Choo and the ability for that brand to continue to grow along with Michael Kors. Thank you very much.

Thanks, guys. Best of luck for the year. Our next question is from Rick Patel with Raymond James. Please proceed with your question.

Thank you. Good morning, everyone. You talked about headwinds at Michael Kors, including reducing markdowns and lower sales to Daigou and off-price, can you give us your updated thoughts on how long you expect those headwinds to persist as we think about Q2 versus the back cap? And secondly, as we think about Michael Kors returning to growth in the back cap, can you paint a picture for what that looks like from a geographic perspective, given the softness you're seeing in EMEA?

Hello? Oh, sorry. I don't know if you heard me.

I'll we addressed part of the Daigou or the third-party sales in the previous question. That ran about $150 million for the company approximately last year. We do have still headwinds in the first and second quarters and a little bit of the third quarter on that. But post-October, November, that should start to mitigate for us as a headwind. Additionally, we will have entered Q2 as we did Q1, with historic lows on our markdown and clearance inventories. That's planned. There was a business there that is a business that we will not vacate, and we obviously will have markdown clearance, but it will be at a much lower level than the company's had in the past. And so that will be, again, hopefully lesser of a headwind as we head into the third and fourth quarters uh and so i i think that that's you know uh and then and then lastly is the promotional activity where where we will be um uh lapping some of the reductions that we've taken uh uh in terms of removing events and and sizes of discounts um and then and then the second part of your question was, oh, geographic, sorry.

Related to, yeah, from a geographic perspective, what the improvement could look like in the back half.

That's right. So, number one, I think the change, if I can say sitting here, is we would have anticipated, you know, we've had a terrific run in Europe. It's been very strong for the company, even during some of our more difficult periods. So that is a definitive change for us as we look at the back half of the year. We do not see that improving. And obviously, we've taken down our guidance given what we think is still happening. And hopefully, there will be some movement and some of the conflict in the region will settle down and we'll get the benefit of that. But for right now, we can't count on that. So we've removed that from our future guidance. I would say the area where we see the biggest increase will be in North America. We're seeing that North America full price comps are, once again, comp positive. We told you that our wholesale business turned positive in North America at point of sale. And that's the biggest market for us. So we're feeling sufficiently confident that the initiatives that we put in place will begin to see that this marketplace turn positive. And, you know, you saw that the overall Asia market did turn positive for us again this quarter and Michael Kors. So we continue to see that market getting better in China in particular, and so we would look to see that as a positive for us in the back half of the year. And again, AMIA is the one that we are most disappointed about, and we think we've reflected that in our guidance. Thank you, Rick.

Thank you, John.

Our next question is from Brooke Roach with Goldman Sachs. Please proceed with your question.

Good morning, and thank you for taking our question. John, I was hoping you could unpack the trends that you're seeing in Michael Kors' outlet in North America in a little bit more detail. What early reads are you seeing from some of the new product launches and reads that give you more confidence in that inflection to growth in that channel in the back half of the year outside of just cycling Daigo? Are you seeing any change in traffic levels, consumer brand engagement, or NPI, net purchase intent or net promoter scores for that business? Thank you.

Good morning, Brooke. I would say North American Outlet has not changed in terms of trend. It's been fairly similar over the past few quarters. We have delivered some newer styles into the store, which are getting very, very positive results from the consumer. I think I've said to you previously, they are at higher price points. We are actually raising prices in our outlet stores, both on an individual product basis and by lowering discounts. And so that's going to take some time for the customer to adjust to and absorb and accept. We have a new product that's just landed called SAMI, which is really getting some very, very strong traction for us. We have two new Hero products, one called Ashton and one called Bailey that will be in the stores in the later part or in the early part of Q3. And then we have some additional styles that will be arriving throughout the fall season. And so we're very hopeful that these new products will resonate with the consumer. And at the same point in time, we're cycling out of older products. And we're kind of through that at this point in time. That's when I tell you that we're down in markdown and clearance. It's not just in our full price stores, but it's also in our outlet stores as well. And again, this is part of the journey with the consumer to really position Michael Kors as a brand that has much higher perceived value with the customer. And then the last thing I'll say is we just completed a consumer research study on our customers. And I was very pleased by the scores that came back on the brand and how the consumer perceived the brand. And we know we have more work to do on the younger consumer, in particular in Gen Z, but you're going to see some exciting things. We launched our new TikTok shop yesterday. We're in the middle of a very, very successful launch of a back-to-school activity with Amazon. We went live with Amazon a little over a year ago with Michael Kors storefront. It's been very, very successful for us. And we know that by being on platforms like Amazon, like TikTok, and as, you know, Tyler mentioned, we are increasing our marketing spend for the company. We're getting close to – we're going to raise it by almost 200 basis points. We're getting close to 10% of sales, especially in the back half of the year. We're going to be able to focus a lot more initiative around the younger Gen Z consumer. We think that's also going to benefit us. And so I would say to you that a lot's going to be happening for us in Q3 and Q4. And if we've done our job right, we should be in a solid position to turn positive for the back half of the year.

Thank you, Brooke.

Great. Thank you so much, John.

Our next question is from Oliver Chen with TD Cohen.

Please proceed with your question.

Hi, John and Tyler. Regarding pricing and where you are in the pricing journey and raising prices relative to the past, What's happening there by channel and interplays with quality of sales would be great to be briefed on. Thank you very much.

Great. Thank you, Oliver. First, good morning. I want to start with Jimmy Choo. I think we're extremely pleased with the results that we've seen from Jimmy Choo for the last three quarters, both from a revenue standpoint and, as you've seen and Tyler discussed it, the brand is returning to profitability this year. We are one of the strongest brands in our department store partners here in North America. You saw the results that we delivered with Jimmy Choo in North America. They're quite exceptional. And that's really a result of three things. Number one, our accessories business is getting stronger and stronger by the quarter. We have now department stores who are starting to commit to building shop and shops for us. That is a very big hurdle for us to get over. And so I think over the next few years, you're going to be looking at Jimmy Choo as a very strong and powerful accessories business, which will help drive profitability and also growth for the company. And when you look at our pricing architecture, as you know, we have everything from $5,000, $6,000 bonbon bags for the ultra-luxury VICs to our new opening price points of between $1,500 and $750 on bags like Barr. And then, of course, we have our very, very strong cinch platform as well. So we think we really have a great pricing architecture, and the product is resonating with consumers, and it's also driving a new consumer into the stores, which is excellent for us. And you saw we had growth across all regions with Jimmy Choo. Our footwear business in Jimmy Choo has been also very strong. The casual part of our business continues. We've had amazing success with our sneaker program, and especially some of the new lace and slim styles that we've had. And our casual program has also started to really take hold. And lastly, what's interesting is our pump business is starting to come back. There's a trend on pumps again, which is, for us at Jimmy Choo, always puts a big smile on our face. So we feel good about what's happening there. And once again, we have a very, very broad pricing architecture. You look at things like our jellies, our trainers, our sneakers, our casual, and then all the way up to our bridal product, which can be $2,000, $3,000 for shoes. And we have things that open up at $350 to $400. So that is really working quite well for us. And as I said earlier, full-price sell-throughs are up at Jimmy Choo, AURs are up, so the health of the business is quite good. At Michael Kors, again, to restate what we did in spring of last year, we actually lowered prices in the full-price area, and that was a result of we were taking too many markdowns, and we saw what the customer was really willing to pay for the product. So we went back to more historical prices. And the second thing we did in accessories in particular, we have a very, very broad range of under $200 bags today, or smaller bags. And that is, first off, what is happening from a fashion trend standpoint. And secondly, it's attracting a younger Gen Z customer in particular into the brand. So we're really pleased with what's happening with our accessories. We see it in our full price stores. We see it in our wholesale distribution. globally as well. In footwear, just to remind you, that's the business that's actually the business that's the most difficult across the company. And in particular, in our, well, it's in both channels, full price and outlet. But in full price, we've been able to land newer, I would say more modern product into the channel. And we saw a very big step change this quarter in terms of product and the sell-through. Pricing was never as much of an issue in footwear for us, but it was really more of a product design. And I think our teams are doing an extraordinary job of getting on trend in that category. And as I said to you in our last call, we lowered ready-to-wear prices by almost 40%. And that's been one of the highest percentage increase businesses for us in our full price category. And then lastly, I have to give a shout out to our watch business, which now has turned positive. And we're quite pleased to see that that business is returning to growth in our own stores. In the outlet channel, as I mentioned before, we're actually raising prices. We had gotten too inexpensive for the value of the product that we were delivering. I'd say prices have been raised anywhere from five to sort of 10%. We will probably take another increase in prices sometime in the beginning of next calendar year. And we're doing that with individual product itself. And also we're raising AUR by the reduction in promotional activity. And so you're going to see a further step change in our outlet stores with percentage decline in promotional activity, as well as the amount of times that we actually do that and we'll be focused more on individual price points I'm also excited in our outlet channel we're running anywhere between five and six percent of sales in the stores that we have our full price product in the channel we've put our icons in there that's Hamilton Alita and Layla and so we're really pleased with what's happening within in that channel with our ability to sell full price product. Again, we have a long way to go to show the customer that we have new and exciting product that warrants this higher price point. And I think we're just really excited about what we think is going to happen, you know, starting in September, October, November, when what we think is kind of a new face on that product will be in place. The footwear part of outlet will not come until closer to the holiday season. That is something we've, I think, said on the calls previously, but we are feeling better about what is coming now at that period of time. So, we should be about 70%, 75% complete in the outlet stores with product, new product by September, October, and that will reach a higher level, in particular when the footwear arrives for the latter part of the calendar Q4.

Thank you very much, Oliver.

Thanks.

Our next question is from Adrian. in Yeh with Barclays. Please proceed with your question.

Great. Thank you very much. John, thanks so much for all of the detail, and it's very helpful. But kind of staying on the different, you know, there's a lot of shifts going on between full line and outlet. So staying with that theme, as you make these minor adjustments to pricing, how are you seeing, well, how are you messaging those first of all, and then how are you seeing customer acquisition shifting? Are you regaining your historical customer? How are they finding you? And then I guess number two, you're lowering initial retails at full line, raising them at outlet, but you also have the promotional kind of overlay, which is muddying, I'm assuming, kind of the true demand reads. Is the spread between full line and outlet now normalized? Would it just kind of extremely, did it get out of whack relative to history? And are we going back to what you know to be that spread, that norm, that it should be? Thank you.

Thank you, Adrian. I think that's a good question to end on. Number one, in full price, in terms of the reduction in prices that we took, that was in February of last year. So I would say we've anniversaryed that at this point. So that is like for like. In full price as i said earlier the one last step that we're taking well there's two last steps number one um uh you will see one further step down uh in certain uh uh seasonal promotional activity that we that we have done historically for some 10 plus years uh uh that will that will change in q4 uh so that will be the final kind of step down on that uh in in terms of markdown product We have one last phase to go through in Q2, and I've said this in previous calls and conferences, that we will have most likely negative comp store sales in Q2 for full price because of this very large reduction in markdown inventory that will occur in Q2. And then that should be – that's all kind of behind us. In outlet, we are really not at – I would say we're at the very beginning of the price increases, even though we've taken a minor amount of them. The real full amount of product is arriving August, September into the stores. So this is going to be the test with the consumer to say, you know, are you going to accept this higher price from us? Again, we've had some limited tests on it. The limited tests appear that that has had little or no reaction to the customer. I do expect customers to come in and be looking for lower-priced things that they had historically seen from us, and we may lose some of that historic customer. We don't know that yet until we go through it, but we are excited. That's why we're increasing our marketing spend to go out and attract new customers into both full price and outlet, in particular, younger customers who most likely were never shopping with us previously. So we'll be very focused on our new customer acquisition. And then, of course, you asked, how are we getting that message out there? We've hired a new gentleman, Corey Moran, who came to us from 10 years at Google. and he is working very diligently with our teams around all of the marketing initiatives that we're putting forth. And I would say a great deal of the spend that we're adding to Michael Kors is around really top of the funnel marketing and brand engagement. And we will actually reduce some of our more targeted performance marketing in favor of really talking about the brand story and engaging customers from a storytelling standpoint. So thank you for that question, Adrian. Thank you very much. I'd like to conclude the call today by saying thank you for all of you joining us. We are excited about our results for the first quarter. It clearly shows that we're building a stronger and more profitable business. While we're disappointed about our revenue outlook, we are excited about our ability to maintain our $2.15 guidance for the year on earnings per share, which shows our ability to be able to take swift and decisive actions around SG&A when needed without sacrificing any of the growth potential for the company with marketing and with capital expenditure to rebuild our stores. So we're excited about the future for Capri. We're very pleased with what's happened with Jimmy Choo and the third quarter of consecutive growth, and we look forward to the back half of the year for Michael Kors, in particular, returning to growth. Thank you for joining us today and look forward to talking to you on our next call.

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