Michelle Gass

CEO stated current financial guidance assumes higher (20%) reciprocal tariffs. She noted that recent news of a potential reversion to the prior 10% tariff rate is not yet baked into their numbers, representing a potential upside of up to $35 million in EBIT or 7 cents of EPS. A reduction in tariff rates would directly lower the company's cost of goods sold, improving profitability on existing revenue guidance. The stock has clear, unmodeled upside tied to a specific, pending policy decision. The company's strong operational momentum (9% organic growth) provides a robust base, and the tariff reversal would be a pure incremental tailwind. The tariff decision remains uncertain and could be delayed or not materialize, negating the upside. Macro pressures on the consumer could also eventually offset the benefit.