Latest news with #netSales
Yahoo
2 days ago
- Business
- Yahoo
Brown-Forman Corp (BF.A) Q4 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...
Reported Net Sales: Decreased 5% in fiscal 2025. Organic Net Sales Growth: Increased 1% after adjustments. Woodford Reserve Organic Net Sales Growth: 8% increase. New Mix Organic Net Sales Growth: Double-digit growth, surpassing 11 million 9-liter cases. Jack Daniel's Tennessee Whiskey Organic Net Sales Growth: Increased 1%. Diplomatico Organic Net Sales Growth: Strong double-digit growth. Gin Mare Organic Net Sales Growth: 1% increase. Operating Income: Reported decrease of 22%; Organic growth of 3%. Gross Margin: Contracted by 150 basis points to 58.9%. Operating Expenses: Lower due to a 6% decrease in organic advertising expense and a 5% decrease in organic SG&A investment. Diluted Earnings Per Share: Decreased 14% to $1.84. Annualized Savings from Strategic Initiatives: Approximately $70 million to $80 million. Cash Received from Duckhorn Sale: $350 million. Dividends Paid: $420 million in fiscal 2025. Long-term Notes Repaid: $300 million. Fiscal 2026 Outlook for Organic Net Sales: Expected low single-digit decline. Fiscal 2026 Capital Expenditure Outlook: $125 million to $135 million. Fiscal 2026 Effective Tax Rate: Expected to be 21% to 23%. Warning! GuruFocus has detected 5 Warning Signs with BF.A. Release Date: June 05, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Woodford Reserve was the largest driver of organic net sales growth, with an 8% increase driven by higher volume and positive price mix. New Mix achieved double-digit organic net sales growth, surpassing 11 million 9-liter cases and gaining market share in Mexico. Jack Daniel's Tennessee Whiskey increased organic net sales by 1%, supported by new media campaigns and sponsorships. Diplomatico delivered strong double-digit organic net sales growth, particularly in France and Germany. Brown-Forman's emerging international markets collectively delivered a 9% organic net sales increase, led by Turkey and Brazil. Reported net sales decreased by 5% in fiscal 2025, with organic net sales growing only 1% after adjustments. Organic net sales in the travel retail channel declined by 5% due to challenging macroeconomic conditions in Asia. Developed international markets saw a 3% decline in organic net sales, with notable declines in Italy, South Korea, and the United Kingdom. Organic net sales for El Jimador and Herradura tequilas declined double-digits due to a competitive environment in the US and economic challenges in Mexico. Brown-Forman incurred $63 million in charges related to workforce reduction and Cooperage closing, impacting financial results. Q: Can you explain the discrepancy between the consumer environment for Brown-Forman and other consumer categories like lodging and leisure, which seem to be performing better? A: Lawson Whiting, President and CEO, explained that while some consumer categories are performing well, others are experiencing weaker demand. He noted that the spirits industry faces unique pressures, such as competition from cannabis and changing consumer preferences, which may not affect other sectors as much. Despite these challenges, spirits continue to gain market share from beer and wine, and premiumization remains a positive trend. Q: What assumptions are included in the fiscal 2026 guidance regarding distributor inventories and consumer demand? A: Leanne Cunningham, CFO, stated that the guidance assumes a continuation of current consumer behavior and trade inventory levels, with no significant changes expected. The guidance also factors in potential disruptions from distributor transitions in the U.S. and a significant reduction in used barrel sales, which are expected to be more than half of fiscal 2025 levels. Q: How does the fiscal 2026 guidance align with the company's long-term growth algorithm, and has there been any change in the growth outlook? A: Lawson Whiting emphasized that the long-term growth algorithm remains unchanged, with expectations for mid-single-digit growth in the U.S. and higher growth in international markets. However, current market conditions, particularly in the U.S. and Europe, are challenging, and the company is focused on strategic initiatives to drive future growth. Q: What is Brown-Forman's strategy regarding pricing in the current environment of slowing demand and increased supply in the U.S. whiskey market? A: Lawson Whiting stated that the company aims for low single-digit price increases regularly. Despite concerns about industry supply, the pricing environment has remained rational, with no significant promotional activity or price reductions observed in the market. Q: How is Brown-Forman addressing potential anti-American sentiment in international markets, and what is the company's approach to advertising and promotion (A&P) spending? A: Lawson Whiting noted that historically, anti-American sentiment has not significantly impacted the Jack Daniel's brand. The company is seeing improvements in brand health measures following recent changes in consumer engagement strategies. Leanne Cunningham added that A&P spending is aligned with depletion-based growth expectations, and the company believes its current investment levels are adequate. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
4 days ago
- Business
- Yahoo
Dollar General Corp (DG) Q1 2025 Earnings Call Highlights: Strong Sales Growth Amid Challenges
Net Sales: Increased 5.3% to $10.4 billion in Q1. New Store Openings: 156 new stores opened during the quarter. Same-Store Sales: Increased 2.4% during the quarter. Gross Profit Margin: 31%, an increase of 78 basis points. Operating Profit: Increased 5.5% to $576 million. EPS: Increased 7.9% to $1.78. Cash Flow from Operations: $847 million, an increase of 27.6%. Merchandise Inventories: $6.6 billion, a decrease of 5% compared to prior year. Dividend Payment: $0.59 per common share, totaling $130 million. 2025 Financial Guidance: Net sales growth of 3.7% to 4.7%, same-store sales growth of 1.5% to 2.5%, EPS range of $5.20 to $5.80. Warning! GuruFocus has detected 7 Warning Sign with DG. Release Date: June 03, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Dollar General Corp (NYSE:DG) reported a 5.3% increase in net sales to $10.4 billion in Q1 2025, driven by the opening of 156 new stores. Same-store sales increased by 2.4%, with growth in both consumable and non-consumable product categories. The company achieved a gross profit margin increase of 78 basis points, attributed to lower shrink and higher inventory markups. Dollar General Corp (NYSE:DG) saw a 7.9% increase in EPS to $1.78, exceeding internal expectations. The company reported strong cash flow from operations, increasing by 27.6% to $847 million, and reduced merchandise inventories by 5%. Customer traffic slightly decreased by 0.3% during the quarter, despite strong sales growth. SG&A expenses increased by 77 basis points as a percentage of sales, driven by higher retail labor and incentive compensation costs. The company faces uncertainty due to the evolving tariff environment, which could impact consumer spending and cost of goods. Dollar General Corp (NYSE:DG) anticipates a significant headwind from incentive compensation expenses, particularly impacting Q2. The cost to build new stores has risen by more than 40% since 2019, impacting the company's return on investment for new store openings. Q: Can you discuss your confidence in sustaining top-line momentum and any surprises during the quarter? Also, how does the full-year guidance reflect your expectations? A: Todd Vasos, CEO, highlighted confidence in sustaining top-line momentum due to improvements in store standards, customer service, and reduced turnover. He noted that shrink mitigation and supply chain improvements have contributed positively. Kelly Dilts, CFO, added that the guidance considers Q1 outperformance but also accounts for uncertainty, allowing for potential consumer spending pressure. Q: How do you see traffic progressing through the year, and have there been any changes in consumer behavior? A: Todd Vasos, CEO, mentioned that traffic turned positive in May, and they are optimistic about continued comp momentum. He noted that trade-in activity from higher-income customers remains strong, and initiatives like Project Elevate and Renovate are expected to drive further growth. Q: Are there plans for further investments in price or wage rates to sustain comp momentum? A: Todd Vasos, CEO, stated that they are comfortable with current investments in labor and wage rates, which have improved store conditions and employee satisfaction. He emphasized that they feel well-positioned on everyday pricing and continue to invest in maintaining a $1 price point for many items. Q: How important is achieving a 3% comp for margin expansion, and can shrink benefits improve further? A: Todd Vasos, CEO, indicated that sustained comps over 2% are crucial for margin expansion, with a focus on non-consumable categories. Kelly Dilts, CFO, noted that shrink benefits exceeded expectations in Q1 and are expected to continue throughout the year, contributing positively to margins. Q: How is Dollar General addressing competition and potential price investments? A: Todd Vasos, CEO, mentioned that the competitive landscape is stable, and they feel well-positioned on pricing. He emphasized their ability to respond to competitive pressures if needed, supported by strong relationships with CPG partners. He also discussed focusing on new communities to reduce cannibalization and drive growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Globe and Mail
6 days ago
- Business
- Globe and Mail
Costco Wholesale's Sales Are Increasing Modestly, But 1 Part of the Business Is Gaining Much Faster
When it comes to running a brick-and-mortar retail business, Costco Wholesale (NASDAQ: COST) arguably does it better than anybody else. As of May 2025, the company has 905 locations, including 624 U.S. locations. These stores had nearly $62 billion in net sales in the fiscal third quarter of 2025 (which ended on May 11). For those doing the math, this works out to around $68 million in quarterly net sales per Costco location, which is extraordinary and emphasizes my original statement: This company might do physical retail better than anyone else. In short, Costco is huge and stores already generate substantial sales. The challenge is that the bigger the business, the harder it is to grow. In Q3, Costco's same-store sales were up less than 6%. Granted, any growth at this scale is impressive. But it's still a more modest growth rate. The potential problem for shareholders is that growth is one of the most important things to consider when investing in stocks. There are other important factors, yes. But the best stocks have above-average growth rates more often than not, and Costco's growth is modest. Growth for Costco's primary retail business may be modest. But the company does have some under-appreciated growth hiding just beneath the surface. Costco's better growth business The first number to look at is near the surface. In Q3, Costco had e-commerce net-sales growth of nearly 15%. Through the first three quarters of fiscal 2025, it's had e-commerce net-sales growth of more than 16%. Both of these growth rates far surpass the growth rate for the overall business. There are benefits for a brick-and-mortar business that can get its customers to transact digitally. This is why Costco recently partnered with Affirm. People are frequently using buy now, pay later options such as this. By only offering this option on certain purchases in its e-commerce portal, Costco hopes this will drive digital transactions. When a traditional retail business such as Costco has a growing digital business, the biggest benefit is better profit margins -- and that's really important here. Costco has better ability to track its customers than most retailers. Everyone who shops at Costco is a paying member, and purchases are tied to the member's account. Therefore, the company knows who is buying what and when they're buying it, whether the purchase is online or in the store. Advertisers would love to use Costco's data to personalize ads to its members. One place they can better target them is on an e-commerce portal. But they're not necessarily limited to this. They can also send personalized mailers to try to drive a sale. Regardless of the method, Costco generates advertising revenue for little incremental cost, which improves margins. In this case, however, the company doesn't use this margin tailwind to pad its bottom line. Rather, it takes this advertising revenue and lowers prices on its products for its members. This is how it stays the low-price leader. To be clear, Costco isn't only growing its digital business with its e-commerce platform. Its curated marketplace Costco Next is also a budding opportunity. It's a platform for its members that gives them good pricing on select items purchased directly from third parties. Costco's management didn't disclose exact numbers, but it did say that Q3 sales for Costco Next were bigger than Costco Next's sales for all of fiscal 2022. So whatever the growth rate is, it's substantial. Understanding the big picture Costco tries to keep its sales prices low, so sales growth isn't necessarily the best metric to watch with this business. Retail sales don't move the needle much with profits, anyway. What does matter are Costco's memberships. The company's goal is to attract members and keep them returning. Keeping prices low with things such as advertising revenue helps it do this, and it continues to be a winning strategy. Its Q3 retention rate was close to 93%, which is pretty strong. Overall growth in Costco's paid memberships was only 7% in Q3. That number would ideally be higher. But thanks to an increase in membership prices, Q3 membership income was up more than 10% year over year. Since this constitutes a large portion of its overall profits, this is good growth. Costco stock has been a great long-term investment and its huge membership base is a big reason for this. If the company can keep its prices low, it should continue to do well with its membership base. While top-line growth is modest, growth in its digital efforts is allowing it to keep prices low, which supports its membership-based business model. That's something that really matters for investors. Should you invest $1,000 in Costco Wholesale right now? Before you buy stock in Costco Wholesale, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Yahoo
29-05-2025
- Business
- Yahoo
Columbus McKinnon Corp (CMCO) Q4 2025 Earnings Call Highlights: Navigating Challenges with ...
Net Sales: $963 million for fiscal 2025, down 4% year over year on a constant currency basis. Fourth Quarter Sales: $246.9 million, down 5% from the prior year on a constant currency basis. Backlog: $322.5 million, a 15% increase versus the prior year. Gross Profit: $79.8 million in the fourth quarter, decreased by $14.5 million year over year. Gross Margin: 32.3% on a GAAP basis; 35.2% on an adjusted basis. Adjusted Operating Income: $24.1 million in the fourth quarter. Adjusted Operating Margin: 9.8% in the fourth quarter. Adjusted EPS: $0.60 for the fourth quarter. Adjusted EBITDA: $36.1 million in the fourth quarter, with a margin of 14.6%. Free Cash Flow: $29.5 million in the fourth quarter. Debt Repayment: $60 million paid down in fiscal 2025, including $15 million in the fourth quarter. Net Leverage Ratio: 3.1 times on a financial covenant basis. Fiscal 2026 Guidance: Net sales growth flat to slightly up; adjusted EPS growth flat to slightly up. Warning! GuruFocus has detected 3 Warning Sign with CMCO. Release Date: May 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Columbus McKinnon Corp (NASDAQ:CMCO) delivered record orders in fiscal '25, with a 4% increase versus the prior year on a constant currency basis. The company saw strong growth in project-related orders, particularly in precision conveyance, which was up 19% year over year. Backlog increased by 15% to $322.5 million, positioning the company well for fiscal '26. Operational execution improved, with a top-tier TRIR of 0.54 and a 10-point improvement in net promoter score in the EMEA region. The pending acquisition of Keto Crosby is expected to scale the business, expand customer capabilities, and accelerate the intelligent motion strategy. Net sales were down 4% year over year on a constant currency basis, reflecting lower volume due to short cycle order softness. Gross profit decreased by $14.5 million due to lower sales volume, mix, and factory closure costs. Tariffs are expected to be a headwind, with a $0.20 to $0.30 impact on adjusted EPS in the first half of fiscal 2026. The company faces macroeconomic uncertainty and volatility related to the evolving US policy landscape. Short cycle orders remain sensitive to channel dynamics, impacted by policy uncertainty and channel consolidation. Q: What is the tariff rate embedded for China and the EU, and how might the Keto Crosby acquisition impact tariff mitigation? A: David Wilson, President and CEO, explained that the tariff rates considered are 145% for China and 10% for the EU. The company is advancing integration planning for Keto Crosby, which could potentially help mitigate tariff impacts quicker or more effectively than currently guided. Q: How has the short cycle order trend been through April and early June, and what is expected for Keto Crosby? A: David Wilson noted that short cycle sales improved in the latter part of Q4, showing a flat year-over-year performance, which was a significant improvement from Q3. While he couldn't comment on Keto Crosby's results, similar activity levels are anticipated. Q: Can you elaborate on the tariff situation and the expected mitigation measures? A: David Wilson stated that the company expects a $40 million tariff headwind, with mitigation through surcharges, pricing, and supply chain management. The guidance assumes flat to slightly up revenue, with potential volume reductions due to price increases. Q: What is driving the strength in precision conveyance orders, and how are margins in this area? A: David Wilson highlighted robust demand in precision conveyance, with a 19% year-over-year order growth. This demand is driven by sectors like battery production, life sciences, and e-commerce, with contributions from Mantra Tech and Dorner businesses. Q: Why was the mix negative to margin despite strong precision conveyance orders? A: David Wilson explained that while orders were strong, sales were down, impacting margins due to lower volume and mix. The company expects improvements in fiscal '26 as volume ramps up, particularly in precision conveyance and North American linear motion businesses. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
28-05-2025
- Business
- Associated Press
Abercrombie & Fitch Co. Reports First Quarter Fiscal 2025 Results
NEW ALBANY, Ohio, May 28, 2025 (GLOBE NEWSWIRE) -- Abercrombie & Fitch Co. (NYSE: ANF) today announced results for the first quarter ended May 3, 2025. These compare to results for the first quarter ended May 4, 2024. Descriptions of the use of non-GAAP financial measures and reconciliations of GAAP and non-GAAP financial measures accompany this release. Fran Horowitz, Chief Executive Officer, said, 'We delivered record first quarter net sales with 8% growth to last year. This was above our expectations and was supported by broad-based growth across our three regions. Hollister brands led the performance with growth of 22%, achieving its best ever first quarter net sales, while Abercrombie brands net sales were down 4% against 31% sales growth in 2024. We exceeded our expectations on the bottom line as well, with operating margin of 9.3% and earnings per share of $1.59. We also returned excess cash to shareholders through share repurchases totaling $200 million in the quarter, marking our fifth consecutive quarter of share repurchases. As we navigate the current environment, we have the team and proven capabilities in place to read, react and adapt, while continuing to deliver for customers globally. Importantly, with a strong foundation, we remain on offense and focused on top-line growth, store expansion, and investments in digital and technology that will enable sustainable long-term success.' Details related to reported net income per diluted share and adjusted net income per diluted share for the first quarter are as follows: (1) The estimated impact from foreign currency is calculated by applying current period exchange rates to prior year results using a 26% tax rate. A summary of results for the first quarter ended May 3, 2025 as compared to the first quarter ended May 4, 2024: Net sales by segment and brand for the first quarter are as follows: (1) Net sales by segment are presented by attributing revenues to a physical store location or geographical region that fulfills the order. (2) Comparable sales are calculated on a constant currency basis. Refer to 'REPORTING AND USE OF GAAP AND NON-GAAP MEASURES,' for further discussion. (3) The Americas segment includes the results of operations in North America and South America. (4) The EMEA segment includes the results of operations in Europe, the Middle East and Africa. (5) The APAC segment includes the results of operations in the Asia-Pacific region, including Asia and Oceania. As of May 3, 2025 the company had: Details related to the company's cash flows for the year-to-date period ended May 3, 2025 are as follows: During the first quarter of 2025, the company repurchased 2.6 million shares for approximately $200 million, representing a 5% reduction in shares outstanding prior to the vesting impact of stock compensation. The company has $1.1 billion remaining on the share repurchase authorization established in March 2025. Depreciation and amortization was $39 million for the year-to-date period ended May 3, 2025. (1) Includes the estimated impact from the tariffs on goods imported into the United States in accordance with trade policies currently in effect. This includes a 30% tariff on imports from China, and a 10% tariff on all other global imports, but excludes other currently-paused tariffs and any other potential future trade policy changes imposed by the United States or other countries. Net of planned mitigation efforts, the full year outlook assumes approximately $50 million of tariff expense, or 100 basis points as a percent of net sales. (2) Released March 5, 2025. (3) The current outlook for effective tax rate is sensitive to the jurisdictional mix and level of income and does not include the impact of potential future tax policy or legislative changes. (4) The current outlook for net income per diluted share and diluted weighted average shares includes the anticipated impact to shares outstanding from potential share repurchase activity in fiscal 2025. (5) The timing and amount of any such repurchases will be determined based on an evaluation of market conditions, the company's share price, legal requirements, and other factors. Today at 8:30 a.m. ET, the company will conduct a conference call and provide additional details around its quarterly results and its outlook for the second quarter. To access the call by phone, participants will need to register at the following URL address to obtain a dial-in number and passcode: A presentation of first quarter results will be available in the 'Investors' section at at approximately 7:30 a.m. ET, today. Important information may be disseminated initially or exclusively via the website; investors should consult the site to access this information. This Press Release and related statements by management or spokespeople of Abercrombie & Fitch Co. (A&F) contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements, including, without limitation, statements regarding our second quarter and annual fiscal 2025 results, relate to our current assumptions, projections and expectations about our business and future events. Any such forward-looking statements involve risks and uncertainties and are subject to change based on various important factors, many of which may be beyond the company's control. The inclusion of such information should not be regarded as a representation by the company, or any other person, that the objectives of the company will be achieved. Words such as 'estimate,' 'project,' 'plan,' 'goal,' 'believe,' 'expect,' 'anticipate,' 'intend,' 'should,' 'are confident,' 'will,' 'could,' 'outlook,' and similar expressions may identify forward-looking statements. Except as may be required by applicable law, we assume no obligation to publicly update or revise any forward-looking statements, including any financial targets, estimates, or performance outlooks whether as a result of new information, future events, or otherwise. Factors that may cause results to differ from those expressed in our forward-looking statements include, but are not limited to, the factors disclosed in Part I, Item 1A. 'Risk Factors' of the company's Annual Report on Form 10-K for the fiscal year ended February 1, 2025, and in our subsequent reports and filings with the Securities and Exchange Commission, as well as the following factors: risks related to global trade policy, including the impact of the imposition or threat of imposition of new or increased tariffs by the United States or foreign governments, other changes to and continued uncertainties relating to trade policies and arrangements, or a global trade war; risks related to changes in global economic and financial conditions, including inflation, and the resulting impact on consumer spending and our operating results, financial condition, and expense management; risks related to global operations, including changes in the economic or political conditions where we sell or source our products; risks related to the geopolitical landscape and ongoing armed conflicts, acts of terrorism, mass casualty events, social unrest, civil disturbance or disobedience and the impact of such conflicts or events on international trade, supplier delivery or increased freight costs; risks related to natural disasters and other unforeseen catastrophic events; risks related to our failure to engage our customers, anticipate customer demand, expectations, and changing fashion trends, and manage our inventory and product delivery; risks related to our failure to operate effectively in a highly competitive and constantly evolving industry; risks related to our ability to successfully invest in and execute on our customer, digital and omnichannel initiatives; risks related to our ability to execute on, and maintain the success of, our strategic and growth initiatives; risks related to fluctuations in foreign currency exchange rates; risks related to fluctuations in our tax obligations and effective tax rate, including as a result of earnings and losses generated from our global operations, may result in volatility in our results of operations; risks and uncertainty related to adverse public health developments; risks associated with climate change and other corporate responsibility issues; risks related to reputational harm to the company, its officers, and directors; risks related to actual or threatened litigation; risks related to cybersecurity threats and privacy or data security breaches, and the potential loss or disruption to our information systems, and uncertainties related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing laws and regulations. This document includes certain adjusted non-GAAP financial measures where management believes it to be helpful in understanding the company's results of operations or financial position. Additional details about non-GAAP financial measures and a reconciliation of GAAP financial measures to non-GAAP financial measures can be found in the 'Reporting and Use of GAAP and Non-GAAP Measures' section. Sub-totals and totals may not foot due to rounding. Net income and net income per share financial measures included herein are attributable to Abercrombie & Fitch Co., excluding net income attributable to noncontrolling interests. As used in this document, references to 'Americas' includes North America and South America, 'EMEA' includes Europe, the Middle East and Africa and 'APAC' includes the Asia-Pacific region, including Asia and Oceania. Abercrombie & Fitch Co. (NYSE: ANF) is a global, digitally led, omnichannel specialty retailer of apparel and accessories catering to kids through millennials with assortments curated for their specific lifestyle needs. The company operates a family of brands, including Abercrombie brands and Hollister brands, each sharing a commitment to offer products of enduring quality and exceptional comfort that support global customers on their journey to being and becoming who they are. Abercrombie & Fitch Co. operates approximately 790 stores under these brands across North America, Europe, Asia and the Middle East, as well as the e-commerce sites and Reporting and Use of GAAP and Non-GAAP Measures The company believes that each of the non-GAAP financial measures presented are useful to investors as they provide a measure of the company's operating performance excluding the effect of certain items which the company believes do not reflect its future operating outlook, such as asset impairment charges, therefore supplementing investors' understanding of comparability of operations across periods. Management used these non-GAAP financial measures during the periods presented to assess the company's performance and to develop expectations for future operating performance. Non-GAAP financial measures should be used supplemental to, and not as an alternative to, the company's GAAP financial results, and may not be calculated in the same manner as similar measures presented by other companies. The company provides comparable sales, defined as the percentage year-over-year change in the aggregate of: (1) sales for stores that have been open as the same brand at least one year and whose square footage has not been expanded or reduced by more than 20% within the past year, with prior year's net sales converted at the current year's foreign currency exchange rate to remove the impact of foreign currency rate fluctuation, and (2) digital net sales with prior year's net sales converted at the current year's foreign currency exchange rate to remove the impact of foreign currency rate fluctuation. The company also provides certain financial information on a constant currency basis to enhance investors' understanding of underlying business trends and operating performance, by removing the impact of foreign currency exchange rate fluctuations. The effect from foreign currency, calculated on a constant currency basis, is determined by applying current year average exchange rates to prior year results and is net of the year-over-year impact from hedging. The per diluted share effect from foreign currency is calculated using a 26% tax rate. In addition, the company provides EBITDA as a supplemental measure used by the company's executive management to assess the company's performance. We also believe these supplemental performance measures are meaningful information for investors and other interested parties to use in computing the company's core financial performance over multiple periods and with other companies by excluding the impact of differences in tax jurisdictions, debt service levels and capital investment. (1)'GAAP' refers to accounting principles generally accepted in the United States of America. (2)The estimated impact from foreign currency is determined by applying current period exchange rates to prior year results and is net of the year-over-year impact from hedging. The per diluted share estimated impact from foreign currency is calculated using a 26% tax rate. (3) The estimated basis point change has been rounded based on the percentage change. (1) EBITDA is a supplemental financial measure that is not defined or prepared in accordance with GAAP. EBITDA is defined as net income before interest, income taxes and depreciation and amortization. (2)
