“However, excluding the 315 basis point impact, of higher gross product costs related to new tariffs gross margin expansion would be positive in the third quarter.”

In context

“versus the prior year, with units up mid-single digits. Though we saw pockets of improvement year over year. Now I will turn to our third-quarter guidance. We continue to operate in a dynamic environment. Both for consumers our global business. And we remain focused on what we can control to make forward progress for the long-term health of our brands. Our outlook reflects our best assessment of these factors based on the data we have available to us today. We expect Q3 revenues to be down low single digits. With modest growth in North America as we see reduced liquidation activity versus prior quarters performance in Greater China and Converse similar to Q2, as well as a three-point benefit from foreign exchange. We expect Q3 gross margin to be down approximately 175 to 225 basis points. However, excluding the 315 basis point impact, of higher gross product costs related to new tariffs gross margin expansion would be positive in the third quarter. We expect Q3 SG and A dollars to be up low single digits due to higher demand creation and investments in our sport offense. We expect other expense net of interest income, to be an income of 0 to $10 million in the third quarter. Now I'll close with a few final thoughts. We are making progress in the areas we focused on first. And we are increasingly confident in our path forward. Led by momentum in North America. We are making the investments required to position our full portfolio for a recovery. And making decisions in service of the long-term health of our brands. Operationalizing the sport offense, elevating the marketplace, and rebuilding our key city teams are critical priorities to return to sustainable, profitable growth across all brands, all sports, and all geographies. Finall”