“That said, in what we believe are the most likely scenarios that we've modeled, we still have the ability to achieve our full-year guidance for both sales and operating income.”

In context

“out of the other side in an even stronger position. We expect this period to be no different. We'll play offense and may opportunistically invest in areas to improve our value proposition. But we're not fully immune from the financial impacts in the short term. We've done work internally to model various scenarios related to the ongoing trade policy discussions. These scenarios involve making assumptions about how long tariffs persist at certain levels versus coming down to some lower level once bilateral trade deals are completed. We also must make assumptions about the elasticity of demand as well as the overall macro backdrop in this environment. Perhaps it's obvious, but worth stating. The range of possible outcomes is much greater than when we originally provided our annual guidance. That said, in what we believe are the most likely scenarios that we've modeled, we still have the ability to achieve our full-year guidance for both sales and operating income. These scenarios involve the belief that trade policy discussions will result in bilateral agreements, agreements in principle for the existence of good faith discussions moving toward agreements that could result in tariff levels lower than those initially proposed in early April. However, if we see a restoration of dramatically higher tariff levels, the impact on our financials could be significant and even jeopardize our ability to grow earnings year-over-year. In any case, we're comfortable with our ability to grow sales in the range we've guided for the year, though the mix of AUR versus units may be much different in these scenarios. While the swings from quarter-to-quarter could be large, we still think we can achieve our operating income guidance for the year, given what we know an”