Deckers’ star brands Hoka and Ugg continued to lead the way for the company in the second quarter.

The Goleta, Calif.-based footwear company reported net sales in its Q2 of fiscal 2025 increased 20.1 percent to $1.3 billion, compared with $1.1 billion the same time last year. Net income in the period was $242.3 million, up from $178.5 million in the same year-ago quarter.

Shares for the company rose nearly 10 percent in after-hours trading on Thursday.

Deckers also saw a bump in its direct-to-consumer channel, reporting a 19.9 percent increase to $397.7 million, compared with $331.7 million in Q2 of fiscal 2024. Wholesale net sales for Q2 were up 20.2 percent to $913.7 million, compared with $760.2 million the same time last year.

By brand, Hoka saw the largest increase in sales in the second quarter, reporting a 34.7 percent rise to $570.9 million, up from $424 million in Q2 2024. Ugg also continued its winning streak in the period, posting net sales of $689.9 million, a 13 percent increase from $610.5 million last year.

After several quarters of declining sales, Teva returned to growth in the second quarter. Deckers said that its sandal brand reported a net sales increase of 2.3 percent in the period to $22 million, up from $21.5 million the same time last year. Sanuk, which was divested in the middle of the quarter, saw sales decrease 47.6 percent to $2.8 million, compared with $5.4 million last year.

Plus, the company’s Other Brands division, primarily composed of Koolaburra, reported net sales decreased 15.8 percent to $25.8 million, compared with $30.6 million in Q2 2024.

“Hoka and Ugg produced outstanding second-quarter results driven by strong consumer demand for our innovative and unique products,” Stefano Caroti, president and chief executive officer of Deckers Brands, said in a statement. “As I step into the CEO role, I’m committed to building on our proven foundation to support growth, guided by our consumer-first mindset, brand-led philosophy, innovation-forward products, and globally driven focus. Our dedicated teams’ continued execution of Deckers’ long-term strategy has our company well-positioned to achieve an increased outlook for fiscal year 2025.”

Looking ahead, Deckers raised its guidance for the year. The company now expects net sales for the full fiscal year 2025 to increase 12 percent to $4.8 billion. This is up from its previous guidance, which predicted sales for the year to rise 10 percent to $4.7 billion.

Shares for Skechers USA Inc. jumped nearly 10 percent in after-hours trading on Thursday following the company’s record third-quarter earnings.

The Manhattan Beach, Calif.-based footwear company reported Q3 sales of $2.35 billion, a 15.9 percent increase from $2 billion in the same period last year. Net earnings were $193.2 million and diluted earnings per share were $1.26, compared with prior-year net earnings of $145.4 million and diluted earnings per share of 93 cents.

These earnings came at the top of Skechers’ expectations. The company stated last quarter that it expected to see sales between $2.3 billion and $2.35 billion, with diluted earnings per share between $1.10 and $1.15 in Q3.

In the third quarter, international sales were up 16.4 percent and domestic net sales grew 15.3 percent. By channel, direct-to-consumer sales rose 9.6 percent to $81.3 million, and wholesale sales spiked 20.6 percent to $241.4 million. As of Sept. 30, Skechers said it had 592 domestic stores, 1,151 international stores and 3,589 distributor, licensee or franchise stores. Total store count at the end of Q3 was 5,332.

Skechers chief operating officer David Weinberg said in a statement that strong consumer demand for the brand across all distribution channels resulted in this new quarterly sales record.

“With the growing awareness and broad acceptance of our comfort technology products by our partners and consumers, we believe each of these regions represent continued growth opportunities for Skechers,” Weinberg said. “We continue to invest in our operational capabilities and improve the customer experience, while meeting the increased global demand for our products and positioning Skechers for profitable growth now and in the future.”

Robert Greenberg, chief executive officer of Skechers, added that the company’s significant growth in the third quarter can be attributed to “offering the right product at the right price and ensuring availability at locations where consumers want to shop.”

“Raising awareness of our technologies, such as Skechers Hands Free Slip-ins, has been integral to our global growth,” Greenberg noted. “We achieve this through both technology-focused marketing campaigns and by leveraging our strong team of ambassadors and athletes.”

The CEO added that the company is in the early stages of team sports with the global rollout of Skechers court, football (soccer), basketball and cleated styles, supported by a growing roster of Olympians and elite athletes competing in Skechers footwear.

“We believe there are significant opportunities to build on our technical performance business,” Greenberg said. “While continued investment in product and marketing drove record quarterly sales, it is our commitment to deliver what consumers want that inspires us as we strive to bring innovation to people from all walks of life.”

Looking ahead, Skechers expects to achieve sales between $2.17 billion and $2.22 billion and diluted earnings per share of between 70 cents and 75 cents in the fourth quarter.

For the full fiscal year 2024, the company raised its guidance, predicting sales to be between $8.93 billion and $8.98 billion, with diluted earnings per share between $4.20 and $4.25. This is up from its previous guidance of $8.88 billion and $8.98 billion in sales and diluted earnings per share of $4.08 to $4.18.

Adidas has raised its guidance for the year once again after reporting better-than-expected preliminary results for the third quarter.

According to the German athletic company, currency-neutral revenues increased 10 percent compared to the prior year. In euro terms, the company’s revenues grew 7 percent to 6.438 billion euros in the third quarter. Currency-neutral revenues minus Yeezy sales were were up 14 percent in the quarter.

Gross margin grew to 51.3 percent in Q3 and operating profit increased to 598 million euros, which includes 50 euros worth of Yeezy sales.

As a result, Adidas now expects currency-neutral revenues to increase at a rate of 10 percent in 2024. This is up from its previous guidance for an increase in the high-single-digit rate. Operating profit is now expected to reach a level of around 1.2 billion euros, up from the previously forecast of 1 billion euros. The guidance assumes that Adidas sells off its remaining Yeezy inventory at cost, on average, which would result in an additional 50 million euros in sales and no profit impact in Q4.

The results stand in contrast to rival Nike, who this week welcomed a new chief executive officer to help fix longstanding issues in distribution, innovation and culture. Earlier this month, Nike withdrew its guidance for fiscal year 2025 after reporting Q1 revenues that were down 10 percent to $11.59 billion.

According to Piper Sandler’s 48th semi-annual “Taking Stock With Teens” survey, Adidas saw the biggest increase in popularity among female respondents, where it accounted for 14 percent of the vote this fall among the demo, up from 3 percent in fall 2023. Overall, Adidas ranked No. 2 in the top footwear brands list with 9 percent of the vote. Nike ranked number one in top footwear brands but Nike shed 4 points year-over-year.

JD Sports is celebrated its wins on Wednesday as the UK-based athletic retailer reported record interim results for the first half of fiscal 2025.

According to the company, it delivered revenue of 5 billion pounds in the first half, a 5.2 percent increase from 4.8 billion pounds in the first half of fiscal 2024. Net profit before tax and adjusted items was 405.6 million pounds in the period, up 2 percent from 397.8 million pounds the same time last year.

When it comes to North America, now its largest market following the recent acquisition of Hibbett, revenue grew 14.5 percent to 1.2 billion pounds in the first half of the year. The company said that its organic sales growth in North America was 13.2 percent in the period, reflecting the growing presence of the JD brand with 275 JD stores open at the end of the period in North America, compared with 175 just 12 months’ prior.

“With an annual turnover around 11.7 billion pounds, equivalent to more than $15 billion and 4,500 stores in the world, JD Group lead the global stores fashion retail industry,” JD Sports chief executive officer Régis Schultz told analysts on the company’s earnings call on Wednesday. “We have positioned ourselves for ambitious growth with our double-digit revenue growth, double-digit operating margin and double-digit market share in key regions. Those ambitious objectives are not new, but they are more relevant than ever as we continue to drive forward.”

“JD revenue growth is more than double the industry average,” he added. “Where many peers have struggled to maintain single-digit growth, we are consistently delivering strong double-digit growth, particularly in key region like North America and Europe. More importantly, JD store productivity is about 50 percent higher than our competitors.”

Here are some takeaways from the company’s earnings call on Wednesday.

Finish Line’s Conversion Plan

Following an analyst question as to whether the Finish Line banner will disappear as the company continues to convert existing Finish Line stores to the JD banner, also known as a “badge flipping,” Schultz confirmed the company’s plan. “We are looking at the plan for [Finish Line],” Schultz said. “In three years’ time, we will have moved all Finish Line stores to JD.”

But, it’s not the end of Finish Line. In a statement sent to FN, a JD Sports representative confirmed that while all standalone Finish Line stores in malls across the country will eventually convert to JD locations over the next several years, Finish Line stores inside Macy’s will continue to operate going forward. “The Finish Line brand allows us to extend our reach to a unique consumer base and the brand continues to be strong with high levels of awareness and demand,” the company rep stated.

The CEO added that as of now, JD has been focused on converting stores with high sales volume first, but will move on to accessing smaller stores. In the first half of fiscal 2025, the company has converted 13 Finish Line stores to the JD fascia and opened a further 24 new JD stores across the US and Canada. New locations for the JD brand in the region included the Bakers Centre in Philadelphia and the Mayfair Shopping Centre, in Victoria, British Columbia.

“We have continued to invest in growing the JD fascia across our key markets, while reducing the number of non-JD stores, as we pursue our JD First strategy,” Schultz said. “We opened the period with 1,902 stores, of which 1,254 were the JD fascia (66 percent), and we ended the period with 1,951 stores, of which 1,340 were the JD fascia (69 percent).”

JD Sports acquired Finish Line in 2018 in a $558 million deal. Schultz noted that at the time of acquisition, Finish Line had revenue of 1 billion pounds and was “losing money.” By 2023, sales in the U.S. reached 3.1 billion pounds, an increase of more than 1 billion pounds when adding in other U.S. retail acquisitions, the CEO added. “These achievements reflects our ability to scale rapidly while expanding our presence and making, at the same time, JD, our No. 1 fascia across North America,” he said.

JD CEO Positive on Changes at Nike

Following last month’s news that Nike will replace CEO John Donahoe with veteran employee Elliott Hill, analysts were eager to get JD’s take on the move. “I think that we see some good things happening. I think that Elliott will bring energy in the business and focus on product and innovation and wholesale partners. So I think we’re quite positive on that,” Schultz said.

Schultz also noted that JD’s business is still healthy even without a renewed energy at Nike. “We are in an industry which is a growing industry,” he added. “So consumers want new product, and if they don’t find it from Nike, they will find it from other brands. Our agility to move and agility to pick up trends and to be the first one to pick up those trends has been demonstrated time after time, and I think that we will continue to see that happening.”

This sentiment follows JD’s announcement in August that it has expanded its relationship with Nike by offering the Nike Connected Membership program to its U.S. customers. The move made JD the sportswear giant’s first global partner for the popular loyalty rewards program after successfully launching in the UK in 2022, the company said at the time.

Footwear Is Still Winning

Footwear has continued to trade better than apparel, although both categories grew in the period, Schultz said on Wednesday. “Footwear in the lifestyle space is a resilient, growth category driven by the continued growth in sneakers around the world,” he said. “Growth in the period was 9.6 percent and footwear’s share of our revenue increased 2.4 percent to 59.8 percent.”

The CEO also pointed to the climate in the U.S. as another reason why apparel doesn’t overtake shoes as the top category.

“Apparel penetration in U.S. would be always lower because in [the states] because you have a significant part of the country where the weather is hotter than the one we have in U.K.,” Schultz said.

Nike leadership on Tuesday doubled down on renewed efforts to win in running, a crucial category that has eluded the brand for several years. But some analysts say it will take more to get the struggling athletic brand back on track.

“Nike is a running company,” Nike chief financial officer Matthew Friend said in a Tuesday call with analysts discussing the company’s first quarter results. “It’s incredibly important for Nike to win with runners.”

Friend, who led the company’s first earnings call since it announced that CEO John Donahoe would step down and be replaced by Elliott Hill, told analysts that Nike is diving headfirst into its running “comeback,” which will be fueled by new innovations in product and a focus on new distribution channels in run specialty and sporting goods. These efforts come after several quarters of Nike losing share in running as competitors like Asics, Hoka, On and Brooks gain steam. On top of that, Nike has been criticized for a general lack of innovation and has undergone rolling layoffs and leadership changes at the top.

“The heart and soul of the company was running,” said Burt Flickinger, managing director and founder of retail consultancy Strategic Resource Group. “Nike got away from their strategic foundations, which is compromising the company operationally, financially and in terms of market share.”

According to Friend, Nike’s running presence is already on the upswing. Men’s and women’s running footwear grew in Q1, and the category’s order book for spring 2025 is set for double digit growth compared to the prior year, he said. Friend also touted a new marketing campaign that will display running product throughout the fall and holiday seasons as well as product enhancements like a new maximum cushioning system, new trail silhouettes and new franchises for under $100 a pair.

Analysts, however, cautioned that a fix in Nike’s running business won’t be enough to bring the brand back to its former glory. At least not swiftly.

“It’ll take them more than two fiscal years to course correct,” Flickinger said. “And even then, competitors have such a big lead that Nike is so far down the proverbial track, it can’t even see how far ahead [they] are.”

BTIG analysts Janine Stichter echoed this sentiment in her Wednesday note to investors, in which she touted Nike’s investments in new models for the everyday runner like the Pegasus 41.

“However, we note the company has lost significant ground over the years in this channel,” Stichter wrote. “And [we] believe there is still a ways to go before they can meaningfully impact the growth of disruptors like Hoka and On.”

Jefferies analyst Randal Konik also welcomed Nike’s new investment in the running category, but said it would likely not be enough to offset broader issues at the company.

“Nike has witnessed a positive reception from wholesale partners on its new running styles,” Konik wrote in a Wednesday note to investors. “However, we believe this is unlikely to offset declines in other businesses, as reflected in Nike’s Spring 2025 order books, which came in roughly flat. With share losses in running likely to continue, it is too early to get excited.”

Konik added that it is likely that competitors like On, Hoka, New Balance and Adidas will “continue to innovate and gain shelf space as Nike attempts to reinvigorate demand.”

Nike offered mixed results in its first earnings call since announcing that its CEO John Donahoe would step down and be replaced by Elliott Hill.

In addition to announcing results for the first quarter, the athletic giant said it would postpone its widely anticipated Investor Day, which was scheduled for Nov. 19, 2024. A new date has not yet been released. The company also withdrew its guidance for fiscal year 2025.

Shares of Nike were down more than 6.5 percent in after hours trading on Tuesday.

For the first quarter, Nike reported that revenues were down 10 percent to $11.59 billion over the same quarter last year, short of the $11.65 billion expected by analysts surveyed by Yahoo Finance. Net income was down 28 percent to $1.1 billion and diluted earnings per share was 70 cents, which represented a 26 percent decline. This was ahead of the 52 cents expected by analysts.

Nike chief financial officer Matthew Friend said in a statement that Nike’s Q1 results “largely met” expectations and that there are already signs for future recovery.

“A comeback at this scale takes time, but we see early wins — from momentum in key sports to accelerating our pace of newness and innovation,” Friend said. “Our teams are energized as Elliott Hill returns to lead Nike’s next stage of growth.”

Despite a generally positive reaction to the CEO news, analysts have broadly taken a conservative view of the stock, pointing out that big picture challenges persist for Nike. Some suggested in the last few weeks that Nike could further cut its guidance for the 2025 fiscal year as it implements a longterm turnaround plan.

Given the CEO shift, Nike withdrew its guidance for the year and will provide quarterly guidance throughout 2025, Friend said in a call with analysts. This approach is mean to help Hill embed in the company and determine how to reposition the brand for 2026. In June, Nike cut its fiscal year 2025 guidance and said it expected revenues for the year to be down in the mid single digits, with revenues for the first half of the year down in the high single digits.

Though Nike declined to give specific guidance for the year, Friend said that the brand’s revenue expectations have “moderated” due to digital and retail sales trends. Q2 revenues are expected to be down between 8 and 10 percent.

By brand, Nike brand revenues were down 10 percent to $11.1 billion in Q1, driven by declines across all geographies. Converse brand sales declined 15 percent to $501 million. By channel, Nike direct revenues were down 13 percent to $4.7 billion. Wholesale was down 8 percent to $6.4 billion.

Footasylum reported a year of record growth in 2024.

The Aurelius-owned shoe chain announced Wednesday that revenue for the year that ended on Jan. 24, 2024 was up 7 percent to 319.5 million pounds, ahead of the 297.9 million pounds the year prior. By channel, online sales were up 15 percent to 134.9 million pounds and wholesale sales were up 87 percent to 16.8 million pounds, driven by the chain’s portfolio of brands that have spurred international growth. Online sales now make up 42.2 percent of all sales.

In addition to its sale of popular third party brands like Nike and Adidas, Footasylum also sells a mix of its own brands such as Zavetti Canada, Alessandro Zavetti and Monterrain.

Operating profit for the year increased 61 percent to 10.4 million pounds and profit before tax increased 112 to 6 million pounds.

“We are delighted to report that fiscal year 2024 has marked Footasylum’s best-ever financial performance,” said Footasylum chief financial officer Nick Scott in a statement. “We achieved record revenues and profits, driven by double-digit growth in both wholesale and online sales.”

On social media, Footasylum’s following grew by 1.4 million to 5.8 million total followers, driven by the chain’s fourth Locked In reality series that reached 37 million views and saw over two billion impressions across all platforms.

Scott added that the chain has invested in technology for its omnichannel experience, has expanded its brand portfolio and has carried out a robust store expansion program. The chain opened a new 20,000 square-foot flagship store on London’s Oxford Street last September and has opened several other large stores since last fall. Footasylum also recently started using a mobile-first omnichannel tool to help guide the customer journey.

“With strong momentum across the business, and the proven success of our ambitious growth strategy, we are extremely optimistic about Footasylum’s future prospects,” Scott said.

Footasylum noted that its strong performance has continued into fiscal year 2025.

JD Sports Fashion Plc previously owned Footasylum and sold the chain to German asset management firm Aurelius for 37.5 million pounds in August of 2022. In March, Footasylum named David Pujolar as chief executive officer. He previously served in leadership roles at AW Lab, Adidas, Foot Locker and Tommy Hilfiger.

“Footasylum’s continued strong growth underpins the impact of the bespoke guidance that we are able to provide with our team at Aurelius Operations Advisory,” said Tobias Klaiber, managing director at Aurelius operations advisory, in a statement. “Our specialists support driving success across various aspects of the business, from working capital management to operational efficiency and, most importantly, growth. We are particularly proud to see the strong management team thriving and positioning the company for further expansion, aligning with Footasylum’s strategy: transforming into a disruptive entertainment company and leading brand incubator.”

Caleres is lowering its yearly guidance following a reported sales below its expectations in the second quarter.

According to the St. Louis-based footwear company, net sales in the second quarter of 2024 were $683.3 million, down 1.8 percent from $695.5 million in the second quarter of 2023. Net earnings in the period were 30.0 million, or earnings per diluted share of 85 cents, compared to net earnings of $33.9 million, or earnings per diluted share of 95 cents in the same time last year.

By business segment, Caleres reported that net sales at Famous Footwear increased 1.5 percent in Q2, with comparable sales down 2.9 percent. The company’s brand portfolio segment saw net sales decline 5.1 percent in the quarter.

These results missed the company’s Q2 guidance, which were expected to see net sales to be up 3 percent to 4 percent with earnings per diluted share in Q2 expected to be between $1.20 to $1.25.

The miss led to the company’s stock dipping nearly 19 percent in pre-market trading on Thursday.

Jay Schmidt, president and chief executive officer of Caleres, said in a statement on Thursday that both of the company’s business segments “fell short” of their potential in the period.

“Our systems implementation led to lack of visibility that prevented us from delivering our expected results,” Schmidt said. “We also experienced weak seasonal demand and back-to-school business came later than expected.”

But despite the sales miss, the CEO added that the company’s gross margin remained strong in Q2, driven by the brand portfolio. At the same time, Famous Footwear gained market share in the strategically important kids’ category. Furthermore, back-to-school sales surged in August bringing the season in total in-line with expectations, he noted.

“We are confident in our ability to get back on track and have addressed the issues from the ERP implementation that temporarily impacted visibility,” Schmidt added. “We are also accelerating certain restructuring actions to improve the efficiency and effectiveness of our teams.”

The company noted in its earnings release that these restructuring actions will result in $7.5 million in annualized SG&A savings and $2 million in SG&A savings in fiscal 2024. No specifics of the restructure were stated in the release.

Following these results, Caleres is lowering its guidance for the fiscal year 2024. The company now expects net sales for the year to be down low-single-digits percent versus previous guidance of flat to up 2 percent.

Caleres is also lowering its fiscal 2024 outlook for earnings per diluted share in the range of $3.94 to $4.09 versus prior guidance of $4.30 to $4.60 and provides guidance for adjusted earnings per diluted share of $4.00 to $4.15, which excludes $3 million in restructuring costs expected to occur in the third quarter.

“Looking ahead, we are confident in our ability to deliver earnings per share in line with our revised guidance,” said Schmidt. “Longer-term, we believe we are exceptionally well positioned to execute our strategic plan, invest to fuel our growth initiatives, and drive sustained value for our shareholders.”

Designer Brands Inc. (DBI) downgraded its 2024 outlook after it delivered fiscal second quarter earnings and sales results that fell short of expectations.

Net sales for the DSW parent company decreased 2.6 percent to $771.9 million in the second quarter. Comparable sales decreased 1.4 percent in the period, while adjusted net income was $17.1 million, with adjusted diluted EPS of 29 cents.

The results fell short of analysts’ expectations that targeted sales of $816.14 million and EPS of 53 cents.

Shares of DBI were down more than 28 percent in pre-market trading on Wednesday.

DBI chief executive officer Doug Howe said in a statement that dress and seasonal categories were challenged in Q2, but overall sales declines were somewhat mitigated by strength in athletic and athleisure brands, the latter of which saw sales increase eight percent compared to the prior year.

“Our strategy successfully supported a solid start to the back-to-school season, particularly in our kids’ category, which helped us to exit the second quarter in a stronger position than we started,” Howe said.

DBI downgraded its outlook for the 2024 fiscal year, and now expects sales growth to be between flat and in the low-single digits. EPS is expected to be in the range of 50 cents to 60 cents.

Last quarter, DBI rolled out a new strategic business initiative to put consumers first while “being product obsessed and transformation-focused.” The retailer tapped Sarah Crockett as chief marketing officer of DSW in tandem with this new plan.

“We continue to believe that our investments across our retail and brand businesses will help us to accelerate growth moving forward as we sharpen our focus and optimize our assortment, our marketing, and our omnichannel customer experience,” Howe said. “With shoppers becoming increasingly mindful of their discretionary spending, and trends rapidly evolving, we want to ensure that we remain top of mind as the destination for all their footwear needs.”

Academy Sports and Outdoors lowered its fiscal 2024 guidance after reporting that sales were “more challenged than expected” in the second quarter.

The Katy, Texas-based retailer reported that net sales decreased 2.2 percent in the second quarter to $1.55 billion, down from $1.58 billion the same time last year. Net income in the period was $142.6 million, a 9.2 percent decline from $157.1 million in Q2 2023.

Academy said that it opened three stores through the first two fiscal quarters and plans to open a total of 15 to 17 stores in 2024.

Steve Lawrence, chief executive officer of Academy Sports, said in a statement on Tuesday that the company continues to make progress against its strategic initiatives demonstrated by the opening of nine new stores this upcoming quarter, new omni-channel enhancements, such as Door Dash, and leveraging customer excitement around the launch of its new loyalty program.

“For the remainder of the year, we will focus on increasing traffic and conversion for our stores and website, by leveraging our improved targeted marketing capabilities, and expanding our new loyalty program,” Lawrence said. “We will also continue to use our strong cash generation to fund the investments that will drive our long-term growth and increase shareholder value.”

As far as the company’s footwear business, Lawrence told analysts on Tuesday’s earnings call, that footwear was the “best performing division” in the period, with sales increasing 1 percent over last year.

“Kids and athletic were outperformed for the quarter, driven by increases in leading active brands such as Nike, Brooks, Asics and New Balance,” the CEO noted. “Work footwear was also a key contributor with strong sales in Ariat and Wolverine. We’re also pleased with the momentum we’re seeing in our casual business driven Birkenstock, Crocs and Skechers.”

Looking ahead, the company is lowering its guidance for fiscal 2024. As such, Academy now expects net sales for the year between $5.89 billion and $6.07 billion, which ranges from a 4.3 percent loss to a 1.4 percent loss for the year. This is down from the company’s previous guidance, which called for net sales between $6.07 billion and $6.35 billion, which ranges from a 1.5 percent loss to a 3 percent gain for the year.

“Sales for the second quarter were more challenging than expected, impacted by a tough economy, a temporary distribution center backlog related to going live with a new warehouse management system and by a very active storm season across key portions of our footprint,” Carl Ford, chief financial officer at Academy Sports, added in a statement. “We will continue to manage expenses and inventory levels as we focus on driving topline growth. We have a very healthy balance sheet and top quartile cash flow generation, which we will deploy towards our capital allocation strategy.”