Roots Corp Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brian Morrison - TD Cowen - Analyst : Meghan, you commented you said in the transcript that you continue to experience positive trends. Maybe just, I know you don't want to go into detail, but maybe just talk about the consumer behavior you've seen going into Black Friday and relative, as you approach the holidays? Are you seeing any change in maybe the basket size or the AUR? And then lastly, is there any bifurcation of consumer you're seeing with respect to interim demographics or by region?

Question: Brian Morrison - TD Cowen - Analyst : Right. And you can see in store the uniqueness and expansion of the product breadth. I guess in terms of marketing, you addressed this on the call, but I think you said $2 million to $3 million additional in Q4. Maybe can you just talk about when you look forward to next year, I think you're still in the assessment phase, but is there, maybe talk about the options? Is the plan to wean off marketing a little bit? Or do you maintain full steam ahead to further stimulate top line growth in order to drive operating leverage? Maybe just talk about how you're looking at that for next year.

Question: Brian Morrison - TD Cowen - Analyst : Okay. That's helpful. And then last one, maybe, Leon, the gross margin, product cost, and it seems to be an ongoing strength here. I get the lower promo contribution to gross margin. How are you achieving ongoing product cost? Is it sourcing? Is there more room to go? Maybe just comment on that.

Question: Brian Morrison - TD Cowen - Analyst : And is that a function of tariffs in the US on to China as well?

Question: Brian Morrison - TD Cowen - Analyst : Yeah, no, I'll take it off-line. I think it was going to somewhere else with that, but I appreciate it and look forward to seeing strength in the Q4 results and wish you both the prosperous holiday season.