@wpr101 thanks for the excellent and detailed summary. I don’t have a lot to add, but I do have a couple of observations.
Enlisting Billy Jean King as a representative is an interesting choice in that she’s 80 years old and they primarily appeal to a youthful demo. I think the primary reason would be due to the fact that she has been openly lesbian her entire professional career and an advocate of LGBGTQ+ rights long before there was an acronym describing this demo.
Also, you were puzzled about declaring product as inventory when shipped from China rather than the prior practice of recognition when it entered an US warehouse. I speculate there’s a couple of reasons for this bookkeeping policy change. They stated that product for the EU market is shipped from the US rather than directly from China. That might be true today, but if they change this and ship directly to the EU from China, they will have a recognition problem with respect to an FX situation. With inventory being recognized in USD when it ships the destination doesn’t make any difference. Further, recognizing the inventory as it ships would be pre-tariff. So far as I know, there are no current tariffs on cosmetics, but should that policy change, they won’t incur a discontinuity in their recognition of inventory value under this new policy.
I would just add that their guidance showed up in the change in stock price when they declared earnings last evening. At first, the stock price dropped something like 3% - 4%. I’m sure this was an initial response to the guide. A bit later, after the actual earnings report was digested the stock price moved higher.