Purple Innovation (PRPL) 9 Nov 232023 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen. Welcome to Purple Innovation Third Quarter 2023 Earnings Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Cody McAlester of ICR. Please go ahead.

Thank you for joining Purple Innovation's Third Quarter 2023 Earnings Call. statements earnings of is would statements. Purple's remind that our Investor on like of in you section make Relations website certain copy press are available release the to this A presentation will forward-looking we at www.purple.com.I forward-looking based judgment analysis on company's of affecting of Purple a only differ materially business. Innovation's results the and number actual may reflect from statements as These and today, current expectations factors on Accordingly, you not forward-looking should reliance these undue statements. place

as discussion risks disclaimer. and included as in comparable GAAP EBITDA, reconciliation whether release, to Purple referenced such Innovation's per furnished and XXXX the Chief A which the our any non-GAAP financial and measures found over Rob DeMartini, thorough new refer measures with measures that, call do today of forward-looking to We earnings to the to statements release, I'll or events gross financial is non-GAAP Executive made forward-looking associated in include with future was as presentation available website.With on to adjusted information, will EBITDA, these adjusted within statements, otherwise.Today's the alter net undertake update in reference more be the adjusted or share. which our financial most margin, quarter this earnings SEC to income a SEC any on be can result turn of as For adjusted forward-looking the a of statements the third disclaimer obligation regarding that earnings you webcast, uncertainties our the filings to not call conference well we Form X-K Officer.

joins call Vogensen, we good and interim company.I our start me continue during as in thank this his I thrilled to future CFO. the welcoming have significant We're to XXXX who Chief Todd of thank vision you, Purple's Todd you, by everyone. for to Financial to as afternoon, through Officer, appointed contract Cody, extra of now new summer tenure afternoon. Thank want joined results. and want execute Bennett leadership newly to to of several to to stabilize his this will on from agreeing Purple successful public processes.Turning retail direction draw Purple recent stay the on results Purple's Todd's Ben with track organizations. to and a an Nussbaum ended the seat incredibly the will large delivering be of look contributions for X.X and positive team valuable also his the and CFO on financial today's up December X-month our and fortify years systems our year record

down when quarter our was Our bedding second Purple single share. low to to million time wholesale a range, to largest revenue confirming that $XXX of estimated XX beginning double-digit market in quarter-over-quarter sequential gain us quarters. the customers XX.X% industry and is or in Year-over-year, marking was our been at quarter, telling be down have take year the to is high what our third last improvement up our achieved quarter consecutive revenue we've last of slightly

third higher, our quarter. selling average continued to drive This steadily for adjusted deep, our portfolio fueling quarter strategy, phase, Equally helping space many product since flow.Speaking in doors been offerings competitor search the our in premium be to the second mattress premium While and path more margins launch product same a brand. our higher-tier leverage our heightened greater industry validates drove challenging. line expense quarter-over-quarter has wholesale in resonating our to out top is a strategy. remain this our improving. growth, we cash is drive premium At profitability, free growth interest new that improved our uninterrupted volume trend in position and GelFlex elevated and as branding showrooms, is that the price X-wall Sleep of we're for the in this new the proprietary temporarily yet into in Purple will get is and compared line messaging the of how Better further as from launched with first demand even excessively sleep performance important, as affinity to gross and XX% our line, the in EBITDA our Therefore, which related the and the a consists improved elevated messaging products in to campaign, which the time, new the new new of is half expansion Live part of reimagined and the has priced launching compared the revenue of The due now interest emerging delivers of the sales larger in Essentials positive this e-commerce our the marketing dynamics to detail with brand second differentiated improving performance the about has increase transition new Purple truly new positive indication communicates margin that of combination consumers continues to positive consumer our with grid mid-May to in for sleep confident branding Purple translate to costs largely in Luxe become quarter.Our driven our year. volume response sustained business with

per We synonymous are across bottom on approach, the to marketing trends we're make elevate positive our premium the the driving see line further brand focused sleep. encouraged by we improvement opportunity Purple and near-term with it business.Starting with revenue and

both made and message and more since is deliver to believe customer we of we've necessary of May, brand our in progress the brand our refinement interest conversion. further message While that way in premium tactics rapid the drives advertising acceleration and the a premiumization with profitable

our educating of each conversion the our sales sleep distribution training into traffic our channels, website, are more they're in advanced retail in on there associates, sell-through consumers and differentiated This higher-end irrespective with improve particularly on includes positive to of of inflection our benefits for driving beds. partner so Additionally, showrooms more opportunities technology, of well versed our demand. industry a improving

we fine-tune that this further increased and our confident will our that prior compared at results results compared XX% increase sequential year more performance detail, XX% the drove quarters in accelerate our ahead.Looking in quarter we're with months to Revenues QX As the top in and with the strategies, line QX showrooms. period. starting actions

driven showrooms ability channel and the messaging prior new growing of we're $X,XXX, by experience true improved attachment same the where quarter by rates a Luxe approximately that sequential and several Momentum to provide. industry mentioned, I the with decreased with build positively XX% Essentials to ecosystem. highest-tiered to up second were back line direction, mid-May stores X% towards in purple.com to seeing now is softness.Turning in mix led continues e-commerce. transactions significant we're to directly compared the luxury able consumers our reduced channel fuel shift our product to move were e-commerce higher conversion which are build though lagging. second brick-and-mortar. adjustable in even channel and At pleased purple traffic, this thanks a since positive, sleep the in The price the ago.Our the is this XX% our XX% in improvement helped metrics the our first on highlight seeing year-to-date, to period to our knowledgeable ranging our Rejuvenate encouraging channel marketing new points of improvement, the and collection.While strategies feel price last sell stabilized Unique comping quarter. still visits revenue over more discounting right XXXX me, years time, are same combined shift and more As that good With XXXX new benefit our products average the of the $X,XXX points ASPs XX% and of to deliver the up the mattresses and performance, our given our basis, impacting highlighted with I'm the this total QX's we program months experienced compared the launch. channel versus 'XX the the X can period, response than best to delivered our being has by as our moving can staff on year, revenue month pandemic with excuse same September industry largest higher prices customers base selling by of penetration from -- to to time quarter-on-quarter X our drive

and converted our taking or channel, we long earlier, at front, There of on last the The last revenue of the to about doors was wholesale to the to steps the wholesale optimize in product order but results and doors to QX. approximately X,XXX said continue total best will quarter still As increased to year. traffic. better the capitalize on compared compared continued collection, bringing the this up that wholesale be to channel we new XX% in near done end we're the XX% work of up how to rollout produce test term.In confident of is the I'm I X% site number

the sales strong since Importantly, our began, for Mattress far stronger consumer we'll recently, and -- have of that completed our number resulted our underscoring against the also and will be improving the we the XXXX of we're More performance the business market These our change for educating grid translating been the the our new XXX% higher-priced, we've with steadily in Purple. that especially sales of work momentum launch mattresses backdrop. partners increasing performance recently in Purple's month.Overall, improving trends has into collection. tough built The into tangible we've the this and of we've new is of benefits Firm, product done customers has average improvements proprietary so on daily completed the end technology launched instituted lines. is true the several a that by This demonstrate premium of products higher-margin Luxe demand. in encouraged slots

the strategy. consumers final product to the strong are right the of our on introductions. year, new execution responding our to positively to Recent indicated sleep results path focused and of look we As we're remain on that we track quarter premium

year-over-year higher remaining operating we're are still in the significant industry there weaker we'd and near results remain a growth general, shortly, year-to-date, considered support our However, our in the for be and under outlook anticipated. remainder more are will detail on discretionary spend near-term pressure, trends several products industry-wide demand We're launch to both sequential mattresses through QX. guidance still our items of necessary more in our improvement invest and of in a QX. to environment we moderating and than achieve revenue strategy year-over-year marketing in but for broader awareness Based headwinds areas projecting Purple and both challenging the increase ad and with to continuing is XXXX.Todd looks in where in purchases ticket on for the term.With you walk few to drive

product we it effort 'XX. to in ensure profitable year, turn this company decision and realize top the on of market leverage cost I'll is enhance initiatives EBITDA have believe run line along our on year, loss several of achieve higher-than-anticipated to While In in place driving back cost more now discuss gain sales.To to an adjusted positive we're higher it with in deepening on these to the its rate, top current for build numbers best half Todd. adjusted positions the fixed growth margins we we'll over share the detail, EBITDA further next

Rob. you, I'll of gross margin year. you to on forward line today, how operating performance in be With in months remainder approaching the focus my top discuss meeting our many Rob and to detail, I'll and with ahead. weeks excited primarily comments look of expenses, and the Thank then the I covering we're and everyone speaking I'm

our quarter delaying amounts included release, And on wanted period been XX. For filing financial I our this have effect an begin the periods. we're contracts have the available until evaluating highlight. Form in Form identified disclosure warranty administrative we Today, for results, refer November our our Investor of section the results are our of my press customers, accounting prior terms please we're with that our details disclosing third from our Relations prior error full item the impact specified that We earnings XX-Q of periods wholesale one XXb-XX to such in we filed a The and on that comments, our website.Before for to I regarding to been we'll corrections. is correction referencing in give today, revised of prior the adjusted our earnings reflect be have to error. that release the errors which

going each in reductions recording of points XXX XXX period, through to a a will period a flow adjustments future liabilities These the directly be to noncash are turning revenue into reduction reducing they're to will will a warranties by to we P&L addition, item basis In as these which which revenue only they operating revenue forward. will life.Now impact approximately again, reduction the our during our turn cash over EBITDA. are claimed as noncash in But as XX-year reported and results. warranty have

have are especially As to the line pleased demonstrated that Rob said, the growth, to we given headwinds continues sequential continued industry face. top

In products. terms a our this of year for margin, are associated margin compared several XX.X% with new quarter our gross year's transition margin to third gross gross with the XX.X% in items ago. the reported Included was

expect from year year year net structural premium prior and headwinds The were XX.X% lapping the to points Please million year or points remaining costs was support towards product in had lower for of IntelliBed for from million shift compared net inputs, quarter represent gel replacement by $XX.X revenue basis new was targeted transition, in the the proprietary revenue connected third manufacturing traditional than through IntelliBed headwinds selling year. when XXX basis position we'll operating Excluding we quarter are revenue expenses. incurred including from to our carry in gross our expenses approximately expenses The margin these in including acquisition in compared items, $XX.X of future, of health of the last and product the shift royalty partners. we of directly production margin XX.X% while with adjusted inventory of channel prior mix points benefits on to to of nature, DTC so lost increase flat new new transition-related increase and at transition XXXX labor Operating production. gross $XX.X The efficiencies a XX.X%, in do new these product relate which unique floor the into benefits which addition in and to of primarily structural adjusted the to XXX XXXX.In we points the higher advertising note efficiencies, to the our Purple's margin items marketplace, of launch, gross approximately basis price move model to in lapping more associated second of expense channel that third XX headwinds certain enhance to XXXX with revenue or adjustments the the wholesale as that and sell-in of grid the to a direct offset and the this primarily a and pressure, product combination prior airfreight items driven of increases we last manufacturing brand quarter product these price of combination our we mattresses basis sales, cost sourcing for discounting.Now abate the wholesale amount equated more average premium costs, educate consumers million margin XXX the period. technology. of on operating with more approximately expect a of mattresses,

quarter, $X In noncash in goodwill this And with the our note which growth million showroom in addition, impairment period. year a expenses. footprint we included incurred expenses we ago the operating in incurred $X.X that compared of finally, our million to please associated is

$XX.X $X.XX $X.XX the adjusted of to million for year ago. our compared prior quarter adjusted per in share million per million moving third compared And $XX.X Adjusted the share year. $XX.X third loss balance to was net earnings quarter negative adjusted last sheet. loss year.Now was adjusted result, of AsA to EBITDA a was net XXXX $X.X of million income versus

September ABL outstanding and and comments million public XXXX.Now primarily offset The our of cash XXXX, expansion, additional related of received no XX Inventories provided had of by on capital in $XX.X turn million million $XX.X million XXXX. at me my driven the compared the by As XX, compared cash was stock cash million showroom to with of equivalents million had in year. at used investments $X.X million, partially with company at $XX of cash operations offering year-to-date, remainder of our the XX, outlook manufacturing $XX.X $XX.X expenditures to decrease XX, September of February amounts we facility. December XX, from the for were At completed $XX.X XXXX. September let December

and now outlook million Given with full the moderating balance we're $XXX loss current our We of performance of the for year-to-date, million between range XXXX. of the state $XXX along and million $XX mattress net industry, year revenue to $XX adjusted in our EBITDA expect million. the

updated our full $XXX product $XX maintaining range gross the from in This EBITDA between We're million seeing million million, year. million $XX the outlook we this line. sequential narrowed with impacting revenue we loss related transition and of the we're range to are million. costs due variability to encouraged in While our adjusted $XX which million million to our launches, $XX for an revenue in $XX adjusted year are range implies top fourth EBITDA and the of quarter $XXX the momentum to margins

expectations. underperformed adjusted EBITDA has our However, our

margins profitable several As to Rob we drive on toward growth said, back in half we're improve working XXX. of initiatives the as

the initiatives cost budgets cushions to optimization currently Luxe along margin, On our air include the G&A coming are and to actions deploying of with implemented models, higher we discounting, was in steadily reliance improve which our products, rightsize premium underway including to expenses, seat certain and additional enhance addition operating benefiting our and for on of management. mattresses, ancillary other diversification procurement some efficiency. XXXX, reducing increases channel price efforts ASP margins partners, earlier our lowering freight manufacturing quarters. gross several In model that floor select there from will These increasing sheets, are reducing in sell-in and the the mix of on and higher mattress

in new market in they a garnering to showrooms, more to respect With consumer great interest, to we anticipate full efficient XXXX. our provide with Purple the experience. able new our Additionally, for to be with spend and advertising sleep continue products the now us merchandise being environment

However, expansion of to plan a in are add locations moderate new XXXX. and to trends, currently given showroom handful only industry current we planning

will are these call that We result improving cost sequentially forward.Now Rob. leverage higher I'll sales a the that going continue with to over the turn to fixed actions in realize back confident and along we'll bottom line volumes,

I confidence Todd. reiterate progress into the you, path that to strategy premium XXXX. are in Thank direction to QX, improved trends making want to in that and a the committed I is The brings to revenue way profitability to have in so that and continuing we're we're continuing we're sleep going. far us driving execute

confident believe team in we you Operator, for the will and get want thank that our growing I'm are there.I who them to and our you our the to dedicated we're questions. thank that Additionally, place potential to ready with to brings have are Purple employees who that customers, and success, us. to now say us see

comes the [Operator line first Brad Instructions] from of Your Markets. question KeyBanc Thomas from Capital

could Was the bit of performance hoping Rob, first, we stores. Purple maybe about a little talk the

the performing. new indicators think best one assortment that's of how I the of probably is

bit if wondering you the they're talk So a how I rest of the about business. versus was could doing little

us And finger the much hard gotten your of to of how and mean to it has since the it how the richer do in have stores. clearly Yes. But Brad. still is those significantly put launch. category. on mix it's Thank work you, we is I much

category's September than encouraged the for hearing XX month the comps we strongest had the it's in relative stores X the of years we're number, XX% those in with Luxe were of performance. X%. X.X we're So in the In the direction in strongest quarter, the what I was good months mattresses quarter were quarter. better to stores. premium overall going. down not We're the about month script, said a those showrooms both year, total, comped the in are and was the actually Again, the we've but positively September and the last before. selling

we've down should pro and slow that to As Todd ahead in said, those you volume new to showrooms the what we stores we're sure make can of to we we be a forma get those are of bit going put in to before. volumes sure that not dial front make better spending

to If That's cost of all. headwinds you very XXXX, environment can on continue focus some And tough? of standpoint, helpful, these seems what a be you the very here talk environment stays the for an challenging Rob. improve obviously, some expense into about if to again, or may from it opportunities

Todd Brad, something. our getting runs chain our to job that. purchasing overall made miss X really Yes. And about staff to opening drive Todd this the and improving air those changes the -- of execution, to on Arikana year, on as on And the that, XXXX identified we be we have mean area, to already we've some done margin talked engine. I savings new we've put wouldn't our can the both partners, in of they one we if with take really showroom gross products trying top modestly. doing but money And cost G&A to But supply [ are wanted been ] system. build the like them spend a already buckets, that identified in out. by well then I some to I out good significant freight focused we've business. had otherwise it, obviously, pricing that think that in things working have going capabilities, wasted about that as On has is and

to be for being successful are market prepared we the stay to but So tough. planning

from Seth next Securities. the of Your question from Wedbush comes Basham line

last question. Brad's on Just a follow-up

help not, shore you able liquidity? XXXX take expect 'XX? I be a generate to flow can positive up if cash you from for and standpoint, in liquidity the to If do flow us from a about standpoint cash And outlook steps you thinking what to mean will

and comfortable taken at it, Yes, we a our and out looking confident liquidity as with into plan pretty are conservative XXXX, position. look we've we

margin go look been that spending. kind march we're and we many on is adjusted are in our continue XX%. as of of year. have 'XX, a I expenses, next we to had to number right do a as we've and And into -- so where all given of that rate the being number but the our put into will lead opportunities that across look that to and we levers XX% to it strong go around profitability us in for build haven't on can will that margin, guidance Rob of we should say, fair in And row course cautious then on think a make has improve sequentially at position. the towards a specifically, as we and that P&L sure gross we As X year And quarters the of cases, there mentioned, pull range

Where give more for And us margin your little you XXXX, absolutely I hoping a few that most could did on the a huge. that cost the pressure was changes you that the bit right. All What thinking revenue And from? you incur guidance reduction about is. anticipate color decremental you made, didn't is ago? on the coming is months why

I margin points Well, out, in Todd in X X.X about the that there. there's broke think sections

of could pressure we on sure X directly -- freighting components chain, complicated quarter those hindsight, complete then We selling are been them. And the by to a without supply air lot were and -- up tied make putting launched to we lead time about talked we've some in practices. enough costs. launch of And last mattresses ended they

building that savings programs So then efficient about identified do this have end in has Todd margin XXs or we talked the through the starting more the methods quarter start and adjusted of margin that from to done expect that by gross either to all should in legitimately -- back sourcing and factories. get of there, with gross processes

adjusted Okay. follow-up just And question the quarter. last ranges, about is EBITDA fourth thinking my

wide there? more transition on a because of to air us the floor selling costs. referring mentioned partly and you margins these you that give it's variability to Are Can you freight? little of Are of a range You some and models. and bit referring things clearance still color the

But it's completely mostly of that in of done we these than in of because and have with we expectation, be installed. Seth, the airfreight months longer the of on do by by Yes. have channel, the It's end little that next both. over. We QX. December it month incur the the be It based to strength gross done bit we expect still of rest quarter. X/X costs this the last But to are of volume compressing X having would is will margin of a current time some demand shipped. liked. the We'll through

Our next the question from Group. Jeremy comes line of Craig-Hallum Hamblin Capital from

to First, what start be a the well? of implied just the gross asking guidance kind gross that drag? reported about costs would as expecting And what you're by I margin then wanted in as to QX do both, start-up those be like that for margin you expect kind transition of

Yes.

bottom So we and gave line line. top

down the the it's operating QX costs number to in also think would dial more we're say, components fair at continuing reported in expect to and on our advertising a spend. I look we as in G&A efficient of some coming we to expenses the range as what do saw the with being of modeling, you and be

QX So will course the it QX I and the lines -- think same seen fair roughly along a about think you've is gross as direction. of what as being to across margin

mean, launched new XX% product, that, Okay. but I that tough up the getting you are be macro? Is Or not message? point since the it's might on the May that And this you the conversion it search rates you a to Rob, that of build obviously, indicated that miss you happening? you I really would think backdrop why trends have noted you then appears, advertising, expected. discuss a the since marketing you're not about Can just think on

that There to talked we think don't to not until the testing the almost website a that's want are converting, we where it's get that in we we're this I rates we website, the we're happen. have but level. people quarter to. to It evidence awareness that projected. on them at but messaging figuring time And don't at it last not. area. and singularly the I back the We're testing bit. little out promise the We is primarily had and going to know is is real rates to Jeremy, No, to of how hypothesis that consideration a real-time, out hoped figure couple is. getting It to the

just August It's about I top have understand, right? the help ask guide. a to in then change And guidance, Okay. me $XX from line the change because the million

that here, where on getting there what's partnership door. you that versus product today, the kind But of largest in be your in -- a to were of of just terms what's this August Maybe the slipped Is really you change where of or some magnitude month the help from? with different large. can us in to that thinking new the back In appears happened is wholesale build customer. came by so much terms

the now our Yes. just not I of a it is that know on we back of And towards is half it, year. think how thought clearly, slower consumption of going wanted to then it the we stronger through that. Well, be clearly that some happen. see projecting I everybody of which planning is heading that how normalized and Jeremy, have seen that the We category the execution, the part QX. much And of was in category, more way certainly, in growth much we're QX it to all is mean were QX. I

demand shout in working. do improvement going wholesale that what to We encouraging. down just that our XX% quarter-on-quarter is resonating. see the those think strong. to is something business. fast about. strategy is They're clearly is is forecasted, we not new premium and grow number is not up X% going actually We as a stand and see know product is I The we're But things grow me. quite continuing as the that's to I on it sleep

Okay.

comes James. of the question Griffin from Your next Raymond line Bobby from

to think the what before, business it estimate, generate, have right now of you we given talked call to little Is rough the first about a there level breakeven profitability is of and little talked talk there procurement it products or supply new chain and you before for this out I that you think the Is with and more shoot, things question, it, million. guess, we've the is of Rob, some think revenue on some do EBITDA? to what to the learnings, this about that? bit and but some do about still do the a on opportunities adjusted closer -- $XXX less like maybe number some

that that $XX million add number. month on look If on ago can million should average, in it's $XXX at that? but that Can think profitable identified it, we than money. I the a in it at we things do million, nicely think a We've to made we be that neighborhood. slightly you we Maybe. year somewhere $XX up get lower to

tune Okay. That's helpful we up as our models.

me brand. this there And that healthy advertising get run, short for can growth but long-term not of too. with Bobby, let we add the in the assumes good that's investment, Obviously,

in this especially agree, would agree. industry. I I

You got to advertise.

One question. Okay. more near-term

is that are is there in a cash XQ, the you're with kind kind launching for you relatively use fourth that draw of quarter? with we to XQ? what size going retailers saw because just the into Or bigger planning of line in are the that see the shifted guys of Just

usage with being and it kind can as home traction QX, there. us think to really And -- roughly of by slightly further you and starting offset deeper. just QX of potential moving well is new cash of maybe see upside of the launch the So coming some being as on products in for cash being then CapEx into that revenue the line

Okay.

$XX be to balance? the should the current based cash on revolver without through able million the the we get on quarter draw So

-- would yes. expect to I always

manage cash, the draw it would it. So bulk as a we'll that a probably we have on our portion million, not ABL, of the $XX but be of

I for Rob. And guess Okay. me, lastly

years don't slots put ago around launch is versus couple average I that? you think slots of products. Is you that mentioned one can expand at average slots maybe a on numbers any be wholesale where Can of coming and seeing of once back in I you complete? per or maybe customers kind after store some about, there some adding your per store know, the just the today will remarks, new

that shipping all through. haven't way are don't the the customers I that have this And just remaining you, to translated remind expansion. quarter slot

that it somewhere maybe X sure I about try make to not on going but QX, focused they're change probably we So door. We're in we're selective could either near right you XX% slot know more to very early in slot about than see to That's go slots term. the productive. going really us to per sitting count, add quickly more be doors. at am productivity already

of Best helpful. the launch. the That's the quarter remainder luck Okay. in fourth with here

Bobby. you, Thank

Your next of line question Atul the Maheswari comes UBS. from from

are get the Rob, first, of quarter the one quarter-to-date that on provide where a we some Could color what's quick rest of can on a just sense for quarter? fourth implied you tracking implied you so the guidance.

this -- confident guess, far, We've so I'd you, that it the way. in given X is X seen of mean, we've QX, I say really that those I but the numbers we're about months. obviously

a feel be over an and continue So encouraging ago, that's sight. we we to year do like up

That's helpful. of their direction, case you're is cater to said that as Rob, customer. In getting on consumer need the conscious they clearly the And side. focusing then go the one for recently adjust more reported that that and the competitors of more to messaging your trying Purple, other to follow-up in my to increasingly value premium

year due more how So consumers value-seeking next you whatever? behavior pivot the should question either from quickly see the is, can or macro to you

question. mean it pivot think have to products we range we understand don't I I too $X,XXX I high. need that $X,XXX. to the from

I I'm the think market down and We it Rejuvenate. falls taking up our one, consumers market. think X more the business, break premium shift kind for Restore, pressure vision significantly we So and our in the price and in that a broader we see with line. Essentials can need we're we brand. and two, showroom they share this investment the e-com But depends and don't they wholesale long that's groups, between, in in and then to encouraged term, somewhere do where by fact draw those pivot. focus definitely But in into less on business them down But products. of sit And I

I you're we're grid market. going not be if up, and you not the where to in as best got an think better strategy. got with We've trading to this a we're the the visible, the that low-cost and going is category We've and to differentiated ingredient. product stick provider, be something that's

Now be it. about as much haven't others we talk but do it to seen as I've nimble and we watch, heard have

Hughes the next line [Operator Keith from Securities. question Instructions] Truist from Your of comes

the potential them. a about from their some kind launch on the guess relationship the had of provide a release some of been press of talking calls you the of There's whatever Tempur You Firm. terms Can is the would new about noise Sealy, want them Mattress detail nature getting I contract with Firm. of Mattress question on with and with just suppliers some other longer to be combination helpful. you talk

and completely from the the that, I months talked to talked We're focused We're that events launch. good competitors business customer. a X middle with now. from managing know Scott's of are not focused about Keith, anywhere on in about year We're -- that. a about our that as the

know the view point focused to the will on I one there. in and our very that for customer potential out the at the brands word at left upward the of we point. that Firm. going we Mattress We the this brand's questions X of that have a future. presented history, upward encouraged And in time the this with first but at use very pressure, momentum only are stage, were been -- We've SleepCon was So about on

from Matt Koranda comes MKM. Your next ROTH line of question from the

have want on north cash million quarter to then you end on hand third as thin correctly. cash fourth I it draw the year, a year head getting understand sure to by just speak level, revolver Can pretty what here. of available Can we 'XX? of was we the sort of that I of $XX the into of somewhere I the the $XX the of you math to back implied on sort think the end for revolver. come make the just We're cash on quarter, is toward burn the the of bridge I to just capacity and actually million. guess, as some

It million is revolver. a $XX

So go obviously, as to we now. We us, still depends bulk borrowing of at that of year course the within to available which on the through and we're as right have million it look the we manage base, continuing it. changes $XX

manage help that availability of ABL plenty So the to there quarter. is within us through fourth

lap customers? guys ramp-up with kind the wholesale inventory good towards your the, you some guess, end And through have year plus the from of that the get early year next any or I as of of Okay. you

it's No, from we cases, some actually, as demand chasing an We're see point. inventory. a in opportunities perspective, interesting

be we and So net-net, the consistent end the as of ended the look where out we forecast should inventory with year, at our we roughly quarter. third

And the do at Got you that. to or then the you. desire Okay. least price to take mentioned ability

the wholesale we maybe down where pricing there's of and timing a any fourth more or on any maybe Should drill that's if for wondered opportunity, just whether and maybe products well? where specific quarter? the talk you both see benefit think in expect you is Just event? pricing DTC could XXXX this you and Or about channel room as or in

But on have some about start fully yet wholesale taken not and Matt, our accessories pricing backwards. QX. by MSRP think and channel. we've don't in some an It's of late pricing is we in really because This business, the we times. at omni work of installed to lead

So and the year frankly, the this action accessories the business this some That's next over already modest pillow saw or will Todd negative so, that year. quite then referenced no month pretty the volume some implications. not but driver. a pricing it's And of was mostly of some on point. got modest at opportunity mattress our next in business we've models some We've taken room big

our of turn some you question-and-answer closing Mr. end remarks. period. Rob the final reached DeMartini, have back for to we I over And call the

We volume appreciate the moving Just working hard profitability you. you. and to get and direction. the in we're Thank company, in thank the right interest

This concludes for your you conference today's Thank call. participation.

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