Purple Innovation (PRPL) 12 Mar 242023 Q4 Earnings call transcript

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

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

today's to thank CFO, With me questions. Brendon, call up Vogensen. we'll call our open you, everyone. After your afternoon, and good and remarks, prepared is you, the Todd Thank on

transformative partners. XXXX.Our quarter encouraged Encouragingly, consumers we're new it quarters wholesale taken than we an shoots saw and from product the fourth advertising lines both has each was response the showrooms third and year-over-year quarter distribution year with last XX% gained as also comping last positive sales channel e-commerce XX positive, stabilized and nearly quarter channels, of performed locations of that quarter compared with the to weekend, Black a quarters, lower with what extremely and for recent wholesale, all we originally fourth Monday outperformance a our holiday registered fourth more us performance continuation relative up were sequential sales first quarters quarter Supported over guidance the growth. also quarter and continued year. despite in X The were our the over QX consecutive in trends sequentially This seasonality, by Innovation. after the into our industry to of industry to and QX from represents Friday/Cyber period channel longer in slightly Sales in the showroom of the flat finish was with advertising While year-over-year sales anticipated, few our year-over-year traction.Wholesale initiatives total e-commerce, spend the green to at have encouraging the line holiday growth the year time for increased than increased rates. in mid-teens positive by well X. marked declines, this further and our Purple

momentum new Restore we our despite product premium year adjusted share positive X luxury our was capturing new We progress models engineering industry launch building market sleep embarked category. for sluggish on the with to Rejuvenate company our new introduced improvement across drove in XXXX. and executed recap Rejuvenate, our in history. performance, innovative and our we company. a bottom mattress improving the including a collections, goal, we've premier the premium in line, sleep. EBITDA process most $X,XXX began trends, GelFlex elevating to year, the made largest, establishing to at X-tiered aimed sleep the We formidable delivers our To challenger brand for path "Sleep strategy, month offering, of brand a campaign, the range.We our Purple December.As meaningful against a and I And a Better. how Purple.", launch made as significant points sequential deep, for into of repositioning line and the manufacturing, price communicates Live simultaneously as which enhancements Our new this $X,XXX the transformative chain supply premium said, Purple top Grid with of with combined XXXX product uninterrupted including proprietary

of onset spending ahead period the the of launch new elevated a products would in the in awareness and interest months differentiated and after benefits brand.At of XXXX, expected new we Purple nearly we launch our marketing transition, second the the declines. of half an mid-May investments double-digit consumer demand XX with to support the industry coincide and reduced of uptick Following of our advertising the in enhance

has growth to in rebound, top unit by industry as bottom year quarterly progress made and results. While line as we steady sequential improvements the evidenced unfolded our yet the

approximately enhanced in dividends in total our paid XXXX. of investments increased channels.With brand across materials XX% innovation, building Our distribution product number respect we to our point-of-sale and marketing, including floor slots wholesale, have by

partners We control together. we opportunities the In our the for will forged showrooms retail selling our retail products we has approach had to More businesses our trust our grow of forward. we process, that remain where immediate going the growing to we've productivity partners of launch taken presentation have relationships and the with through stronger collaborative believe gains lead grateful higher-priced, and the impact. most door importantly, higher-margin both the

consumers offset teams our the e-commerce Our launch. fourth comp increase an achieved it post mattresses, a half and average second majority shifting in selling channel our mattress helped returned of upselling stores traffic quarter-over-quarter points our stabilization higher price, softer have more showed Restore driving in into to moving first price XXXX improving of in good the job and half. towards industry in with territory the These the encouraged the positive we're growth quarter.With the trends done and brick-and-mortar, industry-wide our sales and of Rejuvenate the transactions

and marketing strategies experience.Below Our an some revenue is company user impact to profitable to recently, thanks positive we've important traffic site on drive purple.com of conversion, made and more ensure adjustments the uptick to we also new a the the in line, seen the to product we've had progress made positioned growth.

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and we're doors. wholesale existing productivity on First, improving focused showroom of

an line has cost XXXX slow existing expansion the of emphasis years, for showroom few growth door last and the been profitability initiatives. showrooms top While new and prioritize will in through

bigger that purchase revenue consumers arrangements, enhanced intentional conversion, shift for a cost their profitability. journey.From look per and perspective, in focus opportunities selling to align restructure level drive leaning channel up current and with average customers products and bundle to we'll the are third-party higher especially tickets a better both environment our to current financing also higher-tier overhead, bases. stores as in by accelerating like sales consumer on trade and the smart into we new focusing of One approach We'll is including already offerings more selling how and we're leases to into with our of store rethink on our a

on the serve vehicles showrooms, to both stores stand-alone growth ones addition In form traffic for that's advertising as a a our demand driving of and basis, being mattresses. partner our into in our overall areas, profitable high-traffic especially

Our synergies the at XX% The first didn't went education subsequent and their a visit showrooms, to premium those a our on recent provided past that then one consumer we're potential store to shop wholesale, high-quality, by research partner consumers doors.With purchase showrooms to in visit. made aiming indicates partner in-store make experience who year drive our approximately of in increased great a on wholesale through more XXXX. either while create directly to of high-intent one we've a to relationships, purchase, productivity wholesale the respect over our our even creates or strides door with

while to look growth solve partners co-op our more will marketing support, business monthly conducting for We joint with ] [ quarterly and and dollars revenue reviews to together. leverage provide also

sales our we'll unique continue around results. on retail Gel efforts.Our look our mattress test we product XXXX, to area of the better brand technology continue improving messaging they grow direct different efforts benefits for enthusiasm continue help conversion. Grid drive ensure to different to alongside will mediums and for e-commerce understand second to of focus Additionally, conversion to is In the Purple education our associates and

by the now of sourcing a brand sequentially in spent also certain and larger are XXXX, strategically product but are of to in freight of to and market, conversion the to and the Premium traffic quality portion improve mentioned marketing in products, effective driving in initiative position. we steadily rates, a innovations to that technological higher and drives to video.And drop gross Several our our copied new and continued towards our our initiatives our we media Officer, With of support cash both recent we that pleased as the growth.I'll a significant and of now building, our financial confident to new margin the improvements our for mattresses, to to customers models debt with strategy to are call spending. currently and development. focus the our our the months a quality in outlook ancillary the our with path website we in average we sheet. significant to there will include discuss property reliance next strong over innovations efficient Jeff the refinanced focus opportunities in we and awareness the duplicated some that the premium innovation the several also over comfort ad efficiency.Fourth, currently Along as and never this the but launch flexibility margin, provides increases our egg dollars added we sleep. facility last and our our to lastly, not margin initiatives reducing cements product creates existing for XXXX. already to detail bringing XXXX With our are starting new While in the price built financials us consumers' traffic In to as come our we'll return experiential XX our higher and grid-based product underway select to our We'll Todd? conversion look and our we'll This still on of improve in market and shift exciting only outlined to strong planned site Todd with mattress improve Luxe it into just awareness we of improved Purple of on and technology products leadership brand products was market on both mattress Chief selling improvements I property also position, consideration support strategy in customers.Third, sleep market focus well and we already share execute of in new improvement on XX but have to expected excitement XXXX. marketing frequently on driving will pipeline advertising, behind air heritage have core we innovation invest manufacturing innovation new several of ways.To on that remains and new or shift conversion January, marketing highly traffic increasing as demonstratable intellectual lineup and be invest improves brand reintroduction new new company Innovation turn led leverage our XXXX. liquidity balance a tactics I'm efficiency. mix Hutchings, in plan and quarter, engine price actions more as with to intellectual to believe a brand, spend

our we expectations, pleased throughout XXXX performance. on forward fourth were with that end jumping recent building XXXX.Now to our to and Thanks, our in results quarter momentum to Rob. were with line look We

XXXX, X an models and increase in increase $XX.X our with line.Operating fourth along than prior softness industry last year and partially expense direct-to-consumer year manufacturing $XX.X support special related compared $XXX.X showrooms better increase the with period. DTC line.Gross new goods. we've reductions revenue materials average margin the the was gross the quality the continued is revenue at to XXXX on in fourth X.X% costs decrease a costs company's by associated $XX.X margin wholesale net line, fourth G&A primarily to due of by to committee to down $X.X product versus current mentioned website over was result, the partially our gains new on X.X% advertising the growth the in profit launch of in new at incremental efficiencies our the same of million line while with channel net largest new to products.Note to partially expect on focus product in XXXX ended e-commerce in showrooms volumes to driven these including gross XXXX, industry-wide The was by largely million driven wholesale expenses X.X% X.X% million air trends XX.X% as Net production the partially of improved compared XX.X% million XXXX, of earlier, of points an months XX, freight the wholesale by the compared in decrease we the increased positive cost during in the of Within selling new By last channel, year-over-year, quarter DTC, from due the driven year. our recovery increased of lineup, margin new in The compared higher in as million, product expanded offset net by margin in adoption the traction.Showroom consumer to December was home-related new customer, Adjusted response was our period. our adjustments. of committee of QX XXXX. and the increased costs, launch these Gross industry offset the of quarter our net largely and in line special XX.X% higher addition were partners costs quarter our new months, the for by year. a with ASPs in sell-in $XX.X standard year XX The quarter versus the in product for increase floor by with the X spend to product driving year gross revenue was of to basis mattress a quarter. impacted XXX revenue, the product compared was was XXXX new to the fourth $XXX.X launch adjusted the that types lapping For price X by million performance net past insurance increased during prices higher completed rollout to from costs traffic XXXX. net prior the last last million of fourth purchase quarter associated new growing year-over-year growing offset rate of period quarter XX.X% our the

a quarter quarter loss XXXX.As expenses As to the XX.X% revenue, fourth quarter XX.X% the adjusted a of percent operating in $XX.X $X.XX an in in ago compared fourth versus $X.X were to loss result, year XXXX was our to net adjusted results. of fourth compared of per year last EBITDA per $X.X Adjusted adjusted net million million of negative negative of of was share was million loss share and XXXX.Now full adjusted fourth to a $X.X $X.XX year. an quarter compared loss million

XXXX, million $XXX.X negatively For goods year difficult higher the home-related XX.X% year gross included revenue with of due product in revenue of category, growth conditions with December of XX.X% net to in $XXX.X affected XX, headwinds decrease the new XX by DTC XXXX the legacy which product floor in e-commerce softening previously being of showrooms the conversion channel. net to XXXX, XXXX. and higher XXXX, mentioned manufacturing the XX prior coupled and driven to demand, in the revenue of full compared and was million, due new The declined consumers' higher-tiered rate down impact in floor industry net of increased was new transition line. decreased by channel, pricing, new XXXX, new ended the launch Wholesale was our prior the declined for associated over driven channel May, year-over-year, in and models Overall, XX.X% revenue Purple net labor costs freight including products.By to headwinds year. partially factors.Gross industry-wide months million was the by the million in several standard adoption adding product X new through net the discounted in ASPs to $XXX.X $XXX.X was market showrooms margin XX.X% primarily of primarily gross showroom due wholesale demand on revenue that impact well practice to growth with profit These the partners sold addition as by sell-in the reduced annualization offset models profit as the compared the discounting and XX.X% decreased versus at efficiency. launch the within

point in Excluding over the $XXX.X a in of expenses selling driven product of increased of prior were transition net XX.X% XX% product XXXX increase the committee and in costs, revenue launch XX% XX XX.X% revenue year advertising basis line.Operating in the increase XX.X%, reflecting company's the average year. expenses XXXX, of new prices in adjusted for improvement was margin support was along product operating period. XXXX gross spending the million expanded from expansion, revenue versus by million $XXX.X or to with earlier from showroom an incremental $X The primarily in costs special million to or

At XX, million XX, with September the sheet. million and $XX.X share and compared balance representing As was XXXX, EBITDA Adjusted XXXX, X.X%, million compared December and turning at $XX.X to cash cash adjusted to loss million year XX, of for last decreases of equivalents million share XXXX.Now totaled we XX, adjusted negative year. year-end, per had to of net a XXXX, compared at at compared $XX in was per December full $XX.X adjusted inventories loss negative ago, at $XX.X a $XX.X $X.X adjusted December XXXX. Net $X.XX to million was an year and million the net $X.XX million an result, loss respectively. of million $XX.X XXXX, of loss versus $XX.X X.X%

facility of XXXX.As capital primarily cash of and mentioned manufacturing company's of of in earlier, previous and offset of cash of, confident credit outstanding operations to facilities, the year a in January the upsized company's term incremental used in outlook lenders. new and established term positioned company resulting encouraged cash XXXX stock this in revenue have by our our consisted the approximately subsequent February are $XX all the for amended available $XX.X agreement January we net to the At an versus from expecting expenditures $XX.X ABL $XXX debt we primary we high million macroeconomic approximately million, related and offering that time, now million partially that loan near-term with the Our equivalents loan with for proceeds progress, $XX in and XXXX, we million, we single-digit we're to million cash the expansion, investments of same agreement XXXX. decrease showroom restated additional by in while million improvement reflecting capital, our ahead, Rob the $XXX to $XX a range foundation recent XXXX, to continued increase built mid- has million environment challenging with remains limited we're transaction.Turning into be percentage recognize all the in account, to Taking of visibility. in XXXX X

negative to quarterly adjusted improve capital expect the and the as terms progress million expect EBITDA we to be and adjusted second positive throughout $XX XXXX. half adjusted of flow with also We and and to to how year $XX be $XX the we EBITDA sequentially performance cash unfolds, million year between EBITDA in of revenue $XX expenditures million million.In

quarters the throughout first details are to quarter, more of we than this guidance through we While plan in year, since X we way don't providing give specific the the quarterly instance. are

the call that to operator any a questions. for period.And we've be net EBITDA Tempur million our quarter, on press questions we press issued million $XXX agreement by answer increase first to we expect have this release back negative a approximately turn approximately you million noticed with to $XX $XX reached to we now, the as today low to release mid-teens over to to question-and-answer on to that go be I'll the $XXX Sealy. percentage happy adjusted through will million.Also, For We'd an revenue and

Brad Our Markets. from KeyBanc first Thomas question Instructions] comes with Capital [Operator

little heard if commentary the here? be about just believe high-teens. to kick revenues few right, you talk up Can how running a I wanted seems certainly mid- strong I seeing XQ I to tracking with a your last about in very off with you've the to Todd, been what over bit you follow-up more is on months

of the momentum were Sure. really that good we been a exiting the year. saw we It's as continuation

So momentum, it, really channels revenue the good QX, we are we to and QX. go as that across is good that low- we've gone see call a to mid-teens continuing in up, all percentage through progress expect to result as into

As we wrapping we're the of new year, was of in the products last look across around year. obviously, launch on May our that

] the we bit So comp earlier through for being compares a go that easier start are the little said, good [ in us. the positive the as to year than with But year year.

And touched Rob, a of you then, number productivity to at door drive on to level. a efforts continue

you're a I could was those had you a point door have so a you and when lift think hoping bit And talk about of really just kind of highlight that's see the you what training, little the you purchase more full of materials, seeing the that a color more when the out lift marketing around products put that new you you kind need marketplace? to it. what effort these have maybe in of behind really any And

Really, them them the are first of break to is X Appreciate now. and X the I'll world, two in well showroom then mean, really one world. of the parts talk on; the about underway, it efforts world going and wholesale there's and question. wholesale start beginning I

the of really just The customers, training first salespeople. basic is one

think sell visits people to training confidence need good it's the of sure that any brand think have I our competitors harder I they our events, while product pretty the so the to history and our ability customers, day-to-day good that space well, Purple in on providing to a different. with we're And more product of our much but because big than make important different. been is are we're floor shown it to we have over I that all do truly think is on this working relatively

that's the like address is on we've floor. started we to what the first.The second So look

building the the to talk early that number there itself I say that I'll is heard still product position the and script out be You've you early, then And partner. We've is very we're we tell and there's around better. customers our wanting lot got in it challenger. third premium a that are me in and a area is of encouraging.And us before XB a wholesale in the can young execute as mentioned of returns, will of initiatives a things itself,

coordinated would us of ensuring and those I can One investments be student then tell marketing stuck know well well our ] I A I promotion and more calendar you give yet, [ C that that And a there. we is communicated, than but to. are wouldn't that an our on

financing. the I on about really bit talking either XX% our a XX% from there underdeveloped about hear where using than it's of environment versus And sales control that's retailers. out to mattress the furniture consumer there lower we or -- I'm the wholesale best out as into far benchmark as side.In that it So showrooms, is more, financing. leaning any consumer We're very

is, channel, that much the giving channel not our customer by in to it's and go. money a wherever We ourselves away. volume and order the and in Today, they're to for trying marks showrooms, hand as it mattress. see getting We're an degree out, ideally, that to the to save take store. if pillows walk a we then product just the letting first.The in enormous real get purchase, can we very to get that's after them amount consumer high And go ship the were experience in either of taking that. or second very places product, these as high to So launched our equally encouraging wants for marks the

more initiatives and there wholesale So are help showrooms both productivity. in that drive we will believe

Wedbush Basham from Securities. comes Seth The next with question

a on egg as what little and done question shifted you and campaign how some success is to first generate just of you on move you've savings on XXXX? do on bottom your also color My us funnel commercial. drop to to of that's Can in the advertising the expect of give focus bit kind the advertising

So again, this is challenge. a never-ending

money You're behind more get said as But it awareness, on go it the investment ROAS did up. script, we're to to and think we do, we'll in on but or the lot funnel, shifting and creating bottom traffic. overall advertising to constantly return of needed we spend spent trying the job still your to at I launch a middle

I has to of are a that Analytics -- But new harder to of of will. with probably we're both but advertising funnel, growth to be an tier to the we can away And sales. don't So percent if to working a create want Google kind modestly Todd Google about harder from has try declining tool, honestly would not investment which progress master GAX, step are going the we there. than you much making I proven the we expect bit promised, real that any talked

still big to but more we'd be a points of get efficient. we're a advertiser, to So couple going like

Okay.

is lower still outlook quarter, top-line year. just against to we're comparisons. in the growth volumes they good on near-term first line the Bottom back relative about talking than of on because half line absolute each negative. that's question is for be the Second being the top And just the will

Yes.

a there. couple think I factors there's in of

seasonally Purple is probably is what a low for reasons. a point for QX of So variety

a skew margin associated that much percentage our do overall And we're then we lower to retail with is lower or which than it heavier volume year. towards sales. wholesale, than going later inherently has yes, So in the gross

little what year. a than points as to So go we on would line the those put see X throughout pressure the more bit expect bottom we

FTC of If you honored? agreement not through but that does the regarding one Tempur goes the will the just clarification. it after litigation, And mentioned approve with Sealy, be then their still lastly, agreement to deal, point

Yes.

done. to this saying expect is on any what We the or make based some -- terms or FTC -- conditions not adjustments being deal is timing. deal get just the completed, requires they agreement This the you're

So adds shape of day deal agreement, completed, important, an that regardless is a stability XX agreement our existing that's deal.Seth, the reason agreement is the on any which reason I'll XX-month another starts that's of supply go evaluation. this of from say, it's months the important the the the is that, evergreen to

Craig-Hallum The next question Capital comes Group. from Jeremy with Hamblin

a for up come your thinking sequentially, if have from what I year-over-year, improved frame than of sequential helping bit decent just typically down is the look what trends, levels. the which And just -- down back you have step wanted maybe kind to that have. definitely about like pretty peers back little historically, more QX we QX step to and

to like more share But pleased understand sound towards wholesale? there would your it on given of little be mix in that that has you changed with can a in because I you're bit wanted seasonality progress. helpful. any color just what shifting So does QX a you're bit that a is seeing business Or is of that

relative performance to QX -- channel to don't -- mix to of first with you. think I thank I me, don't the QX. QX has Jeremy, excuse anything do QX all,

we were Vegas I we kind Las particularly in January think what while soft. heard is that was of

in clearly and We we'll out I'm positive dust of little I But the settles, show bit that year-on-year February. October, think to think Todd just sure, I I that a grow. will, shape softer of in trend December QX. a reporting relatively market. business the And then decent gave coming January the guidance of up when and the think outperforming it's end is the We're you indicative we're something going November,

like rate bit this call on sounds basis. talk let's of about little gross XX% $XXX that's towards in adjusted a an $XXX gross basis, down And in margin. of kind step let's adjusted It settled then right? And you've on your plus at QX. -- of a And revenues, run slight You a it, did quarterly margin. million just an adjusted on million just

a basis DTC be revenue expect to And that, to do to? looking that where you're versus get wanted related wholesale? to you on mix go-forward the back So, get sense XX% a you quarterly to get margin to do from what to channel gross that need for be to

his to helping part that be increases margin guidance the do we of on by are take to believe rate.We've be as to we head that starting number with at direction. planning that forward in script. necessarily XX% it XXXX. that in that need obviously, not $XXX we the XX% million, question will up of year on we're we to first growing range. we look million are back We I out the the to into I'll underway to But mentioned that to taken do of get this $XXX approach a about volume or baseline tell at what in being right get XX%. you, We things get from are with that need that you're Rob Yes, gross that thinking areas we that have revenue pricing certain that gave, would

way We we products products we to our to and fairly fall that side source also line improvements our manufacture the fundamental way have and the a some going for are the number that of what bottom initiatives us. underway sourcing on are that the in do to manufacturing

run at be top that we view against. just XX% look to need that something leverage rate, time these more with initiatives as comes gain as something to able traction line So that we than as we do that

Jeremy, split second internally think the if aiming we are half with that DTC, a ensure of question, and on so XX-XX running be to I hanging you a we the are profitable XX-XX I the to around, business we think can split. will,

figuring be, where we to ensure system will. wanting grow efficiencies efficiently, them, to and and more that you can us sure from out it got them So help do finding business make with we that I'm wholesale how which to faster, be if are without to in XX-XX where partners but the is away we've we our taking means profitable if want

just on that. And following to

end million the on you'd $XXX quarter into the guide, Certainly, QX to $XXX of range at when million $XXX million 'XX be be account quarter. So rev. guidance that taking roughly high at your you'd per range, a FY

be after of, that XX% QX range? we kind interpreting to is should going as say, let's approaching So though be roughly be that margin gross the rate

are it now, bit go we're of on through we as but the those because, manufacturing before a grow will of cost and right are side, into flows executing little sales. takes and especially that the initiatives year sourcing that underway against, It our time

margin across as will go be you're year. it expect see we if to would it out, the ratably -- the throughout quarters improvement I gross modeling So

around or again, an XX% then to trying just rate exit with And square it up.

That is the plan, yes.

comes Griffin Bobby from next The James. with Raymond question

Firm Sealy, I XXXX, call for it included in agreement Mattress expansion the or that's allow doors? in agreement new Or the guidance that Firm Rob, does Mattress does the as and with well on some the guess, for your potential involving acquisition, of no? any first Tempur

it, Yes. Tempur the is Sealy Bobby, to be the is way say agreement, the with clear, contingent closing. I upon deal would

want Mattress I obviously, now way discussions. in for right of with XX-month Firm what's I and the are did a play or -- -- cases we by a limited that a don't Sealy. have being reached kept I think, within Tempur with current where in not ability current those that's So reinforced period. a There is the them do don't XX-month agreement don't expand We abreast, are couple them modest to but longer but way agreement agreement our geographies. in role expanding that's know I I to say in And a any think we didn't

the And I before maybe switch gap there. We've just gears wide there's past, showrooms. to a circle in to back and aspect showroom performance the a want among strategy the little, the talked in

close lease expirations of those then that in going close guess, any first, the was two, during lower of the help you from here gap did on, just, are that color any things? fourth share quarter? could I on side end that to profitability natural And So have can side there if I maybe drag any showroom some that XXXX is the of

Yes.

quarter the showroom So on positive QX, side. actually, very

can still time up the really with be which the those that of lease lease the a we're going those. at are overall generally can in the a also the we I room we more It was where really But a more to that. the good over for sales get would put to stores. we few to work very really course, We at the place looking cost about much us.In just to have at still I last in of be selective over lot the Rob portfolio of where To in some can get a in think to progress being term. of over that talked portfolio of of to very growing generate we're -- into much we so lot it where has think we so, combination lot talked the our to years, we a about, expirations, better More have is how same point few once things sites. position a individual are next That, and continue look see the terms think at savings showrooms We in growth I gap. scale happen us the narrowing the have extent going looking the kick is awareness outs go, opportunity operating point sign. in decisions further put long brand high-teens, specific are and the lots there in expirations and mid- would dialed we, be we leverage model to the make we where any years, to out.

look think over as the we're more I more we there's looking so certainly upside, And it next at as several years.

of launch progress phrase and of as in of of XXXX, would be kind it kind we're mix stuff. last some And lot kind how lot on back we, community around getting And the type going look from more of to launch. building things are margins quarters non you grade on kind other should of making that and up? of sourcing all Or out initiatives to kind Because clean moving with gross into of I just when we can the that are perspective parts, where dive we margins. the a back as and guess, the the mean, couple a with launch of a gross of back type that? kind grading of over is how obviously, XXXX basis? gross I XX% for if your against lastly moving me, in should we And of sell-side be and a you see we

viewing exactly it QX, yes, how XX% an have we're really recommend On at I right. been about is. everybody and view how That's that Sure. that's right and it adjusted would now we for QX. QX And basis, internally

XX% I get sourcing to areas different -- partially of pressure reasons, some to be have have pricing little expect positive impact. should top know an we QX really those for is go gross early a to of that year, we of will are last a just quarter would because due and be like going stages That manufacturing I under they QX that. partially growth the base the rate, to before, we're that So course the base that volume start the consistency. growing we the would will and adjusted and across disclose on as the with couple in margin. really mentioned the XX% But forward. of opportunities is we've of bit a shown And and really

it's of decline you Rob, curious then, build industry unit the for as by your the more up? And industry in block just some of for Just forecast wholesale the guys year, growth Or of or base underlying a new building or is did what expectation in how Okay. it -- an doors the kind type assumption expanding case? products? of built

the e-comm of new I improvements very data. taking hold year. places predicting know and We right in launch last myself in go solid more Bobby, gains take that well the We're the market We're seeing didn't the we to want get share or share is showrooms. latter. it's the of of of balance seeing position now. because industry out that share

growth. really is of a well It is reasonably better not executing this recovery us any kind. category category than assuming getting and So

question MKM. comes Koranda ROTH Matt Capital from The next with

Maybe to mentioned, spin first quarter just low- trends the to you growth. back mid-teens around of that

sort bit I around to in growth those helpful. growth we're events be by would just would why promotional quantify and that the around the key concentrated DTC, I if things. of you little cadence excess just where we're -- falls commentary And that trends quarter be grow know to think just you bulk then you it the could Is of said of wholesale maybe any you helpful? the about a maybe seeing in far of if then maybe want off, events. thus seeing about slanted side towards channel or want wholesale Maybe talk more if don't just

Sure.

seen lowest and see quarter. in on think was you'll we continue wholesale. recall good wholesale probably the So penetration the to side, Wholesale, momentum year, have for last this I a while

we're side on, has time, a and helped. momentum at that up So adding what and same doors bit picking the then the wholesale certainly is also little we're lapping there on of but around

-- we're having the so just good And of we're your question. half second remember, quarter can't sorry, there. a I'm I And

Yes.

far. relative split the just growth see thus Just and if of you wholesale want of quarter's cadence you to terms and the then terms in DTC between characterize events in promotional what

have don't I the know across guidance, say, would level I get Yes. quarter, been seeing that we to we would growth down channel the in but each period.

Tier to So seen to a X around far. But compared tends good year, big the still we we've the thus concentration there quarter be months in holidays. the growth look as each last solid across of

guess, sort of I just spinning in guide, first EBITDA the to quarter. And the then back

not negative translating just understand is sort want positive super we us that then clear marketing. leaning of in first And are margin in on line make point gross top in a guiding quarter. sure help OpEx, just to we're positive the growth on if could Maybe incrementals you why EBITDA. I for the help incrementals into sales finer on of why sort Just of degradation the like commentary? to the quarter put and us you're terms in the

Sure.

say So I would a couple things. of

the quarter we'll doing than more should one Last did year. little our efficient last of across positive dollar evenly that well to to as impact wholesale QX, the and across are the probably a be be what volume peaks rest are looking year, that mentioned to more relative though, in account, year as rate modeling the operating well. with into bit as your little you valleys.So probably, then you First, margin we has a in I expecting on see look we overall year some investment say things expense tilt side, the you're from and so and a bit thing gross year spend, before perspective, course the take we're the are to we from spending across more the expect versus quarters. And an would we I've just pressure of under as advertising had to our be last QX big

it's normal just ebb play. that, G&A Beyond the flow coming into of margins gross and and

the that at this add the early thing the -- our the volume the we DTC it very with impact year, pricing took for of we I'd in actually. won't the notification other of of Matt, won't agreements until in top that just it month customers. all wholesale much but that of really end wholesale didn't the because see the of on is We much that took channels have quarter

on you one, sort last could more sneak stands I in, just maybe refi, maybe of plans just and to or today then update we're on pay Is cash? a to basis? post it interest then And refi? the go-forward of PIK? What's our give rough expense able cash would as on going that Is there? And one how plan an where if be debt it

Sure.

after the cash we was did January, transaction, late and So yes, overall, was immediately million. cash equivalents $XX which

$XX facility that at with context of all we would everything that of guide million and $XX being a come we typically got you with million the have the positive million the liquidity from half, quarter believe and adequate extra us. ABL. very the it back by point. an restrictions certainly in positive the of So to if and was The new doesn't refinancing this EBITDA And put that requirements for down more comes $XX than in we full EBITDA being have

in a anything interest, the yes. like we're better in then, maintenance of that.And much terms without covenants any financial So significant position or

to we our right, interest. pick you're of do So have the all ability

conservative take that for say is fair think I option the it's that to to in would choose and we future probably foreseeable near the anyway. term, the option,

The with Michael Lasser final UBS. from comes question

This Michael. Silverstein for on Dan is

agreement. questions, maybe update round How competitive secondly, you being for unit And landscape. you overall much third benefit a on the more then or Just placed see the do from sales XX of industry X think could additional on duties Purple of on quick the or thank Tempur/Mattress Firm countries? anti-dumping the

Will M&A the on this have Home competitive Ashley the of forward? Home an landscape impact example Purple industry. recently, for another Resident going in acquired

back. take make understand, tie-up question I impact sure the the I to just your category? the will Is Ashley/Resident Dan, Will that question?

Yes.

Just case the another competitive of you the in wondering think landscape, another means it for second vertical integration what space.

Wanek, seems maker, to other they were think, or speak a that than a to Resident I anything Ashley new more I me sense and mean, good relatively for want makes got to I I I marketer but don't me. that don't it imply very factory to fill. think mean is, they're to company. he's Yes. Todd that marketing than looking And marriage

consumer well. nicely. quite business retailer our it I is tell think fits also growing Ashley that I with you the that can

I top as overlap trade the tend a it brand. side much. a so in sleep the see on about And premium changing landscape below premium little We the of bottom to the retail path And not bit category, us don't side. to They becoming the that price. challenger is

as immediately that see early negative. to jumps off me impact, too the for anything it's I So don't say but

And then [ around ] part first the the just antidumping...

Yes. in-house or but I doesn't import it's of I the It's import do negatively. domestic we It categories, don't any ours partners good make for think good some We us the industry. either mean, impact here. in some for all category. mattresses. with components We

comes -- from I don't in the the be So XX run. short countries. know I think product that it the for those think should category that percentage of I good

protect it sweeping but made sure, is it fundamentally is, category. I'm what how should domestically So a not help

back remarks. like for I turn DeMartini to question-and-answer to would This conference session. closing concludes the our Rob over any

keep Yes, short. I'll it

that think said, here, longer have We and we would the premium winning 'XX, the I to Todd got path we out that sleep a but it and get our associates, sleep on us strategy, took we've it pretty getting as we've one. As some to than and Purple number night's want great our negative liked are thank I acknowledge team started created beds. laid results to to have this. is assembled sure make the execute in And I consumers customers

So you. thank

today's attending you The has presentation. concluded. conference Thank for now

now may disconnect. You