JOANN, Inc.

Welcome to the fiscal year 2022 third quarter earnings call. My name is Adrienne, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star then 1 on your touch-tone phone. Please note this conference is being recorded. I'll now turn the call over to AJ and Dan. AJ, you may begin.

Thank you, operator, and good afternoon. I'd like to remind everyone that comments made today may include forward-looking statements, which are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from management's current expectations. These statements speak as of today, and the company undertakes no obligation to update or revise any forward-looking statement to reflect subsequent events, new information, or future circumstances. Please review the cautionary statements and risk factors contained in the company's earnings press release and the recent filings of the SEC. During the call today, management may refer to certain non-GAAP financial measures. A reconciliation between GAAP and non-GAAP financial measures can be found in the company's earnings press release, which was filed today with the SEC, and posted to the investor relations section of Joanne's website at investors.joanne.com. On the call today from Joanne are Wade Michelon, President and Chief Executive Officer, and Matt Seuss, Chief Financial Officer. I'll now turn the call over to Wade for his prepared remarks.

Thank you, AJ. Good afternoon. I'd like to welcome everyone joining the call today for their interest in Joanne. Today, I'll provide some color on our third quarter results. As an organization, we continue to execute at a very high level despite unprecedented and ongoing supply chain challenges, as well as some of the most unique sales comparisons on record at Joanne due to the pandemic. I'd be remiss if I didn't start by thanking all Joanne team members for their stellar contributions to help us be fully prepared for our all-important holiday season. I'd also like to introduce two new team members to Joanne's senior executive team. Lisa Whitman-Smith has just joined Joanne as our new senior vice president of inventory management and business insights. Lisa comes to us with an extensive background leading highly sophisticated planning groups across a variety of retail sectors, including department stores, specialty retail, and optical retail. Over the last several years, she's built a high-performing analytics team focused on delivering actionable business insights and forecasts from consumer and market data. We've also promoted Joe Dieboldt to Senior Vice President of Store Operations. Joe has been with Joanne since 2002 and has served in many different leadership roles across our organization. Joe has been the leader of our Store Operations team for the past three years, where his outstanding work has improved our customer experience and operational efficiency. Please join me in congratulating Lisa and Joe on their new roles. As the nation's leading sewing and crafts retailer, we continue to see encouraging industry trends overall. We are solidly growing revenue on a two-year comparison with very strong gross margins, even after absorbing unprecedented supply chain costs. We are pleased to see that our customer is engaging in a wide variety of selling and crafting activities across our broad portfolio of categories. It reflects a far more diverse profile across multiple demographic measures. And we are in a strong position financially, whereby our balance sheet, operating earnings, and cash flow are allowing us to simultaneously invest in our strategic initiatives, dividend payments, modest share buybacks, and further debt reduction. During the third quarter, our total comparable sales increased by 8% based on a two-year stack. Adjusted EBITDA also continued to grow significantly compared to pre-pandemic levels, reaching $72.6 million, an increase of $33.2 million, or plus 84% versus the third quarter of fiscal year 2020. These results were bolstered by improved performance across all of our customer segments, particularly our more seasonal customer that drove what was a very solid fall and Halloween business. Recall that this more seasonal customer cohort is where we experienced some incremental softness during the second quarter. We've also been successful in managing our pricing and promotions, as well as shrink and clearance costs, driving growth in our gross profit dollars of 16.3% after adjusting for $11.3 million of higher excess ocean freight and related supply chain costs during the third quarter. We continue to evolve our position as leading digital retailer in our space, with much more to come as we go into the balance of the year and beyond. Our omnichannel sales grew by 137% in the quarter on a two-year basis, and represented 11% of total company revenue. We are seeing robust increases in both online traffic and conversion, with the customer increasingly choosing to shop us digitally, especially through our industry-leading mobile app. We launched new payment methods to our customers this quarter, notably adding Apple Pay and Klarna's Buy Now, Pay Later services, and we're seeing high levels of initial adoption. Our BOPIS and curbside pickup services are especially popular with extremely high net promoter scores associated to these customers. Based on third-party data, we benchmark among the best in specialty retail and deliver in curbside in just two minutes. We are also encouraged by our international e-commerce expansion, which we began in our second quarter. In less than six months, Joann has gone from shipping to one country to now shipping to 58 countries as customers from around the globe are learning about the Joann brand and the vast amount of sewing, fabric, and craft SKUs that we can offer at competitive prices. And in many cases, finding items that cannot be found anywhere else around the globe. Research indicates that for the creative products market in Europe, where there are more limited retail options, it's roughly about the same size as the United States. Beyond Europe, data suggests that sewing and crafting are broadly large and vibrant as well. Regarding our announcement earlier today, we are excited to enter into a joint venture with Singer, a partnership that we believe will transform sewing and craft patterning globally. Joanne has developed a proprietary and innovative technology that streamlines many cumbersome steps through a product that allows sewing enthusiasts to both project and cut patterns with ease, as well as customize pattern designs and sizes using artificial intelligence. We expect to roll out this offering to our customers in calendar year 2022. Through a combination of strong intellectual property rates around this technology and our distribution reach in the sewing category, we are very well positioned through this partnership with Singer. This joint venture will also capitalize on Singer's unmatched sewing technology expertise, as well as global presence, extreme brand loyalty in more than 190 countries, at the core of which is an extensive dealer network. This is the first time that we've announced what we refer to as one of our Blue Ocean initiatives. These initiatives build from our core and tap into significant new pools of value creation, both with physical product and also digital offerings, both domestically and globally. We will continue to unveil more on this opportunity and many other major growth initiatives at the appropriate time. Our physical store locations also continue to be a preferred space for the creative consumer to connect with our team members and with each other, seeking inspiration, education, or sometimes just getting advice on their project. Both in the latest quarter and on a year-to-date basis, our net promoter scores continue to outpace fiscal 20 and 21 on all of our key satisfaction metrics showing measurable improvements across our physical store network. The improvement in customer satisfaction is also evident across our newly remodeled stores as they outpace our chain in all customer satisfaction metrics. While our store refresh initiative is still in early stages, we expect continued momentum as we accelerate the program to launch to over 50 additional locations next year. Excitingly, we are also seeing sales lifts from these early projects that will support our four-year payback expectations and also change the game by stepping out of traditional selling and craft retail space into one that is truly differentiated and completely raises the experiential bar. We continue to be pleased with our ability to retain our newly acquired customers from the record acquisition we've achieved in fiscal 2021. Based on our internal tracking, overall retention remains significantly higher relative to pre-pandemic levels. We've also continued to add new customers to our database in fiscal 2022, acquiring over 4.5 million new customers. Our email database and our mobile app remain the most attractive new contact channels for customers, with engagement in both digital platforms exceeding the prior year. Despite well-publicized supply chain challenges leading to weakened inventory positions for many retailers this holiday season, our in-stock position remains extremely strong as we head into the final stretch of the holiday season. Our proactive measures and decisions to absorb significantly higher ocean freight and additional handling costs in the ports have allowed us to deliver key seasonal goods for the holiday selling season. We remain focused on providing a relevant and inspiring assortment of merchandise in our stores and on joann.com. and never give our customers a reason to shop anywhere else. Also, our current mix of inventory is very clean with very low levels of clearance and past season merchandise relative to our total inventory mix. Our team continues to lead through the ongoing challenges associated with poor congestion, commodity costs, and labor shortages. And in that regard, I could not be more proud that our online and retail channels continue to stand tall as evidenced by our customer satisfaction metrics, inventory position, and market share metrics as we move into our fourth quarter. We continue to strike the right balance between top-line growth and profitability, but most of all, we continue to keep our customer and their experience with our brand top-of-line in all that we do. Again, I want to thank all of our team members at Joann for their efforts and continued dedication. As an organization, we remain very focused and committed to being a friendly, clever ally to our loyal customers. With that, I will turn the call over to Matt Seuss for a more detailed review of our financials.