The Lovesac Company

Greetings. Welcome to Lovesac's first quarter fiscal 2022 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the call over to Rachel Schachter of ICR. Rachel, you may now begin.

Thank you. Good morning, everyone. With me on the call is Shawn Nelson, Chief Executive Officer, Jack Krause, President and Chief Operating Officer, and Donna Delamo, Chief Financial Officer. Before we get started, I would like to remind you that some of the information discussed will include forward-looking statements regarding future events and our future financial performance. These include statements about our future expectations, financial projections, and our plans and prospects. Actual results may differ materially from those set forth in such statements. For discussion of these risks and uncertainties, you should review the company's filings with the SEC, which includes today's press release. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on assumptions and beliefs as of today, and we undertake no obligation to update them except as required by applicable law. Our discussion today will include non-GAAP financial measures, including EBITDA and adjusted EBITDA. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. A reconciliation of the most directly comparable GAAP financial measure to such non-GAAP financial measure has been provided as supplemental financial information in our press release. I'd now like to turn the call over to Sean Nelson, Chief Executive Officer of the Lovesac Company.

Thank you, Rachel. Good morning, everyone, and thank you for joining us today. It was just eight weeks ago that we were on our year-end call where I discussed our fiscal 2021 accomplishments, our CTC operating philosophy, and Lovesac's go-forward strategy in a fair amount of detail. So I will keep my remarks brief today by reviewing the highlights of our first quarter financials and operational performance before Jack outlines the our first quarter progress on our key growth initiatives. Donna will wrap up our prepared remarks with a review of our financial results and a few other items relating to our outlook. We are overall very pleased with our first quarter results as we continue to build on our momentum from last year. As a reminder, we anniversary the onset of the pandemic and subsequent showroom closures late in Q1. Even on a two-year basis, Business performance was very strong relative to the first quarter of fiscal 2021, with two-year combined comps at 98.9%. Now let me review the highlights of our first quarter performance. For the quarter, total net sales were 82.9 million, up 52.5% versus the prior year period. We delivered total comparable sales growth of 48.8%. and continue to be very encouraged by the broad-based strength and demand for our products across both new and existing customers. We saw strong growth across showroom and other, partially offset by a decrease in internet sales, reflecting the channel shift back to our showrooms that are now fully open. Adjusted EBITDA increased 193.7% to 5.3 million and marks the first time we've achieved profitability in Q1. This strong start to the year is reflective of continued strength in the demand environment, combined with our focus on improving our offering, customer experience, and go-to-market position as we seek to expand our market share of this heavily fragmented industry. We continue to advance our strategic priorities during the quarter, which Jack will discuss in detail. A few notable call-outs. Starting with our brand presence across showrooms and channel partners, our comp performance speaks for itself. But we are also seeing strength in the performance of our Best Buy Shop and Shops. We are pleased to have all of our showroom leases meant to open for the balance of the year already signed and moving toward opening. Our innovation agenda and engine is humming. Besides the planned launches on track already slated for later this year, we are quickly adding talented engineers and designers to our team to allow us to scale even faster in the future. As it relates to the broadly discussed supply chain backdrop, I want to first recognize our team and the great work they have done and continue to do navigating what remains a tight supply chain environment. The diversification of our supply chain around our few core products and the international redundancies created has helped us stay in stock and meet demand in Q1. As we look ahead, we will have to manage this carefully through the year. On the ESG front, we continue to develop our circle to consumer or CTC philosophy. which continues to drive our operations. Under the CTC model, we plan to deliver more high quality, sustainable long-term product platforms in multiple categories across the home space and pair them with services meant to create raving fans and build long-term relationships with them. A long-term focus on all things is at the heart of the circle to consumer philosophy. Additionally, as part of our continued ESG focus, In addition to the work we are doing on the environmental and sustainability side, we are making strides on the governance front. Just this week, we announced the appointment of Sharon Lighty as a new member of our board of directors. Sharon currently serves as CEO of The Vitamin Shop and has extensive and diverse experience in consumer-facing businesses across areas including product innovation, channel distribution and loyalty, and personalization. Her perspective will be very valuable as we continue to build and scale the Lovesac brand. Sharon is filling Bill Phoenix's position, and we want to thank Bill for all of his contributions as a board member over the last four years. So in summary, we are very pleased with our first quarter results and the continued execution across our strategic priorities. As we look to the remainder of the year against a dynamic operating environment, we will stay focused on expanding our brand, continuing to elevate our customer experience, and strengthening our foundation to support the considerable growth that lies ahead. With that, I'll hand it over to Jack to cover our strategic priorities and progress. Jack?