The Lovesac Company

Greetings and welcome to the Lovesac third quarter fiscal year 2025 earnings 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 the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Ms. Caitlin Churchill, Investor Relations. Thank you. You may begin.

Thank you. Good morning, everyone. With me on the call is Shawn Nelson, Chief Executive Officer, Mary Fox, President and Chief Operating Officer, and Keith Signer, 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 a 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. Now, I would like to turn the call over to Sean Nelson, Chief Executive Officer of the Lovesac Company. Sean?

Good morning, everyone, and thank you for joining us. I'll start by sharing a high-level overview of our third quarter results and outlook. Then, Mary Fox, our President and COO, will discuss our key growth initiatives. Finally, Keith Signer, our CFO, will review our financial results and a few other items related to our outlook in more detail. Turning to the highlights of our Q3 results, total net sales were 149.9 million, reflecting a year-over-year decline of 2.7%. As you're aware from many others in our category, headwinds clearly persisted in the pre-election period. For us, we felt this in some pressure on average order size, where we saw encouraging growth in quotes for very large setups but less conversion of those quotes than we expected.