Tile Shop Holdings, Inc.

After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Ken Cooper with Investor Relations. Please go ahead.

Thank you and good morning to everyone. Welcome to the Tile Shop's third quarter earnings call. Joining me today are Cab Lomaw, our Chief Executive Officer, and Mark Davis, our Chief Financial Officer. Certain statements made during the call today constitute forward-looking statements made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in our earnings press release issued earlier and in our filings with the SEC. The forward-looking statements made today are as of the date of this call, and we do not undertake any obligation to update those forward-looking statements. Today's call will also include certain non-GAAP measurements. Please see our earnings release for reconciliation of those non-GAAP financial measures, which has been also posted on our company website. With that, let me now turn the call over to Cab.

Thank you, Ken. Good morning, everyone, and thank you for joining us today for an update on our business. Macro headwinds affecting the home improvement industry continue to persist throughout the third quarter. Despite these challenges, we have continued to be proactive, driving connections with our professional customers, expanding our assortment, enhancing our e-commerce capabilities, and maintaining our unwavering commitment to provide exceptional service. Together with our strong balance sheet, we're in a great position to serve our customers in our stores and online. I was encouraged by the recent actions taken by the Federal Reserve to cut interest rates and signal further cuts in future periods. We believe that an easing interest rate environment could potentially lead to an improvement in existing home sales trends, which we see as the leading indicator for home improvement demand. However, the most recent existing home sales report from September shows housing turnover at the lowest level we've seen since 2010. During the third quarter, sales at our comparable stores decreased by 7.9%, which reflects the challenges of the current environment. Over the next few minutes, I'll provide an update on our key business initiatives, and Mark will review our financial results in more detail, as well as several actions we're taking to manage expenses given the headwinds facing our business. The first initiative I'd like to touch on relates to the relaunch of our enhanced line of private label installation products sold under the Superior brand name. We relaunched Superior line in June, seeking to, one, generate more opportunities to sell towels to professional customers who develop a preference for using our high-quality, cost-efficient Superior products, and, two, support ticket averages by improving attachment rates of installation products. So far, we're off to a nice start. The Superior launch is just one of the many changes we're making to refine our assortment. We've also been focusing on an initiative to expand our selection of entry-level, competitively priced products. Demand for these products is tracking in line with our expectations. We believe this expansion of our assortment will help strengthen our value proposition with customers seeking to complete a smaller remodel project on a budget. We also believe the selection of entry-level price products strengthens our competitive positions with pros, especially when they are working on smaller projects for their end customers. While many of the additions to our assortment have started to work their way into our stores, we still have more on the way that should be ready in time for our 2025 spring season. One particular line that I'm excited about is our Arbor Collection, which is a new line of high-quality LVT products. By direct sourcing this line, we're able to offer this collection to our customers at attractive price points and while maintaining the ability to expand our margins. The new collection is beautiful, and I look forward to hearing the feedback from our customers as the Arbor Collection makes its way into our assortment. We've also been working on new additions with our design partners. Over the years, we've cultivated relationships with popular designers like Annie Selke, Jeffrey Allen Marks, Laura Ashley, and Morrison Company. These design partnerships give us the ability to create unique tile products that appeal to our core customer and more broadly across the design community. During the third quarter, we announced our newest partnership with Nikki Chu. Nikki has been great to work with, and the projects I've seen that use her tile are absolutely stunning. In closing, while the headwinds facing our industry still persist, we're focusing on curating the best assortment of tile products in the industry, giving our customers the ability to design a space that differentiates their home and providing exceptional service to all customers who visit our stores. We believe this commitment to excellence will position us for future success. With that, I'll now hand the call over to Mark.