Tile Shop Holdings, Inc.

Good morning, and welcome to the Quarter One 2025 Tile Shop Holdings Incorporated Earnings Conference Call. This is Franz, and I'll be the operator assisting you today. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Ken Cooper, Investor Relations. Please go ahead.

Thank you, and good morning to everyone. Welcome to the Tile Shop's first quarter earnings call. Joining me today are Keab Loma, 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 1985 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 these forward-looking statements. Today's call will also include certain non-GAAP measurements. Please see our earnings press release for a reconciliation of those non-GAAP financial measures. The press release has also been posted on our company website. With that, let me 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. We continue to navigate challenges presented by lower housing turnover, market volatility, consumer confidence concerns, and tariff noise during the first quarter. Since these external factors are largely out of our control, we choose to focus on the things we can influence, which center around providing an exceptional experience to our customers and effectively managing our expenses. Our overall comparable store sales decreased by 4% during the quarter. However, it is worth noting that we saw an increase in the volume of tile that we sold during the first quarter. The increase in the tile volume sold was driven by our recent initiatives, which included the expansion of entry-level, competitively priced products. We also added our Arbor collection of high-quality luxury vinyl tile products last fall that has helped bolster our LVT offering. By direct sourcing this line, we were able to offer this collection to our customers at attractive price points. Additionally, we saw nice volume increases in large-format tiles benefited from the addition of engineered hardwood and laminate products to our assortment. Overall, our assortment is in fantastic shape as we move through our spring selling season. While our purchasing team has done a great job bringing us to this point, we still have work ahead of us as tariff policies evolve. It is important to note that we have made significant strides over the last five years and have a much more diversified supplier base that spans across over 25 countries. We continuously evaluate alternative sources of supply to ensure we're able to maintain a high-quality offering at attractive price points for our customers. Additionally, we carry more inventory than the typical flooring retailer, which gives us time to maneuver as tariff policies evolve. We've also made inroads building partnerships with tile manufacturers based in the United States in recent years and are proud to carry a robust line of domestically manufactured tile. We believe our seasoned purchasing team with a deep track record of managing our robust network of suppliers across the globe has us in a good position to help us maintain a competitive advantage in this area. Our team continues to collaborate with leading designers to expand our assortment of products that cater to the design community. Over the years, we forged partnerships with reputable brands, including Annie Stelke, Nikki Chu, Jeffrey Allen Marks, Laura Ashley, and Morrison Company. These design partnerships help us create unique tile products that are one-of-a-kind and exclusive to the tile shop. Last month, we announced the expansion of our collaboration with Allison Victoria. We've enjoyed working with Allison to develop beautiful design options that feature contemporary color combinations and distinctive details that embody Allison's design style. In closing, I am encouraged that these changes we've made to our assortment contributed to the increase in tile volume sold during the first quarter. While we continue to navigate the near-term challenges that affect our industry, we're focused on maintaining 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. With that, I'll now hand the call over to Mark.