Aarons Holdings Company, Inc.

Thank you for your patience, everyone. The Aaron's Company Q1 2024 earnings call will begin shortly. During the presentation, you'll have the opportunity to ask a question by pressing star followed by one on your telephone keypad. The call will begin shortly. Thank you. Good morning, everyone, and welcome to the Aaron's Company Q1 2024 earnings call. My name is Angela, and I'll be coordinating your call today. During the presentation, you can register to ask the question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by T. I will now hand you over to your host, Mark Levy, Vice President, Finance and Investor Relations. Please go ahead.

thank you and good morning everyone welcome to our first quarter 2024 earnings conference call joining me today are aaron's chief executive officer douglas lindsay president steve olson and chief financial officer kelly wall after our prepared remarks we will open the call for questions yesterday after the market closed we posted our earnings release on the investor relations section of our website at investor.airns.com we also posted a slide presentation that provides additional information about our first quarter 2024 results. During today's call, certain statements we make may be forward-looking, including those related to our outlook for this year. For more information, including important cautionary notes about these forward-looking statements, please refer to the Safe Harbor provision that can be found at the end of the earnings release. The Safe Harbor provision identifies certain risks and uncertainties that may cause actual results to differ materially from the content of our forward-looking statements. Also, please see our Form 10-K for the year ended December 31, 2023, and our other filings with the SEC for a description of the risks related to our business that may cause actual results to differ materially from our forward-looking statements. On today's call, in the earnings release and in the supplemental investor presentation, we refer to certain non-GAAP financial measures, including EBITDA and adjusted EBITDA. non-GAAP net earnings, non-GAAP EPS, adjusted free cash flow, and net debt, which have been adjusted for certain items which may affect the comparability of our performance with other companies. These non-GAAP measures are detailed in the reconciliation tables included in our earnings release and the supplemental investor presentation posted on our website. With that, I will now turn the call over to our CEO, Douglas Lindsay.

Thanks, Mark. Good morning, everyone. Thank you for joining us and for your interest in the Ahrens Company. Our performance in the first quarter was in line with our guidance, and I'm encouraged by the positive momentum that I'm seeing in the business so far this year. In the Ahrens business, we continue to significantly grow our e-commerce channel, driven by our new omni-channel lease decisioning and customer acquisition program that we launched in Q4 of last year. Due to the seasonal trends in the lease-to-own business, It's common for our lease portfolio size to decrease in the first quarter. This year, we experienced the smallest decrease in a decade. This improvement was driven by the actions we've taken to generate year-over-year growth in lease merchandise deliveries across all major categories. At BrandSmart, we exceeded our top and bottom line expectations for the quarter, despite continued demand pressure. While comparable sales remain negative, we did experience sequential improvements in demand each month in the first quarter. Based on our first quarter performance and the trends across both businesses, we are reaffirming our full year 2024 outlook provided on February 26th for revenues and adjusted EBITDA. And we are raising our outlook for non-GAAP diluted EPS due to a lower estimated tax rate. Kelly will speak to this in more detail in a few minutes. Now turning to the results of the first quarter, I'm pleased to report that we delivered consolidated revenues and adjusted earnings in line with expectations. At the Aaron's business, our lease merchandise deliveries increased 6.8% as compared to the prior year period. This led to year-over-year growth and recurring revenue written into the portfolio. We continue to close the gap from the beginning of the year. with our lease portfolio size ending the quarter down 4.8% after starting the year down 7%. On a same-store basis, our lease portfolio size ended the quarter down only 1.4%. This momentum has continued into April, with our lease merchandise deliveries up 18.6% year over year, driven by over 115% e-commerce growth. At the end of April, our same-store lease portfolio size was down only 20 basis points as compared to the prior year period. I'm happy to report that we've seen further improvement in May, and we've reached an inflection point where our same-store lease portfolio size is now larger than it was the same time last year. We remain excited about our new omni-channel lease decisioning and customer acquisition program, which provides leasing power to all Aaron's customers. As highlighted last quarter, this program is driving significantly higher conversion rates of lease applications, and we continue to expect it to drive mid-single-digit growth in our total lease portfolio size by end of year. Now turning to BrandSmart. While profitability remains challenging, BrandSmart ended the quarter with revenues and adjusted earnings slightly above our internal expectations, with a sequential quarterly improvement in comparable sales. We continue to expect improvements in customer demand in the second half of the year, primarily due to an anticipated rebound in our major product categories. We are also continuing to enhance our capabilities in merchandising, marketing, and technology to better position the business for long-term growth. Although the broader demand environment is still challenging, we remain confident in BrandSmart's compelling value proposition and potential to expand to new markets. Before I turn the call over to Steve, I want to reiterate how encouraged I am by the customer demand trends we're seeing in the Aarons business. As I just mentioned, we have reached an inflection point where our same store lease portfolio size is now larger than it was the same time last year. We expect this to lead to incremental flow through to profitability, benefiting earnings in the second half of the year and end of 2025. I will now turn the call over to Steve to discuss operational performance of each business segment.