Tempur Sealy International, Inc.

Good day, everyone, and welcome to today's Timber Sealy International Incorporated call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star and 2. Please note this call is being recorded. I will be standing by if you should need any assistance. And it's now my pleasure to turn the conference over to Aubrey Moore, Investor Relations.

Please go ahead. Thank you, operator. Good morning, everybody, and thank you for participating in today's call. Joining me today are Scott Thompson, Chairman, President, and CEO, and Bhaskar Rao, Executive Vice President and Chief Financial Officer. This call includes forward-looking statements that are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve uncertainties, and actual results may differ materially due to a variety of factors that could adversely affect the company's business. These factors are discussed in the company's SEC filings, including its annual reports on Form 10-K and quarterly reports on Form 10-Q. Any forward-looking statement speaks only as of the date on which it is made. The company undertakes no obligation to update any forward-looking statements. This morning's commentary will also include non-GAAP financial information. Reconciliations of this non-GAAP financial information can be found on the accompanying press release, which is posted on the company's investor website at investor.tempersealy.com and filed with the SEC. Our comments will supplement the detailed information provided in the press release. And now, with that introduction, it is my pleasure to turn the call over to Scott.

Thank you, Aubrey. Good morning, everyone, and thank you for joining us on our first quarter 2024 earnings call. I'll begin with some highlights from the quarter and then turn the call over to Bhaskar to review our financial performance in more detail. After that, I'll provide an update on our proposed acquisition of Mattress Firm, which we expect to close by the end of the year. Lastly, I'll open up the call for Q&A. In the first quarter, net sales were approximately $1.2 billion, and adjusted EPS was 50 cents. Our adjusted EBITDA was 198 million, consistent with the same period last year. These results are evidence of our strong competitive position in the market. Turning to a few highlights. First, we continue to develop and launch high-quality bedding products in all the markets we serve. We are actively refreshing our U.S. temper portfolio with our latest ADAPT products. These products are designed to address the fundamental consumer need, alleviating aches and pains. They feature our most innovative temper material and are engineered to provide an impressive 20 percent improvement in pressure relief compared to standard material. When our mattresses are combined with our proven range of smart, adjustable bases, The result is a comprehensive, advanced sleep system. A rollout of over 60,000 ADAPT mattresses to retailers is on schedule, and we expect to be substantially rolled out by Memorial Day. Early reports from our third-party retailers and our direct-to-consumer operations are strong. We also, to select national retailers, recently rolled out Active Breeze, our most customizable heating and cooling sleep system priced at approximately ten thousand dollars for a queen and base set this system caters to the discerning ultra luxury consumer seeking cutting edge sleep solutions offering both active climate management and the benefits of sleep tracker ai our third-party retailers and our company-owned temper stores are reporting but the presence of this product on the showroom floors generates a halo effect, propelling interest towards the top-tier offering of our Tempur lineup. Although still early in the rollout, when bundled with additional products, the active breeze is driving some tickets upward of $20,000. While we anticipate modest sales volume for this ultra-premium product, its significance lies in elevating the brand perception and foreshadowing the future of bedding innovation. Please note that even with challenges like reduced brick-and-mortar retail traffic, our innovative products are driving momentum in the category. Excluding the impact of floor models, our U.S. average mattress sales price across all brand products increased mid-single digits, and our attach rates increased double digits year over year, demonstrating the consumer's willingness to spend on innovative, quality products designed to provide better night's sleep. New products are also building momentum in our international business. Our new product collection features consumer-centric innovation and an extended price range that meets the needs of a broader spectrum of customers. In the first quarter, we executed the launch of our all-new temper mattresses, bed bases, and pillows in the UK. and are now fully rolled out worldwide. We also optimized the new tempered mattress beds construction to facilitate a higher level of customization while streamlining the manufacturing process, allowing us to effectively meet the unique demands of consumers across various markets and channels. Second highlight, we invested in compelling marketing to support our brands and products. We continue to be balanced with our media strategy. focusing both on broad-based and targeted digital outlets to meet consumers throughout their purchase journey. In North America, we developed a new creative design to drive consumers' interest in the category and our recently launched Tempur products. In the first quarter, we introduced a new ad focused on the Tempur-Pedic Ergo ProSmart base and its exclusive Soundscape mode feature, which delivers and immersive relaxation experience designed to help people who have trouble falling asleep. These ads are already resonating with consumers in driving attach rate and APS and ASP expansion for our retail partners. In the second quarter, we continue to support these lineups with our new targeted TV spots and digital assets focused on illustrating how the ADAPT collection provides a solution to one of the leading barriers to quality sleep, aches, and pains. Our consumer research shows that these new assets are our highest scoring ads to date, and we're excited to put this new content into the market. We also continue to invest in advertising to support our Stearns and Foster products with engaging messages that reinforces the superior comfort, quality, and craftsmanship that's been the hallmark of the brand for over 175 years. As has been the case with our successful Tempur-Pedic advertising, Our recent investments in Stearns and Foster have also been successful, helping the brand to achieve excessive year-over-year growth in consumer traffic to StearnsandFoster.com every year since we first introduced the television advertising in 2021. And in 2023, helping the brand to achieve the industry's highest year-over-year growth in Google search volume. Internationally, we continue to increase our marketing investments to support the positive momentum of our recently launched new Tempr product range. Our creative assets highlight the many benefits of the latest generation of Tempr materials, covers all retail assortments, and reaches all relevant media channels. We continue to see positive results with uplift in awareness, share search, web sessions, and retail traffic. Our market intelligence reaffirms that we are outperforming the market in a challenging retail environment. We recently announced the signing of David Beckham as our newest brand ambassador for our key markets in the high growth Asia Pacific region. The campaign consists of television assets, content for our online channels, and point of sale material for our own stores and retail partners. The campaign launched in March in Australia. They'll also go live in our other Asia Pacific subsidiaries later this year. And we will host an event with David Beckham and key retail partners in China during the second quarter. Our advertising efforts worldwide are designed to break through to consumers at all points in their purchase journey, driving near-term sales while also continuing to build long-term support for our brands. Our research shows that our brands continue to be top of mind for consumers seeking high-quality sleep solutions. Third highlight, we continue to expand and optimize our diverse omnichannel distribution platform to meet the consumer wherever they want to shop. Our brands and private labels continue to gain traction in the wholesale segment across existing and new distribution channels. In the first quarter, we expanded our OEM relationship with a large specialty bedding retailer. And in April, we expanded our products into additional big box stores with one of the largest U.S. bedding retailers. Consumers are also engaging with our product through our company-owned stores and e-commerce presence. Our North American direct channel performance was solid in the quarter. delivering a robust 8% sales growth year-over-year, driven by strength in our e-commerce business. Finally, we continue to drive year-over-year improvements in cost through sourcing and operational efficiencies. During the quarter, our operations team focused on enhancing supply contracts, improving labor productivity, and optimizing logistics. These efforts combined with the impact of normalizing commodity prices resulted in a 270 basis point benefit to the North America first quarter adjusted gross margin and 130 basis point benefit to international's first quarter adjusted gross margin. With that, I'll turn the call over to Bhaskar to provide more details.