Lovesac Co (LOVE) 2024 Q3 法說會逐字稿

Greetings, and welcome to love sacks Third Quarter Fiscal 2024 earnings conference call. (Operator Instructions) Please note that this conference is being recorded. At this time, I'll turn the conference over to Elizabeth Schnoerr. Ms. Schnoerr, you may now begin.

您好，歡迎參加 Love sacks 2024 財年第三季財報電話會議。 （操作員說明）請注意，本次會議正在錄製中。這次，我將把會議交給 Elizabeth Schnoerr。施諾爾女士，您現在可以開始了。

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 Siegner, Chief Financial Officer.

謝謝。大家，早安。與我一起參加電話會議的是執行長肖恩·尼爾森 (Shawn Nelson)。瑪麗‧福克斯，總裁兼營運長；財務長基思‧西格納 (Keith Siegner)。

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.

在我們開始之前，我想提醒您，討論的一些資訊將包括有關未來事件和我們未來財務表現的前瞻性陳述。其中包括有關我們未來預期、財務預測以及我們的計劃和前景的陳述。實際結果可能與此類風險和不確定性討論的聲明中提出的結果存在重大差異，您應該查看公司向 SEC 提交的文件，其中包括今天的新聞稿。您不應依賴我們的前瞻性陳述作為未來事件的預測。我們在本次電話會議中所做的所有前瞻性陳述均基於截至目前的假設和信念，我們不承擔更新這些陳述的義務，除非適用法律要求。

Our discussion today will include non-GAAP financial measures, including EBITDA and adjusted EBITDA. These non-GAAP financial 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.

我們今天的討論將包括非公認會計準則財務指標，包括 EBITDA 和調整後 EBITDA。這些非公認會計原則財務指標應作為我們公認會計原則結果的補充，而不是替代或獨立於我們的公認會計原則結果。我們的新聞稿中提供了最直接可比較的 GAAP 財務指標與此類非 GAAP 財務指標的調整表作為補充財務資訊。

Now, I would like to turn the call over to Shawn Nelson, Chief Executive Officer of The Lovesac Company.

現在，我想將電話轉給 Lovesac 公司執行長 Shawn Nelson。

Thank you, Liz. Good morning, everyone, and thank you for joining us today. I'll start this call off by reviewing the highlights of our third quarter fiscal 2024, briefly providing an update on our operational accomplishments and finishing up with our outlook. Then Mary Fox, our President and COO, will update you on the progress we made against our strategic initiatives. And finally, Keith Siegner, our CFO, will review our financial results and a few other items related to our outlook in more detail.

謝謝你，莉茲。大家早安，感謝您今天加入我們。我將首先回顧 2024 財年第三季的亮點，簡要介紹我們的營運成就的最新情況，最後展望我們的前景。然後，我們的總裁兼營運長瑪麗福克斯將向您介紹我們策略舉措所取得的最新進展。最後，我們的財務長 Keith Siegner 將更詳細地審查我們的財務表現以及與我們的前景相關的其他一些項目。

Turning to the highlights of our results. Not a lot has changed since we spoke with you four weeks ago. Lovesac continues to deliver strong financial results and category outperformance backed by a very strong balance sheet. For third quarter, we're pleased to confirm top and bottom-line results that were in line with the outlook provided on our second quarter call on November 3. The headline is that third quarter net sales grew double digits in a double-digit negative category.

轉向我們結果的亮點。自從我們四個星期前與您交談以來，情況並沒有太大變化。在非常強勁的資產負債表的支持下，Lovesac 繼續實現強勁的財務表現和類別表現。對於第三季度，我們很高興確認頂線和底線結果與 11 月 3 日我們在第二季度電話會議上提供的前景一致。重點是第三季度淨銷售額增長兩位數，出現兩位數負增長類別。

To be clear, the macro backdrop largely remains the same as last month. Lingering macro uncertainty leads to consumer caution and pressure on the furniture category, which we estimate was down mid to high teens in the third quarter. However, our playbook also remains largely unchanged and continues to deliver. Our disruptive designs for life platforms, impactful product innovation, compelling marketing, and highly productive omnichannel footprint continue to distinguish our unique brand and engender customer loyalty.

需要明確的是，宏觀背景基本上與上個月相同。揮之不去的宏觀不確定性導致消費者謹慎行事，並對家具類別造成壓力，我們估計第三季家具類別下降了中等到高位。然而，我們的策略也基本上保持不變，並繼續發揮作用。我們對生活平台的顛覆性設計、有影響力的產品創新、引人注目的營銷以及高效的全通路足跡繼續使我們獨特的品牌脫穎而出，並提高客戶忠誠度。

More specifically, for the third quarter, total net sales were $154 million, up 14.3% versus the prior year period AND 32% on a two-year basis. Omnichannel comparable net sales growth was 2% for the quarter, a key metric for how we evaluate and manage our unique omnichannel business. We delivered gross margin expansion and substantial abatement in SG&A deleverage as expected, which led to materially improved profitability compared to the third quarter of fiscal 2023.

更具體地說，第三季淨銷售額總額為 1.54 億美元，比去年同期成長 14.3%，比兩年增加 32%。本季全通路可比淨銷售額成長率為 2%，這是我們評估和管理獨特全通路業務的關鍵指標。我們按預期實現了毛利率擴張和銷售、管理、行政管理去槓桿化的大幅降低，這使得獲利能力與 2023 財年第三季相比大幅提高。

Adjusted EBITDA reached a positive $2.5 million compared to a negative $6.9 million in the prior year period. Net losses also improved to $2 million compared to a net loss of $7 million in Q3 last year, and that's despite non-recurring expenses related to the restatement that are called out in our press release.

調整後 EBITDA 達到正 250 萬美元，而去年同期為負 690 萬美元。與去年第三季的淨虧損 700 萬美元相比，淨虧損也改善至 200 萬美元，儘管我們在新聞稿中指出了與重述相關的非經常性費用。

The Lovesac team continued to execute across all our priorities, including our innovation agenda, physical footprint expansion, omnichannel experience from order to delivery, and marketing efficiencies. Mary will discuss in more detail the progress of these growth strategies in a moment.

Lovesac 團隊繼續執行我們的所有優先事項，包括我們的創新議程、實體足跡擴張、從訂單到交付的全通路體驗以及行銷效率。瑪麗稍後將更詳細地討論這些成長策略的進展。

As we look to the final quarter of the year, which includes the all-important holiday selling weeks, I'd like to note the following. The macro environment and in turn the discretionary home category has remained challenging. As we said on our last call, we are not planning for any meaningful recovery in category growth in the near term.

當我們展望今年最後一個季度（包括最重要的假期銷售週）時，我想指出以下幾點。宏觀環境以及可自由支配的住房類別仍然充滿挑戰。正如我們在上次電話會議中所說，我們不打算在短期內實現品類成長的任何有意義的復甦。

And yes, as expected, the promotional environment was more competitive over the Black Friday and Cyber Monday periods than last year. But as we discussed with you last month, we adapted our plans, increasing the discount slightly, and delivering relevant and distinctive marketing with strong gross margins to boot. Taking all that into account and with the Black Friday and Cyber Week events behind us, I'm happy to say that Lovesac has continued to grow and outperform the category.

是的，正如預期的那樣，黑色星期五和網路星期一期間的促銷環境比去年更具競爭力。但正如我們上個月與您討論的那樣，我們調整了我們的計劃，略微增加了折扣，並提供了相關且獨特的營銷活動，並帶來了強勁的毛利率。考慮到所有這些，並且隨著黑色星期五和網路週活動的結束，我很高興地說 Lovesac 繼續增長並超越了該類別。

As a result, we are further tightening our full-year net sales guidance range now of $710 million to $720 million, which represents high single to nearly double-digit growth, even excluding the impact of the 53rd week this year. A truly standout performance.

因此，我們進一步收緊全年淨銷售額指導範圍，目前為 7.1 億美元至 7.2 億美元，這代表著高個位數至近兩位數的增長，甚至不包括今年第 53 週的影響。真正出色的表現。

We are not ready to provide guidance for fiscal 2025 today. However, we will prudently control expenses and with a focus on efficiency, balanced against proactive investments in new products to drive profitable growth.

今天我們還沒準備好提供 2025 財年的指導。不過，我們將審慎控制開支，注重效率，與積極投資新產品平衡，以推動獲利成長。

In summary, we are pleased to deliver third-quarter results that were in line with our expectations, and which once again are ahead of the competition. The operational progress we are making against our growth strategies, along with disciplined investments in key foundational areas like technology, new product innovation, and insights continue to fortify our flywheel, thereby driving consumer demand and expanding our market leadership, which we believe can last well into the future.

總之，我們很高興提供符合我們預期的第三季業績，並再次領先競爭對手。我們根據成長策略的營運進展，以及對技術、新產品創新和洞察等關鍵基礎領域的嚴格投資，繼續強化我們的飛輪，從而推動消費者需求並擴大我們的市場領導地位，我們相信這種領導地位能夠持續下去進入未來。

Finally, I want to thank the entire Lovesac team for their tireless execution of our strategies and delivery of our goals, especially during this critical time of year. Our disruptive model enables us to continue to grow, thrive, innovate, and invest in this business. But it is our people who ensure an outstanding customer experience and are the reason that our Lovesac family is growing so steadily as we enjoy a great holiday season together.

最後，我要感謝整個 Lovesac 團隊，感謝他們孜孜不倦地執行我們的策略並實現我們的目標，特別是在一年中的這個關鍵時刻。我們的顛覆性模式使我們能夠繼續發展、繁榮、創新並投資於這項業務。但正是我們的員工確保了出色的客戶體驗，也是我們 Lovesac 家族在我們共同享受美好假期的同時穩步發展的原因。

With that, I will hand it over to Mary to cover our strategic priorities and progress in more detail. Mary?

接下來，我將把它交給瑪麗，更詳細地介紹我們的策略重點和進展。瑪麗？

Thank you, Shawn, and good morning, everyone. As Shawn discussed, with sales growth of 14.3% of quarter three results, again reflected industry leading growth driven by our unique omnichannel business model. Importantly, on a full-year basis, our sales were up 196% from pre-pandemic levels and our adjusted EBITDA margin has increased 880 basis points over the same time period.

謝謝你，肖恩，大家早安。正如 Shawn 所討論的，第三季業績的銷售額增長了 14.3%，再次反映出我們獨特的全通路業務模式推動的行業領先增長。重要的是，從全年來看，我們的銷售額比疫情前的水平增長了 196%，調整後的 EBITDA 利潤率同期增長了 880 個基點。

Category outperformance has continued this quarter with strength in demand versus last year during [cyber side] from Black Friday through Cyber Monday, and we are very pleased with our early results. Some highlights from cyber side include having our two largest sales days and the largest week in our history. We believe this peak in sales that is unique to our business within our category is due in part to our investment in building a brand that is unmatched in the furniture category, coupled with delivery to customers' homes in just a few days.

本季度，從黑色星期五到網路星期一的[網路方面]，與去年相比，該類別的表現持續強勁，需求強勁，我們對早期結果感到非常滿意。網路方面的一些亮點包括我們歷史上最大的兩個銷售日和最大的一周。我們相信，我們在該類別中的業務所特有的銷售高峰，部分原因在於我們投資建立了一個在家具類別中無與倫比的品牌，再加上在短短幾天內送貨到客戶家中。

Our clear strategy for growth and the team's consistent execution against our growth strategies allows us to continue to fuel our flywheel and drive operational excellence across the business. I will now share the highlights of our operational progress in quarter three.

我們明確的成長策略以及團隊對我們的成長策略的一致執行使我們能夠繼續為我們的飛輪提供動力並推動整個業務的卓越營運。我現在將分享我們第三季營運進展的亮點。

Firstly, starting with product innovation. During quarter three, we expanded distribution of our newly launched angled side, which is now available across our showroom base as well as our e-com platform. And we're very happy with the impact and feedback. Angled side performance is even above our original expectations, which were ambitious, emphasizing how it is a meaningful driver of our overall continued growth and category outperformance.

首先，從產品創新開始。在第三季度，我們擴大了新推出的斜面的分銷範圍，現已在我們的展廳基地和電子商務平台上提供。我們對影響和回饋感到非常滿意。傾斜的側面表現甚至超出了我們最初的預期，我們的預期是雄心勃勃的，強調它如何成為我們整體持續成長和類別表現優異的有意義的驅動力。

As I said before, we partnered with Architectural Digest to launch angled side to the consumer and design a world. The event was well attended by influencers as well as media outlets such as Vogue and glamour. And of course, Architectural Digest. In addition to generating over 1 billion impressions. The event was surrounded by Architectural Digest paid media, further powering the success we've seen since launch. In short, we're very happy with the early performance of angled side as it's approaching becoming Lovesac's number one style choice after only a few months.

正如我之前所說，我們與《建築文摘》合作，向消費者推出斜面並設計一個世界。這項活動吸引了許多有影響力的人士以及《Vogue》和《魅力》等媒體的參與。當然還有《建築文摘》。除了產生超過 10 億次印象之外。這場活動由《建築文摘》付費媒體圍繞，進一步推動了我們自推出以來所取得的成功。簡而言之，我們對斜邊​​的早期表現感到非常滿意，因為僅幾個月後它就接近成為 Lovesac 的第一風格選擇。

We're also launching some strong collaborations into the holidays, including a partnership with no instruments of update to develop a full stack that will be featured within Nordstrom and nordstrom.com this holiday. We continue to demonstrate that we will gain market share through our new product introductions and brand collaborations. As awareness and appreciation continue to grow, all of which reinforce the strength of our customer-centric business model.

我們還在假期期間推出了一些強有力的合作，包括在沒有更新工具的情況下合作開發一個完整的堆棧，該堆棧將在今年假期的 Nordstrom 和 Nordstrom.com 中展示。我們繼續證明，我們將透過新產品推出和品牌合作來獲得市場份額。隨著意識和欣賞力的不斷增長，所有這些都增強了我們以客戶為中心的業務模式的優勢。

Our omnichannel experience. This model is driven by a combination of our physical touch points in our digital platform. During third quarter, we opened 10 showrooms and 16 Best Buy shop-in-shops. With regards to our Best Buy partnership, sales were up 42.8% in quarter three, driven by increased shop-in-shop presence versus last year.

我們的全通路經驗。該模型是由數位平台中的實體接觸點組合驅動的。第三季度，我們開設了 10 個陳列室和 16 個百思買店中店。至於我們與百思買的合作關係，由於店中店數量較去年增加，第三季銷售額成長了 42.8%。

Our e-commerce channel performance continued to show strong growth and increased 20% to last year and contributing meaningfully to our category outperformance. Our omnichannel model and investments into touch points and website technology continues to drive improved customer satisfaction scores as we continuously monitor feedback and improve the overall customer shopping experience.

我們的電子商務通路業績持續呈現強勁成長，比去年成長了 20%，為我們的品類表現做出了重大貢獻。隨著我們不斷監控回饋並改善整體客戶購物體驗，我們的全通路模式以及對接觸點和網站技術的投資繼續推動客戶滿意度得分的提高。

We made significant improvements to the website shopping experience before entering our holiday code freeze, including new configurators to ease the customer rebuy journey, update the post-purchase experience, and platform security enhancements. Strong collaboration across touch points and e-commerce enable us to continuously improve the omnichannel experience.

在進入假期代碼凍結之前，我們對網站購物體驗進行了重大改進，包括新的配置器以簡化客戶重複購買之旅、更新購買後體驗以及增強平台安全性。跨接觸點和電子商務的強大合作使我們能夠持續改善全通路體驗。

Third is our brand ecosystem.At the center of our ecosystem lies our efficient marketing and effective driving brand awareness, familiarity love and ultimately customer acquisition, which supports our strong customer lifetime values, the customer acquisition cost ratio. Overall, we continue to be agile with our marketing mix. As the backdrop for customers' interaction with our category continues to change.

第三是我們的品牌生態系統。我們生態系統的核心是我們的高效行銷和有效推動品牌知名度、熟悉度和最終客戶獲取，這支持了我們強大的客戶終身價值，即客戶獲取成本比。總體而言，我們的行銷組合持續保持敏捷。隨著顧客與我們品類互動的背景不斷變化。

Let me share a few highlights of what we've been working on for awareness, more broadly, increasing efficiency and achieving reach enabled us to drive rate and also improved targeting simultaneously live sports upfronts are a key example of this improvement while on this subject Hopefully you all have seen our newest commercial that tested very strongly across all metrics.

讓我分享我們一直在努力提高知名度的一些亮點，更廣泛地說，提高效率和實現覆蓋面使我們能夠提高效率，同時改善定向直播體育預付款是在這個主題上進行這種改進的關鍵例子希望你們都看過我們最新的廣告，它在所有指標上都經過了非常嚴格的測試。

We continue to closely scrutinize digital marketing program optimizations to our SEM and social program, which have driven improvements in our overall ad exposure and cost metrics, along with improving conversion rates and ROI.

我們繼續密切關注 SEM 和社交計劃的數位行銷計劃優化，這推動了我們整體廣告曝光度和成本指標的改進，同時提高了轉換率和投資回報率。

We've had strong success with some social partnerships that reinforced the resonance of our brand with culture. Charli D'Amelio posted from her new home unless that product she requested. And as you know, she has more than 151 million followers on TikTok and over 9 million YouTube subscribers. We collaborated with Justin Pugh on a special fact when his Saturday Night Football intro restaurants straight off the couch. And these two collaborations garnered over 35 million impressions and are just a few examples of the work our team is doing, building brand love and stickiness and not to be forgotten direct mail campaigns once again delivered strong ROIs for us and not only drove customer acquisition, but aided increasing lifetime value of our customers.

我們在一些社會合作夥伴關係方面取得了巨大成功，增強了我們品牌與文化的共鳴。查莉·達梅里奧 (Charli D'Amelio) 從她的新家發帖，除非她要求使用該產品。如你所知，她在 TikTok 上擁有超過 1.51 億粉絲，在 YouTube 上擁有超過 900 萬訂閱者。我們與賈斯汀普 (Justin Pugh) 合作製作了一個特別的節目，他的《週六夜足球》直接在沙發上介紹餐廳。這兩次合作獲得了超過3500 萬次展示，這只是我們團隊正在做的工作的幾個例子，建立品牌喜愛度和粘性，不要忘記直郵活動再次為我們帶來了強勁的投資回報率，不僅推動了客戶獲取，但有助於提高客戶的終身價值。

Lastly, we are really excited to see the Esquire named StealthTech one of its best 37 gadget for 2023. Yes, that is right to calculate the best gadget list, reinforcing the strength of design for life products powered by technology.

最後，我們非常高興看到《Esquire》將 StealthTech 評為 2023 年最佳 37 個小玩意之一。是的，計算最佳小玩意列表是正確的，增強了科技驅動的生活產品的設計實力。

And finally, disciplined infrastructure investments and efficiencies. During quarter three, we continued to make investments in technology and research and development as we scale our business for the long term. We completed the national rollout of Project Spring, our new POS system in all of our touch points. This rollout enhances the customer experience through speed of transactions and unlocks new modern payment options like pay by Link capability.

最後，嚴格的基礎設施投資和效率。第三季度，我們繼續在技術和研發方面進行投資，以實現長期業務擴展。我們完成了 Project Spring 的全國推廣，這是我們所有接觸點的新 POS 系統。此次推出透過交易速度增強了客戶體驗，並解鎖了新的現代支付選項，例如透過連結支付功能。

Our quick delivery continues to drive customer satisfaction. And our investments in supply chain, which we remain on track to deliver by the end of this year are expected to help drive inventory productivity improvements of 20%. As we have previously stated, as mentioned last quarter, we continue to make progress on our second operations and open box inventory as we focus on improving the executional effectiveness and brand experience. And we are seeing over 48% improvement in units back to stock versus last year.

我們的快速交付持續提高客戶滿意度。我們對供應鏈的投資預計將有助於推動庫存生產力提高 20%，預計在今年年底前交付。正如我們之前所說，正如上季度所提到的，我們繼續在第二次營運和開箱庫存方面取得進展，因為我們專注於提高執行效率和品牌體驗。我們發現，與去年相比，庫存數量增加了 48% 以上。

As a result of these initiatives, we expect to see improvements in working capital as well as associated cost reductions across inbound freight and warehousing, which we saw in quarter three and we'll continue to realize in Q4. Investments in gladly, our customer service platform has allowed us to better serve customers as part of our sales and service strategy, driving over 8 points of increase in C love customer satisfaction scores in quarter three over the same quarter last year and an impressive increasing service performance versus last year during cyber side.

由於這些舉措，我們預計營運資金將得到改善，入境貨運和倉儲的相關成本也會降低，這是我們在第三季度看到的，並將在第四季度繼續實現。高興的是，我們的客戶服務平台的投資使我們能夠更好地為客戶服務，作為我們銷售和服務策略的一部分，推動第三季度的C love 客戶滿意度得分比去年同期提高了8 個百分點以上，服務的成長令人印象深刻網路方面的表現與去年相比。

We are laser focused on operational excellence, and we will continue to manage our cost structure and capital allocation as we deliver operational performance ahead of our competitors.

我們高度專注於卓越運營，我們將繼續管理我們的成本結構和資本配置，以提供領先於競爭對手的營運績效。

In summary, we are pleased with our results for the third quarter and our continued and consistent track record of market share gains. I want to echo Shawn's gratitude to our amazing team members for helping drive these financial and operational outcomes. For the big holiday weeks that we just covered and the ones to come, one thing that is certain is that we are ready for them and look forward to closing out our fiscal year having built on our market share gains, expanded our physical footprint with highly productive locations, improved our digital go-to market position, made important infrastructure investments, and doing all of this, while advancing our innovation agenda.

總之，我們對第三季的業績以及市佔率成長的持續記錄感到滿意。我想表達肖恩對我們出色的團隊成員的感謝，感謝他們幫助推動了這些財務和營運成果。對於我們剛剛報導的重要假期週以及即將到來的假期週，可以肯定的是，我們已經做好了準備，並期待著在我們的市場份額增長的基礎上結束我們的財年，擴大我們的實體足跡生產力地點，提高我們的數位進入市場地位，進行重要的基礎設施投資，並在推進我們的創新議程的同時完成這一切。

I will now pass the call over to Keith to review our third quarter results and our outlook for the fourth quarter. Keith?

我現在會把電話轉給基思，回顧我們第三季的業績和第四季的前景。基思？

Thanks, Mary. Let's jump right into a quick review of the third quarter, followed by our outlook for the rest of fiscal '24.

謝謝，瑪麗。讓我們快速回顧第三季度，然後展望 24 財年剩餘時間。

Net sales increased $19.2 million or 14.3% to $154 million in the third quarter of fiscal 24, with the year-over-year increase being driven by web and showrooms. This was in line with what we projected for the quarter, driven by our 25th anniversary celebration and the launch of angled side.

24 財年第三季淨銷售額成長 1,920 萬美元，成長 14.3%，達到 1.54 億美元，年成長是由網路和展廳推動的。這與我們在 25 週年慶典和傾斜側面推出的推動下對本季的預測一致。

Showroom net sales increased $15.7 million or 18.9% to $98.7 million in the third quarter as compared to $83 million in the prior year period. The increase in showroom sales was driven by an increase of 2% in omnichannel comparable net sales growth related to higher point of sale transactions with higher promotional discounting than the prior year, as well as the net addition of 41 net new showrooms compared to the prior year period.

第三季陳列室淨銷售額增加了 1,570 萬美元，或 18.9%，達到 9,870 萬美元，而去年同期為 8,300 萬美元。展廳銷售額的成長是由於全通路可比淨銷售額成長 2%，這與銷售點交易量增加和促銷折扣比上年更高有關，以及與上年相比淨增加 41 個新展廳有關。年期間。

You'll notice that beginning this quarter, we've replaced previously provided comparable sales growth metrics with a new metric, omnichannel comparable net sales growth. This is the metric most closely aligned with how we evaluate and manage the financial performance of our omnichannel business. It also eliminates noise cost through the inclusion of demand-based metrics in the past such as orders placed, but that have not been shipped, and should therefore be far more useful for new models.

您會注意到，從本季開始，我們已用新的指標（全通路可比淨銷售成長）取代了先前提供的可比較銷售成長指標。這是與我們評估和管理全通路業務財務績效最接近的指標。它還透過納入過去基於需求的指標（例如已下訂單但尚未發貨）來消除噪音成本，因此對於新模型來說應該更加有用。

Internet net sales increased $6.7 million or 20.1% to $40 million in the third quarter of fiscal '24 as compared to $33.3 million in the prior year period. Other net sales which include pop-up shop, shop in shop, and open box inventory transactions decreased $3.1 million or 17.1% to $15.4 million in the third quarter of fiscal '24. The decrease was principally due to a lower open box inventory transaction level, only $2.5 million compared to $4.2 million in the third quarter fiscal '23.

2024 財年第三季網路淨銷售額成長 670 萬美元，成長 20.1%，達到 4,000 萬美元，而去年同期為 3,330 萬美元。其他淨銷售額（包括快閃店、店中店和開箱庫存交易）在 2024 財年第三季下降了 310 萬美元或 17.1%，至 1,540 萬美元。下降的主要原因是開箱庫存交易水準較低，僅為 250 萬美元，而 23 財年第三季的交易水準為 420 萬美元。

Our open box inventory transactions with [ICON] are a part of our circular operations, design for life, and ESG initiatives. As we discussed last quarter, these transactions are waning in materiality as our initiatives to optimize our process for return product kick in. This better aligns with our sustainability goals and should retain more profits for Lovesac at the same time. We may engage in limited open box inventory transactions with ICON going forward to ensure that our warehouses are operating as efficiently as possible.

我們與 [ICON] 的開箱庫存交易是我們循環營運、終身設計和 ESG 舉措的一部分。正如我們上季度所討論的，隨著我們優化退貨流程的舉措的啟動，這些交易的重要性正在減弱。這更符合我們的永續發展目標，同時應該為 Lovesac 保留更多利潤。未來我們可能會與 ICON 進行有限的開箱庫存交易，以確保我們的倉庫盡可能有效率地運作。

By product category in the third quarter, our Sactional net sales increased 18%. Sac net sales decreased 10%. And our other net sales, which includes decorative pillows, blankets, and accessories, decreased 15% over the prior year. Gross margin increased 920 basis points to 57.4% of net sales in the third quarter versus 48.2% in the prior year quarter, primarily driven by a decrease of 1,070 basis points in total distribution and related tariff expenses. This was offset partially by 150 basis points of pressure from higher promotional discounting.

以產品類別計算，第三季我們的 Sactional 淨銷售額成長了 18%。 Sac 淨銷售額下降 10%。我們的其他淨銷售額（包括裝飾枕頭、毛毯和配件）比前一年下降了 15%。第三季毛利率成長 920 個基點，佔淨銷售額的 57.4%，而去年同期為 48.2%，這主要是由於總分銷和相關關稅費用減少了 1,070 個基點。這被較高的促銷折扣造成的 150 個基點的壓力部分抵消。

The decrease in total distribution and related tariff expenses over the prior year is principally related to the positive impact of 1,160 basis points decrease in inbound transportation costs, partially offset by 90 basis points in higher outbound transportation and warehousing costs. SG&A expense as a percent of net sales increased by 420 basis points in the third quarter or half the deleverage seen in the second quarter. The deleverage was primarily due to deleverage within employment costs, selling-related expenses tied to the Lovesac credit card, continued investments to support current and future growth, and also professional fees.

總分銷及相關關稅費用較上年減少主要與入境運輸成本下降1,160個基點的正面影響有關，部分被較高的出境運輸和倉儲成本90個基點所抵銷。第三季的 SG&A 費用佔淨銷售額的百分比增加了 420 個基點，是第二季去槓桿化的一半。去槓桿化主要是由於就業成本、與Lovesac信用卡相關的銷售相關費用、支持當前和未來成長的持續投資以及專業費用的去槓桿化。

In dollars, overhead expenses increased $10 million, consisting mainly of increases of $6.3 million in professional fees and $3.7 million in infrastructure investments in other miscellaneous items. Employment costs increased by $2.9 million, primarily driven by an increase in new hires in fiscal '24. Selling related expenses increased $1.5 million, principally due to credit card fees related to the increase in net sales and an increase in credit card rates.

以美元計算，管理費用增加了 1,000 萬美元，主要包括增加 630 萬美元的專業費用和 370 萬美元的其他雜項基礎設施投資。就業成本增加了 290 萬美元，主要是由於 24 財年新進員工增加所致。銷售相關費用增加了 150 萬美元，主要是由於與淨銷售額增加和信用卡利率上漲相關的信用卡費用。

We estimate non-recurring incremental fees associated with the restatement of prior period financials was approximately $1.7 million in the third quarter. Advertising and marketing expenses increased $2 million or 10.8% to $21.1 million for the third quarter of fiscal '24 compared to $19.1 million in the prior year period. Advertising and marketing expenses were 13.7% of net sales in the third quarter as compared to 14.1% of net sales in the prior year period.

我們估計第三季與前期財務重述相關的非經常性增量費用約​​為 170 萬美元。 2024 財年第三季廣告和行銷費用增加 200 萬美元，或 10.8%，達到 2,110 萬美元，而去年同期為 1,910 萬美元。第三季廣告和行銷費用佔淨銷售額的 13.7%，而去年同期則佔淨銷售額的 14.1%。

Operating loss for the quarter was $3.6 million compared to operating loss of $10.1 million in the third quarter of last year, driven by the factors we just discussed. Before we turn our attention to net loss, net loss per diluted share and adjusted EBITDA, please refer to the terminology and reconciliation between each of our adjusted metrics and their most directly comparable GAAP measurements in our earnings release issued earlier this morning.

由於我們剛才討論的因素，本季的營運虧損為 360 萬美元，而去年第三季的營運虧損為 1,010 萬美元。在我們將注意力轉向淨虧損、攤薄後每股淨虧損和調整後EBITDA 之前，請參閱我們今天早上早些時候發布的收益報告中的每個調整後指標與其最直接可比的GAAP 衡量指標之間的術語和調節。

Net loss for the quarter was $2.3 million or negative $0.15 per diluted share compared to a net loss of $7.4 million or negative $0.48 per diluted share in the prior year period. During the third quarter of fiscal '24, we recorded an income tax benefit of $1 million as compared to $2.8 million for the third quarter of fiscal '23. The change in benefit is primarily driven by the reduction in net loss for the quarter.

本季淨虧損為 230 萬美元，即稀釋後每股負 0.15 美元，去年同期淨虧損為 740 萬美元，即稀釋後每股負 0.48 美元。在 24 財年第三季度，我們記錄了 100 萬美元的所得稅優惠，而 23 財年第三季為 280 萬美元。效益變化主要是由於本季淨虧損減少。

Adjusted EBITDA for the quarter was an income of $2.5 million as compared to adjusted EBITDA loss of $6.9 million in the prior year period. Adjusted EBITDA for the third quarter was ahead of our expectations, principally driven by the upside to gross margins.

本季調整後 EBITDA 營收為 250 萬美元，而去年同期調整後 EBITDA 虧損為 690 萬美元。第三季調整後 EBITDA 超出我們的預期，主要是因為毛利率上升。

Turning to our balance sheet, our total merchandise inventory levels are in line with our projections and have leveled out as we discussed on our prior call. This is despite the addition of angled sides queues and we believe this is a clear highlight of the uniqueness of our business model. We feel exceptionally good about both the quality and quantity of our inventory and our ability to maintain industry-leading in-stock positions and delivery times.

談到我們的資產負債表，我們的總商品庫存水準符合我們的預測，並且正如我們在先前的電話會議中所討論的那樣已經趨於平穩。儘管增加了傾斜的側面隊列，但我們相信這是我們商業模式獨特性的明顯亮點。我們對庫存的品質和數量以及保持行業領先的庫存位置和交貨時間的能力感到非常滿意。

We ended the third quarter with a very healthy balance sheet, inclusive of $37.7 million in cash and cash equivalents, as well as $36 million in availability on our revolving line of credit with no borrowings. Please refer to our earnings press release for other details on our third quarter financial performance.

第三季結束時，我們的資產負債表非常健康，包括 3,770 萬美元的現金和現金等價物，以及 3,600 萬美元的可用循環信貸額度，沒有借款。有關我們第三季財務業績的其他詳細信息，請參閱我們的收益新聞稿。

So now our outlook and let's start with the fiscal fourth quarter. We estimate net sales of $260 million to $270 million. We expect adjusted EBITDA between $48 million to $56 million. This includes gross margins just under 60%, merchandising and advertising of 10.5% to 11% as a percentage of net sales, and SG&A of 31% to 32% as a percent of net sales.

現在我們展望一下第四財季的情況。我們預計淨銷售額為 2.6 億至 2.7 億美元。我們預計調整後 EBITDA 在 4800 萬美元至 5600 萬美元之間。其中包括略低於 60% 的毛利率、佔淨銷售額 10.5% 至 11% 的銷售和廣告以及佔淨銷售額 31% 至 32% 的 SG&A。

We estimate net income to be $29 million to $33 million. This includes approximately $1.5 million of non-recurring incremental expenses associated with our restatement of prior period financial statements. We estimate diluted income per share is expected to be $1.77 to $2.2 with $16.6 million diluted weighted average shares outstanding.

我們預計淨利潤為 2900 萬至 3300 萬美元。這包括與我們重述前期財務報表相關的約 150 萬美元的非經常性增量費用。我們預計稀釋後每股盈餘預計為 1.77 至 2.2 美元，稀釋後加權平均流通股數為 1,660 萬美元。

Now for the full year fiscal 2024. We are tightening the range of our full-year outlook for net sales to $710 million to $720 million. We expect adjusted EBITDA between $54 million and $62 million. This includes gross margins of 57% to 57.5%, merchandising and advertising of approximately 13% as a percentage of net sales, and SG&A of approximately 38% as a percentage of net sales.

現在展望 2024 財年全年。我們將全年淨銷售額展望範圍收緊至 7.1 億美元至 7.2 億美元。我們預計調整後 EBITDA 在 5,400 萬美元至 6,200 萬美元之間。其中包括 57% 至 57.5% 的毛利率、約佔淨銷售額 13% 的商品銷售和廣告、約佔淨銷售額 38% 的銷售及管理費用 (SG&A)。

We estimate net income to be between $22 million and $26 million. This fiscal 2024 estimates include $4.5 million to $5 million of non-recurring incremental expenses associated with our restatement of prior period financial statements. We estimate diluted income per common share in the range of $1.35 to $1.60 and approximately $16.5 million estimated diluted weighted average shares outstanding. As a reminder, the 53rd week in the fourth quarter is expected to contribute approximately $6 million in net sales.

我們估計淨利潤在 2200 萬美元至 2600 萬美元之間。 2024 財政年度的預估包括與我們重述前期財務報表相關的 450 萬至 500 萬美元的非經常性增量費用。我們估計每股普通股的稀釋收入在 1.35 美元至 1.60 美元之間，預計稀釋後加權平均已發行股票約為 1,650 萬美元。提醒一下，第四季第53週預計將貢獻約600萬美元的淨銷售額。

Quickly on our cash balance outlook, we were very pleased to have reported such a strong cash position for the third quarter, which is typically our lowest quarter ending cash balance of the year given the inventory build ahead of the strong holiday sales period. As we monetize inventory through the busy season, we continue to estimate we will end fiscal '24 with a higher net cash balance than we ended fiscal '23.

就我們的現金餘額前景而言，我們非常高興地報告了第三季度如此強勁的現金狀況，考慮到強勁的假日銷售期之前的庫存增加，這通常是我們今年季度末現金餘額最低的情況。隨著我們在旺季將庫存貨幣化，我們繼續估計 24 財年結束時的淨現金餘額將高於 23 財年結束時的淨現金餘額。

So in conclusion, we're pleased with our third quarter results and how early holiday sales have supported the continuation of competitively superior results as it is reflected in our outlook, market share gains, strengthening foundations, exciting new growth drivers, and a healthy balance sheet put Lovesac in an enviable position. The more I get to know the teams, the more excited I get about our collective commitment to optimizing the opportunity ahead of us. With a strong focus on growth, underpinned by an ROI-based approach to measured reinvestment, I'm confident in the outlook.

總而言之，我們對第三季的業績以及早期假期銷售如何支持我們繼續保持具有競爭力的卓越業績感到滿意，這反映在我們的前景、市場份額的增長、鞏固的基礎、令人興奮的新增長動力以及健康的平衡中床單使洛夫薩克處於令人羨慕的位置。我對這些團隊了解得越多，我對我們對優化面前的機會的集體承諾就越感到興奮。由於對成長的強烈關注，並以基於投資回報率的衡量再投資方法為基礎，我對前景充滿信心。

Now I'll turn the call back to the operator to start our Q&A session.

現在我將把電話轉回接線生以開始我們的問答環節。

(Operator Instructions) Maria Ripps, Canaccord Genuity.

（操作員說明）Maria Ripps，Canaccord Genuity。

Good morning and thanks for taking my questions. First recognizing that it's still pretty early and you're not guiding to next year, but maybe can you talk about sort of your current expectations for the category growth and consumer demand next year? And what kind of macro assumptions are embedded in your sort of internal forecast for next year?

早安，感謝您提出我的問題。首先認識到現在還為時過早，您不會指導明年，但也許您能談談您目前對明年品類增長和消費者需求的預期嗎？你們對明年的內部預測包含了哪些宏觀假設？

Hey, Maria. And luckily, we hear from you for the question. Yes, obviously, we are fully focused on Q4. And this all important. Holiday season, we'll share more when we come through to our earnings for quarter four.

嘿，瑪麗亞。幸運的是，我們收到了您關於這個問題的來信。是的，顯然，我們完全專注於第四季。這一切都很重要。假期期間，當我們公佈第四季度的收益時，我們將分享更多資訊。

In terms of plan for next year we still anticipate the macro environment will be choppy and the cash will be remaining challenging, and we have planned that way. But as we've done now, so this year, last year, we continue to obviously, really outperform the category really driving tremendous growth.

就明年的計劃而言，我們仍然預計宏觀環境將動盪不安，現金仍將面臨挑戰，我們就是這樣計劃的。但正如我們現在所做的那樣，今年、去年，我們的表現繼續明顯優於該類別，真正推動了巨大的成長。

And I think just so much of that goes back to the fact co-brand Frank continues to just really grow. I think, you know, our customers even just being asked in showroom last week, they just love the brand. They believe in design for like Sina. We're plan continue to be pragmatic students in terms of our investments with obviously a deep focus on ROI. And but obviously, as soon as that thing turns, as you know, we hope it will as the category starts to improves. That will be the ones that will be the fastest to be able to chase into that growth we saw through COVID as we feel good and obviously, that's the advantage of our supply chain.

我認為這在很大程度上要歸功於聯合品牌 Frank 的持續成長。我想，你知道，我們的客戶即使上週在陳列室被問到，他們也只是喜歡這個品牌。他們相信像新浪這樣的設計。我們計劃在投資方面繼續保持務實態度，顯然非常注重投資報酬率。但顯然，正如你所知，一旦事情發生變化，我們希望隨著類別開始改善。這將是最快能夠實現我們在新冠疫情期間看到的成長的企業，因為我們感覺良好，顯然，這就是我們供應鏈的優勢。

Maria, this is Keith. Just to just to add to that a little bit. I mean, that's one of the really, really alluring aspects of this business model to me because of our approach, not being merchandise led but primarily selling seats and sides and Sax with the various covers our ability to scale up with upside surprises to the macro. It's really advantageous from, you know, starting from a position of shipping in less than two weeks, even if we needed to potentially extend a tiny bit in order to if it was, it was a really material upside macro, surprise we could do so. So we sort of retain the ability to participate in upside macro surprises in a way that I think is sort of unmatched.

瑪麗亞，這是基斯。只是為了補充一點。我的意思是，這對我來說是這種商業模式真正非常有吸引力的方面之一，因為我們的方法不是以商品為主導，而是主要銷售座椅和側面以及薩克斯管，並提供各種覆蓋範圍，我們有能力透過宏觀上行驚喜來擴大規模。這確實是有利的，因為，從不到兩週的運輸時間開始，即使我們需要潛在地延長一點點，如果是的話，這是一個非常重要的宏觀上行空間，令人驚訝的是我們可以這樣做。因此，我們保留了以一種我認為無與倫比的方式參與宏觀上行驚喜的能力。

Got it. That's helpful. And then secondly, sort of you've made a lot of progress on gross margin expansion over the past couple of quarters. Can you maybe talk about your philosophy around preserving that margin versus maybe passing on some of the savings to the consumer to drive volumes, especially kind of here in the near term in this macro-environment?

知道了。這很有幫助。其次，過去幾季你在毛利率擴張方面取得了很大進展。您能否談談您關於保持利潤的理念，而不是將一些節省的費用轉嫁給消費者以推動銷量，特別是在這種宏觀環境下的短期內？

Sure. I'll start off on this one. So we've been we've been really pleased with this, and there's a whole host of factors behind it that we walked through on the call are that I walked through in the call earlier. And you could see as we get into fourth quarter with the guidance that we gave, they were looking for continued gross margin expansion through the fourth quarter. Let's call it heavily rounded half the benefit year over year that we saw here in the third quarter.

當然。我將從這個開始。所以我們對此感到非常滿意，我們在電話會議中經歷過的背後有很多因素，我之前在電話會議中也經歷過。您可以看到，當我們按照我們給出的指導進入第四季度時，他們希望在第四季度繼續實現毛利率擴張。我們可以稱其為我們在第三季度看到的同比收益的四捨五入一半。

But I think I would say this. We've sort of settled into where we think is a healthy range for us. It barring any material shocks, whether it's on inbound freight or outbound freight. There's always potential for some type of systemic shock. But barring anything like that, I think we feel pretty good about this. Then what it becomes for us is a balancing act across pricing, across promotions, across managing all of those inbound and outbound freight cross plus how we leverage our marketing and our ineffective promotions we offer through the financing through Lovesac credit card.

但我想我會這麼說。我們已經進入了我們認為對我們來說健康的範圍。排除任何重大衝擊，無論是入境貨運還是出境貨運。總是有可能發生某種類型的系統性衝擊。但除非發生類似的事情，我認為我們對此感覺很好。那麼對我們來說，這就是在定價、促銷、管理所有進出境貨運交叉以及我們如何利用我們的行銷和透過 Lovesac 信用卡融資提供的無效促銷方面的平衡行為。

So put it altogether, I think these feel like pretty sustainable and healthy levels for us. Again, barring any systemic shock.

總而言之，我認為這些對我們來說是相當可持續和健康的水平。再次強調，除非出現任何系統性衝擊。

Got it. Thank you for the color.

知道了。謝謝你的顏色。

Brian Nagel, Oppenheimer.

布萊恩·內格爾，奧本海默。

First question I want to ask, and I think it's a bit of a follow-up to that, the prior gross margin question. You mentioned in the comments that we've heard this elsewhere through the notes, it's more promotional out there. Companies is more virtual backdrop. So I guess the question I have is with regard to gross margins. As we look at the results we've put up today for Q3 and the guidance for Q4, to what degree your consumers react more favorably to price promotions? And how much of a driver gets you to that strategically, how much of a driver of the business is that?

我想問的第一個問題，我認為這是之前毛利率問題的後續問題。您在評論中提到，我們在其他地方透過筆記聽到這一點，那裡更具促銷性。公司的背景更加虛擬。所以我想我的問題是關於毛利率的。當我們查看今天發布的第三季度的結果和第四季度的指導時，您的消費者對價格促銷的反應在多大程度上更有利？有多少驅動力可以讓你從策略上實現這一點，這對業務有多少驅動力？

Look, I think promotions is a very powerful tool in our arsenal, especially given our high gross margins to begin with and the competitive nature of our unique products. We tried to be very strategic with them. As you know, we're trying to build the business that's here to stay for a forever, for 50 years. We're trying to build a generational brand and a brand that means something.

看，我認為促銷是我們武器庫中非常強大的工具，特別是考慮到我們的高毛利率和我們獨特產品的競爭性質。我們試圖與他們保持戰略性的關係。如您所知，我們正在努力打造能夠永遠存在 50 年的業務。我們正在努力打造一個代際品牌和一個有意義的品牌。

And so we have long leveraged promotions. Fairly healthy levels because in this industry, in particular, it's a considered purchase. And so people spend quite a long time, researching products, researching competitors, research our product before they make the decision to purchase. And what we found, especially during the holidays, it's while -- our business spikes as we as we all know, during Q4 and kind of uniquely in our category, let's check.

所以我們有長期槓桿促銷。相當健康的水平，因為特別是在這個行業，這是經過深思熟慮的購買。因此，人們在做出購買決定之前會花費相當長的時間來研究產品、研究競爭對手、研究我們的產品。我們發現，特別是在假期期間，我們的業務在第四季度出現了高峰，這在我們的類別中是獨一無二的，讓我們來檢查一下。

And we estimate as we look at that, you know, is that or is that a blessing or a curse, but we enjoy the extra business that comes by the exposure being out there in shopping centers. And during this time of year when when there's foot traffic, et cetera. But actually, most of those sales as we observe them and as I observe them in the wild in the front lines and showrooms come from these considered processes where customers are weighing the value. And then frankly, they leverage the holiday season to push them over the edge and make that makes that purchase.

我們估計，當我們看到這一點時，你知道，這是福是禍，但我們很享受在購物中心曝光所帶來的額外業務。每年的這個時候，人流量大，等等。但實際上，正如我們觀察到的以及我在前線和陳列室中觀察到的那樣，大部分銷售都來自這些經過深思熟慮的流程，客戶在這些流程中權衡了價值。坦白說，他們利用假期將自己推向極限並進行購買。

Finally for themselves, it's actually most of the time is not a gift or even related to gifting at system kind of a psychological excuse purchase. And so during this time of year, in particular, the way that we manage promotions is really critical because we have people that have been shopping us maybe throughout the entire year and finally pull the trigger and are waiting to see it might do they might get better, et cetera. So we've exercised, I think, a pretty disciplined hand this season, particularly because it's maybe the most promotional season it's ever been. And at least in recent history, given the given the industry right now. And so our promotions are lower, then what we observe by really any of our competitors.

最後對他們自己來說，它實際上大多數時候都不是禮物，甚至與系統贈送的某種心理藉口購買有關。因此，特別是在每年的這個時候，我們管理促銷活動的方式非常重要，因為我們有人可能一整年都在我們這裡購物，最後扣動扳機，等待著看看他們可能會得到什麼更好，等等等。因此，我認為，本賽季我們採取了相當嚴格的紀律，特別是因為這可能是有史以來促銷最大的一個賽季。至少在最近的歷史中，考慮到目前的行業。因此，我們的促銷活動比我們觀察到的任何競爭對手都要低。

And as you can see by the numbers, we are competing very robustly. I think we probably have the strongest growth in the category. And so we think we have that right balance of promotion and the healthy fundamentals in the business for the category right now. And the nice thing is should things in the category get worse or just continue to languish. We have a strong opportunity to leverage promotions further to drive the business if necessary. But we're not chasing business to chase business. You know, again, we're trying to balance building a brand that people can love and trust in and have consistency as well as, of course, compete in real time and generate cash and generate profits returns for investors.

正如您從數字中看到的，我們的競爭非常激烈。我認為我們可能是該類別中成長最強勁的。因此，我們認為我們目前在促銷和該類別業務的健康基本面之間取得了適當的平衡。好的事情是，如果該類別的情況變得更糟或只是繼續萎靡不振。如有必要，我們有很好的機會進一步利用促銷活動來推動業務。但我們並不是為了追逐業務而追逐業務。你知道，我們再次努力平衡打造一個人們喜愛、信任、具有一致性的品牌，當然，還要即時競爭、為投資者創造現金和利潤回報。

I think, Shawn, just maybe Brian to add a little bit more. I mean, what we see as well is in consumers, they love the deal and excitement to that deal. But it doesn't mean about the lowest price and we've said before, nearly 40% of consumers that come into our brand, they don't even cross upwards with anyone else.

我想，肖恩，也許布萊恩可以補充一點。我的意思是，我們也看到了消費者，他們喜歡這筆交易並且對這筆交易感到興奮。但這並不意味著最低的價格，我們之前說過，接近 40% 進入我們品牌的消費者，他們甚至不會與其他任何人向上交叉。

So we feel very good in terms of gross margin, and it being maintained. We have been doing some selective price increases in places as we ladder out, particularly on our more premium sales. And we've seen great performance from that. So we're constantly testing the levers that we have available and you can, from our result gaining huge market shares, outperforming everything else.

因此，我們對毛利率感覺非常好，並且一直保持不變。隨著我們的逐步退出，我們一直在一些地方有選擇性地漲價，特別是在我們更優質的銷售方面。我們從中看到了出色的表現。因此，我們不斷測試我們可用的槓桿，您可以從我們的結果中獲得巨大的市場份額，超越其他一切。

Then this algorithm has been working for some we saw from the Goldman Sachs report yesterday, the promotional level, either with high throughput, we had about 40% and at a similar level through November. And we are substantially estimating again, different funds. We do feel good on the gross margins.

然後這個演算法一直在我們昨天從高盛報告中看到的一些促銷水平上發揮作用，無論是高吞吐量，我們大約有 40％，並且在 11 月處於類似水平。我們再次對不同的基金進行大幅估算。我們對毛利率確實感覺良好。

That's very helpful. Then during my follow-up question on a different topic. So I think as Mary I think you were talking in your comments, it's about, you know, they are highlighting, I guess, the ongoing success of the relationship with Best Buy. So the question I had is I know I know you're a company very guarded about your future plans. I mean, should we expect additionally newer distribution type partnerships with companies like Best Buy to help basically get the Lovesac products out there.

這非常有幫助。然後在我就不同主題提出後續問題時。所以我認為，作為瑪麗，我認為你在評論中談論的是，你知道，他們強調，我想，與百思買的關係持續取得成功。所以我的問題是，我知道你們是一家對未來計畫非常謹慎的公司。我的意思是，我們是否應該期待與百思買等公司建立新的分銷類型合作夥伴關係，以幫助基本上將 Lovesac 產品推向市場。

Before I think either way, we always want to be best-in-class partners where you know that it's really on their minds to be made and how much is the cost because of this has been an incredible promise for FI., particularly the wind farm when a home a tech, there's no one better to partner with them. The best Mark do you want to be with footsteps?

在我考慮任何一種方式之前，我們總是希望成為一流的合作夥伴，您知道這確實是他們的想法，並且成本是多少，因為這對FI 來說是一個令人難以置信的承諾，尤其是風能當家庭成為技術人員時，農場是他們的最佳夥伴。你想成為腳步最好的馬克嗎？

So yes, we've continued to expand the relationship with Best Buy and more to come, and we'll share more obviously at the end of this year. As I said, we are gaining share there, very happy in terms of a chip and want to continue to advance it. And then we're always considering drawn into any other in best-in-class partners that we should be partnering with as you consider the whole ecosystem, whether it be so room, whether it be Costco, I in our own e-com platform, I'm just when should we be and where those footsteps that either always on our mind, strategic, very thoughtful how we do it to ensure that we really drive the rate that we build and consumers expect to find us very helpful routes again, happy holidays.

所以，是的，我們繼續擴大與百思買的關係，未來將擴大更多關係，我們將在今年年底更明顯地分享。正如我所說，我們正在那裡獲得份額，我們對晶片感到非常高興，並希望繼續推進它。然後，當你考慮整個生態系統時，我們總是考慮與我們應該合作的任何其他一流合作夥伴合作，無論它是否有那麼大的空間，無論是 Costco，還是在我們自己的電子商務平台上，我只是我們應該在什麼時候，在哪裡，那些腳步要么總是在我們的腦海中，戰略性的，非常深思熟慮的，我們如何做到這一點，以確保我們真正推動我們建立的速度，消費者期望再次找到我們非常有幫助的路線，節日快樂。

Matt Koranda, Roth MKM.

馬特·科蘭達，羅斯·MKM。

Hey, guys, good morning. Thanks for taking the questions. I just wanted to spend back to the Black Friday, Cyber Monday commentary and the holiday commentary in general that you had. Just wondering if you can maybe speak to sort of consumer behavior that you're observing.

嘿，夥計們，早安。感謝您提出問題。我只是想回顧一下黑色星期五、網路星期一的評論和假期評論。只是想知道您是否可以談談您正在觀察的消費者行為。

One of the things we've seen sort of quarter to date from a number of folks is that consumers seem to be responding to promotions within kind of sitting on their hands between those promotional periods. I'm just curious if that's the trend that you're seeing and then any willingness to sort of quantify the Black Friday Cyber Monday growth? You said? I know you mentioned two record days and a record week, but any further quantification would be appreciated.

本季度迄今為止，我們從許多人那裡看到的一件事是，消費者似乎在促銷期間對促銷做出了反應。我只是好奇這是否是您所看到的趨勢，然後是否願意量化黑色星期五網路星期一的成長？你說？我知道您提到了兩個創紀錄的日子和創紀錄的一周，但如果有任何進一步的量化，我們將不勝感激。

Yes. No, I thank you for the question, Matt. I think 1st of the year, we were incredibly happy with the performance of five, as you mentioned, and from all industry reports. We know we are on the category significantly upon a lot of market share. I think in terms of dynamics, all of our channels contribute to this strong performance it really felt like we were back to 2019 from traffic day rooms, e-commerce growth well into the late evening. And it was great being back in the front line.

是的。不，我謝謝你的提問，馬特。我認為今年第一天，正如您所提到的，以及所有行業報告中的內容，我們對五家公司的表現感到非常滿意。我們知道我們在這個類別中佔有很大的市場份額。我認為就動態而言，我們所有的管道都為這種強勁的業績做出了貢獻，從流量日間、電子商務成長一直到深夜，我們真的感覺回到了 2019 年。回到前線真是太好了。

We saw consumers coming in and reset. We're very focused in what they wanted to buy. You know, and as we said with you back at the last call a month ago, we're not seeing anything in terms of trade down time or, you know, some trade-up, particularly in the fill, but also just storage in the seats and the other things that really drives that they have a so that continued financing for continued. I think you talked about some people waiting for sure.

我們看到消費者進來並重置。我們非常關注他們想買的東西。你知道，正如我們在一個月前的最後一次電話會議上與你所說的那樣，我們沒有看到任何貿易下降時間，或者，你知道，一些貿易上升，特別是在填充方面，但也只是存儲在席位和其他真正推動他們擁有的東西，以便持續不斷的融資。我想你談到了一些人肯定在等待。

And we saw that across the industry with others come out with deals, you know, even earlier than Halloween, we were beta and we promise that we gave them the best deal and we are holding to that. And we did so see a little bit more of that pent-up demand coming, which is obviously, you know, the results that we said. So you can have a from from everything we've done and we've baked all of that performance into our guidance for this year. We decided to wait for Tesla a lot to come, but it was obviously amazing to see the performance and just really reinforcing the spread and just a great job to our team managing those records.

我們看到整個行業與其他人達成了交易，你知道，甚至在萬聖節之前，我們還是測試版，我們承諾給他們最好的交易，並且我們堅持這一點。我們確實看到了更多被壓抑的需求即將到來，這顯然就是我們所說的結果。因此，您可以從我們所做的一切中了解一些，我們已將所有這些表現納入今年的指導中。我們決定等待特斯拉的到來，但看到它的表現顯然是令人驚訝的，而且確實加強了傳播，對我們管理這些記錄的團隊來說是一項偉大的工作。

That is, is that our little show room with incredible productivity. It was great and they did an amazing job.

也就是說，我們的小展示廳具有令人難以置信的生產力。這太棒了，他們做得非常出色。

Okay. Very helpful, Mary. Thank you. And then maybe for Keith, just on the gross margin, I wanted to attack it from a different angle. So in the third quarter, you had an upside surprise versus sort of the commentary that you had last call. I'm just wondering what drove the upside. And then for the fourth quarter in terms of product margin. Are we baking in a deeper headwind in that [sub 60] outlook that you talked about? Just maybe talking about the bridge, especially as it pertains to product margin in the fourth quarter. Thank you.

好的。非常有幫助，瑪麗。謝謝。然後也許對基斯來說，只是在毛利率上，我想從不同的角度來攻擊它。因此，在第三季度，與您上次通話的評論相比，您看到了上行的驚喜。我只是想知道是什麼推動了上漲。然後是第四季的產品利潤率。在您談到的 [sub 60] 前景中，我們是否面臨更嚴重的逆風？也許只是在談論這座橋樑，特別是與第四季的產品利潤率有關。謝謝。

Yes, sure. So starting with the third quarter and where maybe some of that upside came from, I think it gets back to what Mary was just saying, which is we've been seeing some decent premium upgrades, things like gloves, soft things like storage seats and add-ons along those lines as well as a little bit more shift towards Sactionals within the mix of product versus where we might have been the surgical price increases we've been taking on certain of those products has also been beneficial has not been broad-based or are materially large and there was a price increase, but put the whole package together and that got us a little upside on the quarter.

是的，當然。因此，從第三季度開始，也許一些好處來自哪裡，我認為這又回到了瑪麗剛才所說的，那就是我們已經看到了一些不錯的高級升級，比如手套、儲物座椅等柔軟的東西和沿著這些思路的附加組件以及在產品組合中向Sactionals 的更多轉變，與我們可能對某些產品採取的外科手術價格上漲的情況相比，我們對某些產品採取的手術價格上漲也帶來了好處，但並不廣泛-基礎或實質上很大，並且價格上漲，但將整個一攬子計劃放在一起，這使我們在本季度獲得了一些上漲。

When you think about Q4, really what's happening is we're lapping some of the abatement of the inbound freight costs that were really pressuring last year. That's why we're seeing less of a year-over-year benefit into Q4. It's more the easing of the tailwind on a year-over-year basis that's causing that deceleration and expansion. You'll notice that like we do get a higher absolute gross margin in Q4 than Q3 because we do get some leverage. The higher sales gives us some leverage over things like warehouse costs and so on and so forth.

當你想到第四季時，真正發生的事情是我們正在減少一些去年確實帶來壓力的入境貨運成本。這就是為什麼我們在第四季度看到的同比收益較少的原因。造成減速和擴張的更多是逐年順風的減弱。您會注意到，我們第四季度的絕對毛利率確實高於第三季度，因為我們確實獲得了一些槓桿。較高的銷售額使我們在倉庫成本等方面具有一定的影響力。

But that's why what I was saying earlier was when we think about holistically where we are in gross margins here in these high 50s, this feels like a good level for a full-year basis for us and barring any systemic shocks. I think the way the business is trending, we feel good here.

但這就是為什麼我之前所說的是，當我們從整體上考慮我們的毛利率處於 50 多美元的高位時，這對我們來說是一個很好的全年水平，除非出現任何系統性衝擊。我認為按照業務的發展趨勢，我們在這裡感覺很好。

Alex Fuhrman, Craig-Hallum Capital.

亞歷克斯·福爾曼，克雷格·哈勒姆資本。

Hey, guys.

大家好。

Thanks very much for taking my question and congratulations on a really strong year on you know, Mary, I think you mentioned a couple of times, and Shawn, you touched on as well that you set new records for big days and weeks here during the holiday season so far on you guys have done a really good job historically over the last couple of years of being able to handle those volumes without any kind of shipping delays or anything like that, but can you talk about the profitability of those orders on peak days? Are there any incremental costs that you start to incur when you're operating your peak capacity? And would it be more profitable if there were ways to smooth out demand a little bit more? Yes.

非常感謝您提出我的問題，並祝賀您度過了非常強勁的一年，瑪麗，我想您提到過幾次，肖恩，您也談到了您在這期間在這裡創造了重要日子和幾週的新記錄。到目前為止，你們在過去幾年的假期中做得非常好，能夠在沒有任何運輸延誤或類似情況的情況下處理這些數量，但是您能談談高峰期這些訂單的盈利能力嗎？天？當您運行峰值容量時，是否會開始產生任何增量成本？如果有辦法進一步緩解需求，利潤會更高嗎？是的。

No, thank you, Alex. Great question. And yes, it was the phenomenal thing. Those record performance is I think, you know, the team had planned for everything.

不，謝謝你，亞歷克斯。很好的問題。是的，這是一件了不起的事。我認為這些創紀錄的表現是團隊已經計劃好的一切。

And as we go through different scenarios and working with all of my partners, we plan for that capacity. So therefore, there wasn't any incremental cost that really came in. So from that side, slightly, to what we plan for and it did a great job moving that through.

當我們經歷不同的場景並與所有合作夥伴合作時，我們會針對這種能力進行規劃。因此，沒有任何真正增加的成本。因此，從這方面來看，稍微符合我們的計劃，它在推動這一目標方面做得很好。

I think the second piece, as we think about it and we talked about Project Spring, we completed that full rollout and that's significantly improving the speed of transaction with the when you have five or six customers and Ray on those peak days or even more just having that be and the technology to be able to transact has really helped the web performance. And customers often choose to then convert at home and close the sale that. So again, the rack to the kind of reinforcement of the omnichannel model, but nothing that we see in terms of any profitability impact it was as we planned.

我認為第二部分，當我們思考它並討論 Spring 專案時，我們完成了全面部署，這顯著提高了交易速度，當您在高峰日甚至更多的時候有五六個客戶和 Ray擁有這種能力以及能夠進行交易的技術確實有助於提高網路效能。客戶通常會選擇在家中進行轉換並完成銷售。再說一次，全通路模式得到了強化，但我們沒有看到任何獲利影響，就像我們計劃的那樣。

Thomas Forte.

托馬斯·福特.

Great. Thanks, Shawn, Mary, and Keith, congrats on the quarter and strong start to the fourth quarter. So two questions. The first one is can you give your updated thoughts on your ability to generate solid free cash flow and your thoughts on what you intend to do with the free cash flow as you advance the model.

偉大的。謝謝肖恩、瑪麗和基思，恭喜本季以及第四季的強勁開局。那麼兩個問題。第一個問題是，您能否提供關於您產生穩定自由現金流的能力的最新想法，以及您在推進模型時打算如何利用自由現金流的想法。

Absolutely. And o I appreciate the question. Thanks.So we're going to we're looking to provide more details about this with Q4 earnings when we get into the outlook for next year. But I think little bits and pieces of everything we've been talking about are sort of starting to lay the foundations for how we're going to approach this on a go-forward basis, which is as we transition into generating more substantial free cash flow off of seats and sides and sacs. It's how do we how do we appropriately balance the reinvestment into future sales growth drivers with other options for that cash flow.

絕對地。我很欣賞這個問題。謝謝。因此，當我們展望明年的前景時，我們將在第四季度的收益中提供更多有關此方面的詳細資訊。但我認為我們一直在談論的所有事情的點滴都開始為我們如何在未來的基礎上解決這個問題奠定基礎，也就是當我們過渡到產生更多的自由現金時從座椅、側面和囊中流出。問題在於我們如何適當地平衡未來銷售成長驅動力的再投資與現金流的其他選擇。

So we fully anticipate ending this year having been in a cash generative position, new systems and other tools and optimization programs are being put in place all the time. We are going to balance that, as Shawn has said, as Mary and I have said against those future sales drivers, our goal is to, but you translate more of the top line growth to bottom line growth going forward, and that should create more cash flow out of the business which we can use strategically along those balance lines I was just talking about.

因此，我們完全預計今年年底將處於現金生成狀態，新系統和其他工具以及優化計劃將一直到位。我們將平衡這一點，正如肖恩所說，正如瑪麗和我針對未來的銷售驅動因素所說的那樣，我們的目標是，但你將更多的頂線增長轉化為未來的底線增長，這應該會創造更多從業務中流出的現金流，我們可以沿著我剛才談到的平衡線策略性地使用。

Thanks, Keith. And then you've pretty consistently generated a lot of market share gains. Shawn, you've talked in the past about your ability to consistently outperform the market at a high teens, perhaps low 20 percentage point rate. I wanted to talk about the source of the market share, do you feel like you're getting market share from the same players or do you think it's changed over time?

謝謝，基斯。然後你就持續獲得了大量的市佔率。 Shawn，您過去曾談到您有能力以高 10 個百分點（也許低 20 個百分點）的速度持續跑贏市場。我想談談市場份額的來源，你覺得你是從同一個參與者那裡獲得市場份額還是你認為它隨著時間的推移而改變？

Yeah, it's a great question. It's hard for us to know for sure. But our observations on the category, and we tried very hard to stay abreast of every player who sells couches, that's our core business and therefore, any firm that sells couches, we consider a competitor, and we track them all. I think there's kind of in our world, there are two main buckets of competition. And remember, of course, we are operating at a certain price points, but the brand Lovesac stretches across broad, I think fairly broad demographics because we can sell to the very high end customer who had a massive home and is excited to put a 20 seat Sactionals with StealthTech in their basement or entertainment room.

是的，這是一個很好的問題。我們很難確定。但我們對該類別的觀察，我們非常努力地跟上每一個銷售沙發的玩家，這是我們的核心業務，因此，任何銷售沙發的公司，我們都認為是競爭對手，我們會跟踪所有這些公司。我認為我們的世界有兩種主要的競爭。當然，請記住，我們是在一定的價格點上運營的，但Lovesac 品牌涵蓋了廣泛的、我認為相當廣泛的人口統計數據，因為我們可以向擁有大量房屋並很高興能將20 美元出售給非常高端的客戶。將配備 StealthTech 的 Sactionals 安置在地下室或娛樂室。

And we can sell to Middle America where this is their main piece of furniture and we pull them up to our price points through the real value that Sactionals create and you know, and so we compete with all of the established brands in home that we may be in the malls that are otherwise. We compete with brand-new startup to kind of copycat the Sactionals format, modularity, et cetera, and tried to mimic that value prop. And so I think that in this environment, we're taking market share from all of them. And as you can see with most of our competitors negative growth and you know, obviously our positive growth and we are certainly taking market share. So I think that it ebbs and flows based on the health of that marketplace. And for instance, I think that in startup land capital is much more dire than it was over the last number of years. And so we they're not spending in necessarily the same ways across the board and again, just chasing growth. And I think the incumbent and have some of their own problems to deal with in this environment where there is still a massive hangover in the home category.

我們可以向中美洲銷售，這是他們的主要家具，我們透過 Sactionals 創造的真正價值將它們拉到我們的價格點，你知道，因此我們與所有我們可能的知名家居品牌競爭在其他地方的購物中心。我們與全新的新創公司競爭，模仿 Sactionals 格式、模組化等，並試圖模仿這種價值支柱。所以我認為在這種環境下，我們正在從他們所有人身上奪取市場份額。正如您所看到的，我們大多數競爭對手都出現負成長，而且您也知道，顯然我們的正成長，我們肯定會佔據市場份額。所以我認為它的起伏取決於市場的健康狀況。例如，我認為新創企業的土地資本比過去幾年要可怕得多。因此，我們不一定會以相同的方式全面支出，只是為了追求成長。我認為現任者和他們自己有一些問題需要處理，在這種環境下，家庭類別仍然存在巨大的後遺症。

Meanwhile, we have very low and within the category that is the category this category is known for very low, aided awareness and it's very fragmented. And so we are taking market share based on the competitors' unaided awareness. It's hard for furniture brands to gain real brand awareness because consumers buy from Furniture Brands and home brands sporadically and sometimes with years in between. And therefore, as you observed love sacks strategy of building a brand in between leveraging pop culture being in the zeitgeist through celebrity influencer, of course, are very sticky brand names. All of these things give us strength. Whereas, seeing many of our competitors you can't mimic that aspect of what we do and how we do things.

同時，我們的認知度非常低，而且在這個類別中，這個類別以非常低的輔助意識而聞名，而且非常分散。因此，我們是根據競爭對手的無意識意識來獲取市場份額的。家具品牌很難獲得真正的品牌知名度，因為消費者從家具品牌和家居品牌購買的產品是零星的，有時甚至是相隔數年的。因此，正如您所觀察到的，Love sacks 在透過名人影響者利用流行文化和時代精神之間建立品牌的策略當然是非常黏性的品牌名稱。所有這些都給我們力量。然而，看到我們的許多競爭對手，你無法模仿我們所做的事情以及我們做事的方式。

And I think the SEC is a major player in establishing that brand. And so for all these reasons. I think that I think that we certainly are taking market share. It's hard for us to pin down exactly where and where and who it's coming from. And I think that does change based on that state of the category, which also has been in flux recently.

我認為美國證券交易委員會是建立這個品牌的主要參與者。出於所有這些原因。我認為我們肯定正在佔據市場份額。我們很難確定它的確切來源、地點和來源。我認為這確實會根據該類別的狀態而改變，而該類別最近也在不斷變化。

Thank you. We've reached the end of our question-and-answer session, and I'll hand the floor back to management for closing remarks.

謝謝。我們的問答環節已經結束，我將把發言權交還給管理階層作結束語。

Yes. Thank you so much for joining the LoJack 3Q conference call. For fiscal 2024. We look forward to reporting again at the wrap up of our fiscal year. And we want to just thank investors and all of the hashtag Lovesac family. We're building this brand that we hold so dear.

是的。非常感謝您參加 LoJack 3Q 電話會議。 2024 財年。我們期待在本財年結束時再次報告。我們只想感謝投資者和所有主題標籤 Lovesac 家族。我們正在打造這個我們如此珍惜的品牌。

This will conclude today's conference. You may now disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。