Container Store Group Inc (TCS) 2024 Q2 法說會逐字稿

Greetings and welcome to the Container Store second quarter, 2024 earnings call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Caitlin Churchill, Investor Relations. Thank you. You may begin.

大家好，歡迎參加 Container Store 2024 年第二季財報電話會議。（操作員指示）提醒一下，本次會議正在錄音。現在我很高興介紹你們的主持人、投資者關係部凱特琳‧邱吉爾 (Caitlin Churchill)。謝謝。你可以開始了。

Good afternoon everyone and thanks for joining us today for the Container Store's second quarter, fiscal year 2024 earnings results conference call. Speaking today are Satish Malhotra, Chief Executive Officer; and Jeff Miller, Chief Financial Officer. After Satish and Jeff have made their formal remarks, we will open the call to questions.

大家下午好，感謝您今天參加 Container Store 2024 財年第二季收益業績電話會議。今天發言的是執行長 Satish Malhotra 和財務長 Jeff Miller。薩蒂什和傑夫發表正式演講後，我們將開始提問。

Before we begin, I would like to remind everyone that certain matters discussed in today's conference call are forward-looking statements relating to future events, management plans and objectives for the business, including the transaction with beyond and the future financial performance of the company that are subject to risks and uncertainties.

在我們開始之前，我想提醒大家，今天的電話會議中討論的某些事項是與未來事件、管理計劃和業務目標有關的前瞻性陳述，包括與 Beyond 的交易以及公司未來的財務業績，這些都受到風險和不確定性的影響。

Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are referred to in the Container Store's press release issued today and in our annual report on form 10-K filed with the SEC on May 28, 2024 as updated by our quarterly reports on form 10-Q and other public filings with the US Securities and Exchange Commission.

實際結果可能與這些前瞻性陳述中預期的結果有重大差異。可能影響結果的風險因素已在 Container Store 今天發布的新聞稿以及我們於 2024 年 5 月 28 日向美國證券交易委員會提交的 10-K 表年度報告中提及，該報告由我們向美國證券交易委員會提交的 10-Q 表季度報告和其他公開文件更新。

The forward-looking statements made today are as of the date of this call and the Container Store does not undertake any obligation to update the forward-looking statements.

今天所做的前瞻性陳述截至本次電話會議之日有效，Container Store 不承擔更新前瞻性陳述的任何義務。

Finally, the speakers may refer to certain adjusted or non-GAAP financial measures on this call. A reconciliation schedule of the non-GAAP financial measures to the most directly comparable GAAP measures is also available in the Container Store press release issued today. A copy of today's press release and investor deck may be obtained by visiting the investor relations page of the website at www.containerstore.com.

最後，發言者可能會在本次電話會議上提及某些調整後或非公認會計準則的財務指標。今天發布的 Container Store 新聞稿中還提供了非 GAAP 財務指標與最直接可比較的 GAAP 指標的對照表。您可以透過造訪網站 www.containerstore.com 的投資者關係頁面來取得今天的新聞稿和投資者簡報的副本。

I will now turn the call over to Satish. Satish?

現在我將電話轉給薩蒂什。薩蒂什？

Thanks Caitlin and thank you all for joining us. I'll begin today's discussion with a review of our second quarter performance and progress we are making to drive improvements across the business including our exciting new strategic partnership with Beyond.

謝謝凱特琳，也謝謝大家加入我們。今天的討論將從回顧我們第二季度的業績以及我們為推動整個業務的改進而取得的進展開始，包括我們與 Beyond 建立的令人興奮的新戰略合作夥伴關係。

Then, Jeff, we'll discuss the details of the quarter's financial results before we open up the call to questions. While we are still contending with a challenging macro and industry backdrop, we are encouraged by the improvements we are seeing in our top line trends as compared to earlier this year.

然後，傑夫，在我們開始提問之前，我們將討論本季財務表現的細節。儘管我們仍在應對充滿挑戰的宏觀和行業背景，但與今年稍早相比，我們的營收趨勢有所改善，這令我們感到鼓舞。

For the second quarter year over year comparable sales declined 12.5%. However, we continue to see relative outperformance in custom spaces and achieved another quarter of sequential improvement in general merchandise trends. Traffic also improved partly due to increased promotional activity which while putting pressure on profitability allowed us to move slower moving products.

第二季同店銷售額較去年同期下降12.5%。然而，我們繼續看到客製化領域的相對優異表現，並在一般商品趨勢方面實現了另一個季度的連續改善。客流量也有所改善，部分原因是促銷活動的增加，這雖然給盈利能力帶來了壓力，但卻使我們能夠銷售銷售較慢的產品。

This also enabled us to engage more effectively with customers seeking compelling value offerings. Within general merchandise, we believe our efforts to stabilize the business are gaining traction particularly through improving in stock levels of our core skews that continue to resonate with customers while also delivering innovation and newness across the assortment.

這也使我們能夠更有效地與尋求引人注目的價值產品的客戶互動。在日用百貨方面，我們相信，我們為穩定業務所做的努力正在獲得動力，特別是透過提高核心商品的庫存水平，繼續引起客戶的共鳴，同時也為整個商品組合帶來創新和新穎性。

Earlier this fall, we introduced our new everything organizer drop front shoebox at Sneaker Con, the world's premier sneaker event. This elevated version of a long time customer favorite features, crystal clear 360 degree views, a magnetic closure, four corner feet for stable stacking and a tuckaway door for easy access and was met with great enthusiasm at the event.

今年秋初，我們在世界頂級運動鞋盛會 Sneaker Con 上推出了全新的多功能收納前開式鞋盒。這款升級版產品具有長期客戶喜愛的功能，如清晰的 360 度視圖、磁性閉合裝置、用於穩定堆疊的四個角腳以及方便取放的隱藏式門，在活動上受到了熱烈歡迎。

As we move into the holiday season, we look forward to showcasing this new product and this year's curated selection of stocking stuffers, gift wraps, boxes and storage solutions. While we are optimistic about our holiday campaign, we have taken a more disciplined approach with tighter imagery buys around our seasonal items, maintaining our focus on top performing skews.

隨著假期季節的到來，我們期待展示這款新產品以及今年精選的聖誕禮物、禮品包裝紙、禮盒和儲存解決方案。雖然我們對假日行銷活動持樂觀態度，但我們採取了更嚴謹的方法，對季節性商品進行更嚴格的圖像購買，並將重點放在表現最佳的商品上。

Post holiday season, we are excited about the expected front feature display of our highly sought after everything organizer collection, developed in collaboration with professional organizers. This collection is designed to optimize any space simplify organization and seamlessly complement any Elfa space.

假期過後，我們非常高興能夠看到我們與專業組織者合作開發的備受追捧的各類組織者係列的預期正面展示。該系列旨在優化任何空間、簡化組織並無縫補充任何 Elfa 空間。

We plan to expand the product line with additional skews for the kitchen and closet as well as introducing it to the bath category. Additionally, we entered into a new licensing partnership with our manufacturer which is expected to expand the organizer collection internationally beginning in the new calendar year.

我們計劃擴大產品線，增加廚房和壁櫥用傾斜件，並將其引入浴室類別。此外，我們與製造商建立了新的授權合作夥伴關係，預計從新的日曆年開始在國際上擴大組織器系列。

Now turning to custom spaces, as noted in our press release, our reported comparable store sales metric reflect only delivered sales. However, when we assess com trends based on operational demand, custom spaces orders placed but not yet delivered, we were up 4.5% compared to the prior year.

現在轉向客製化空間，正如我們的新聞稿中指出的那樣，我們報告的可比較店面銷售指標僅反映已交付的銷售額。然而，當我們根據營運需求、已下達但尚未交付的客製化空間訂單來評估通訊趨勢時，我們發現與前一年相比成長了 4.5%。

This relative strength in custom spaces is partly due to the newness we've introduced over the past few quarters. For example, we are seeing more and more customers choosing Garage Plus by Elfa to transform their cluttered garages into organized aesthetically pleasing spaces that meet their storage needs.

客製化空間的相對優勢部分歸功於我們在過去幾季推出的新產品。例如，我們看到越來越多的客戶選擇 Elfa 的 Garage Plus，將雜亂的車庫改造成井然有序、美觀的空間，滿足他們的儲存需求。

Similarly, the core plus by Elfa continues to also gain traction, offering innovative, modular, wall hanging solutions with elevated design options that create a built in look at exceptional value, while maximizing space.

同樣，Elfa 的 core plus 也繼續受到關注，提供創新、模組化、壁掛式解決方案，具有高級設計選項，可創建具有卓越價值的內建外觀，同時最大限度地利用空間。

Last week, we launched a new campaign partnership with fashion designer and TV personality Tan France, where he transformed two of his kids spaces with Elfa Decor Plus and the necessary general merchandise completion products highlighting the durability and versatility of the line.

上週，我們與時裝設計師兼電視名人 Tan France 建立了新的活動合作夥伴關係，他使用 Elfa Decor Plus 和必要的日用百貨配套產品改造了他的兩個孩子的空間，突出了該系列的耐用性和多功能性。

Looking ahead, we are excited to continue rolling out innovative products for custom spaces. Our next launch will introduce a more affordable premium wood closet in a box system designed for easy do it yourself installation. Building on our success and expertise in custom spaces and Elfa metal box solutions, this new product offers nine versatile configurations for closets up to a succeed.

展望未來，我們很高興繼續推出針對客製化空間的創新產品。我們的下一次發表會將推出一款價格更實惠的優質木質衣櫃，該衣櫃採用盒式系統，方便您自行安裝。基於我們在客製化空間和 Elfa 金屬盒解決方案方面的成功和專業知識，這款新產品為壁櫥提供了九種多功能配置，直至成功。

We believe customers will appreciate its elevated premium design and flexible options throughout their home. Organization should be effortless and this do it yourself solution empowers customers to creatively personalize how they organize their spaces.

我們相信客戶會喜歡其高端的設計和整個家居的靈活選擇。組織應該毫不費力，這種「自己動手做」的解決方案使客戶能夠創造性地個性化他們組織空間的方式。

With the recent decline in interest rates, we are also optimistic about the future of our premium customs based offering Preston which continues to demonstrate strength despite the current macroeconomic climate. We are pleased to see improvements in our conversion rates for Preston as well as in our ability to sell more spaces at a higher average space value when compared to the same period last year.

隨著近期利率的下降，我們對普雷斯頓優質訂製產品的未來也持樂觀態度，儘管當前的宏觀經濟形勢不佳，但該產品仍將繼續展現強勁勢頭。我們很高興看到，與去年同期相比，普雷斯頓的轉換率有所提高，而且我們能夠以更高的平均空間價值出售更多空間。

Additionally, we are looking forward to the newly announced strategic partnership with Beyond. We believe this partnership will strengthen our capabilities by leveraging Beyond's data analytics to improve our lead management and conversion model while offering customers additional financial solutions to support their purchases.

此外，我們期待與 Beyond 建立新策略合作夥伴關係。我們相信，透過利用 Beyond 的數據分析來改進我們的潛在客戶管理和轉換模型，這項合作將增強我們的能力，同時為客戶提供額外的財務解決方案來支持他們的購買。

This is just one aspect of the partnership with Beyond that, we believe will enhance our capabilities, expand our reach and deepen our relationship with customers. Through the licensing of the iconic Bed, Bath and Beyond brand, we expect to enhance our store format and general merchandise offering to drive increased traffic across our businesses.

這只是與 Beyond 合作的一個方面，我們相信這將增強我們的能力，擴大我們的影響力並加深我們與客戶的關係。透過獲得標誌性的 Bed, Bath and Beyond 品牌的授權，我們希望增強我們的商店形式和日常商品供應，以增加我們業務的客流量。

Our customers are also expected to benefit from Beyond's global loyalty program, multiple payment solutions and ancillary insurance and protection products.

我們的客戶還有望受益於 Beyond 的全球忠誠度計劃、多種支付解決方案以及輔助保險和保護產品。

In addition, we plan to utilize Beyond's growing data platform to enhance our marketing strategies and reduce customer acquisition and retention costs. We plan to integrate our custom spaces offering across beyond portfolio of e-commerce banners as well as other ventures where Bed, Bath and Beyond future license stores exist thereby creating expanded distribution of our iconic custom spaces offering.

此外，我們計劃利用 Beyond 不斷發展的數據平台來增強我們的行銷策略並降低客戶獲取和保留成本。我們計劃將我們的客製化空間產品整合到電子商務橫幅產品組合以及 Bed, Bath and Beyond 未來授權商店所在的其他企業中，從而擴大我們標誌性客製化空間產品的分銷。

I would now like to take an opportunity to acknowledge our teams for their unwavering commitment and exceptional customer service. Despite the challenging economic conditions, our teams from the support center and distribution centers to our designers and stores have remained dedicated and focused on advancing our strategy and supporting initiatives.

現在，我想藉此機會感謝我們的團隊的堅定承諾和卓越的客戶服務。儘管經濟形勢嚴峻，但我們的團隊（從支援中心和配送中心到設計師和商店）始終致力於推進我們的策略和支援計劃。

While external economic factors are beyond our control, our focus remains on managing what we can, providing the excellent customer service we are known for, controlling expenses and capital progressing on our initiatives including stabilizing the general merchandise business and positioning ourselves for when the market conditions become more favorable.

雖然外部經濟因素是我們無法控制的，但我們的重點仍然是管理我們所能管理的，提供我們聞名的優質客戶服務，控制費用和資本，推進我們的計劃，包括穩定日用百貨業務，並為市場條件變得更加有利時做好準備。

And now I'll turn the call over to Jeff to discuss our financial results in more detail. Jeff?

現在我將把電話轉給傑夫，讓他更詳細地討論我們的財務表現。傑夫？

Thank you, Satish and good afternoon, everyone. As Satish reviewed while still challenged our second quarter results reflect another quarter of sequential improvement compared to the prior quarter with ongoing relative strength within custom spaces.

謝謝，Satish，大家下午好。正如 Satish 所回顧的，儘管我們仍面臨挑戰，但我們的第二季度業績反映出與上一季相比又一個季度的連續改善，並且定制領域的相對優勢持續存在。

For the second quarter, consolidated net sales decreased 10.5% year-over-year to $196.6 million. By segment net sales for the Container Store retail business were $186.8 million a 10.4% decrease compared to $208.5 million in the prior year.

第二季度，綜合淨銷售額年減 10.5% 至 1.966 億美元。按部門劃分，Container Store 零售業務的淨銷售額為 1.868 億美元，較上年的 2.085 億美元下降 10.4%。

The decrease is inclusive of a comp store sales decrease of 12.5% driven primarily by the 18.7% decline in our general merchandise categories which negatively impacted comp store sales by 1,200 basis points. Customs space, comp store sales decreased 1.5% compared to last year and negatively impacted comp store sales by 50 basis points.

這一下降包括同店銷售額下降 12.5%，主要原因是我們的日常百貨類別下降了 18.7%，這對同店銷售額產生了 1,200 個基點的負面影響。海關空間，同店銷售額與去年相比下降了 1.5%，並對同店銷售額產生了 50 個基點的負面影響。

As a reminder, our comp store sales are reported on a GAAP basis and represent delivered sales. When looking at custom spaces comps from an operational demand standpoint orders placed but not delivered were up 4.5% in Q2 representing a modest year over year trend improvement from the 2.9% we saw for the same metric in Q1.

提醒一下，我們的同店銷售額是按照 GAAP 報告的，代表已交付銷售額。從營運需求的角度來看客製化空間的訂單量在第二季成長了 4.5%，與第一季相同指標的 2.9% 相比，年比趨勢略有改善。

It has been a while since we have referenced this operational demand comp metric, the delta between operational demand and reported comps for custom spaces this quarter is evidenced by the increased, unearned revenue from $18.3 million last year to $21.8 million this year largely as a result of a year over year shift in timing of custom space orders placed versus delivered to customers.

我們已經有一段時間沒有參考這個營運需求補償指標了，本季客製化空間的營運需求和報告補償之間的差異可以透過未賺取收入的增加來證明，從去年的 1830 萬美元增加到今年的 2180 萬美元，這主要是由於定制空間訂單下達和交付給客戶的時間同比發生變化。

Sales from non-comparable stores were a net benefit to total TCS sales of 210 basis points. For the second quarter fiscal 2024 our online channel decreased 13.7% year-over-year. And our website generated sales which includes curbside pickup decreased 7.9% compared to last year.

非可比商店的銷售額為 TCS 總銷售額帶來了 210 個基點的淨收益。2024 財年第二季度，我們的線上通路較去年同期下降了 13.7%。我們網站的銷售額（包括路邊取貨）與去年相比下降了 7.9%。

Website generated sales represented a total of 22.4% of TCS net sales in Q2 which is 60 basis points higher than 21.8% in Q2 of last year. Elfa, third party net sales of $9.8 million decreased 12.9% compared to the second quarter of fiscal 2023 excluding the impact of foreign currency translation Elfa third party net sales decreased 16.2% year-over-year, primarily due to a decline in sales in the Nordic markets.

網站產生的銷售額佔 TCS 第二季淨銷售額的 22.4%，比去年第二季的 21.8% 高出 60 個基點。Elfa，第三方淨銷售額為 980 萬美元，與 2023 財年第二季相比下降 12.9%，不包括外幣折算的影響。 Elfa 第三方淨銷售額較去年同期下降 16.2%，主要原因是北歐市場銷售額下降。

From a profitability standpoint, our consolidated gross margin for Q2 decreased 210 basis points to 55.5% compared to 57.6% last year. By segment TCS gross margin decreased 260 basis points compared to last year. Primarily due to increased promotional activity and unfavorable mix in Q2 of this year, partially offset by freight tailwinds.

從獲利能力的角度來看，我們第二季的綜合毛利率從去年的57.6%下降了210個基點至55.5%。按部門劃分，TCS 毛利率較去年同期下降了 260 個基點。主要是由於今年第二季促銷活動增加和產品組合不利，但被貨運順風部分抵銷。

Elfa gross margin increased 250 basis points compared to last year. Primarily due to price increases to customers. Consolidated SG&A dollars decreased $4.1 million or 3.7% to $105.2 million compared to $109.3 million in Q2 last year.

Elfa 毛利率較去年同期增加 250 個基點。主要是由於對客戶的價格上漲。合併銷售、一般及行政費用減少 410 萬美元至 1.052 億美元，去年第二季為 1.093 億美元，降幅為 3.7%。

As a percentage of net sales SG&A increased 380 basis points year-over-year to 53.5%. The increase is primarily due to deleverage of fixed cost associated with lower sales and increased marketing spend in the second quarter of fiscal 2024.

銷售、一般及行政費用佔淨銷售額的百分比年增 380 個基點，達到 53.5%。成長的主要原因是 2024 財年第二季銷售額下降和行銷支出增加導致的固定成本去槓桿。

In the second quarter, we recorded a $3.4 million long live asset impairment related to one underperforming store in a store which had been identified for closure in fiscal 2024. Also in the second quarter, we recorded $3.5 million of other expenses which is primarily due to legal and professional fees related to the strategic alternatives review as well as employee retention costs incurred in the second quarter of fiscal 2024.

在第二季度，我們記錄了 340 萬美元的長期資產減值，與一家業績不佳的商店有關，該商店已被確定於 2024 財年關閉。此外，在第二季度，我們記錄了 350 萬美元的其他費用，這主要是由於與策略替代方案審查相關的法律和專業費用以及 2024 財年第二季度發生的員工保留成本。

Our net interest expense in the second quarter of fiscal 2024 increased to $6 million compared to $5.2 million in the second quarter of last year. The year-over-year increase is primarily due to higher borrowings on the revolving credit facility and higher year over year interest rates on our term loan during Q2.

我們的 2024 財年第二季淨利息支出從去年第二季的 520 萬美元增加至 600 萬美元。年比成長主要是由於第二季循環信貸額度的借款增加以及定期貸款的年比利率上升。

The effective tax rate for the second quarter was 21.5% compared to negative 2.6% in the second quarter of last year. The increase in the effective tax rate was primarily related to the impact of discrete items on a pretax loss in the second quarter of fiscal 2023 which drove the effective tax rate negative.

第二季有效稅率為21.5%，去年同期為-2.6%。有效稅率的增加主要與 2023 財年第二季單項項目對稅前虧損的影響有關，這導致有效稅率為負。

Net loss for the quarter on a GAAP basis was $16.1 million or $4.85 per share as compared to a GAAP net loss of $23.7 million or $7.17 per share in the second quarter of last year. Adjusted net loss was $10.7 million or $3.23 per share as compared to last year's adjusted net income of $0.4 million or $0.11 per diluted share. Our adjusted EBITDA decreased to $3.9 million in the second quarter this year compared to $17 million in Q2 last year.

根據 GAAP 計算，本季淨虧損為 1,610 萬美元，即每股 4.85 美元，去年第二季 GAAP 淨虧損為 2,370 萬美元，即每股 7.17 美元。調整後淨虧損為 1,070 萬美元，即每股 3.23 美元，而去年調整後的淨收入為 40 萬美元，即每股 0.11 美元。今年第二季度，我們的調整後 EBITDA 下降至 390 萬美元，去年第二季為 1,700 萬美元。

Turning to our balance sheet, we ended the quarter with $66.1 million in cash, $232 million in total debt and total liquidity including availability on our revolving credit facilities of $96.5 million.

回顧我們的資產負債表，本季末我們的現金為 6,610 萬美元，總債務為 2.32 億美元，總流動資金（包括可用的 9,650 萬美元循環信貸額度）為 9,650 萬美元。

As you know, we have faced challenges due to softening demand and increased price sensitivity, affecting our financial performance. In addition to significant expenses incurred as a part of our review of strategic alternatives and refinancing of our credit facilities, all of which have placed pressure on our ability to comply with the leverage ratio covenant and our term loan facility.

如您所知，我們面臨需求疲軟和價格敏感度增加帶來的挑戰，影響了我們的財務表現。除了我們在審查策略替代方案和再融資信貸安排時產生的大量費用外，所有這些都給我們遵守槓桿率契約和定期貸款安排的能力帶來了壓力。

As previously communicated, earlier this month, we amended our senior secured term loan facility to waive the testing of consolidated leverage ratio covenant for the second quarter of fiscal 2024 among other things.

正如本月稍早所通報的，我們修改了優先擔保定期貸款安排，其中包括放棄對 2024 財年第二季度的合併槓桿率契約進行測試。

In addition, our revolving credit facility under which we had $71 million outstanding at the end of the quarter matures in one year. In light of these factors, you will see the addition of going concern language in our Form 10-Q for the second quarter of fiscal 2024.

此外，我們的循環信貸額度將在一年內到期，截至本季末，我們尚未償還的循環信貸額度為 7,100 萬美元。鑑於這些因素，您將看到我們 2024 財年第二季的 10-Q 表中增加了持續經營語言。

We are actively collaborating with our lenders to amend or refinance these facilities and consummate the equity investment transaction with beyond which we believe would improve our financial situation.

我們正在積極與我們的貸方合作，修改或再融資這些設施，並完成股權投資交易，我們相信這將改善我們的財務狀況。

We ended the quarter with consolidated inventory down 12% compared to the second quarter of last year. The decline reflects a concerted effort to tightly manage inventory in the current environment and is primarily the result of fewer inventory units year over year and lower freight costs held in inventory.

本季末，我們的綜合庫存與去年第二季相比下降了 12%。這一下降反映了當前環境下嚴格管理庫存的共同努力，主要是由於庫存單位同比減少以及庫存運費成本降低。

At TCS on a unit basis, on hand, inventory was down approximately 17% year-over-year driven by general merchandise categories. Capital expenditures were $15.3 million in the first half of fiscal 2024 versus $22 million in the first half of fiscal 2023.

以單位計算，TCS 現有庫存年減約 17%，主要受一般商品類別的影響。2024 財年上半年的資本支出為 1,530 萬美元，而 2023 財年上半年的資本支出為 2,200 萬美元。

As a reminder, we plan to spend approximately $20 million to $25 million of capital in fiscal 2024. We're continuing to prioritize investments in our stores and technology this year. We've opened one store, closed one store during the second quarter of fiscal 2024. For the remainder of fiscal 2024, we plan to open two more new stores and have made the strategic decision to close our store in Chicago at Chicago South Loop.

提醒一下，我們計劃在 2024 財年投入約 2,000 萬至 2,500 萬美元的資金。今年我們將繼續優先投資於我們的商店和技術。我們在 2024 財年第二季開設了一家商店，關閉了一家商店。在 2024 財年的剩餘時間裡，我們計劃再開設兩家新店，並已做出關閉位於芝加哥南環路的芝加哥門市的策略決策。

We closely monitor the productivity of our stores and decided it was not in the company's best interest to renew the lease when it ends in February of 2025. Free cash flow used in the first half of fiscal 2024 was $10.6 million versus $1.3 million in the first half of fiscal 2023.

我們密切監控我們商店的生產力，並決定在 2025 年 2 月租約到期時續約租約並不符合公司的最佳利益。2024 財年上半年所使用的自由現金流為 1,060 萬美元，而 2023 財年上半年為 130 萬美元。

As noted in our press release, we're not providing financial guidance at this time. With respect to Q3, we have seen a challenging start to the period largely due to the difficult comparison to last year, which benefited from the very successful Elfa anniversary sale that said we have continued to see sequential improvement in general merchandise.

正如我們的新聞稿中所述，我們目前不提供財務指導。就第三季而言，我們看到了一段充滿挑戰的開局，這主要是因為與去年相比比較困難，受益於非常成功的 Elfa 週年慶促銷，我們繼續看到一般商品的連續改善。

And as Satish reviewed, we believe we are taking the right steps to stabilize that business. We are controlling the aspects of the business we can control and continue to work diligently to aim to position the company for long term success.

正如 Satish 所說，我們相信我們正在採取正確的措施來穩定這項業務。我們正在控制我們能夠控制的業務方面，並繼續努力工作，以期使公司長期成功。

This concludes our prepared remarks. I'll now turn it over to the operator to begin the Q&A session for questions.

我們的準備好的演講到此結束。現在我將把時間交給操作員，開始問答環節。

(Operator Instructions) Kate McShane, Goldman Sachs.

（操作員指示）高盛的凱特·麥克沙恩。

And thanks for taking our question. I wondered if I could start with, the mix within general merchandise. Maybe what is trending better if there's anything that's trending worse. And if you could give a little bit more commentary on quarter today, which I think you said was sequentially a little bit better.

感謝您回答我們的問題。我想知道我是否可以從日用百貨的混合開始。如果有什麼事情的趨勢變得更糟，那麼也許什麼事情的趨勢就會變得更好。如果您能對今天的季度做出更多評論，我認為您說的這個季度比上一季有所改善。

Yeah. Hi, Kate. I'll take the first part of that question.

是的。你好，凱特。我來回答這個問題的第一部分。

Definitely, we are seeing sequential improvement in our general merchandise and it's primarily thanks to our getting back in stock in our core skews within a positive momentum in water hyacinth, for example, now that we're back in stock there, but also seeing tremendous growth in our everything organizer connection. As I had mentioned earlier, we're continues to do well, is actually up 14% over the prior quarter and up 50% compared to the same period last year.

毫無疑問，我們的日用百貨商品正在連續改善，這主要歸功於我們核心商品的恢復庫存，例如，水葫蘆的庫存已經恢復，而且我們的一切組織者連接也出現了巨大的增長。正如我之前提到的，我們繼續表現良好，實際上比上一季成長了 14%，比去年同期成長了 50%。

And that's why we are super excited about our ability to be able to have the everything organizer, have a front feature expression post-holiday where we can continue to introduce those additional skews in kitchen and closet as well as the new launch that we have planned within back.

這就是為什麼我們對能夠擁有一切組織者的能力感到非常興奮，在假期後有一個前端功能表達，我們可以繼續推出廚房和衣櫃中的額外傾斜以及我們計劃在後面推出的新產品。

It's actually one of the reasons we decided to also work with our vendor to now license the everything organizer collection internationally because we think that there is decisively a significant demand outside of the US into other countries as well.

這實際上是我們決定與供應商合作在國際上授權萬能整理器系列的原因之一，因為我們認為除了美國以外，其他國家也存在著巨大的需求。

Okay. Thank you. And then I had a mechanical question with regards to the demand comp. It sounds like the demand comp for custom spaces improved sequentially. Could you maybe talk about when your comp catches up to the demand comp or maybe better ask like what is typically the delivery time or the amount of time between the order placed and order delivered?

好的。謝謝。然後我有一個關於需求補償的機械問題。聽起來客製化空間的需求補償正在持續改善。您能否談談您的公司何時能滿足需求，或者最好問一下交貨時間通常是多長，或者下訂單和交貨之間的時間是多少？

Yeah, Kate, this is Jeff. Thanks for the question. When we look at the custom space order depends on the particular line would drive your average install time frame. I would say an Elfa product line would be anywhere between two weeks to a month, could be longer depending on the customer's project timeline. But [Preston] is a little bit longer of a timeline typically that's around four to six weeks from the order placement time.

是的，凱特，這是傑夫。謝謝你的提問。當我們查看自訂空間順序時，取決於特定的線路將驅動您的平均安裝時間範圍。我想說 Elfa 產品線的周期將在兩週到一個月之間，也可能更長，這取決於客戶的專案時間表。但[Preston]的時間線通常要長一些，從下訂單到完成大約需要四到六週的時間。

Okay. And is Preston becoming a bigger part of the next part of the reason why you're seeing this GAAP occur again?

好的。普雷斯頓是否會成為您再次看到這種 GAAP 出現的原因中更重要的一部分？

No, I wouldn't necessarily say that Preston is becoming a bigger part of the mix at this point yet. Elfa is still the large part of our custom spaces offering. And typically when we see growth in the business, especially at the end of the quarter, we'll see an increase of our unearned revenue or prepaid sales at the end of a quarter like that.

不，我還不一定會說普雷斯頓現在正在成為其中更重要的一部分。Elfa 仍然是我們客製化空間產品的重要組成部分。通常，當我們看到業務成長時，尤其是在季度末，我們會看到季度末的未賺取收入或預付銷售額增加。

Okay. And then, my last question is just with regards to Elfa, you mentioned the challenging start to Q3 because you're lapping the successful Elfa anniversary sale. Can you just remind us, what you are doing with the Elfa brand this year versus last year.

好的。然後，我的最後一個問題是關於 Elfa 的，您提到第三季的開局充滿挑戰，因為您正在進行成功的 Elfa 週年紀念促銷。您能否提醒我們一下，今年與去年相比，您對 Elfa 品牌做了哪些改進？

In terms of the campaigns that we have?

就我們所進行的活動而言？

Yes.

是的。

Yeah, this is Satish. So as we mentioned, we decided to actually split the Elfa campaign into kind of two halves, which is a new way for us to create kind of a sense of urgency than we have normally done in the past where we would essentially just have one long campaign.

是的，這是 Satish。因此，正如我們所提到的，我們決定將 Elfa 活動分成兩半，這是一種新的方式，可以營造一種緊迫感，而不是像過去那樣，我們基本上只進行一次漫長的活動。

The durations of the campaigns are actually the same in terms of the number of days, but we just put a pause in the middle so that we could conclude kind of part A of the campaign as we were ramping up the end of the quarter and then wait a period before we then start the second part of the campaign.

就天數而言，這些活動的持續時間實際上是相同的，但我們只是在中間暫停一下，以便我們可以在季度末加緊努力時完成活動的 A 部分，然後等待一段時間再開始活動的第二部分。

In addition, as a reminder, this time last year, we were also -- we had an anniversary sale and so we're comping over that difference of a discount rate.

此外，提醒一下，去年這個時候，我們也進行了周年慶促銷，因此我們正在彌補折扣率的差異。

Thank you.

謝謝。

Absolutely.

絕對地。

We have reached the end of our question and answer session. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

我們的問答環節已經結束。今天的電話會議到此結束。現在您可以斷開線路。感謝您的參與。