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Casper Sleep (CSPR)

Participants
Philip Krim Chief Executive Officer
Emilie Arel President and Chief Commercial Officer
Stuart Brown Interim Chief Financial Officer
Peter Keith Piper Sandler
Alexandra Walvis Goldman Sachs
Randy Konik Jefferies LLC
Michael Lasser UBS
Bob Drbul Guggenheim Securities
Curtis Nagle Bank of America Merrill Lynch
Lauren Cassel Morgan Stanley
Seth Basham Wedbush Securities
Call transcript
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Operator

Good morning, and welcome to Casper's Second Quarter 2020 Earnings Conference Call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Jeff Grossman [ph], Investor Relations for Casper. Mr. Grossman you may begin.

Unidentified Company Representative

operator. you, Thank welcome conference to Casper's quarter second I'd everyone earnings call. XXXX like to

begin, June performance results, report our or Factors updated; for call. represent XXXX; XXXX future of any call. the actual Securities remind novel relate forward-looking cause of date by other Before achievements forward-looking Exchange call or the like our call be XXXX. I'd we to considered XX, risk on made of forward-looking by Litigation materially on from of and XX-Q different Act this within historical All Securities should statements will in year do everyone statements factors statements materially discussed forward-looking quarterly the matters Private Form statements, implied meaning for not including the that Reform XX, of to statements. such on as contain this and and strategies, the that fact guarantees, filings plans, our as and on the statements expected of These on goals the or could annual Form of the to and made but unknown nor this performance; those management's regarding risks other statements with indicated Commission forward-looking anticipated differ are from management's by the impact cause estimates our report Any may XX-K achievements statements December expressed ended uncertainties results, objectives; that our results coronavirus known promises performance this be business. our to and financial neither factors section actual important ended the involve quarter

so, in disclaim to some forward-looking any statements may events views we update do elect subsequent future, we While if our change. point cause the to obligation at to even such

in at our reference be non-GAAP Relations of website release Company's nearest to reconciled the also which ir.casper.com. GAAP Investor we can found addition, metrics on are the may metric earnings In certain which

including is update Philip Commercial in today Emilie operational call brief President results the and performance around quarter half Executive as retail is Philip how second the the will the business; and as provide the financial the Officer; some the of the an and thinking finally reopening about trends detail on provide in Arel, quarter color Krim, will year. On a well Stuart of status Chief update, around Officer. second provide Emilie plans; Chief will company the recent the

open would Executive we'll Following remarks, the Chief to session. call like turn Officer, prepared Philip question-and-answer now Krim. the Casper's, for I over to call

Philip Krim

everyone. morning, good and you, Thank

just and employees care our care I’m take our or are during a of the structural communities take support witnessing we committed country our hard of hiring I of as our those Before critical a and speak accountable, ourselves in quarter continuously efforts performance, uncertainty historic for to challenging a are which we and hold world the racism. global employees is and and a and more amplifying Casper internal the moment of I start against for development it believe discuss to our a to our grateful faces their examine the systemic and health the diverse pandemic, work, talents diversity we’re want times. know efforts time. which ever, to racial to of We reckoning for second struggling and tireless marginalized moment fostering equity a and Through perspectives. this wellbeing. must customers current company who challenging dedication we’re standard up the during collective take and diverse fight extremely to to our Against acknowledge backdrop work, our timing in than inclusion

now has team the key employees and remains with as better number priority clock our sleep keep the unexpected of demand and to health consumers a Our the safety night as Casper customers. emphasize around of worked more one And and are results progress up our the environment, our American and Despite record pleased well health e-commerce their than challenging with to profitability ever. significant to wellness North ahead towards our say revenue macro I'm of expectations. second quarter very

EBITDA have market million, unique while the multichannel prior the a adapted a second delivered year. $XX.X business XX% over market of increase share. improvement XX% loss We Globally, more of capturing quickly quarter meet XXXX; to million, an our of needs $XXX we and the difficult a to consumers, from adjusted of revenue

XX% direct-to-consumer $X Excluding Europe, pleased at performance top which second adjusted performance track our delivered approximately revenue our channel with fact X% XX% wound offerings. only our loss. we delivered very channel down even sales where closure service and partnership QX due retail the despite our and to am strong stores EBITDA line and growth, in million quarter, better modest American growth North had the I limited growth that retail

very to Mathis Club, Sam's Ashley partners. and excited HomeStore, as retail are Mattresses, Denver As new Brothers we we welcome announced yesterday,

We while expansion Southwest. national this mattress additional West, geographic are expand Midwest growth to Casper to brand continues into X be top partner national we and look in forward footprint providing these our with regions retailers now key of the additions future. channel and the in for and leading partnered a XX the desired retailers, across

we on in pillows, market are goals. consumer retail our With and improvements take reopening I'll growth half and our shows These now deliver for gross that reflect the the sales channel that continued advantage board achieving profitability well-positioned mattresses and in back we the and confidence the behavior and update coming industry With leverage we expect and turn than we are in profit in and progress acceleration quarter's that trends to to investment. can expansion marketing experiencing performance, and to our XXXX. as margin continue Emilie our our this ability is and providing exceeded increased model profit of an expected to an is positive results earlier G&A growth, we gross quarter. Furthermore, demand of and continued on distribution it performance in deliver quarter of over strength well, status. out multichannel work strong working take across to continue brand Our the share an share. to performance our against we expectations products

Emilie Arel

Thanks.

pleased performance As are very this Philip with quarter. we our mentioned,

direct-to-consumer the channel performed for well results Our closed stores driven e-commerce our own by retail of record the were entirety as almost quarter.

continued that strong well [technical into last e-commerce significant Our March summer moved year, half during difficulty]. strength the we to performance saw the as accelerated quarter of season. as traffic second selling Compared the as we and in increase through

the in July weekend. of category, and during saw We Xth also growth Memorial pillow Day both mattress our and particularly

the On of at stores the retail retail quarter, of side, XX were open. owned the owned end our XX

taken have approach We reopening a with four phases. to measured

then appointments; private limited with one-on-one most queue First, curbside pickup, walk-ins virtual, appointments; management. recently no and contact

where service conditions. response to and and Our retail responsibly health and developments each continuously health stores varying to reopening are have customers developed our location. regulations COVID-XX our locations our of needed in stores, to or and and as procedures have phases and efficiently guidance adjust The government on remains We related employees the changing in priority. enable for our stores one close of offerings COVID-XX we in monitor public open safety us based to number

during partners, partnerships. performing In this Amazon key part Target robust including remaining growth open as quarter again well. largely started pandemic in some regional their Go our our plan of retail partners see reopen. extremely To the on the and and store to Moving been we've to pleased of in Costco, into channel the performance is The July, and retail latter due have second reopening. to and also Rooms specialties, fleet began to We've furniture with our

the and are of retail Brothers contribute today. in of new two Ashley we excited addition our of HomeStore but products very person, will country recent addition top national across American North experience expand And broaden market. reach our to have enable our retailers addition, we partners regional will expect fourth retail announced bringing will the suite four begin will and In Sam's partners this to Mattress to total in the modestly The of consumers XX our to growth to footprint. our the significantly XX These mattress the partnerships quarter they more new Club, in year. Mathis Denver

partnerships will a strategy. as our it expand retail is multichannel key continue component of to We

continue of mattress be performance new portfolio of proud our We the launched to in March.

we As reopen, our retail to new are the owned about traction model, stores with our excited began partner and Nova. The

last As by over performance portfolio Philip fantastic on which XX% mentioned, are increased year. seeing other we our also from pillow in products sales, led

I'll COVID-XX, for significantly network into which challenges we We've actively base broader logistics some expect new supply industry, it managing caused to on we demand team many chain constraints logistics any constraints mitigate an some and we fulfillment. walk leading Stuart are significant leading a more inventory the and help will experienced and chain in our supply to With see detailed updates. on onboarding over focused turn and to Casper products to While continue financial qualifying seeing that, industry-wide near-term order through suppliers, are by to QX. like

Stuart Brown

second growth echo retail continue retail operating by $XX.X I prior to Thank increase additional the leveraging costs. by down are the Casper X% a direct-to-consumer Further, quarter, have sales channel and quarter, share, in wind earlier the margins our performance in in with Revenue welcome, sales. last initiatives taking and revenue improving ability revenue clear million we our partnership the our partnership only and up increase year. growing losses our from positive our million which in while comments, the ramp market you, year. stores we $XX The and Emilie, Retail about mostly everyone. our as revenue pleased underway. modest from execute in very quarter in XX.X% grew to To marketing driven Starting and in XX% quarter, was as second was very EBITDA was to already strength channel. Direct-to-consumer path results. demonstrates talk the retail increase million e-commerce earnings driven e-commerce with revenue adjusted $XXX.X record will Europe, a and gross

revenue of sell-through partnerships the to has the June XX.X%, revenue, of margin ago direct-to-consumer. ahead supported quarter quarter local planned partnership year-over-year. XX.X% down revenue despite retail a to the retail to $X to we pace second operations point mix the discounting through channel lower XX% and and in than of which a was growth, increase of achieved partners by a Looking The completed at with and Europe direct-to-consumer by wind mix, reported was of in basis $XX.X in increase Gross profit was XXX increased expectations resulted inventory. million, which discounting increased expansion gross our margin strong of over With margins increasing of Europe, XX.X% of end from year million Emilie in regards XX.X% with the new discussed. total the which retail

discussed Emilie quarter, second reduced As QX, mattress our late performance meaningfully logistics of gross the in improvement. positive change new transportation in discussed last XXXX provider collection, to in which the costs primary the The gross margin benefited margin. contributing also has the quarter,

taking the continue the second the and year expect when of year and delivering expertise of to the efficiency a We In down quarter, we Sales to while capitalize from our of drive quarter a advertising decreased XX.X% profit launch underway. number of and leveraged mattresses. a in other marketing our mix than of growing percentage faster revenue still support second invested and more gross was media a expense also ago, initiatives half digital of rate marketing XXXX, and growth spend, costs chain, as in the revenue quarter at we on the in supply to share. second heavily XX.X% hybrid

our the an quarter, EBITDA million compared year. $XX.X the of last $XX.X $X.X of When to consider had such and expenses workforce We million, retail which a restructuring new benefits severance why associated you announced $XX loss for operations presence, adjusted gross second of European Our leverage quarter of achieve rent. understand EBITDA closing number by previously and comfortable reiterating and margin to to loss from a closing cost middle quarter was over operating partnerships adjusted larger of in administrative you in our retail of of Europe, reopening, about by underway our improve the million our year. global of our to very outlook well primarily related public Adjusted to recorded our EBITDA quarter an of can of charge a the the as and reduction the retail million increase costs, and loss in million $X we corporate were the insurance, general mainly XX%. relating the as as a company due stock with feel to of $X.X positive initiatives expansion options expenses next the the million

Turning cash, with We relocations investments and providing about the plans. for to million capital This quarter million capital outlook with relative strong planned ended $XX contemplates quickly expenditure the of due of year to pandemic. end. outlook liquidity prior to total signed to we cash X sheet. new and XX-day facility, unchanged the X our below to a our subordinated expenditures balance is the million. for the $XX opening flow $XX our our the million of of year maturities, Year-to-date, our to following stores second and December X, With of refinancing process expire $XX is which leases subsequent the signed quarter debt in are half in regards senior extension

of a second of sales does to in retail predict. COVID-XX for predict ways challenge. the that and remains, course, consumers impact year to ahead, are Looking the hard trying to continues half

We well the be retail our of our customers supply sales across retail will stronger and impact as the benefiting business COVID-XX will sales continue industry. expected strong, than partnership our and remain as members, expected. that will on the and chain currently prioritize but from to believe business than the e-commerce the owned monitor of team originally safety lower continue We stores

contributed For come half $XX in of the of that the back XXXX, Europe should about which modeling, baseline. out remember revenue of million

less EBITDA of back quarter the open the expected expect we should challenged to adjusted line and now be might second quarter had me year, we let from more the at expected than improved for Q&A. wrap call our be revenue we than further While Philip loss half to turn results. And a growth the fourth second start the up before over

Philip Krim

Thanks, Stuart.

achieving market get you've profitability goal As the on to against we're during of grow been focused while quarter. four profitability. made drivers executing taking us heard proactive today, We've many to share, progress and steps we've key our substantial to our

growth. continued drive our improvement growth partners. nimbly to strong, Despite XX% stores First our being demonstrates business continuing gain which in a is our wholesale channel e-commerce to and market business expand our retail we to remains reported we share. retail are revenue with year-over-year, closed, our from owned ability multichannel strong

The gains second we gross margin to XXX throughout XXXX and margins profit and XXXX. we is Gross basis grew continue points by make believe expansion. year-over-year, can

and sales is leverage. Third marketing

our is e-commerce minimal from lower acquisition are marketing benefiting rapidly segment, and And while which wholesale expanding our customer leverage. year-over-year e-commerce up also wider We media improved incremental in costs thanks channel, adoption fourth XX% to G&A costs, is requires and spend.

a We the the took investment have to of approach beginning capital allocation pandemic. demonstrated and at focused actions decisive we decisions the with

profitability We of into on the are heading trajectory the are optimistic our and our ahead path half year. to well expectations of second about

the performance closing, progress to in quarter is back which a typically industry's our on is open updating next Q&A. with The on second you Operator, now strongest third pleased to turn quarters to like already our made seasonal progress the strong start. up quarter, We great In the off call. challenges significant and I'll we've in look of ongoing are we to quarter spite We'd you. market. it to it in forward the

Operator

Instructions] And Sandler. [Operator Keith line from question first the of from comes our Piper Peter

Your line is open.

Peter Keith

you've notable through hoping to of the Hi. on several growth a congrats retail sales growth about everyone you said just more got than XX%. the morning, I April to what it XX%, quarter. continuation partnerships. June quarter pieces. at finished July. sales my from seen was like those and it about bit Philip, was pace of I'm If acceleration notes, was moving have and talk looks But up industry the could then I and back you April into you players little Good think new Number checking your

and can So hope the us kind break of you overall us for trend. that apart help understand

Philip Krim

Sure. Good Peter. morning, Yes.

into saw retail in saw positivity good to through contribute we quarter much to we overall. starting really of though, strength What was our So and stores April mid the consistent going rest didn't that about quarter the late the QX.

to partnership late think, the strong really I throughout was QX. e-commerce there mid So given was for And we quarter and showing throughout stores. of regional the big just of April the understanding they But throughout retail quarter, the a safety and and the a protocols business retail -- strong to growth kind each were basis in part slow that are we're on quarter starting, business. the of reopen our into then obviously emphasizing from our growth consistent and

Peter Keith

Okay. And feel spot back with the towards your a consumers how you good in spend right is year? do the does It of the given to pretty shifting half like the with industry seem now do into about be the more a hear helpful. about We spend that strength. Do bit you competitive? half? you broad Are there finding of Any be accelerate home. back based the color advertising pace to want to advertising would

Philip Krim

Sure.

continue it's the the That we urban now positioned industry think moving housing to we and given meaning do of strong make be strong I see. continue will that that of see trends the that ability very So the is to continue includes trends that that areas, as mattress we homes market and as share. our said, to areas will macro overall can great think mattress far a the industry, to well and a to suburban in strength, time industry just industry spend, into we believe business strong capture out

how one the We that conservative provided election back year. just we the start and strength. spend some were we end the would half throughout QX. and continue of we quarter, the of So commentary the will towards we've an is year, say I cautions the intra-quarter more QX of of I spending it's been about that to very we than started at spending more think aggressively were

to some provide rates. But overall still averages. media see and see adoption we to volatility strong. continuing be will we historic rates below media And kind of that So trends e-commerce

two if spending up, And that hold be advertising, overall going think a so the themes growth good drive to to to those business. we on be that time for it's us for

Peter Keith

much Thanks and very great. good That's Okay. luck.

Philip Krim

Thanks, Peter.

Operator

Our line from Sachs. comes next Goldman question the from Alex Walvis of

open. is line Your

Alexandra Walvis

you've growth here Good morning. any retail about is much first partnership there Is can wholesale for been strong and here. particular question that And bucket, types you down taking by, Very trap you’re that quarter. question of the partners most growth driving that those of a that growth while. where that which break the the My for my Thanks new way with then in channel. second partners strength? within so in seeing

Philip Krim

I'll our Sure. within to bit turn what it about to over retail talk more Emilie little partnership channel. seeing we're a

Emilie Arel

Yes. morning. good Hi,

in really were strong what noted while, partnership with pandemic. the all partners As my came the we're our Costco, like the partnerships and during time of is we've open who Amazon, remarks, QX about from in that the majority had for during still excited Target revenue a

excited we're about business the there. So really

and we retail bringing total press As noted our new yesterday, the we're XX you to partnerships. partners onboarding release saw in some

contributing to expect continue partners do And so the see the that but revenue our current partnership come growth in we them our QX, to we from we near-term see modestly in balance retail of

Alexandra Walvis

some or of the the increased of like that a of you're question the business then mix mentioned attractive online e-commerce across drive I that about restrictions thinking Great. on market. light in wonder in media business high if my the The things and the indeed opening second of channel led to you your differently disruption marketplace about this seen optimal stores? any to acceleration has your call, already of channel question we've And the in more business. and e-commerce business exposure terminal rates is the level

Philip Krim

channels Casper Instead a was that in in the purchase to wellness, this it's of viewing were going convergence we traditionally about that shopping. a separate and them quite how multichannel the in I our industry, when high online great would believe channels drive that of the And your offline the decision. we basically any that which question, increasingly health order enjoy bit, accelerated mattress consumers online or happen silos going because consideration to journeys shopping is kind as like right believe are industry impacts talking shopping think I what and a exists Yes, most of say to Alex. and approach traditional which and both we thinks is one leverage especially of and operates, offline

part model of important so model is more of purchase. right that that our is shopping overall consideration future, hugely offline for but retail and still to this believe and given the we that e-commerce the are and leverage as going the and more And experience, consumers nature their digital

same the positioned so to we consumer that become to think our ground And and at the future increasingly how consumers we in the going we online think more built going and intertwined, often of offline that's just and this they're business are more well for traverse That's up the industry. and from time.

Alexandra Walvis

all for all and much so the the Thanks color Excellent. best.

Philip Krim

Thanks, Alex.

Operator

Our next question comes Konik of line from from Jefferies. Randy the

Your line is open.

Randy Konik

Are had morning, is it to of improvement, significant mentioned I'm saw Flanigan The you think I'm quarter. like during reason partners setup, partners. Just the and with partners why perspective those the channel you Raymour were suggesting the doing that everybody. you for retail us how with asking open partners Back you're I & those your think that? perspective that Good partnerships, on anything significant you that sell-through is, anything with just color wanting there from closures? would some in some occurred? that kind improved Thanks. the signage, any sell-through to suggest give on many doing of of are on things different for do get terms partners

Philip Krim

want to one? tackle do Emilie, that Sure. you

Emilie Arel

Randy, Thanks, your question. Yes. Yes. for

opening little of majority the earlier. the go, for & starting closed So partners open But the rooms specifically a quarter. bit you're most trial them of trial just our right are that partner Raymour to Flanigan to for

We across Target, did about. really expanded growth of partners the pillow We Target, excited have gains in specifically three so from continues But Amazon. the our industry which share within overall and quarter, Costco in strategy. Peter growth the saw it see and about excited incredible those products QX. and of saw coming which talked we from distribution And mattress home products, of pillow, lion others did strong our super have as we're partners like that, change about throughout some and into all the we're

Randy Konik

we were Got to million think what then just losses in that back [technical half Can how I -- year, the year? the a it losses were just the Europe, helpful. going $X EBITDA we second normalizing of get on give attributable And about profitability for last just in of the half think difficulty] the back this can of into perspective bearing normalizing the year the business quarter. you into us the

Stuart Brown

Yes, think I going still I a rate is monitor as was losses. that, year, to better run generating second really again, growing was still forward think mix for in -- business just use EBITDA core probably What of of given EBITDA the changes but quarter overall. the last the Randy business results the

that that to for and adjust the revenue, to quarter then had start second you you so million forward model the there. should try and million if $X EBITDA get the and the we revenue you able loss, So be $X with QX in

Randy Konik

would about And marketing opening store it. [technical the meaning slower that I G&A initially how buckets initially And leverage year, within marketing be these last kind pack, efficiency openings, of how -- or towards thought difficulty] moving think expense plans, is we Would they with think the less store kind from about had back the the the half think pressure year. on be, kind then look really than just next [technical how than I'm have given less into that you be then the to accelerate difficulty] expenses G&A of curious pandemic? Got thought, go do your question should going really the Thank at to like, of we you. you contemplated way [technical the line helps of trend the profitability. down difficulty] path good the different you line. combined would you

Philip Krim

Sure.

we be early were environment conservative the we increase and sales marketing, in had the very that macro believe the overall understand pandemic throughout kind on spend commented we we we viewed we quarter. because and the in of that So to being what

that manage continue profitably run I take good is to see to we So quite continue as we do is which that. our we acquire opportunistic ways to profitably, the not would would opportunities I customers, see marketing to rate we're spend to say spend forward into how QX going because

On and haven't about about opening continue meaningful our we believe store plans to we've and But our be side, part talked our going talked into the of expand for store XXXX specifics our do will a that's to I XXXX. we footprint continuing us. overall count how the reopen we of to are ahead performing ramping what But business overall that about opportunity think to sales and we and and watch are going also formats forward. stores the and of the how drive store

we'll stores going is a be to to and key very no to still our continue it's regard our expand over how that's of So with performing. that to much But in strategy. continue overall kind mode doubt learn of part retail time

so G&A the of And part growth. that is

or as declining been as we to headcount regard though, have with side, talked well. in flat store keeping some the instances Beyond about we've G&A expenses

Randy Konik

guys. Thanks, helpful. Very

Philip Krim

Thanks, Randy.

Operator

comes UBS. from line Lasser Michael from question next of Our the

is line open. Your

Michael Lasser

taking think the you lost up sales late? quarter. you market you that a and Why too was share do sales, Phil, morning. your where it during the of compare e-commerce Good lot ramped question. was? results others for which a you or industry, my the issue in Thanks marketing it Do into we implied sales quarter if in appears we're versus the e-commerce the backing that think

Philip Krim

we saw don't very XX% drive fundamentals. business were partnership at retailers you we're market partners We a and different growth through and us. can to traffic that decide saw to their .coms great So because look through and business and stores in share open I each the comparing their have think channel our that able the retail businesses stayed you're that

throughout We so and doors were business. have that QX, drove for physics closed our that different XX

So I up as it and America. globally, were Overall, don't as reported share. in wholesale share we e-commerce think we XX% our here's market XX% look market we at here's our North

some our in to down America compares in North peers XX% that or I of America. who think XX% were North

we the overall, ourselves benchmark at industry when And we when feel most pretty data in players, the against industry of see look QX. that we contracted industry good. So we

we multichannel -- than our overall, the physics to took so share competitors think market that we And we we've be is some other share. our of achieved. took companies business market the and way given just And the different going of scale that

Michael Lasser

you -- the being sales that can quantify sales so you've seen Phil, that With quarter-to-date said, the strong far? growth growth

Philip Krim

the out been break throughout to and QX pleased has the quarter but I've sales going growth not we're So started. with performance, QX, continued how see we

Michael Lasser

My as how to more mattress that plan create? last the you've worked of brand do Phil, into to question traditional the authenticity expand is, you maintain Casper you and distinction hard channels,

Philip Krim

a great Michael. table retail when that's potential partner. for us we a with And stakes question, negotiate It's

see the that and to value and is brand, retail that with, question to is are we make how showcase brand in sure value the our show drive value for products the to of and comes to going how that news our working and that. quality our important is of want brand ask the through talking the appropriately that and see the is we're partners up exact our that And going First we way to good us?

of at continue grow. have it we see, been you capture. When going driver value to brands with you a great to the ton key space to the who still appreciate look friction industry. segment So space, a part for this as those just it's to white And of footprint. business a industry partner the a hasn't partners in joining of can in doors be to the market where experiences success of overall within with we way to do size, to doors, we're starting trial their by trial the branded the bring Casper we're far addressable and and largest penetrate And seeing the really lot that represent the

And so there's really us. growth about huge and there we're early of think excited signs potential ahead that

Michael Lasser

luck. Thank you and good

Philip Krim

Thanks, Michael.

Operator

of comes Bob Our the next Drbul. question from line

open. Your line is

Bob Drbul

Hi. Couple for of me. questions

about split, how a of just customers forward? On value talk can the that break sort And going can order cost side, trends you thinking new and bit can little orders? e-commerce of average obtaining you of versus maybe into the you're the about

Philip Krim

you seen what order Sure. channels? to the within Emilie, values just do and we've about want different talk average

Emilie Arel

we you think I that in nice a previously new that excited is in adoption portfolio about at is we see our What more for about Original our new which we're and sits Sure. us in upward the Wave. as that really March trend launched middle look see Nova a especially mattress, order point as value, average price we into of our spoke our

trend we're we our e-comm in right customer, and an to products stores our attachment so outside the and of for also AOV other what excited for retail into about for rate with assortment owned seeing And our are and test the partners is continue mattress.

Bob Drbul

announced the Got the it. just I is And the question wholesale on you new yesterday. partnerships other with have

Costco any going to it for XXXX? piece And the you was. Thanks. we to additional previously? ones that one the expect it. new of could of think, think had I it would be pace That you think this Should with guys, fastest Just helpful. is trying rollout about of or I partners maybe just the year, that the if talk of understand be I versus

Philip Krim

on say to just there. ourselves time on long-term and still our with we work a is of for make partners retail more set pace, XXXX, then lot guess to we I there's clock that the up sure the Yes, we try come so all for would And success.

any to optimize specific for trying not timelines. we're So

we right than more long-term and we represent to up partner hit the or any especially can you and short-term and Some others retailers each the for pace sure our that quickly brand we metrics. during set working post that fashion move not different products are a in ourselves to of operations. success, correctly see with pandemic, make will But

Bob Drbul

Phil. Thanks, Great.

Philip Krim

Thanks, Bob.

Operator

Bank from America. from of comes line the Curtis Nagle of question next Our

is open. line Your

Curtis Nagle

much Good question. taking my morning. very for Thanks

one on So, launch out guess in Did impact first I I the yes, mix. guess, did how -- quarter? were How And work trend did what the that product the just Wave? mix Nova down? it of How the those, did XQ? all in dynamics

Philip Krim

the product saw? mix about Sure. we Emilie, that to do want talk you

Emilie Arel

Good Yes. Hi, Curtis. morning.

-- new bit in stores reopen talked said uptake their mattresses, call, the new a the of it partner we commentary, the And very we're mattress. obviously, what So really that to point began the a the as as as last this to about I a launch see in and comfortable. starting about across price we're excited -- has great but performance owned It my the country. has just from little stores, Nova, and original It's the we're mix a is and great is and seeing and also us. is margins on which with new to for retail bed

across customers pillow year-over-year, about all also is new and of really really seeing And the then we're into spoke about which up seeing And channels the mattress, we're really we that. repeat the of so sales, about. categories Nova and outside excited excited lot we're other that represented. customers where strong a So grow XX%

Curtis Nagle

than related tend at difficulty] then thinking they some are Costco question. that higher a you price to are launch? How to bedding your points And original partners when sell guys great. some of of like of about new your maybe specialty which mix [technical look like kind product partners, for Okay, just retail going

Philip Krim

Yes.

back this a Philip establish ago, strong So to brand questions we're we important with the of to which part goes answer that what's and partners a is of gave location, our really that the brand right for us as connection customer way e-comm retail us showcasing that the in in and right or environment. way and the store our it their Casper partner shops in an whether for be the couple

fill continue on their are to looking And what partners they're by in so assortment. what they based varied as assortment our be looking will to our customer's for, now

as for it look for with us. one-by-one individually assortment So them find our best basis at a and the and we really work to partners

Curtis Nagle

much, it. I very Thanks appreciate gentlemen. Okay.

Operator

the comes line next Morgan Instructions] Lauren Stanley. [Operator question of Cassel Our from from

open. is line Your

Lauren Cassel

you on following a sort additional expected of attribute that retail there. the than quarter. margin? And year? of to original results at magnitude then earlier Great. costs the nice much might've benefits Thanks store expected little any sort up the expectation? Just beginning so lower end benefited the on of how than And of were the of specifically the few questions, gross and Any deceleration Thanks. I slower quarter? quantify the would through just roughly to of Was What partnerships, expect much. much that e-commerce better margin, in understanding to you the just bit the guess opened a you logistics gross your way see would color then same helpful. there would really be the really

Philip Krim

question the Sure. Maybe, lot. question. e-commerce Thanks mix then tackle sales the tackle can between do Stuart you first Emilie, want you just a overall second and channels about and to

Emilie Arel

Good Lauren. Hi, morning. Yes.

closed we partnership our ramp the of quarter, in stores as retail country a indicated majority happy it growth. very opening geographies And with differently. were were for to the and we the continue retail partner we affects commentary, As the owned our stores in see and of different

it both As who non from coming of and during the mattress I said, partners of mattress. QX open course the sales majority the really and stayed strong in

a As for to Philip the see balanced profitability profitable said the we're are driving path on business. span spend, focus is value but and continuing earlier, really we're a really leaning to our approach and into really taking where that we media growth, ensuring

so as shop the e-comm don't retail really partnerships shop cross know. Philip and channel that really are to and of model partnership working will our So confident Consumers current having be our noted They channels this in to work we our in own stores, and one continue business in place. and our all earlier seems we together e-comm environment.

Stuart Brown

the We've supplier supplier is but of to change number impact logistics the not costs majority on a the primary by bit far margin mix really product improvements and improvement the margin -- to for flowing of lower some through gross the by logistics of the on costs the the we've so was item. item, the team were new but it that been improvement, biggest a biggest due the single working the is single mostly has on year-over-year, And been our product time. There touched of fuel, from most little driven but products. new -- a long

a really EBITDA most flow to it's in initially you drove that So continue of year through to rest that continue of to should the performance the we the really expect have what combination things had. to for of significant the drive and quarter

Lauren Cassel

Thank you. Great.

Operator

Wedbush. of And line our from next Seth Basham question from comes the

open. is line Your

Seth Basham

first the trends a and My just Thanks in good question lot sure business morning. making understand some is [ph]. of restoring I

You us going spending like you if I but that I'm it advertising, growth you've what's in direct Can rates. presume that's sales can if me understand advertising. doesn't a mentioned wrong? ? improvement more response correct on help started commensurate on seem not, got And you there? aggressively you

Philip Krim

good So, morning, Seth.

And business to advertising. a emphasis continue and with that's seen response started the the we and up We of that spend have about we've second on half advertising QX. through into on strong consistently tied seen with QX, strength performance when and

growth QX was So said, that we off a like has April. good, to to is a overall continued business late think perform since the and we've mid starting we increased to felt after And good consistent QX strength overall, we that. start consistent

Seth Basham

it. Got

not increases acquisition consumer any business, So costs? for direct customer your in seeing you're online

Philip Krim

fairly since fluctuations consistent QX some kind been seasonality. around They've mid of with

with well think We're weekend. Labor weekend Xth periods really strength we're around, had excited strong holiday we've weekend and positioned at about there. So first, July then Memorial and Day Day

that's kind more than there, of bit So than there's performance Other and out fluctuations. little that, when zoom of very kind consistent. driven cost fluctuations normal but then acquisition feels a it seasonality you that, some customer

Seth Basham

Got it. or mentioned. you left might the normalize? is last difference you table, when just expect question And your your us then a you you an and around into the Can do And chain order sales quarter? of whether how growth some give sales the the on supply this insight have for you constraints growth that not between many

Philip Krim

hard to it's quantify. Yes,

we partners. shipping conversion because our outlined with we retail times about shipments, can various lower delayed shipping times slightly have on some our products consumers website We to know, rates correspond and And immediately. talked need

times. leaving exactly the that table to But We're diligently we're supply So hands ship across business working up what suppliers. this new model of to third-party We standing we're on is base quickly it's said, benefit we get our around for key having have chain. just we that business, a longer we our think manufacturing with a can hard that that and respond this. the have

unexpected the supply stress quickly. the are having we ameliorate that on is to demand so chain looking our And

Seth Basham

Thank good and you much it. very Got luck.

Philip Krim

you, Thank Seth.

Operator

back to we no turn And remarks. queue. questions the I have will presenters call for in closing further the

Philip Krim

stay for Thank and all healthy interest you hope We you safe. today you family in your Bye-bye. for Thank time everyone and the Casper. time. Excellent. and the

Operator

Ladies participating. and for call. you gentlemen, Thank conference this concludes today's

now may disconnect. You