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Casper Sleep (CSPR)

Participants
Norberto Aja Investor Relations
Philip Krim Co-Founder and Chief Executive Officer
Emilie Arel President and Chief Commercial Officer
Mike Monahan Chief Financial Officer
Bobby Friedner Piper Sandler
Seth Basham Wedbush Securities
Atul Maheswari UBS
Bob Drbul Guggenheim
Matt Koranda ROTH Capital
Curtis Nagle Bank of America
Nick Jones Citi
Randy Konik Jefferies.
Lauren Schenk Morgan Stanley
Call transcript
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Operator

Good morning, and welcome to Casper Sleep's First Quarter 2021 Conference Call. Today's call is being recorded. I would like to turn the conference over to Norberto Aja, Investor Relations for Casper. Mr. Aja, you may begin.

Norberto Aja

good and operator, you, morning, everyone. Thank for conference call. you joining the quarter first XXXX Sleep Casper Thank We'll in your questions. get comments management's started just a with minute and before minute take harbor But let the language. read safe a so, doing to me call will forward-looking XXXX the Securities statements May of Act of contain Litigation meaning is Reform taking the XXXX. This on Private XX, place within and forward-looking our All objectives, of plans, historical fact of relate to statements matters management's performance financial made on anticipated COVID-XX regarding be our this statements, considered and call strategies, impact statements that goals business. do not expected including should the on These from statements important and factors nor future achievements or any to results, implied but other unknown cause may involve achievements our actual results, the performance are known neither or forward-looking promises statements. that performance expressed and different risks, by materially uncertainties or guarantees be on results annual today. with other for Factors forward-looking actual cause and report year in on Securities those from statements and the Form discussed XXXX, made December call filings by this indicated ended to materially XX-K the differ could XX, Commission our the Exchange forward-looking such represent Any the as call. this management's date of of statements estimates

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

Mike Arel, Investor Chief the Krim, addition, Commercial may of earnings Co-Founder our which at company's Financial website and Executive in the release Officer certain Emilie Philip on also our GAAP and non-GAAP reference nearest metrics, be ir.casper.com. In call Officer. and metric we on today Relations Officer; the Chief to which Casper; are With Monahan, reconciled can is me Chief President found

Krim, your that, we Chief like the Casper's ahead. call would questions. Philip Executive call the their prepared now will over Philip, Officer. go open to Following please With remarks, to turn I for

Philip Krim

reflect strong to exceeded everyone. start and expectations, marking Norberto, you, morning, financial exceptionally performance conference an executing good year. has well The our first team Casper's quarter the quarter Casper's been Welcome that. to results first the Thank call. and

quarter growth, deliver robust in ability partnership additional results drive spend, foot market, revenue stores. Our path of innovative XXXX. strong drive demonstrate to the as leverage first business our clear well retail coming our margins, grow traffic additional paves to products our bring half top marketing achieving and profitability second Together, this across to improve in Casper in a as adjusted EBITDA accelerating the quarters line

we that continue Our execute and our on successfully. to ability plan plan is working to well prove

materials manufacturing largely remain quarter, with this, needed first strategies our us and Despite supply and the in navigate to We management these stock. During reallocated we production chain to industry-wide in raw our partners challenges. worked produce shortages inventory mattresses. third-party saw model enabled effectively to

in revenue we including XX% in seeing these As increased capture more the revenue. expect we increased subside, shortages demand to of growth year-over-year first retail market. a are North XX% America the to quarter record, partnership

high-end for gross XXX improved XX.X% range Our line an in year-over-year, resulting our performance points of guidance quarter. basis the that surpassed the margin expanded of bottom

sales channels. and quarter strong categories momentum across first reflect Our product results

continue real to broader the gain growth we market continues Our industry meaningfully and outperform mattress share. to

Casper half strong of in profitability the accelerate reinforcing the we to coming across line top EBITDA With growth expectation our are the second business, signals in seeing demand expect our that quarters, reach we XXXX. will adjusted

favorable through full you will our XXXX year trends. reflect take those outlook moment. result, a As we these numbers in a Mike financial to are raising

our increasing and three making our Before our distribution. across growing the brand progress three, would that, our product we points like outlined are which touch offerings; I briefly awareness; we previously priorities, expanding strategic to as; core of on though, one, two,

product strategies, see tremendous which estimated in is innovation, and building our that our the of the Starting brand. With of be I these to U.S. products with company early a design, why days differentiators and market large $XX nearly and across be addressable customer Sleep we to quality very services. consistent continue service still the of Economy's alone, hallmarks and Casper billion offerings; each true believe total is in runway continue to

All of are of products team by engineers. our and Casper our Labs researchers, developed designers,

In diversify our for revenue addition Casper solutions such late products, technologically our Collection; cooling most April, pillows, we temperature offerings sheets, innovative lineup new In the to a one our overheating, advanced weighted early, Collection line restful people with streams across are will strategic launched Arc we introduction Sleep channel while more for features mattresses, initially of and successful shopping confident the We blankets The our rigorous and of we sleep. The broaden mattresses help sleep a the product a design award-winning of of brand’s continue premium to Cooling as consumers the research, encouraging. comfortable are leading other DTC the and Cooling with accessories. unveiled the results and XX line Technology. Snow achieve nighttime months mattress. of and of exclusively testing proprietary of and concerns through results our new the among products that

and just week our of Sheets was leverage our begin Mattress our through mattresses number quarter. line our this for offering Snow the first success, seller Nova launch, Wave that our and channel in category. nearly we in upgraded the customers Wave further To partnership our all plan to Snow retail us of example, the later of Snow to one-third one For of Technology, Hyperlite

higher step in our across of trial in the and has a initial Casper's the include offerings been in forward As points and expanding an doors. the The to positive, driving success we new mattress about assortment our channels to further at appeal values the elevating on updating products quarters. sales we've of order premium our launch cooling brand, look is coming response in of visibility talked product particularly the our overwhelmingly you and to priced average past, strategic premium

with launch, new accessories. prominently campaign maximize unique even The across with the consumer The cooling platform. example another how and and even Tomorrow placements to humor awareness outside is Economy. integrated mattresses media of the Your developed storytelling awareness. Love few was marketing engagement. Love truly around Casper the drive on an and our We to a In of new featured utilizes on to brand we reach Collection suite consumer sleep Tomorrow make and platform of Your brand leading our of product launch campaign Sleep and Moving Today's focus channels strategy brand multiple the our can the brand, new show, brands acclaimed Cooling conjunction of becoming introduced

through retail our made partnerships. network the new multi-channel have we Finally, significant in progress growing distribution

expanding on more but focus coming in front customer partners trial more additional in have consumers and an emphasis trial particular share we us expect to products. on in more a within focused mattress segment, provide very with our trial you compare capture online premium opportunities to exciting our can XXXX, products. to drive you'll a some is on consumers see continue the our are to Bringing presence. months. in for high-end bringing announcements experience and the conversion market We this ability moment, In more opportunities to factor color key priced where Emilie will on

XXXX growth to expect story. a in be Looking ahead, pivotal we year Casper’s

early growth not more what Casper pleased we consumer And and same. with the past people us. shared including that on distribution of best-in-class in our I technology, We're of in together Casper market capitalizing We the product our for reinforce seventh data about achieved growing sleep leadership in recognition, of opportunities so our front could by makes I cutting who of we share, our future to creating the recently the developing and has and experiences am of grow brand deliver shareholders. working ever products strong R&D To edge be insights talented our world much and remained the capabilities leverage Casper, group have of are sleep. position and and year, In lines a of are and while category goal its exceptional value the assembled what changed improve our develop closing, team While the harder on much and executives we excited world-class to-date. footprint. in has a and with working that, have at to broadening sleep anniversary, stages celebrated an experienced for best-in-class proud solutions extremely than and senior way customers many capturing

value. we build in position confident As progress our turn I to ability Emilie. our growth shareholder Casper and best recent our we future, while on Emilie? now the over to will significant for creating are achieve profitability goals to call the

Emilie Arel

than ever, shop thank changed convenience consumers seeing us anywhere. for you, want everyone the trends to flexibility and way the Thank that of you and able year clearly accelerated to and shop. past events want anytime to More The today. be the Philip, we already were have have and they joining

touch creating approach to e-commerce remain As such, as focused consistent retail our partner resonate points network, this we multi-channel across on our with experience, stores, strongly our and continues Casper in footprint consumers. our distribution

team through made at Mathis retail and back conversion. partnerships, including distribution During Late XXXX, partners are further XX increase position our help our Denver work and revenue us to progress partnerships we retail launched expand new XX% more last this QX growth increased QX. and for to customer our Brothers, of support in entered Club, accelerated and year, retail expanding segment the We the hard field in in-house on profitable Mattress, America we drive Sam's in significant Nordstrom. North with better reach than our

retail approach to our field real about has customer trial associates walks and our of technology. strategy a equity empower This team’s products ensures been partner into for informed conversations once at doors. a tailor us unlock one location and with brand customers Our sales partnered holds Casper’s have that our

website, segment strong as COVID-XX and favorable organic platform, QX, was and tested to provide the traffic terms We traffic In to to which economy in value gaining this and are well enhanced promotions, had traction brand AOV. ways both across Regarding landscape as efficiency we results the results. to Direct-to-Consumer, changing by reflecting navigate structures new further as retail Casper our our the stores proposition. of continue saw regulation strong driven e-commerce normalizes. consumer, robust

key enter their of important regard great but and best are to Casper products XXXX, the higher welcome and conversion our in only our share excited are to doors them for and the upsell we driver, more trial particularly to As our a important they new or both Trial second with stores opportunity plays the is represent we half also us priced Trial cross-sell. items. not wellbeing. to and opportunities fleet and consumers back more with

and feel retail the between experience themselves new allowing sleep body well breathability bed between air includes room retail Breathable in Nova the of AOVs at new materials as made Touching design, products Mattress Casper with doors. sheets the create the They time Snow The addition, structures Technology and new the time on line again stores TENCEL fiber trial your sheets, grid Casper the aeration by comfort Duvet the throughout like see and sacrificing mattress, as with ambiance both a without temperature our that the partnership see night, and experience humidity curated the blankets entire in a and air unique see Protector, flow our vent product Customers come together. can and we In hyperlite created. unveiled consistently lightweight and mattresses to we the product and higher can flow maximum provide expansions, technology, and Wave Cooling that in coolness the mattress. improve of collection to control increase the world and immerse recently lines, providing and we new woven Collection. the pillows,

technology designed utilized Snow Some of more comfortable the interesting over labs proprietary XXX Casper to and restful the help achieve undergone a a sleep. tests has and about technology include, consumers Technology at more facts cooler, as

testing over team reduces from underneath six through a HeatDelete remove the touch away cover, with labs overall body rigorous to air Hybrid, for more when inclusion feeling heat, with climbing cooler XX compared upon Casper our top to Our breathable an which which the degree flow foam layer And the the perforated QuickCool of Wave combined through hours Snow that XX% cooler provides of and sleep. has works sleep band, XX% foam, Technology the in air heat delivers bed. escape substantiated increases that

power truly a feedback has Cooling positive. overwhelmingly launch, from excited the of innovative to Wave brings example that And innovative design cutting consumer adoption materials more and make Customers continue research, mattresses to the various outreach the with and in our This benefits Casper of there's continue sheets immediate how leading thoughtful is be the the Casper the and come. about look couple Nova $XXX to weeks initiatives, of Philip industry mentioned, evolve we to and strategic together brand leverage the seeing early ways within at hyperlite the the Collection edge we're families of premium. mediums to a first look for and within at consumers curated of As and Taking been our the fresh products touch yet most entire dialogue another together technology. technology, and for this across points.

recently McClammy, get achieve launched Our Vanessa creative media of that elevates from Actress, sleep exceeded broadcast eyes way. Casper our their with helping Bayer Love tomorrow better customers. help is hopelessly campaign new a our Tomorrow to Award The various the featuring platform visits mission for for Love expectations with an personified how in narrative Tomorrow the better a over of various exhausted The night's for tomorrow Winning to them through Award platforms that. a millions the our potential Wayne sleep night's and a notion appreciation perfect life Director, articles sleep comes deprived of reframes and character initial products who to Collection. we characters Emmy the of and reaction a XX campaign reaching of has people and cranky, so example eccentric sleep humorous Cooling visibility the yet Nominated Your across through campaign, of brand Your and does very best great achieve relatable The powerful night’s and

can building brand across improve to added-brand and consumer to build marketing We momentum approach continuing that creating our pleased and to we momentum deepening and are efforts by are brand we laser-focused our equity, brand with spend the and seeing from the taking a how are access Casper on are and platforms. very connection, ensuring consumers the sales strategic brand dynamic

accessible All larger of helps which us to a sleep make products market. our

share I rest and increasing as and feel Phillips An team's Looking key enthusiasm, wellness, along stay. nutrition value, number future. ahead, and which trend with is and a for sleep we Casper’s here exercise, entire to of consumers excitement a our see pillar,

people engaging The an brand. foundations strategy long-term we mission amazing presence, multi-channel improve believe who healthy important build a have our wellbeing. world-class to industry We a our of to enduring in people's most of and all, are and have products group everyday

a leverage Mike. sleep to that, and we are As designing this turn the that consumers significant products demand to such, will confident to over by that embrace. have wellness opportunity we enthusiastically With Mike? like I call would

Mike Monahan

Emilie. Thanks,

year XXX.X did progress have We XXXX. North we American QX are comparable revenue we remember our prior XX% pleased direction North we or revenue X.X any the grew while compared which the revenue in making the QX are period. of revenue first reported in of QX headed. from and quarter first by with QX on million in outside to We versus America increase now to It's our growth XXXX, XXXX. that European operations in and the had are million discontinued important not of XX% approximately quarter goals we profitability XXXX

period a for network gross our year gross and The XXX channel driven to of XX.X prior compared XXXX, in the direct improvements product America margins or XX.X% year revenue compared improvement to XX.X% primarily in retail million logistics XX.X a North this profit for and XX.X% the costs. was an QX XX.X improvement. while quarter margin the consumer increase expansion QX our as efficiencies of XXXX gross increase versus prior in million, led a by was XX.X%, million, was Our resulted to point partnership in period, basis revenue

priority, key plus of preserving continue margins top line growth XX% on managing as will we focused our be to of a goods cost and our strategically While possible. remains as

QX costs and income Moving in XX.X% or expenses revenue but and of depreciation Sales general payroll corporate one-time down operating to primarily was the million in This items. XXXX. increased statement, expenses declines of declined G&A, XX.X versus administrative million or by the driven overall and excluding X.X%. by XX.X% X.X% revenue including store XX.X marketing

marketing our and in to spend. continue sales we achieve However, leverage

of XXXX, operating in million XX.X interest loss while amortization expense the X.X per improved distribution XXXX. QX from a first and first to expenses Earnings our quarter of million percentage X.X increased from led a XX.X% efficiency from an and quarter first compared QX million quarter. in X.X strategy. loss sales improvement from Depreciation As of X.X million of million. XXXX quarter expanded to declined net operating first This to in reflecting and of significant the million for XXXX, loss XX.X% XX.X revenue $X.XX share the multi-channel marketing decreased a was in a of of

adjusted the million improvement loss the representing first quarter XXXX. of year-over-year EBITDA in a narrowed Our to XX.X% quarter XXXX, XX.X first of versus

XX, of liquidity to and Moving of feel our our XX.X and position cash position, with XX, to and balance XX.X as balance we compared our We the of of sheet. sheet the March December equivalents had liquidity cash comfortable XXXX. health million as million

the quarter soft historically, As we prior in us expected that XXXX. this mentioned on first we been the for to be our call, the seasonally quarter and has case

result, accelerated continue expect line to top a As growth. we

XXXX. move remainder through we As of the

XX a XX% X of XXXX, million represents in At North of million. growth XX of our to million XXX this Regarding the million revenue This of XXXX. American and would to net midpoint, for to X loss quarter loss the revenue. QX the second approximately to lead approximately we EBITDA of second million to deliver adjusted XXX million expect XX% outlook quarter growth range and

XXXX, growth over continue year XXXX. to accelerate expect revenue full the to For we

range American million retail challenge stores, the continued within e-Commerce XXX revenue revenue represents growth traffic along trends overall year with strong by of our XXX North are in our At growth increasing in offset for this retail channel, and be to partnerships. our We growth for midpoint, the XXXX. reflecting outlook XX% range full growth for in XXXX to million XX%

to expect stores XX we plan to year. capital below fewer than open XXXX expenditures also be Casper this as XX We million in

XXXX. half expect reach EBITDA communicated, As in second adjusted of previously the to we profitability

Looking the are ahead, across results we pleased EBITDA. the we're our and adjusted seeing business, including with trends overall

of understand areas can work where in we ahead also We us there's improve.

progress of we our and improving leveraging do doors, trial ways more Casper towards retail result, more resources. doing we're expanding look a in what our our for we a successfully goals operations effective continually closing, and said would to we share, efficient In making company. make footprint As gaining our market and strategically

We to of will now interest we our call customers, on what back focus is the our best our continue like the to shareholders, believe brand. I in to Philip. and turn would

Philip Krim

Thanks, Mike.

We future our optimistic and excited are of about the business.

As we XXXX, challenges teams even encouraged the to the doing emerge our how from I'm stronger by accomplishments, recent than came on are build into of we work it. our

market, to largely on brand, working short unprecedented diligently and best with how we in company, has history. human made a products ourselves bringing We’re areas as and by strategic Casper progress life public key in elevating of great refining in marked most engage further periods possible. people period our surrounding a consumers, the amazing the our investing partners with one

shareholder world we significant growth, now the achieve share, the to growing Operator? market profitable call create turn As opportunities over to the operator significant see and gain further normalizes, I for questions. will value. and

Operator

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

Bobby Friedner

for Friedner morning. on for Nice questions. good Bobby Hey, my Peter. results. Thanks It's taking

you QX, it growth QX. out wholesale doors? accelerated more nicely about from a rolling seeing on material Is ask drivers per Or in Can here? function to the of speak door some want improvement to are a you basis? I First

Philip Krim

strong business honestly distribution particular, little In We for entire everything. existing thanks from retail March Bobby, of saw we Hey, a really bit channels. our great demand set in the of saw question. across partners. It's the

our We and also expanding have on new standing opportunities. out door been those focus and partners presence trial

work the folks on the and helping for we us. optimize are launched to pay partners, our that a We and really retail team talked dividends about field, That in also last call that their continues well business. of

growth overall pretty So that retail partnership it the the channel. based strength drove in was broad

Bobby Friedner

the Has love plateaued? Thanks into over Casper actual seen right Okay. strategies Given how you would now? week-on-week improvements. you're COVID that describe of sequential reevaluating? state And traffic for any Any I'd to stores, that. diving insight year there. impacts, play a now you've

Philip Krim

kind sequential improvement. a seeing of are we Yes, week-to-week

So retail we're and maybe to seeing bit Emilie Casper doing over a I'll own within what to turn talk it our stores. little about

Emilie Arel

good Hi, Yes. morning.

see up our base to continue rollout America. across store vaccine as see variations in restrictions with regionally continuing to We and the pickup and North COVID traffic lifting picks performance across really confidence consumer

So communicate make safe – on focus communicating to our your teams to products our and them in the stay the on to those sleep the that spending store benefits. benefits focused very time feel the and with bring consumer really all

welcome on store consumers So we focused strategies the into regulations continue to stay core our as lift. and the

Bobby Friedner

Thanks, Okay. Emilie.

Operator

comes And line from Wedbush Basham with question your of Seth next the Securities.

Seth Basham

Good Thanks question morning, a and results around My margin. gross is nice lot. outlook. and

Just cooling faster DTC, going give retail thinking of line XX% be from launch despite wholesale quarter over new and outpace as But channel. seeing think much margins more about gross mix to the new the even grew know wholesale annualize strength and strong that with the I there, the benefits you guys able your should you channel margin should lower to well gross we XX%. I color should margins to continues you we shipping contract plus. guided Can you about guys posted partner please? think that you channel How forward? than be some the fact this DTC product channel, see

Philip Krim

grow also by profit to continues in dollars that almost really we've going XX%. is forward. able to maybe us were shows about me, margin a the value the gross morning, in strength highlighted why thinking I'm able margin, gross and then glad gross about which it showing we consistently our margins. big Seth. and and real what the to to have marketplace Mike Good to But margins how over talk win kind for Yes. expand sign about saw just talk is it to our turn been Thank of you. because gross gross we're you we brand currently, I'll that

achieving that So it margins gross who we here. what forward. gross were going we're for on really did And talk of post pleased about could with puts seeing to and margin we Mike over the the turn kind takes I'll

Mike Monahan

you The largest to Sure. two the and Thanks, gross drivers mentioned, as channel mix, margins. are Philip. product

we over channel G&A a the in The long-term, to lower. we they above margins drive retail the But about, range, overall XX%. pretty bit a meaningful be marketing while in the our script, that talked and So require blended because expect tend has margins DTC spend. EBITDA to little keep mid-XX% less margins partnership adjusted the retail partnerships

And seeing so product we're the well. as kind improvements both those, throughout of of underlying costs

our As margins. be margin in – as – mattresses highest general, get right mattress on expand will well. our to accretive so drive to I par now, the where our grow our to with that that mix margins overall as product we our goal they're non-mattress product is overall up it, and products think But margins about highest those

Seth Basham

color. helpful That’s

forward Just with new a line. going follow-up on cooling the mix the product benefits

you If could repeat made how line performing. in comment you around the script is the the

recent that said upgraded to of of DTC your And be customers penetration think expect balance in do on launch. mattress I mattresses of where since that the line for year? you you channel the one-third weeks in

Philip Krim

Yes.

in we April. So Collection Cooling launched the

and adoption pleased out we the data, kind recent So gate. it's that saw of a of we the were but exceeded

third immediately the the what saw include immediately customers the of And we We is, the ramp upgraded to like take Wave technology. to something out Snow expected the line of into longer. gate, Snow

Wave And model. Hybrid were so the they buying Snow

took of adoption And When bit so we expected. doing. a faster for the adoption were Hybrids, understand we what that little happened to we longer kind than launched people

case were the pleased of the cost. you kind that. were $XXX So And doing incremental a technology upgrade to really see, Snow is they then we didn't in that consumer

It's And driving so margins. that's for good higher AOV.

strong the forward. will new we be performance lineup, a going so driver of think, And

Seth Basham

Got it. very much. Thank you

Philip Krim

Thanks, Seth.

Operator

line from with of Atul Maheswari And next your UBS. question comes the

Atul Maheswari

Good for question. morning. my Thanks lot a taking

the least revenue back XX% a growth, your at implied guidance around So deceleration would for at half midpoint. to the imply

So there why you've new you decelerate Are half stance being that's the Or going third else Collection? the take on you in the in half? on given back causing comparison would is a have more revenues maybe back and simply here? easy quarter the launched conservative conservative Cooling you to something

Philip Krim

you talk do about guidance? Mike, to the want Sure.

Mike Monahan

Sure.

So last partnership our timing the strong year, QX of XXXX. in channel. Atul, QX a for XXXX we had shipments subject to retail

we as are guidance. can end supply capacity, the so time for just we around visibility expectations insight what clear the so now, QX, get that our chain the our factored year don't at But we of between update between on into market more and QX have the QX. right line And we

Atul Maheswari

Understood. That’s helpful. And question. Thank you. then near-term a

So you guidance. provided late your sometime your first your are in numbers February, now and actual quarter guidance above

attribute So stronger Would would you than assuming what else? expected that you or you had a March, that? attribute to stimulus was something there

Philip Krim

our would our also in was channel. as was good both as retail DTC I of week-over-week. channel that store our a business March part comment kind well month, stimulus improved of I think it. Certainly, has partnership

in happen but seen our well Just confidence. QX the And that Casper-owned gaining as improvement and in the are quarter country, Emilie and we've differently Texas QX. states South, into as we've with mentioned, throughout like stores seen the consumers Florida, throughout continuing

in were drivers think several as there the that no factor well. So of kind I QX. was stimulus accelerated business doubt, a But

Atul Maheswari

able is way stimulus the a were benefit? do you Have to you to an And you. around analysis Thank – quantify there it?

Philip Krim

kind immediately just angles, across we in on it traffic nothing increase accounts. checks to saw quantify at bank stores. it, We how but We our other from increase saw demand traffic confidence traffic different of increase looked would that foot saw as hit in several than us give property. We web

increase this into be the that generally strong. And Demand to to see we speaking. And broad-based but Business strong kind hit, happened. QX, and of year to has hard continues it so was in good QX just was demand from checks when been started quantify. it’s

So don't there to checks think we by hit. when definitely only stimulus any to step-up started attributed a it's means, but was

Atul Maheswari

color. luck you. Got the of with year. Thank good the rest it. And Helpful

Philip Krim

Thank you, Atul.

Operator

question line comes And with your the Guggenheim. of from next Drbul Bob

Bob Drbul

guys. morning, Good

me. for questions of couple a Just

the first And would I customer to seeing just still think and what pressure the at think is process question or manufacturing talk on you Any points be base, one supply getting the have second the of today? more I are bit repeat you very Thanks. numbers, little update you as what helpful. a about what's look customers? happening really can about in your chain you you think is, those had? that you're you better think is, think, when I concerned Sort

Philip Krim

Bob. Thanks, Sure.

the customers. around been versus and customers, I notably has new to key a been with part new So is business a a of kind But launch that's on of transacted of repeat who very business. out And strong products. previously continuing that we Casper customers strong the specifics think from break standout. part repeat repeat Obviously, don't

So quality a launched they Hyperlite bedding best-selling by we their when within Casper to program. for our Sheets, and we And looking customers products became driven sheet to our that lot immediately featured, which elevate the greatest the latest of is sleep. help

focused been this area to so that customers, be And And then continue definitely far has optimization the we ongoing supply of but on year. strength model. drive largely how previous with an to But very Chemical so different to challenged our I continue shortages continues chain of those do impact to we've question, manufacturing sidestepped foam issues be backdrop. chain because third-party think it manufacturers. supply on a

year. talked of about we've supply capacity really last chain been building within our since as QX So previously, we've

start is that's pricing continues us a our because will We And be that of allowing flow. continue to do getting the us build issues. throughout not long-term, that within I power chain. we the I chemicals to think worse. critical think sidestep industry to better, is supply the the capacity to that to what base, industry and give And benefit And believe most picture build capacity manufacturing us will capacity once

are very And and so we think chemicals the for expecting our that this seeing behind be that all we're able demand problem year. the work across largely make flowing are now with of will we're later that the But fulfill business. that continue closely we of sure to channels and now, getting goods we're all and us to suppliers

Bob Drbul

Philip. Thanks,

Philip Krim

Thanks, Bob.

Operator

Capital. Matt from of the comes Koranda your ROTH And next line with question

Matt Koranda

Thanks. guys. Hey,

revenue guide it could and if maybe overall about you're growth, implies XQ out channels terms wholesale. the across channel seeing the speak talk obviously, revenue. But of split in and for revenue between in wondered you acceleration what and by just guidance, the an Just DTC the

Philip Krim

retail any Mike, from want And the well. we said, the then, foot specifically. On the And new sales. We color traffic standpoint to stores, continuing see it of guidance strong opposed we more across of than country start in are launch, focused. of expansion good on we expected products, retail which good to drive we're that our Casper and to where QX it as of be the regionally improvements if partners kind week-over-week about gone And AOVs. an better But adoption talk just seeing business. add you on now do I’ll The broadly. QX has gone product saw has as demand. see see

business. backdrop just is the consumer a strong. the that think be I time demand to So mattress is in It's good

sought after. out seeing? across the and But add break we're channels, between is to to on specifically didn't channels. be Mike, any through kind want our brand we a guidance, of I partnership. all what stores that QX Casper-owned And seeing We we're guidance retail color continue know e-com, you'd and strength on

Mike Monahan

I a just of area Wholesale DTC and it's continues between to us. would wholesale, a couple balanced drivers. growth say be for

if In we back existing terms of will sell-through, at seeing good foot well. the seeing year-over-year but you saw our in and partners, are our we're are in So growing stores partners what comp, when to second were also through retail QX, nicely the that retail continue through anticipate that we we the pre-pandemic, Casper-owned quarter, is e-com look performance come retail a similar stores you traffic on it's side solid saw levels seeing – look growing kind of and as the we to back, stores, not QX.

across channels. So would and general, pretty both reasonably key I no of say outlier specific our in balanced

Matt Koranda

speak modeling to Okay. there, guess look That's it bit or up quarter? worse just helpful. get a And you step I sequentially of gross mix in next could to terms to a the implies have this how should the the be little need then for bit at margins when we guide, we EBITDA either OpEx, little Mike, I

Mike Monahan

more kind gross you maybe than kind in be, as of would a bit – view bit general little about margin I of would a quarter-over-quarter, the I range. comparable less same but to of little or QX think think

we in have retail first in G&A of guide more for but as is we smaller, we're have to go staff one-time the it one-time but there's the lower and kind to part didn't in some On second items that G&A stores we up some open side, expenses and there, did QX, in costs the quarter. due G&A managing bringing start quarter back that did of as through that to the we line

Matt Koranda

And last fair. one. That's Okay. then just

DTC sounds not Snow why now On I'm in the timing it's introduce in rollout same It wholesale there obviously there DTC like curious it and seems given improved the to new What's terms just benefiting retail quite would in the with that partners? like the do channel your the available least I have of assume channel? line, bit right to that it the a channel at would AOV.

Philip Krim

I that. talk about would you one? to Emilie, that assume you want But do

Emilie Arel

showcase for locations. We the our Snow QX, partners and along and to you'll partner excited to to that some items we retail really the Cooling are the really of find right hit then some Technology the the Collection in our consumers late to partners with for as quarter other of Snow see and

Operator

Nagle And America. line your Curtis Bank with the from of next comes question of

Curtis Nagle

to on taken that theory, anticipate antidumping actions sourcing inshore sound do supply due to, quick third-party of guys were with issues a earlier but in starts Doesn't just morning, the one just like manufacturers more any as terms year? in Good it, you the in production chain.

Philip Krim

has been it morning, insuring and have to a question get the ahead telegraphed for well-known Good think well kind of been That's I of Curtis. time we trying good because now. some

And so to supply within to what increasing chain. earlier I just with capacity that regard goes our about spoke

off producers happened at we for for So more is emerge places most imports doing we to think I have shift good industry, demand facilities that ensuring of that within kind a If of we've continues and look spot. behind just to with demand to business, has produce our in like think just coming. manufacturing the we're as more focused shore domestic feel to to us. the good our on anything, domestic pretty the footprint And we for do production. from largely would more that we see like data But feel look around been expect capacity and and the that I if you we

Curtis Nagle

for for if going then any you out quarters the products could it coming higher in? plans particularly mystery what guess has – And and the NSP I or a know could the a contribution between just quarter, with you of And it. the us, been over growth price break was couple the volume Got past ticket then more and guess increases I remind forward? so sort

Philip Krim

you do question. maybe want talk Mike, about Sure. first And prices. to can talk I about the

Mike Monahan

price to we in piece did We and see per We do of two. price increase year, tend about pricing. tend by correct Sure. bump to one somewhat terms me, is of a Emilie driven our average year-over-year unit. A that can one per

by within while – a category. products don't to that we're break really success we rate. each product moving seeing we're but raw good pricing, the volume And demands has Per basis, To the little of the Unit, We're we're it's we're majority that. more but good largely driven. a it selling at it driving consumers lot it's the product so growth a in end lot with and to of first That's do consumers mattress mix – seeing on within our complemented increases a product, PPU, seeing Price of out where majority seeing your of premium being seeing a year-over-year We're you're channel. on from question,

Emilie Arel

we to the to balance couple And of a where price the on then at families, we'll take prices continue we look makes price we prices portfolio. a look increase seeing in $XXX at other the Since end months which year is everything question, that's just price of as in movement over we are we continuing of next half move make before sense the how Wave any and the said and of did year. to at see the as QX. items the your the increase April, and launched mattress on and in to we're of Nova back want And it out beginning if at the launch, premium in the Phillips look

Curtis Nagle

Okay. much. Thanks very

Mike Monahan

you. Thank

Operator

Yes. lineup, And from next with Jones your question comes Nick Citi.

Nick Jones

if there's of I guess reopen, revert, kind of questions. kind thinking revert e-commerce Great. around rest to marketing a plans deploying dollars? the How your one e-commerce Thanks things levels broadly, think about starts to the broader are of as will to just in a year. you start Particularly, I for the marketing pre-COVID taking through some view, extent.

play the into how does thinking in how So Thanks. half? terms that you're of deploying come in about back maybe

Philip Krim

Yes, Nick.

dollars a trend net I marketing continue in but which you sales will relative likely basis more to that QX that drive saw dollar is think deploy basis, a leverage revenue. the to and is on on something continue,

trying are across to obviously different line. we keep to watching efficiency going we're So drive demand sales marketing channels. Overall, in our and

be levels, that new behavior. we of buying will and some create than kind e-commerce this higher – think kind pre-COVID will believe I of of

channel will strong for a a And channel we Casper in be albeit XXXX strong as was. still great do not industry, so as think and e-commerce the

how XXXX I think of regard, that navigated well because in XXXX. set actually we we're up navigate to

And stores. believe and but not so over we kind growing for overall, drive growth where that e-commerce and like the elevated both we owned it strong DTC levels XX can pre-COVID, certainly of see did our the across the industry within that will months. year, last above were And e-commerce we operated

Nick Jones

you. Thank Great.

Philip Krim

of comes Randy your from line Jefferies. And question you. next Konik the Thank with

Randy Konik

store about Sorry, you? you of Did about are business? the progress had the side if just to us kind of talk levels, of the you're to How of kind over guys. play out the that what dial-in there. that of in conversion, I on talking how just et seeing of balance not, traffic give in late. Just expect some terms Hi, you thoughts cetera? do you're improvement the Or year

Philip Krim

we QX, now mentioned in our regionalized. earlier they store And saw performance. in we're of were Hey just improvements, improvements Randy kind but week-over-week how about good seeing more morning. We

going as seeing states board. we foot Florida, with is in out And our continue kind to better as And business like and that's the us see improvements we're higher seeing looks week-over-week, get like it across higher confident, to strong kind in consumers and sales. better. vaccines our trends. to and QX, Texas prevalently, we’re there notably more more So started retail it of traffic, more just just it's get to getting now drive that And of view

we're positioned about excited we're going And into summer. throughout the And to so weekend. strengthen hopefully, where continues Memorial that Day

Randy Konik

stores a have just example. do you say, New if off, perspective close the regions of kind And perspective, number of geographic that you were will? disproportionate Let's more the a in penetration from – for York,

the disproportionately it on accelerate in in just they're curious will, year. like north kind because more way if obviously door, stores Just to where the the back sit areas, pent-up the if those there'll be half closed demand seems stores you the of more business of the coming help towards the up regions on geographically,

want thoughts Just there. your

Philip Krim

Yes.

think I California. of We kind to the Northeast do you're exactly and overindex right. to

the regions of And other country. so lagged have parts those

and as the of Texas market we've seen we strengthen. kind those Florida to expect so And just strengthen,

you're – that So continue other lagging we to to been parts, expect but will that up as that the those reopen. of has pick that, right parts country

Randy Konik

thing, – profitability, last level accelerated expense that the And if guys, in towards showing just improved path around the and last is I a continue, of few this show on The and it. Got thing nice, and one you improvement discipline so forth. heightened quarters the to so may. one it. Got there, structure

thoughts some to kind us on just of So path that give profitability.

becoming and teams different in organization? of across and kind effective been change things the Thanks. continuing to efficient the the what business you've Just in and more

Philip Krim

one? want that you talk do on focus to our Mike Randy. Thanks, Sure. about

Mike Monahan

it's Randy, P&L. across Sure. the

our around chain, So getting P&L, year-over-year the logistics we're seeing product focused work of efficient way more if down gross supply costs. of you And we're and kind nice input kind margin. with your improvements on

get investing how focused as And continue that. We're efficiency of Casper-owned we're we're of leverage that our being leverage across still of and out very the expand G&A kind disciplined as very we around seeing You're stores. execute points where much of spend our as G&A, partnerships on retail retail getting against really hold out we're to that business, distribution channels leverage in and revenue to line. drive we strategy, the media but we obviously expand to our get trying

drive so retail the we out media more or as we partnership G&A. require the partnership doesn't continue growth And that, marketing spend the look leverage as sales profitability, in retail we're all is channel a key getting the channel, that and really to partners, the forward to expand because brand. into spend component we invested our our behind partnerships And through that additional existing of

gross more of you're drop adjusted down profit that seeing So EBITDA. contribution to

Randy Konik

guys. Super helpful, thanks

Philip Krim

Thanks Randy.

Operator

Schenk your Morgan And with comes next question Stanley. Lauren from

Lauren Schenk

the year. Great. But Thanks. I would bigger mid-single-digits perhaps the of sort like is quarter March assume looks an of sort of And negative easier I last sort it first mid-single-digits guess disclose sort in separately. back top of grew it growth of on a e-commerce question, envelope, you of understand compare. don't picture but I

guess I uplift in would So we've about of we've e-commerce didn't the that diagnosis your why I as thinking business? of sort hypothesis the and broadly magnitude seen what strength the Thanks to or guess, seen furnishing, just, in, same in in-home last much. holistically that months, your XX the sort e-commerce be of strength you see so

Philip Krim

right math don't – actually have on think I the Lauren. Hey one. I you that

the above and our in been e-commerce on well performance nicely, grew break has It has DTC speaking, QX. weight you we But business out. don’t just just channel business of stores. broadly grew kind The our what e-commerce grown. Our spoke it to

XXXX XX at Casper, ended been and of year. XX the In COVID. the channel stores. we for had the owned end because operated this We retail QX pressure with retail under has stores of channel, So

QX talked we've of dragged Casper-owned and a was pretty And about, quarter. performance so our DTC improving. we that XXXX really strength down store notably. things Like But strong see there see we

QX performance been for we our to and had investing e-com that's improve has a year, driving side our to not performance, We sales continued how course tweak the that's what's allocating playbook things was starting QX, our that e-com, appropriately. QX up we the QX we to capital on supply going will comp at really strong think growth, We not messed drive think marketing e-com we drive – QX. started continued up spend throughout have were It's lean we start into that. that starting really – the but changes in we've that own to But year. rest QX, didn't stores. – we're QX, that And down within look did kind so basis, We we of do XXXX, And to talked the year. we of seeing, in able for of believe We demand tough really we're spend And made a and overall, some that the fulfill a that about quarter. the and continue performance. on the last but e-commerce to in to and DTC then of strong. of in

Lauren Schenk

Thank you. Okay.

Philip Krim

Thanks a lot.

Operator

further are remarks. to time. closing team no for the there And turn it at this now back questions I'll

Philip Krim

you. and day. Thank for you, Thank Casper. today operator, a your great Have and thank the all continued interest for in you time

Operator

Thank And your call. today's this you participation. for concludes conference

now may You disconnect.