Q1 2022 Sleep Country Canada Holdings Inc Earnings Call
Yeah.
Operator: Good morning, and thank you for standing by.
Operator: I'd like to welcome everyone to Sleep Country's Q1 2022 results conference call.
Yesterday Sleep Country released their financial results for the first quarter of 2022.
Operator: A copy of the earnings disclosure is available on their Investor Relations website and includes cautionary language about forward looking statements risks and uncertainties, which also applies to the discussion during today's conference call.
Operator: I would now like to turn the call over to Mr. Stewart Schaefer, President and CEO . Please go ahead Sir.
Stewart Schaefer: Thank you and good morning, everyone. Thank you for joining us. I hope you're all keeping well on this beautiful spring day. With me today is Craig De Pratto, our CFO .
Stewart Schaefer: We are very pleased to share our strong results for the first quarter.
Stewart Schaefer: Best Q1 in our company's history, building on our record performance in 2021, we delivered impressive growth across all the key metrics of our business and strengthened our position as Canada's leading sleep partner. Revenue increased by an impressive 13.1%.
Net income grew by 111.8% and operating EBITDA increased by 48.5%, reinforcing the power of our sleep ecosystem and our best in class teams to provide a seamless customer experience across all of our brands and all of our channels.
Same store sales increased by 8.8% despite the resurgence of Covid that began in mid December. Our results demonstrate our diversified investments in our portfolio of leading products and brands, digital and physical channels and our distribution network that has positioned us well to adapt to the challenges we face because of supply chain disruptions.
<unk> face because of supply chain disruptions.
While we were not immune to the rippling effects of the pandemic, challenging supply chain issues, volatile interest rates, inflation, rising oil prices, the tragic war in Ukraine and a drop in consumer confidence our proactive measures to adjust our prices ahead of the curve allowed us to somewhat off set the cost of goods, freight and logistic pressures. Our pricing power allows us to increase prices in certain select categories, reducing some of the inflationary pressures that we are experiencing across the board.
Set the cost of goods freight and logistic pressures our pricing power allows us to increase prices in certain select categories, reducing some of the inflationary pressures that we are experiencing across the board.
Even in this challenging environment our more than 1,600 associates at Sleep Country, Dormez Vous, Endy, and Hush continue to demonstrate their resilience and determination to deliver the best experience for our customers. We remain committed to and are very bullish on our brick and mortar strategic footprint with the addition of one new store in Thornhill, Ontario, this quarter, bringing our growing retail network to 286 stores.
our brick and mortar strategic footprint with the addition of one new store in Thornhill, Ontario, this quarter, bringing our growing retail network to 286 stores.
In the months ahead, we will continue to expand our footprint and look forward to introducing a transformed store design in key locations to further enhance our customers' experience. We extended our digital reach in January with the addition of our Sleep Country and Dormez Vous shops on Loblaw.ca, growing our existing online best in class marketplace partnerships with Best Buy and Walmart, reaching millions of more new and loyal customers with a full assortment of sleep products.
growing our existing online best in class marketplace partnerships with Best Buy and Walmart, reaching millions of more new and loyal customers with a full assortment of sleep products.
E-commerce sales represented 20.8% of our total revenue reinforcing the importance of creating a channel agnostic and seamless customer experience as Canada's leading omni-channel sleep retailer.
We elevated our purpose with our World Sleep Day campaign, raising awareness for the importance of sleep for our wellbeing with $100,000 donation to the Canadian Mental Health Associant- Association and a powerful brand activation that was our most successful performance campaigns since boxing week. We pledged over $250,000 worth of sleep essentials to support Ukrainian families displaced by this tragic war and who are in dire need.
and a powerful brand activation that was our most successful performance campaigns since boxing week. We pledged over $250,000 worth of sleep essentials to support Ukrainian families displaced by this tragic war and who are in dire need.
Looking ahead, we are well positioned and diversified in our blend of merchandising channel agnostic approach to whether the changing economic climate and continue to lead candidates sleep base with our frictionless digital experience, multiple distribution channels, powerful and the most innovative sleep brands in the country.
Brands in the country.
We will continue to focus on driving growth and delivering the best omni-channel sleep experience for our customers while building shareholder value.
Thank you. Thank you to all our Sleep Country, Dormez Vouz, Endy, and Hush teams and all our market partners for their incredible contributions throughout the quarter and continued commitment to our customers.
With that I will now turn the conversation over to Craig to discuss our financial results.
Craig De Pratto: Thank you Stewart, and good morning, everyone.
Craig De Pratto: As Stuart noted earlier in the call we are extremely pleased with our Q1 2022 results despite the macro environment we operate in. We saw an increase in our revenues of $24 million or 13.1% from $183 million in Q1 2021 to $207 million in Q1 2022.
Craig De Pratto: This change was mainly driven by an 8.8% increase in our same store sales, the opening of three net new stores since Q1 of last year, as well as the incremental revenue from Hush, who we acquired in Q4 of last year.
Craig De Pratto: Our Q1 2022 e-commerce sales represented 20.8% of our revenues.
Craig De Pratto: On to gross profit. Our gross profit margin increased by 710 basis points from 27.5% in Q1 2021% to 34.6% in Q1 2022.
Craig De Pratto: This increase was mainly as a result of our strategic pricing beginning in Q2 of 2021 and throughout the rest of last year and into early Q1 fiscal 2022. Our gross profit saw an increase due to our average unit selling prices lower, inventory adjustments and COVID-19 PP&E costs, in addition to leveraging on our occupancy and depreciation costs.
Craig De Pratto: Additionally, in Q1 2021, we had incurred higher wage costs as a result of keeping our stores open for curbside pickup due to temporary store closures in select regions. This created a drag the drag on margins of approximately 160 basis points in the prior year.
Craig De Pratto: These margin efficiencies were offset by higher sales salaries and commission costs due to the shift in revenue earned from our e-commerce platform in the prior year to a retail retail stores in Q1 2022.
Craig De Pratto: Our EBITDA was impacted by higher G&A costs, mainly driven by an increase in media and advertising, compensation, professional fees, IT and depreciation expenses. Three items to point out within G&A costs are: one our higher LTIP cost as we continue to perform well against our fiscal 2020 PSU plan, two: structuring costs that were incurred during the quarter as we made certain changes to the company's leadership team and lastly, the inclusion of $1.1 million in professional fees tied to our ERP project.
two: structuring costs that were incurred during the quarter as we made certain changes to the company's leadership team and lastly, the inclusion of $1.1 million in professional fees tied to our ERP project.
Craig De Pratto: Our EBITDA increased by $13.8 million or 45.7% from $30.4 million in Q1, 2021 to $44.2 million in Q1 2022.
Craig De Pratto: Adjusting our EBITDA for LTIP and ERP costs our operating EBITDA, an increase of $15.2 million or 48.5% from $31.5 million in Q1 2021 to $46.7 million in Q1 2022.
Craig De Pratto: Net income attributable to the company increased by $9.7 million from $8.7 million in Q1 2021 to $18.4 million in Q1 2022.
Craig De Pratto: Adjusted net income attributable to the company increased by $11.2 million from $9.6 million in Q1 2021 to $20.8 million in Q1 2022.
Craig De Pratto: Diluted earnings per share increased by 26 cents or 113% from 49 cents in Q1 2022- or to 49 cents in Q1 2022 from 23 cents in Q1 2021.
Craig De Pratto: Diluted adjusted earnings per share increased by 30 cents or 115.4% from 26 cents in Q1 2021 to 56 cents in Q1 2022.
Q1 2022.
Craig De Pratto: Onto other items, in our last Investor call, we provided an update to our capital allocation framework.
Craig De Pratto: As a reminder, with regards to our leverage we intend to maintain a strong balance sheet while being comfortable with long term leverage in the area of two times.
Craig De Pratto: We also feel comfortable temporarily exceeding two times leverage for a period of time provided we see a path to getting back below this level within a reasonable timeframe.
Craig De Pratto: We had mentioned that we intended to increase our Q1 dividend by at least 10% and increase our annual dividend at a minimum growth rate of 10% for the near to medium term going forward.
Craig De Pratto: Subsequent to Q1 quarter end on May 4th 2022, the board declared a dividend of 21.5 cents per share an increase of 10%, which is payable on May 30th to the shareholders of record at the close of business on May 20, 2022.
Craig De Pratto: In Q1 2022, the TSX approved our NCIB program and subsequently purchased- and we subsequently purchased and canceled 85,000 shares to date, and we will be continuing to execute against the NCIB in future quarters. In terms of our capital expenditure plans, we continue to intend- we intend to open a minimum of six net new stores- new stores for Sleep Country Dormez Vous and renovate between 20 and 30 stores later this year to our newest format. Additionally, we will continue to invest in our ERP and technology to further enhance our digital capabilities and omni channel experience and spend approximately 1% of revenue for ongoing store and DC maintenance.
we intend to open a minimum of six net new stores- new stores for Sleep Country Dormez Vous and renovate between 20 and 30 stores later this year to our newest format. Additionally, we will continue to invest in our ERP and technology to further enhance our digital capabilities and omni channel experience and spend approximately 1% of revenue for ongoing store and DC maintenance.
D C maintenance.
Craig De Pratto: Lastly, we will maintain a disciplined filter when assessing potential M&A targets and evaluate M&A against alternative uses of cash.
Craig De Pratto: Thank you and I'll now pass the call back over to Stuart for closing remarks.
Stewart Schaefer: Thanks, Craig. Our strong results in the first quarter continue to demonstrate the power of our sleep ecosystem and our team's ability to deliver for our customers. Building on our deep foundation of sleep expertise, we will continue to expand our reach and grow our channels and build the most innovative and expansive product assortment in Canada. We remain focused on executing against our strategic plan and are committed to delivering long term profitable growth for our shareholders, as we also help Canadians achieve their best night's sleep in support of their health and well-being. With that we conclude our remarks and open the floor for questions. Thank you.
product assortment in Canada. We remain focused on executing against our strategic plan and are committed to delivering long term profitable growth for our shareholders, as we also help Canadians achieve their best night's sleep in support of their health and well-being. With that we conclude our remarks and open the floor for questions. Thank you.
remarks and open the floor for questions. Thank you.
Operator: Ladies and gentlemen, we will now begin the question and answer session.
Operator: If you would like to ask a question please press star followed by the one on your telephone keypad.
Operator: If you would like to withdraw your question please press star followed by the number two.
Operator: One moment please for your first question.
Operator: Your first question comes from John Zamparo of CIBC. Please go ahead.
John Zamparo: Thank you. Good morning.
Multiple speakers: Good morning. I wanted to start on the- good morning.
John Zamparo: I wanted to start on the higher average sell price that you referenced in the press release. I'm wondering if you can add some details on pricing and mix and just what you're seeing from from consumers above and below that $1,000 price point.
Craig De Pratto: Sure, John.
Craig De Pratto: So as referenced in previous quarters, we did see a little bit of a softness below our $1,000 price point as consumers start spending money potentially on other items concerned about some inflationary items, but in general the biggest part of our business the mid to high end, which is where the strength of our business has always been. Was-.
we did see a little bit of a softness below our $1,000 price point as consumers start spending money potentially on other items concerned about some inflationary items. but in general the biggest part of our business the mid to high end, which is where the strength of our business has always been.
start spending money potentially on other items concerned about some inflationary items. but in general the biggest part of our business the mid to high end, which is where the strength of our business has always been.
but in general the biggest part of our business the mid to high end, which is where the strength of our business has always been.
which is where the strength of our business has always been.
Was.
Craig De Pratto: Our pricing power allowed us to drive prices higher to compensate for any any loss in units below $1,000. Interestingly enough, our unit growth proved out to be quite handsome in the quarter because the offset of below $1,000 was partially caused by us by shifting our price bands higher- higher than the $500 price point, higher than the $1,000 dollar price point, so we saw the unit growth accelerate quite considerably above that point.
any loss in units below $1,000. Interestingly enough, our unit growth proved out to be quite handsome in the quarter because the offset of below $1,000 was partially caused by us by shifting our price bands higher- higher than the $500 price point higher than the $1,000 dollar price point, so we saw the unit growth accelerate quite considerably above that point.
higher than the $500 price point higher than the $1,000 dollar price point, so we saw the unit growth accelerate quite considerably above that point.
John Zamparo: Okay. That's helpful.
John Zamparo: And when you look at the same store sales number, how did that trend throughout the quarter? The reason I ask there is some of your U.S. peers have talked about slowdown as a result of the war and its impact on consumer caution is that similar to what you saw?
Craig De Pratto: Yeah. It was it was definitely a bumpy quarter. The quarter start- Omicron hit mid December so, going into the quarter at the beginning of January people started backing away from the stores and our e-commerce business was picking up.
going into the quarter at the beginning of January people started backing away from the stores and our e-commerce business was picking up.
people started backing away from the stores and our e-commerce business was picking up.
Craig De Pratto: Then mid or the third week in February the Ukraine war began and that definitely we saw a little bit of a slowdown and then picking up aggressively by the end of the first week of March and ending well into the to the end of March.
began and that definitely we saw a little bit of a slowdown and then picking up aggressively by the end of the first week of March and ending well into the to the end of March.
and then picking up aggressively by the end of the first week of March and ending well into the to the end of March.
aggressively by the end of the first week of March and ending well into the to the end of March.
John Zamparo: Okay got it.
John Zamparo: On the cost inflation side, the press release referenced lower product and delivery costs.
John Zamparo: I was a bit surprised to see that given the inflationary environment. So is there any more color you can add to that and can you quantify the cost inflation you are seeing whether it's as a as a whole or on your largest cost inputs?
Craig De Pratto: Yes, so John on the the comment around lower cost- the lower cost as a percentage of sales just because, as Stewart alluded to, as our AUSP or average ticket was higher those as a percentage of sales year over year, but not as an absolute dollar. We've definitely seen that similar pressures that you're hearing more broadly on that front.
the comment around lower the- the lower cost as a percentage of sales just because as you alluded to as Stewart alluded to, our average ticket was higher those as a percentage of sales year over year, but not as an absolute dollar we've definitely seen that similar pressures that you're hearing more broadly on that front.
lower the- the lower cost as a percentage of sales just because as you alluded to as Stewart alluded to, our average ticket was higher those as a percentage of sales year over year, but not as an absolute dollar we've definitely seen that similar pressures that you're hearing more broadly on that front.
Stewart Schaefer: It costs us the same amount to deliver a $1,500 dollar mattresses as it does a $500 dollar mattress John, so that's a big benefit in our business.
A big benefit in our business.
Multiple speakers: Okay, and any color or quantification, you can add to the inflation side on cost? Yes, I mean, we're no different than anyone else. We're seeing it across the board, We're seeing it in gas prices. We're seeing it in labor prices.
Multiple speakers: On cost, yes, I mean.
we're no different than anyone else. We're seeing it across the board, We're seeing it in gas prices. We're seeing it in labor prices.
Stewart Schaefer: The good thing about our business is a large component of our workforce is commission based and that is the biggest part of it. There's no question that there is a war on talent when it comes to IT and e-commerce.
is commission based and that is the biggest part of it. There's no question that there is a war on talent when it comes to IT and e-commerce.
and that is the biggest part of it. There's no question that there is a war on talent when it comes to IT and e-commerce.
E Commerce.
Stewart Schaefer: And- But, we've been very proactive and ahead of the curve in terms of what we've been seeing for over a year and some of the- most of the adjustments that we were able to make in specific categories of our business has clearly offset some of those pressure- that inflation pressures that we're seeing.
But, we've been very proactive and ahead of the curve in terms of what we've been seeing for over a year and some of the- most of the adjustments that we were able to make in specific categories of our business has clearly offset some of those pressure- that inflation pressures that we're seeing.
we've been very proactive and ahead of the curve in terms of what we've been seeing for over a year and some of the- most of the adjustments that we were able to make in specific categories of our business has clearly offset some of those pressure- that inflation pressures that we're seeing.
Multiple speakers: Okay, understood. And then last one for me, and I know I've asked this before, but just trying to get a better understanding- a better understanding of the thinking. When you post a quarter like this, which is well above expectations, it's on top of a strong year last year, you've had incredible results over the past 18 months and when you see the stock where it is, what stops you from doing something more impactful on the capital return side to refute the notion that's out there that these strong results are temporary? That, I think, is impacting valuation on the stock. Yeah, well, thank you, John, for noticing that our multiple is at a ridiculously low level, but I'll let Craig talk about our NCIB.
see the stock where it is, what stops you from doing something more impactful on the capital return side to refute the notion that's out there that these strong results are temporary? That, I think, is impacting valuation on the stock. Yeah, well, thank you, John, for noticing that our multiple is at a ridiculously low level, but I'll let
what stops you from doing something more impactful on the capital return side to refute the notion that's out there that these strong results are temporary? That, I think, is impacting valuation on the stock. Yeah, well, thank you, John, for noticing that our multiple is at a ridiculously low level, but I'll let
Craig talk about our NCIB.
Craig De Pratto: Yes, I think the one thing, John, under NCIB we were in blackout for much of the much of the quarter after we came out of last quarter's results, and so we bought back actively for the time period outside of the blackout.
the one thing, John, under NCIB we were in blackout for much of the much of the quarter after we came out of last quarter's results, and so we bought back actively for the time period outside of the blackout.
we were in blackout for much of the much of the quarter after we came out of last quarter's results, and so we bought back actively for the time period outside of the blackout.
last quarter's results, and so we bought back actively for the time period outside of the blackout.
Craig De Pratto: We are looking at- obviously, we'll be back active on the NCIB- post- post blackout period, and we are also looking into putting in place an automatic share purchase plan. So when we do have those blackout periods we can be active in the market as well, you know, with predetermined ranges. So, I think that's one area where you can expect to see us continue to be very active going forward.
obviously, we'll be back active on the NCIB- post close blackout period, and we are also looking into putting in place an automatic share purchase plan. So when we do have those blackout periods it can be active in the market as well, with predetermined ranges. So, that's one area where you can expect to see us continue to be very active going forward.
it can be active in the market as well, with predetermined ranges. So, that's one area where you can expect to see us continue to be very active going forward.
with predetermined ranges. So, that's one area where you can expect to see us continue to be very active going forward.
that's one area where you can expect to see us continue to be very active going forward.
very active going forward.
John Zamparo: Okay. Thank you very much I'll pass it on.
Craig De Pratto: Thanks, John .
Operator: Your next question comes from Martin Landry of Stifel. Please go ahead.
Multiple speakers: Hi. Good morning, Stuart and Craig. Hey, Martin. How are you?
Martin Landry: Good, good, thank you.
Martin Landry: I would like to dig a little bit deeper in your gross margin expansion.
Martin Landry: You know, it's expanded by 700 basis points, it's the largest expansion I've seen you guys achieve and it's- it's occurring at a time when freight is increasing, it also contrasts with your peers that have seen their margin erode. So Craig, I was wondering if you could do a bridge for us and quantified are the main buckets that explain the increase?
occurring at a time when freight is increasing, it also contrasts with your peers that have seen their margin erode. So Craig, I was wondering if you could do a bridge for us and quantified are the main buckets that explain the increase?
Craig De Pratto: Yes.
Craig De Pratto: So, one piece that we just discussed was obviously the higher AUSP, which is- there is some efficiencies on our delivery side of our business on that front. So that is- that's one benefit, but if we go a little bit more specifically in Q1 of last year, we had curbside pickup which was a drag on our margin about 1.6% so 160 basis points.
the higher AUSP, which is- there is some efficiencies on our delivery side of our business on that front. So that is- that's one benefit, but if we go a little bit more specifically in Q1 of last year, we had curbside pickup which was a drag on our margin about 1.6% so 160 basis points.
Craig De Pratto: In addition, if you go sequentially from Q2 to Q3 to Q4 of last year, when we did put the proactive retail pricing strategy in place, you will see that we did separate and continued to separate on our margin and lever by about 200 to 300 basis points just on those last couple of quarters.
Craig De Pratto: So we did see that come through and roll through, so that was if you ended at Q4 and went and bridge to Q1, you should have already baked in or look to bake in an efficiency there or a step up in our overall margins on that front.
Craig De Pratto: And then lastly, was just in terms of our depreciation and occupancy costs, we do lever that a little bit more nicely this year with the big increase in sales at the 207 mark. So, those would be the main pieces that I would kind of point out and then lastly is also on the on the price increasing we did also roll through an additional price increase in early Q1 2022, so that has an additional offset against some of the cost pressures we're seeing. So, when you add those all up, those are really some of the main contributors, where we saw the step up kind of happening gradually throughout last year and then also the additional retail price in Q2- or Q1 of this year.
just in terms of our depreciation and occupancy costs, we do lever that a little bit more nicely this year with the big increase in sales at the 207 mark. So, those would be the main pieces that I would kind of point out and then lastly is also on the on the price increasing we did also roll through an additional price increase in early Q1 2022, so that has an additional offset against some of the cost pressures we're seeing. So, when you add those all up, those are really some of the main contributors, where we saw the step up kind of happening gradually throughout last year and then also the additional retail price in Q2- or Q1 of this year.
has an additional offset against some of the cost pressures we're seeing. So, when you add those all up, those are really some of the main contributors, where we saw the step up kind of happening gradually throughout last year and then also the additional retail price in Q2- or Q1 of this year.
Martin Landry: Okay, just to be clear curbside pickup is a boost of 160 basis points, your pricing last year 200 to 300 basis points, your occupancy costs I'm, sorry, I didn't get the numbers there.
is a boost of 160 basis points, pricing last year 200 to 300 basis points, your occupancy costs I'm, sorry, I didn't get the numbers there.
pricing last year 200 to 300 basis points, your occupancy costs I'm, sorry, I didn't get the numbers there.
Craig De Pratto: I don't have the exact number and occupancy leverage, but if we can take that offline and I can get you I can get you the bridge on that but there is a little bit of efficiency there as we continue to lever off of higher sales results.
Our sales results.
Martin Landry: And then and then you said you took on price in Q1 of this- of 2022. How much of an impact did that have on your gross margin?
Craig De Pratto: It was- it wouldn't have been for the entire quarter, but it would have had an efficiency in the, you know, 0.5% to 1% range, given when we rolled it out throughout the quarter.
efficiency in the, you know, 0.5% to 1% range, given when we rolled it out throughout the quarter.
in the, you know, 0.5% to 1% range, given when we rolled it out throughout the quarter.
0.5% to 1% range, given when we rolled it out throughout the quarter.
Multiple speakers: So you add those all up and I think you bridge pretty closely to the year over year between margins. I think you have to look at it sequentially and then- versus that year over year straight up comparison, there is just a little bit of noise in the numbers. I'm going to add one last thing, Martin.
between margins. I think you have to look at it sequentially and then- versus that year over year straight up comparison, there is just a little bit of noise in the numbers. I'm going to add one last thing, Martin.
and then- versus that year over year straight up comparison, there is just a little bit of noise in the numbers. I'm going to add one last thing, Martin.
last thing, Martin.
Stewart Schaefer: Traditionally, we are always on event, there's always some type of promotion that's going on.
In Q4 of last year, our discounting on some of our promotions were a little bit less. There is no question that inventory is the new gold and being in stock is a competitive advantage for us. So if you look at our discounting promotions that we would've had in Q1 of 2021 compared to our discounted promotions in 2022, it is also a little less.
were a little bit less. There is no question that inventory is the new gold and being in stock is a competitive advantage for us. So if you look at our discounting promotions that we would've had in Q1 of 2021 compared to our discounted promotions in 2022, it is also a little less.
our discounted promotions in 2022, it is also a little less.
Martin Landry: Okay. That's helpful. And I was wondering if you can discuss the traffic trends post quarter?
Martin Landry: The sentiment- there's lots of moving parts on the macroeconomic fronts, so any color you can give us on consumer- consumer sentiment and traffic would be super helpful.
there's lots of moving parts on the macro economy fronts, so any color you can give us on consumer consumer sentiment and traffic would be super helpful. Yeah.
Stewart Schaefer: I got to tell you Martin, 28 years doing this there are so many moving parts and it is getting harder and harder to navigate through this environment and giving even any guidance 60 or 90 days out because so many things can happen in this economy in this world. That being said we're- we are currently feeling really bullish on our business. We think that the consumer still has a very healthy balance sheet. There is no question that on the lower end of the consumer maybe they're pulling back a little bit as they see their gas prices and everyday expenses, but our customers are happily returning to the stores, enjoying the shopping experience.
there are so many moving parts and it is getting harder and harder to navigate through this environment and giving even any guidance 60 or 90 days out because so many things can happen in this economy in this world. That being said we're- we are currently feeling really bullish on our business. We think that the consumer still has a very healthy balance sheet. There is no question that on the lower end of the consumer maybe they're pulling back a little bit as they see their gas prices and everyday expenses, but our customers are happily returning to the stores, enjoying the shopping experience.
navigate through this environment and giving even any guidance 60 or 90 days out because so many things can happen in this economy in this world. That being said we're- we are currently feeling really bullish on our business. We think that the consumer still has a very healthy balance sheet. There is no question that on the lower end of the consumer maybe they're pulling back a little bit as they see their gas prices and everyday expenses, but our customers are happily returning to the stores, enjoying the shopping experience.
because so many things can happen in this economy in this world. That being said we're- we are currently feeling really bullish on our business. We think that the consumer still has a very healthy balance sheet. There is no question that on the lower end of the consumer maybe they're pulling back a little bit as they see their gas prices and everyday expenses, but our customers are happily returning to the stores, enjoying the shopping experience.
we are currently feeling really bullish on our business. We think that the consumer still has a very healthy balance sheet. There is no question that on the lower end of the consumer maybe they're pulling back a little bit as they see their gas prices and everyday expenses, but our customers are happily returning to the stores, enjoying the shopping experience.
stores, enjoying the shopping experience.
Stewart Schaefer: I'm not even hearing comments about death of the stores that we saw- heard a few years ago. The omni-channel experience is definitely an important part of it so the trends in traffic have been different but not weaker so we're- we're feeling that as we go into the second quarter, so can't predict further out but that's what we're feeling now, very bullish.
the trends in traffic have been different but not weaker so we're- we're feeling that as we go into the second quarter, so can't predict further out but that's what we're feeling now, very bullish.
different but not weaker so we're- we're feeling that as we go into the second quarter, so can't predict further out but that's what we're feeling now, very bullish.
weaker so we're- we're feeling that as we go into the second quarter, so can't predict further out but that's what we're feeling now, very bullish.
we're- we're feeling that as we go into the second quarter, so can't predict further out but that's what we're feeling now, very bullish.
that's what we're feeling now, very bullish.
Martin Landry: Okay, great. That's good to hear. Congrats. Thank you.
Stewart Schaefer: Thank you.
Operator: Your next question comes from Stephen MacLeod of BMO Capital Markets. Please go ahead.
BMO capital markets. Please go ahead.
Stephen MacLeod: Thank you. Good morning, guys.
Stewart Schaefer: Hey, Steve. How are you?
Multiple speakers: Good morning, and good, thanks. How are you? Good, thank you.
Stephen MacLeod: Good.
Stephen MacLeod: Just wanted to- so lots and lots of great color, so far so thank you.
Stephen MacLeod: I just had a couple of follow up questions on the gross margin.
Stephen MacLeod: Can you just talk a little bit about whether you had the positive mix shift from higher accessories growth in Q1? I assume you did. I just didn't hear it in the buckets. And then- and then secondly to that, I know you don't give guidance, but just thinking about all the puts and takes, Craig, that you went through on the gross margin side. It sounds like a lot of the benefit has been from price. So is it fair to assume that you wouldn't give that back necessarily as you roll through the rest of 2022?
I know you don't give guidance, but just thinking about all the puts and takes, Craig, that you went through on the gross margin side. It sounds like a lot of the benefit has been from price. So is it fair to assume that you wouldn't give that back necessarily as you roll through the rest of 2022?
Craig De Pratto: Yes, so on the- so on the first part of your question on the accessories piece, yes, we are seeing a nice mix in compounded growth year over year in that bucket, which does tend to be about a 10 point, 10% higher margin. So yes, we are seeing a greater mix shift and accessories, which is- which is a very- which is a positive.
so on the first part of your question on the accessories piece, yes, we are seeing a nice mix in compounded growth year over year in that bucket, which does tend to be about a 10 point, 10% higher margin. So yes, we are seeing a greater mix shift and accessories, which is- which is a very- which is a positive.
Craig De Pratto: And on the price as you roll through the rest of the year, we would expect that you will continue to see a step up in the in the sales and levering on gross profit and that we would not be giving that back.
and levering on gross profit and that we would not be giving that back.
Multiple speakers: As Stewart did allude to, there are different pressures in the market around container costs. That's something which we feel we've gotten ahead of with our retail pricing strategy and that's why we did start rolling that out last year in Q2. So Q1 as a comparative just has a little bit more noise than when we look back on that Q2, Q3, Q4, where we we did see year over year growth in that 200 to 300 basis points due to the some of those pricing strategies that we implemented last year that just weren't there in Q1. Steve also I want to just hit on your comment about mix of product because all retailers are living and learning through pre-COVID, post-COVID and just the patterns of the consumer in this omni-channel world that we're in.
we did see year over year growth in that 200 to 300 basis points due to the some of those pricing strategies that we implemented last year that just weren't there in Q1. Steve also I want to just hit on your comment about mix of product because all retailers are living and learning through pre-COVID, post-COVID and just the patterns of the consumer in this omni-channel world that we're in.
all retailers are living and learning through pre-COVID, post-COVID and just the patterns of the consumer in this omni-channel world that we're in.
living and learning through pre-COVID, post-COVID and just the patterns of the consumer in this omni-channel world that we're in.
post-COVID and just the patterns of the consumer in this omni-channel world that we're in.
Stewart Schaefer: The most interesting thing that we've noticed in Q1, which was a big help as people were- and continuing into Q2, as people return to the stores the average transaction is substantially higher- literally almost double than what we were doing on e-commerce. So thank goodness, we had our e-commerce in place during this pandemic and it drove a whole new customer segmentation for us, which we're very excited to have and that's going to continue to grow. But, interestingly enough, as customers walk into our stores, greeted by our sleep experts, go through the experience, that customer experience is key, they're also graduating to a higher quality, higher and higher average unit selling price in terms of mattress for that same- for that same transaction, and the basket size also when they come in and they go through the whole experience of why the pillow also is important, why the sheets are also more important, which is also a pickup in terms of our accessory business too.
the average transaction is substantially higher- literally almost double than what we were doing on e-commerce. So thank goodness, we had our e-commerce in place during this pandemic and drove a whole new customer segmentation for us, which we're very excited to have and that's going to continue to grow. But, interestingly enough as customers walk into our stores, greeted by our sleep experts, go through the experience, that customer experience is key, they're also graduating to a higher quality, higher and higher average unit selling price in terms of mattress for that same- for that same transaction, and the basket size also when they come in and they go through the whole experience of why the pillow also is important, why the sheets are also more important, which is also a pickup in terms of our accessory business too.
Yeah.
is substantially higher- literally almost double than what we were doing on e-commerce. So thank goodness, we had our e-commerce in place during this pandemic and drove a whole new customer segmentation for us, which we're very excited to have and that's going to continue to grow. But, interestingly enough as customers walk into our stores, greeted by our sleep experts, go through the experience, that customer experience is key, they're also graduating to a higher quality, higher and higher average unit selling price in terms of mattress for that same- for that same transaction, and the basket size also when they come in and they go through the whole experience of why the pillow also is important, why the sheets are also more important, which is also a pickup in terms of our accessory business too.
interestingly enough as customers walk into our stores, greeted by our sleep experts, go through the experience, that customer experience is key, they're also graduating to a higher quality, higher and higher average unit selling price in terms of mattress for that same- for that same transaction, and the basket size also when they come in and they go through the whole experience of why the pillow also is important, why the sheets are also more important, which is also a pickup in terms of our accessory business too.
terms of mattress for that same- for that same transaction, and the basket size also when they come in and they go through the whole experience of why the pillow also is important, why the sheets are also more important, which is also a pickup in terms of our accessory business too.
transaction, and the basket size also when they come in and they go through the whole experience of why the pillow also is important, why the sheets are also more important, which is also a pickup in terms of our accessory business too.
Multiple speakers: Okay, that's great. And just so I understand Stewart, you're saying that as people come to stores their average purchase price- their average basket is more than double what it was through the pandemic online. Is that what you meant? Is that what you mean? Correct, yes. On e-commerce online approximately the average transaction is about $700- I think it's $672 for us.
the average transaction is about $700- I think it's $672 for us.
Stewart Schaefer: Right now in store, that is probably $1,250 to $1,300- same customer just different experience and willing to pay up for that experience.
Yes.
Stephen MacLeod: Great. Okay. Okay, well thank you.
Stephen MacLeod: And then and then maybe just finally,
I was wondering if you could comment a little bit about the performance of your partnerships?
Stephen MacLeod: Best Buy, Walmart, Loblaws- I know they're still somewhat early days, but just wondering if you had any incremental color?
Craig De Pratto: Yeah.
Craig De Pratto: We're really happy about these partnerships and having conversations about how do we develop and enhance these relationships?
For sure the expansion of our brand through the millions of people that go through their stores, on their websites and everything has definitely positioned us really well in a broader customer segmentation than ever before.
of our brand through the millions of people that go through their stores, on their websites and everything has definitely positioned us really well in a broader customer segmentation than ever before.
Craig De Pratto: Transactionally, it's been- we've been very pleased. Loblaws, who joined in January, we had some of our biggest marketplace days ever in there- in our company's history.
marketplace days ever in there- in our company's history.
And.
Craig De Pratto: The stores that we're doing with Walmart, our Sleep Country Express, we're doing some final tweaks and changes on some of the- the look of the stores that we've already put into place because our accessory business seems to be quite brisk and we have to probably increase some shelving to support that.
Craig De Pratto: And hopefully as I said in the last quarter, at the end of June, we're hoping to announce that we're going to be taken our next step into opening multiple more stores with them.
we're hoping to announce that we're going to be taken our next step into opening multiple more stores with them.
Multiple speakers: Great. Thanks, guys. I appreciate it. Thank you, Steve.
Okay.
Operator: Your next question comes from Megan Annett of TD Securities. Please go ahead.
Meaghen Annett: Thank you. Good morning.
Multiple speakers: Good morning, Meaghen.
Meaghen Annett: I have a question around the competitive environment in Canada. So we have been dealing with supply chain delays and what not for some time and I'm sure you're aware of this as well, but it seems that as some of the more diversified players in furniture and other categories are receiving those goods demand may be normalizing a bit and that could be putting some pressure on their businesses in one way or another. So, as a specialty retailer, how do you think that this shifting supply demand dynamic impacts your business for better for worse? And maybe just as a follow up, in the event that demand does level off to an extent, can you just talk about your ability to appropriately manage the flow of inventory going forward?
in one way or another. So, as a specialty retailer, how do you think that this shifting supply demand dynamic impacts your business for better for worse? And maybe just as a follow up, in the event that demand does level off to an extent, can you just talk about your ability to appropriately manage the flow of inventory going forward?
in the event that demand does level off to an extent, can you just talk about your ability to appropriately manage the flow of inventory going forward?
Stewart Schaefer: So Meaghen, I just wanted to be sure I understand your question.
Stewart Schaefer: Are you asking about our supply dynamic or you're asking in comparison to other retailers?
in comparison to other retailers?
Multiple speakers: Right. So as some of the, let's say, furniture retailers are potentially pulling back on, let's say, their bedding stock or having to promote some of their product, how do you see that impacting the competitive environment? Yeah. So I'm not sure what others are necessarily doing, but I will say that our inventory is managed very well. The majority of our business still in mattresses, 80% of our business is still manufactured in Canada. So we haven't had a lot of the import supply chain disruptions as others have and thats very much a just in time model.
some of their product, how do you see that impacting the competitive environment? Yeah. So I'm not sure what others are necessarily doing,
but I will say that our inventory is managed very well. The majority of our business still in mattresses, 80% of our business is still manufactured in Canada. So we haven't had a lot of the import supply chain disruptions as others have and thats very much a just in time model.
our inventory is managed very well. The majority of our business still in mattresses, 80% of our business is still manufactured in Canada. So we haven't had a lot of the import supply chain disruptions as others have and thats very much a just in time model.
Stewart Schaefer: So- and the negative working capital of our business, which is one of the beautiful parts of our business and we sell the product usually and then order it from our suppliers and receive it within 24 to 48 hours and then ship it out. We're always keeping a decent level of inventory. On the other 20% of our business, which is on the import side, which has been definitely disrupted like everyone else and you probably have seen a tick up in terms of our inventory, which is on proactive measures that we brought in extra inventory because we think that's a competitive advantage. Again in Q1, we brought in extra inventory as we get into the moving season for Q2 and again, we think that's a competitive advantage.
which has been definitely disrupted like everyone else
and you probably have seen a tick up in terms of our inventory, which is on proactive measures that we brought in extra inventory because we think that's a competitive advantage. Again in Q1, we brought in extra inventory as we get into the moving season for Q2 and again, we think that's a competitive advantage.
Stewart Schaefer: It's off- the holding costs of the extra inventory is offset by the expansion of gross margin that, by us direct sourcing, including the cost of the freight, and so we're comfortable in- and seem to be managing around- the team seems to be doing an amazing job managing around this disruption. So there's no need for us to discount aggressively because I have heard that some people that were ordering inventory in the fourth quarter. It only showed up in the first quarter and they and they have to try to now get rid of it. We're not having that same kind of problem and then we're not even seen it so much in our category in Canada.
and so we're comfortable in- and seem to be managing around- the team seems to be doing an amazing job managing around this disruption. So there's no need for us to discount aggressively because I have heard that some people that were ordering inventory in the fourth quarter. It only showed up in the first quarter and they and they have to try to now get rid of it. We're not having that same kind of problem and then we're not even seen it so much in our category in Canada.
and seem to be managing around- the team seems to be doing an amazing job managing around this disruption. So there's no need for us to discount aggressively because I have heard that some people that were ordering inventory in the fourth quarter. It only showed up in the first quarter and they and they have to try to now get rid of it. We're not having that same kind of problem and then we're not even seen it so much in our category in Canada.
of problem and then we're not even seen it so much in our category in Canada.
Meaghen Annett: That's great color. Thank you. And then, just looking at the accessories piece of the business, Stewart, you have talked about potentially growing Sleep Country's market share in that category over time, and my question is do you feel that you have the levers in place today needed to achieve that goal or will that require some investments in either organic growth or M&A?
Meaghen Annett: For example, you had alluded to certain brands like Hush being available at a wholesale level. So any color on the strategy there would be great.
Stewart Schaefer: Yes, if you can see my face Megan, I'm smiling right now because don't ever asked me if we think we have enough because we don't and we do believe still that this is a huge opportunity. We still believe we only have about an 8% to 10% market share. We do believe that we could grow this aggressively.
Stewart Schaefer: And we do believe still that this is a huge opportunity. We still believe we only have about an 8% to 10% market share. We do believe that we could grow this aggressively.
Stewart Schaefer: And the brands that we're creating at Sleep Country, some of the direct sourcing that we're doing, some of the innovative product that we're looking at with our partners at Purple, Casper, Tempur Pedic.
Stewart Schaefer: So we still think we're early days and there's some new innovative products. We just came back from a trip from Utah, spent some time with our friends at Purple and at Malouf, a very important partner for us, especially on the accessory side of our business.
Stewart Schaefer: I think there is still is a lot to grow there. Hush definitely, we loved the brand we love all our brands, but we do believe in expansion on the accessories side and Hush both online and in store is in the future for us.
There is still is a lot to grow their harsh definitely we loved the brand we love all our brands, but we.
do believe in expansion on the accessories side and Hush both online and in store is in the future for us.
Meaghen Annett: And just last question related to Hush- seeing as they are in the U.S. market, any early learnings there from that geography that you can talk to?
Stewart Schaefer: Lots of early learnings.
Nothing that I could project of what's going to happen. There is no secret that there has been a little bit of a pullback on the e-commerce world, especially within the United States- Amazon reporting their first negative numbers and I think over a decade, especially in the home category.
That I could project of what's going to happen. There is no secret that there has been a little bit of a pullback on the E Commerce world, especially within the United States Amazon reporting.
their first negative numbers and I think over a decade, especially in the home category.
negative numbers and I think over a decade, especially in the home category.
Stewart Schaefer: That being said, we continue to grow in the United States, cost of acquisition is grow- is becoming more expensive.
Stewart Schaefer: So like I said on the last call, we're very excited about this because we get to experiment and learn from from the Hush brand before we decide to do anything more aggressively.
Stewart Schaefer: It's only been a few months and it's been a really busy few months so, ask the question again in three months and maybe we will have a different answer for you.
ask the question again in three months and maybe we will have a different answer for you.
Multiple speakers: Will do. Thank you. Thank you.
Operator: Your next question comes from Patricia Baker of Scotiabank. Please go ahead.
Patricia A. Baker: Hi. Good morning, guys.
Multiple speakers: Hi, Patricia. Stewart- hi, there. So Stewart in your opening remarks, you referenced the new store design. Can you talk about what prompted this and what some of the elements- what we can expect from that new store design?
Stewart Schaefer: Sure.
Stewart Schaefer: I haven't given our broader teams a sneak peak yet so I'm not going to share too much but I'll give you a little bit of a flavor. First of all it's constantly evolving and obviously even from Meaghen's question before, and you know very well Patricia, that our accessory business transact very well at a higher margin even than our mattresses. If you look at the square footage in our existing stores today, it out performs per square foot, even our mattress business.
and you know very well Patricia, that our accessory business transact very well at a higher margin even than our mattresses. If you look at the square footage in our existing stores today, it out performs per square foot, even our mattress business.
out performs per square foot, even our mattress business.
Stewart Schaefer: As the world opens up and people are returning to the stores and the overall experience, the customer journey and experience is more and more important.
Stewart Schaefer: We're trying to enhance that and it will be an expansion on some of our accessories in the space and the square footage devoted to it. There will be a digital footprint in our stores with an expansion of endless aisle. So that our sales associates will have the ability to increase the basket size not only with what is on the floor, but the fabulous partnerships that we're digitally creating in our drop ship programs.
that and it will be an expansion on some of our accessories in the space and the square footage devoted to it. There will be a digital footprint in our stores with an expansion of endless aisle. So that our sales associates will have the ability to increase the basket size not only with what is on the floor, but the fabulous partnerships that we're digitally creating in our drop ship programs.
footprint in our stores with an expansion of endless aisle. So that our sales associates will have the ability to increase the basket size not only with what is on the floor, but the fabulous partnerships that we're digitally creating in our drop ship programs.
is on the floor, but the fabulous partnerships that we're digitally creating in our drop ship programs.
Stewart Schaefer: So expect an enhancement of the look and the feel with an expansion of our accessory ability to broaden our assortment.
Han spent the look and the feel with an expansion of our accessory ability to broaden our assortment.
Patricia A. Baker: Okay, Stewart.
Patricia A. Baker: That is exactly what I was hoping to hear from you- that you would enhance the accessories at the store level, because I think that will do a lot towards building even greater awareness that you are in the accessory business.
building even greater awareness that you are in the accessory business.
So I think that will be very positive. So that's all I was hoping to hear from you guys.
Multiple speakers: Secondly, you referenced- you referenced your market share- your market share in accessories, 8% to 10%- can you just talk about where you think you are on the mattress mattress side given that 13.1% sales gain in the quarter and the comps that you have? I'm assuming that you gained market share in Q1? So yes, so we last year- pardon me- we believe we did. And the only reason for my hesitation is because obviously, we're usually taking U.S. data and trying to translate that back to the Canadian data. If you look at a lot of our peers in the United States and a lot of them, who reported last week and had big misses- I don't know if the differentiating factor is the retailer, or the economy, or the market and so right now we're not seeing the alignment between what we're seeing in our business and some of the poor numbers that we saw last week- last week. All of that to be said, throw in the fact that as you see our unit growth above $1,000, also were increasing prices.
Yes.
your market share in accessories-
can you just talk about where you think you are on the mattress mattress side.
where you think you are on the mattress mattress side.
mattress mattress side.
given that 13.1% sales gain in the quarter and the comps that you have? I'm assuming that you gained market share in Q1? So yes, so we last year-
Multiple speakers: sales gain in the quarter and the comps that you have? I'm assuming that you gained market share in Q1? So yes, so we last year-
pardon me- we believe we did. And the only reason for my hesitation is because obviously, we're usually taking U.S. data and trying to translate that back to the Canadian data. If you look at a lot of our peers in the United States and a lot of them, who reported last week and had big misses- I don't know if the differentiating factor is the retailer, or the economy, or the market and so right now we're not seeing the alignment between what we're seeing in our business and some of the poor numbers that we saw last week- last week. All of that to be said, throw in the fact that as you see our unit growth above $1,000, also were increasing prices.
we believe we did. And the only reason for my hesitation is because obviously, we're usually taking U.S. data and trying to translate that back to the Canadian data. If you look at a lot of our peers in the United States and a lot of them, who reported last week and had big misses- I don't know if the differentiating factor is the retailer, or the economy, or the market and so right now we're not seeing the alignment between what we're seeing in our business and some of the poor numbers that we saw last week- last week. All of that to be said, throw in the fact that as you see our unit growth above $1,000, also were increasing prices.
and trying to translate that back to the Canadian data. If you look at a lot of our peers in the United States and a lot of them, who reported last week and had big misses- I don't know if the differentiating factor is the retailer, or the economy, or the market and so right now we're not seeing the alignment between what we're seeing in our business and some of the poor numbers that we saw last week- last week. All of that to be said, throw in the fact that as you see our unit growth above $1,000, also were increasing prices.
translate that back to the Canadian data. If you look at a lot of our peers in the United States and a lot of them, who reported last week and had big misses- I don't know if the differentiating factor is the retailer, or the economy, or the market and so right now we're not seeing the alignment between what we're seeing in our business and some of the poor numbers that we saw last week- last week. All of that to be said, throw in the fact that as you see our unit growth above $1,000, also were increasing prices.
I don't know if the differentiating factor is the retailer, or the economy, or the market and so right now we're not seeing the alignment between what we're seeing in our business and some of the poor numbers that we saw last week- last week. All of that to be said, throw in the fact that as you see our unit growth above $1,000, also were increasing prices.
the alignment between what we're seeing in our business and some of the poor numbers that we saw last week- last week. All of that to be said, throw in the fact that as you see our unit growth above $1,000, also were increasing prices.
<unk>.
poor numbers that we saw last week- last week. All of that to be said, throw in the fact that as you see our unit growth above $1,000, also were increasing prices.
as you see our unit growth above $1,000, also were increasing prices.
Stewart Schaefer: Part is price increase which is a which is a good thing for us because we like inflation as long as it's controlled inflation and everyone's experiencing the same thing and hopefully everyone's income is going up at the same time.
price increase which is a which is a good thing for us because we like inflation as long as it's controlled inflation and everyone's experiencing the same thing and hopefully everyone's income is going up at the same time.
we like inflation as long as it's controlled inflation and everyone's experiencing the same thing and hopefully everyone's income is going up at the same time.
Stewart Schaefer: But- so I would say, we would have grown maybe 1% to 2%, but I don't want to give you the wrong numbers because there's so much noise in the numbers over the last few quarters, it's really hard to say.
so I would say, we would have grown maybe 1% to 2%, but I don't want to give you the wrong numbers because there's so much noise in the numbers over the last few quarters, it's really hard to say.
Patricia A. Baker: That's fair enough. And then, Stewart, I just wanted to throw one of your comments back at you. When you compare yourself to what you call your peers in the U.S., I mean, you said you're not sure if it's the market or whatever.
you call your peers,
I mean,
You said you're not sure if it's the market
Whatever.
Patricia A. Baker: Wouldn't you also recognize that your differentiated model and the way that you've come to market and the fact that Sleep Country does really have a full sleep ecosystem, which none of those none of your so called peers have, would be a reason why your performance would be different from their performance?
differentiated model and the way that you've come to market and the fact that Sleep Country does really have a full sleep ecosystem, which none of those none of your so called peers have would be a reason why your performance would be different from their performance?
Not really.
really have a full sleep ecosystem, which none of those none of your so called peers have would be a reason why your performance would be different from their performance?
Element.
Stewart Schaefer: Patricia, we don't normally stand on our soapbox, but I'm going to take a lap for my team who's worked so hard and not just on the quarter because this is multiple, multiple, multiple quarters of growth that we're seeing and the strategic diversified digital and brick and mortar sleep ecosystem that we've built over the last few years, the exclusive partnerships that we have made with the most relevant sleep brands, our strategic acquisitions of Endy and Hush, the marketplace relationship that we're talking about- Walmart, Best Buy, Loblaws and even our productive investment in our sleep supply chain like in- the in the depths of COVID last March of 2020, not only even 2021, 2020, the fore sight from my supply chain team to recommend putting in the super hubs to be able to support our growing import business. So, yeah, I think this team has done an unbelievable job diversifying our portfolio. We feel stronger than ever before. We feel that our balance sheet is the best it's ever been, even though our multiple's trading at historical levels. We're excited about the future and then the opportunities that are out there and even if there is a recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
and not just on the quarter because this is multiple, multiple, multiple quarters of growth that we're seeing and the strategic diversified digital and brick and mortar sleep ecosystem that we've built over the last few years, the exclusive partnerships that we have made with the most relevant sleep brands, our strategic acquisitions of Endy and Hush, the marketplace relationship that we're talking about- Walmart, Best Buy, Loblaws and even our productive investment in our sleep supply chain like in- the in the depths of COVID last March of 2020, not only even 2021, 2020, the fore sight from my supply chain team to recommend putting in the super hubs to be able to support our growing import business. So, yeah, I think this team has done an unbelievable job diversifying our portfolio. We feel stronger than ever before. We feel that our balance sheet is the best it's ever been, even though our multiple's trading at historical levels. We're excited about the future and then the opportunities that are out there and even if there is a recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
and Hush, the marketplace relationship that we're talking about- Walmart, Best Buy, Loblaws and even our productive investment in our sleep supply chain like in- the in the depths of COVID last March of 2020, not only even 2021, 2020, the fore sight from my supply chain team to recommend putting in the super hubs to be able to support our growing import business. So, yeah, I think this team has done an unbelievable job diversifying our portfolio. We feel stronger than ever before. We feel that our balance sheet is the best it's ever been, even though our multiple's trading at historical levels. We're excited about the future and then the opportunities that are out there and even if there is a recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
last March of 2020, not only even 2021, 2020, the fore sight from my supply chain team to recommend putting in the super hubs to be able to support our growing import business. So, yeah, I think this team has done an unbelievable job diversifying our portfolio. We feel stronger than ever before. We feel that our balance sheet is the best it's ever been, even though our multiple's trading at historical levels. We're excited about the future and then the opportunities that are out there and even if there is a recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
2020, not only even 2021, 2020, the fore sight from my supply chain team to recommend putting in the super hubs to be able to support our growing import business. So, yeah, I think this team has done an unbelievable job diversifying our portfolio. We feel stronger than ever before. We feel that our balance sheet is the best it's ever been, even though our multiple's trading at historical levels. We're excited about the future and then the opportunities that are out there and even if there is a recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
the fore sight from my supply chain team to recommend putting in the super hubs to be able to support our growing import business. So, yeah, I think this team has done an unbelievable job diversifying our portfolio. We feel stronger than ever before. We feel that our balance sheet is the best it's ever been, even though our multiple's trading at historical levels. We're excited about the future and then the opportunities that are out there and even if there is a recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
import business. So, yeah, I think this team has done an unbelievable job diversifying our portfolio. We feel stronger than ever before. We feel that our balance sheet is the best it's ever been, even though our multiple's trading at historical levels. We're excited about the future and then the opportunities that are out there and even if there is a recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
yeah, I think this team has done an unbelievable job diversifying our portfolio. We feel stronger than ever before. We feel that our balance sheet is the best it's ever been, even though our multiple's trading at historical levels. We're excited about the future and then the opportunities that are out there and even if there is a recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
and then the opportunities that are out there and even if there is a recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
recession that happens we've lived through multiple recessions, multiple stock market crashes, and every single one of those times we took more market share because we look for opportunity, which is why our balance sheet is so strong. So, so thank you- thank you for asking.
Patricia A. Baker: Okay.
Multiple speakers: My pleasure to give you the opportunity to get on your soapbox. <laughter>
Great that's helpful.
I wanted to say one.
Patricia A. Baker: One thing Craig, I would say based on everything that Stuart just said, I'm really pleased that you indicated earlier in response to another question, you are going to be aggressive on the buyback.
Craig De Pratto: Yes.
Craig De Pratto: We got a little bit caught with the blackout on this- this time around but we'll- we're looking to be active once we're out of blackout on the other side of this and whether the multiple is trading- it would be silly not to think that that's the move that management would make.
out of blackout on the other side of this and whether the multiple is trading- it would be silly not to think that that's the move that management would make.
it would be silly not to think that that's the move that management would make.
Multiple speakers: Exactly. Good luck. Thank you.
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Operator: Ladies and gentlemen, as a reminder, if you would like to ask a question please press star one now.
Operator: There are no other questions from the phones. I will turn the conference back to Mr. Stewart Schaefer for closing remarks.
Stewart Schaefer: So we want to thank everybody again for the continued support.
Stewart Schaefer: This was a fabulous quarter. I want to just do a call out to our entire team is the Dormez Vous, Sleep Country, Endy and Hush teams, who really have worked hard in these- this difficult environment environment, and obviously the customer is rewarding us for it and choosing us for it. So we appreciate it, we don't take it for granted and just thank you for everything that everyone's doing. Gave a great day. Have a great weekend, everyone, and happy Mother's Day for all of the Mothers that are out there.
this difficult environment environment, and obviously the customer is
rewarding us for it and choosing us for it. So we appreciate it, we don't take it for granted and just thank you for everything that everyone's doing. Gave a great day. Have a great weekend, everyone, and happy Mother's Day for all of the Mothers that are out there.
everything that everyone's doing. Gave a great day. Have a great weekend, everyone, and happy Mother's Day for all of the Mothers that are out there.
Operator: Ladies and gentlemen, this does conclude your conference for this morning. We would like to thank you for participating and ask that you please disconnect your lines.
Okay.
Sure.
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