Q1 2025 Beyond Inc Earnings Call

Okay.

Aaron: Good morning. My name is Aaron and I'll be our conference operator for today. At this time, I would like to welcome everyone to the Q1 2025 Beyond Incorporated Earnings conference call.

Aaron: Good morning, My name is Aaron and I'll be your conference operator for today at this time I would like to welcome everyone to the Q1 2025 beyond incorporated earnings Conference call.

Aaron: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. And at that point, if you would like to ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question at any time, simply press star followed by the number one again.

All lines have been placed on mute to prevent any background noise.

Aaron: After the Speakers' remarks, there will be a question and answer session and at that point. If you would like to ask a question simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question at any time simply press star followed by the number one again.

Melissa Smith: With that, I'm pleased to turn the call over to Melissa Smith, General Counsel and Corporate Secretary. Melissa, you may now begin. and Hugh Operator.

Speaker Change: With that I'm pleased to turn the call over to Melissa Smith General Counsel and corporate Secretary Melissa you May now begin.

Melissa Smith: Thank you operator, good morning, and welcome to beyond Inc. First quarter 2025 earnings Conference call. Joining me on the call today are executive Chairman and principal Executive Officer, Markus Wilderness, and President and Chief Financial Officer, Adrian Lee I'm also joined by Lee of Putnam, Chief Accounting Officer.

Melissa Smith: Good morning and welcome to Beyond Inc's first quarter 2025 earnings conference. Joining me on the call today are Executive Chairman and Principal Executive Officer Marcus Lemonis and President and Chief Financial Officer Adrianne Lee. I'm also joined by Leah Putnam, Chief Accounting Officer, and Alex Thomas, Chief Operating Today's discussion and our responses to your questions reflect management's views as of today, April 29, 2025, and may include forward looking statements, including without limitation, statements relating to our future business strategy, goals, financial performance, outlook for the remainder of the quarter, or any other period, anticipated growth, stock price, profitability, macro economic conditions, and the value of our brands and investments.

Speaker Change: Alex Thomas Chief operating Officer.

Speaker Change: Today's discussion and our responses to your questions reflect management's views as of today April 29, 2025 and May include forward looking statements, including without limitation statements relating to our future business strategy goals financial performance outlook for the remainder of the quarter or any other period.

Speaker Change: Anticipated growth stock price profitability macroeconomic conditions, and the value of our brands and investments relationships with third parties agreements with and we are entering into with that margin improvement expense reduction marketing efficiencies.

Melissa Smith: Relationships with third parties, agreements we are entering into with them, margin improvement, expense reduction, marketing efficiency. Conversion, Customer Experience, Changes to Brands or Websites, Product Offerings, Blockchain Efforts and Strategies, Tokenization Efforts and Strategies, and the Timing of Any of the Foregoing.

Speaker Change: Conversion customer experience changes to brands, our websites product offerings.

Speaker Change: Our efforts and strategies <unk> efforts and strategies and the timing of any of this we're getting actual results could differ materially from such statements additional information about our risks uncertainties and other important factors that could potentially impact our financial results is included in our Form 10-K for the year.

Melissa Smith: Actual results could differ materially from such state Additional information about our risks, uncertainties and other important factors that could potentially impact our financial results is included in our Form 10-K for the year ended December 31, 2024, and in our subsequent filings with the SEC.

Speaker Change: Year ended December 31, 2024, and in our subsequent filings with the SEC.

Melissa Smith: During this call, we'll discuss certain non-GAAP financial measures. Our filings with the SEC, including our first quarter earnings release, which is available on our Investor Relations website at investors.beyond.com, contain important additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable GAAP Following management's prepared remarks, we will open the call for questions. A slide presentation with supporting data is available for download on our Investor Relations website.

Speaker Change: During this call, we'll discuss certain non-GAAP financial measures are filings with the SEC, including our first quarter earnings release, which is available on our Investor Relations website at investors <unk> beyond Dot com.

Rob: Important additional disclosures regarding these non-GAAP measures, including reconciliations of these measures to the most comparable GAAP measures. Following management's prepared remarks, we will open the call for questions. A slide presentation with supporting data is available for download on our Investor Relations website. Please Rob.

Melissa Smith: Please review the important forward-looking statements disclosure on slide two of that presentation.

Rob: The important forward looking statements disclosure on slide two of that presentation with that let me turn the call over to you Markus. Thank you Wow, that's a lot of a lot of stuff.

Marcus Lemonis: With that, let me turn the call over to you, Marcus. Thank you. Wow, that's a lot of stuff.

Marcus Lemonis: Just to make sure that we are crystal clear, on our investor website, we have put together not only a robust release that has financial information as part of it, but a very robust slide deck that will give you a really simple illustration of how we actually think about the business. And the reason that we would encourage you to go through that slide deck is that those are really a highlight identification of how we think about the key guideposts and metrics that all of us as a management team use on a daily basis.

Speaker Change: Just to make sure that we are crystal clear on our Investor Web site, we have put together not only a robust release that has financial information as part of it but a very robust slide deck that will give you a really simple illustration of how we actually think about the business and the reason there.

Speaker Change: We would encourage you to go through that slide deck is that those are really a highlight identification of how we think about the key guideposts in metrics that all of us as a management team use on a daily basis.

Marcus Lemonis: As we think about this business, and we are really excited to be here today, but as we think about this business here, in talking about our first quarter results, we really feel like the first quarter was the first quarter of a brand new business. And it's been about a year that this restructuring had started. And when I first arrived, I anticipated that it was a little more of a transformation. And we all know the story about the first six months of the company since I've been here and how we had to learn a lot together.

Speaker Change: As we think about this business and we are really excited to be here today, but as we think about this business here in talking about our first quarter results, we really feel like the first quarter was the first quarter of a brand new business and it's been about a year is that this restructuring had started and when I first arrived I.

Speaker Change: <unk> that it was a little more of a transformation and we all know the story about the first six months of the companies since I've been here and how we had to learn a lot together, but as we move into 2025, we feel like we have restructured and rebuilt and re imagined and entirely new company.

Marcus Lemonis: But as we move into 2025, we feel like we have restructured and rebuilt and reimagined an entirely new company. both the employees that work here today, in fact, about 65 to 70% less of them have a different mindset. We have built a real organization solely around winners, waking up every day, seven days a week, working on the websites, thinking about the customer, making sure that the customer experience is solid. And while we're not fully done with our transformation on the websites, the team's working every single day to improve site experience, add new technology, find new third-party vendors to lay over our websites and plug into our websites, we know that the road ahead seems to be filled with tons of green shoots.

Speaker Change: The employees that work here today.

Speaker Change: <unk> about 65% to 70% less of them have a different mindset, we have built a real organization. So solely around winners waking up every day seven days a week working on the website is thinking about the customer.

Speaker Change: Making sure that the customer experience is solid and while we're not fully done with our transformation on the websites. The team is working every single day to improve site experience add new technology find new third party vendors to lay over our websites and plug into our website. We know that the road ahead seems to be.

Speaker Change: Filled with tons of Green shoots I think the important reason that I want to really focus on the first quarter of this year being in our opinion in the first quarter of a new business. It's because we have in our possession, some really valuable assets that didn't exist before the resurgence of the overstock Dot com brand and we are.

Marcus Lemonis: I think the important reason that I want to really focus on the first quarter of this year being, in our opinion, the first quarter of a new business is because we have in our possession some really valuable assets that didn't exist before. The resurgence of the Overstock.com brand. We encourage you to visit that website to see how different it is. Never in a million years did people expect to see Overstock selling Gucci bags. It's doing so and it's doing so successfully, while it's also selling furniture and other high brand, high ticket items that customers are looking for.

Speaker Change: Encourage you to visit that website to see how different it is never in a million years did people expect to see overstock selling gucci bags.

Speaker Change: It's doing so and it's doing so successfully while it's also selling furniture and other high brand high ticket items that customers are looking for they're looking for value. We've really re imagined the bed Bath <unk> beyond site, we've cut almost 8 million skus off of that site and to say that we're done would be an understatement.

Marcus Lemonis: They're looking for value.

Marcus Lemonis: We've really reimagined the Bed Bath & Beyond site. We've cut almost eight million SKUs off of that site. And to say that we're done would be an understatement. At this point, while we're continuing to eliminate vendors that we don't think fit our ethos or products that don't meet our margin profile, we want to start getting into adding new categories and thinking about new things.

At this point, while we're continuing to eliminate vendors that we don't think fit our ethos or products that don't meet our margin profile, we want to start getting into adding new categories and thinking about new things.

Marcus Lemonis: I wouldn't have imagined years ago that Bed, Bath & Beyond would become a very large furniture retailer, patio, rug, furniture, and it's changed the name of the business. We've had to learn how the taxonomy works and how to make it more efficient while never forgetting the core items that Bed, Bath & Beyond built its brand on, kitchen, bed, bath. As we think about the future, we want to continue to build those up and we'll do so, but we also want to have people learn, get comfortable, have positive experience and return to the site in categories that Bed Bath & Beyond never sold.

Speaker Change: I wouldn't have imagined years ago, they'd bed bath and beyond will become a very large furniture retailer patio furniture, and it's changed the name of the business. We've had to learn how the taxonomy works and how to make it more efficient well never forgetting the core items that bed Bath <unk> beyond built its brand on kitchen bed Bath.

Speaker Change: As we think about the future we want to continue to build those up and we will do so but we also want to have people learn get comfortable have positive experience and return to the site and categories that bed Bath <unk> beyond never sold.

Marcus Lemonis: We recently acquired Bye Bye Baby, an asset that I felt needed to be part of this company at all costs. Bed Bath & Beyond and Bye Bye Baby were known synonymously by consumers. And those two brands really set the table for what that company was, which was a life events company.

Speaker Change: We recently acquired buy buy baby and asset that I felt needed to be part of this company that all costs bed Bath <unk> beyond and buy buy baby, we're known synonymously by consumers and those two brands really set the table for what that company was which was a life events company, we've gotten away from that.

Marcus Lemonis: We've gotten away from that. You could expect us to lean back into that again. As we think about everything from the birth of a child to the first home to the wedding to the going to college, and everything in between, we know we have to excel. But as part of excelling in that particular area, we know we have to meet the customer in different places. selling online is a very complicated business, and few do it very well. We want to be one of those few. But we also know that we have to lower our cost of marketing, we have to increase the size of our retained database.

Speaker Change: You can expect us to lean back into that again as we think about everything from the birth of a child to the first home to the wedding to the go into college and everything in between we know we have to excel, but.

But as part of its selling in that particular area.

Speaker Change: We know we have to meet the customer in different places selling.

Speaker Change: Selling online is a very complicated business and few do it very well we want to be one of those few but we also know that we have to lower our cost of marketing we have to increase the size of our retained database and we have to figure out how to build basket size over time.

Marcus Lemonis: And we have to figure out how to build basket size over time. Part of our investment thesis around doing that is the investment that we made in Kirkland. 330 store home decor business based out of Nashville, Tennessee. What we liked about it as a management team was small format, low risk, low expense, low real estate costs, and high margin products inside of them.

Speaker Change: Part of our investment thesis around doing that is the investment that we made in Kirkland's, a 330 store home decor business based out of Nashville, Tennessee.

Speaker Change: We liked about it as a management team was small format low risk low expense low real estate cost and high margin products inside of them and while we've seen those results of that company continue to improve we know that the future of that business through our investment and the future of our business.

Marcus Lemonis: And while we've seen those results of that company continue to improve, we know that the future of that business through our investment and the future of our business requires us to work together far more. About six months ago, we put a collaboration agreement in place that showed the idea behind how we would bring our powerful brands to market through another company.

Speaker Change: Choirs us to work together far more.

Speaker Change: About six months ago, we put a collaboration agreement in place that showed the idea behind how we would bring our powerful brands to market.

Speaker Change: Through another company beyond is not prepared today to go open a bunch of stores, nor with anybody in this room ever vote for spending one dollar on capex to build out take out locations Buildout things, we want our dollars to be built on technology invest.

Marcus Lemonis: Beyond is not prepared today to go open a bunch of stores, nor would anybody in this room ever vote for spending $1 on CapEx to build out, take out locations, build out things. We want our dollars to be built on technology, investing in the customer experience, figuring out how to exploit and get more out of our blockchain assets, and look to acquire other valuable IP in the same family and home space so that we can then take those brands to our investment vehicle of Kirkland's and see those brands come to life. Shortly, people will learn that Kirkland's will start transforming a number of their location.

Speaker Change: Investing in the customer experience figuring out how to exploit and get more out of our blockchain assets and look to acquire other valuable IP in the same family and home space. So that we can then take those brands to our investment vehicle of Kirkland's and see those brands come to life.

Speaker Change: Shortly people will learn that kirkland's, we'll start transforming a number of their locations.

Marcus Lemonis: In the early stages of that discovery, we have made the decision that we're going to open up at least four overstock stores. geographically placed so both that our vendors and our customers can ship product to and return product to in a more efficient manner, which over time will improve our financial performance, primarily through margin improvement in return. Secondarily, we will be launching in a very, very low capex way, Bed Bath & Beyond Home.

Speaker Change: In the early stages of that discovery, we have made the decision that we're going to open up at least for overstock stores geographically placed so both at our vendors and our customers can ship product to and return product too and a more efficient manner, which over time will improve our financial performance primarily through margin improvement.

Speaker Change: And returns.

Speaker Change: Secondarily, we will be launching in a very very low capex way bed Bath and beyond home let me.

Marcus Lemonis: Let me be clear. That is very different from the true blue store that all of us have known for years, which focused on bed, bath, kitchen, and small accessories. Bed Bath Home looks a lot like Kirkland's and incorporates a lot of the products that Bed Bath Beyond is selling today successfully online. Small furniture. a little bit more textiles, a little bit more decor. And the purpose of those stores is to meet the customer at the value proposition we're looking at. If you look at Kirkland's today, they truly are a very well-merchandised, very well-curated attempt to do a lot in what home goods does.

Speaker Change: Be clear that is very different from the true blue still are that all of us have known for years, which focused on bed Bath kitchen, and small accessories that back home. It looks a lot like kirkland's and incorporates a lot of the products that bed Bath beyond is selling today successfully online small furniture.

Speaker Change: Your pieces, a little bit more textiles, a little bit more decor.

Speaker Change: And the purpose of those stores is to meet the customer at the value proposition. We're looking at if you look at kirkland's today, they truly are a very well merchandised.

Speaker Change: Well curated attempt to do a lot and what Homegoods does we believe that the assortment coming from bed Bath, <unk> beyond and potentially overstock into those bed Bath home stores and in the future. Some of those Kirkland stores starts to level, the playing field and makes that Kirkland stores and the bed Bath home stores real players.

Marcus Lemonis: We believe that the assortment coming from Bed Bath & Beyond and potentially Overstock into those Bed Bath Home stores, and in the future, some of those Kirkland stores, starts to level the playing field and makes the Kirkland stores and the Bed Bath Home stores real players in the off price. highly curated, well-merchandised, non-dumpster looking environment that we believe customers are looking for. A lot of value for a very low price. That is our customer.

Speaker Change: In the off price.

Speaker Change: Highly curated well merchandised non dumpster looking environment that we believe customers are looking for.

Speaker Change: A lot of value for a very low price that as our customer base.

Speaker Change: As we also look at that store footprint, we're looking at ways to bring bye bye baby back to life. So we have authorized one store.

Speaker Change: Just want.

Speaker Change: To be opened and tested more than likely that will happen in the Nashville market. Because we believe that's a great demographic to understand all of the different spectrums, including really every new customer that's coming to that market and every existing ones. So it's a really thriving market.

Marcus Lemonis: When we think about our core business, we think about a few basic principles. I'll call them guideposts for this discussion. We believe that in the short term, And I'll say the short term is the next couple quarters. We believe that our margin profile is going to range on the product side from 24 to 26%. You saw the arrival at 25.1. I have to wonder once in a while, when you're testing different elasticity and different promos and different offers, are you doing enough to capture enough customers? As a reminder, our company pays its bills with gross profit dollars, not just gross profit margin.

Speaker Change: When we think about our core business, we think about a few basic principles I'll call them guidepost for this discussion.

Speaker Change: We believe that in the short term and.

Speaker Change: And I'll say the short term as the next couple of quarters, we believe that our margin profile is going to range on the product side from 24% to 26%.

Speaker Change: You saw the arrival at $25, one I have to wonder once in a while when youre testing a different elasticity in different promos and different offers are you doing enough to capture enough customers. As a reminder, our company pays its bills with gross profit dollars not just gross profit margin, while we need that.

Marcus Lemonis: And while we need that margin to continue to improve towards our goal of 27%, we know that we also need to start in the next 60 days, thinking about building the customer file again, getting better, retaining the ones that we have, getting better and more efficient at finding new ones, and then getting them to return. And there's oftentimes, particularly when you're doing that, where you have to use a great deal as base. That'll either come from increased spend on promotion, and we think that's going to range from 13.5 to 14.75 in the short term, or it can come from extra discounting, which could cause the margins to range from 24 to 26.

Speaker Change: Margin to continue to improve towards our goal of 27%. We know that we also need to start in the next 60 days thinking about building the customer file again getting better retaining the ones that we have get at getting better and more efficient at finding new ones and then getting them to return and there is often tie.

Speaker Change: <unk>, particularly when Youre doing that where you have to use a great deal as bait.

Speaker Change: That will either come from increased spend on promotion and we think that's going to range from 13, 5% to 14 75 in the short term.

Speaker Change: Or it can come from extra discounting, which could cause the margins to range from 24 to 26, but one strategy that we have tested and we hope you see it on the balance sheet is our ability to continue to be asset light, but asset smart.

Marcus Lemonis: But one strategy that we have tested, and we hope you see it on the balance sheet, is our ability to continue to be asset light, but asset smart. You'll see about $25 million of inventory sitting on our balance. we have eliminated our distribution center, which was about two million dollars in fixed costs on an annualized basis, and have gone to what we call an accordion style 3PL, which means we pay for what we use. We love variable models, including starting to disseminate variable pay plans. As we do that, we're doing that for a couple of reasons.

Speaker Change: You'll see about $25 million of inventory sitting on our balance sheet.

Speaker Change: We have eliminated our distribution center, which was about $2 million in fixed costs on an annualized basis and have gone to what we call an accordion style three PL, which means we pay for what we use we love variable models, including starting to disseminate variable pay plans as we do that we're doing that for a couple of reasons.

Speaker Change: We're looking for ways for us to exploit the liquidation or the.

Marcus Lemonis: We're looking for ways for us to exploit the liquidation or the misstabilization of other retailers or other manufacturers by taking on product at 30, 40, 50, 60, 70 percent off the original wholesale value. Part of what we're doing is we're just testing out how effective can we be, and where can we effectively do that. And we're not opposed to testing. I want to be clear that already through April, we'll have already wound that number down by about half as we sit here today, but we may wind it up a little bit more from time to time.

Speaker Change: MS stabilization of other retailers or other manufacturers by taking on product at 30, 40, 50, 60, 70% off the original wholesale value.

Speaker Change: Part of what we're doing is we're just testing out how effective can be b and where can we effectively do that and we're not opposed to testing I want to be clear that already through April we will have already wound that number down by about half as we sit here today, but we may wind it up a little bit more from time to time, but you should think about 25.

Marcus Lemonis: But you should think about 25 million dollars as what Adrian describes to the merchants as the authorized playbook, what you're allowed to test into. We can get into it quickly, but we have to be confident we can get out of it quickly. In some cases, it's been the way that we've had to attract certain vendors that we want, particularly some of the larger appliance vendors on the Bed Bath & Beyond side who didn't want to participate in dropship. But we felt that the their brand and our brand made sense, and they treated us very fairly on the first cost side.

Speaker Change: $5 million as what Adrian describes to the merchants as the authorized playbook, what you're allowed to test into.

Speaker Change: We can get into it quickly, but we have to be confident we can get out of it quickly in some cases, it's been the way that we've had to attract certain vendors that we want particularly some of the larger appliance vendors on the bed Bath <unk> beyond side, who didn't want to participate and drop ship, but we felt that the connection between their brand and our brand made.

Speaker Change: And they treated us very fairly on the first cost side, so that was an extra incentive.

Marcus Lemonis: So that was an extra incentive.

Marcus Lemonis: As we look at marketing expense, you can see that there is a massive fallback year over year. Well, that's not because we didn't spend money this year. That's because the way that the company was marketing a year ago is just not sustainable. And we didn't really think I didn't really believe that the spend that we were generating to find new customers was being put into a data lake that gave us confidence that we can extract that information, retain that information, expand that information, because we didn't have the systems in place.

Speaker Change: As we look at marketing expense you can see that there is a matter there was a massive pullback year over year, well, that's not because we didnt spend money. This year, that's because the way that the company was marketing a year ago.

Speaker Change: Just not sustainable and we didn't really think I didn't really believe that the spend that we were generating.

Speaker Change: To find new customers was being put into a data lake that gave us confidence that we can extract that information retain that information expand that information because we didn't have the systems in place.

Marcus Lemonis: I'm proud to announce that Salesforce has been fully integrated and we have brought on an entire new what I would call direct to consumer marketing. Some of the efficiencies that we saw in the end of quarter one, we're a product of that new team, trying new things, recognizing that we need more performance out of our email channels, more performance out of affinity relationships, more partnerships with our vendors, and that Beyond on its own and its Google spend can't continue to be the only source of information. Again, that's why we also like the relationship with an omni-channel retailer, the ability to pick up names at an almost zero cost.

Speaker Change: I'm proud to announce that Salesforce has been fully integrated and we have brought on an entire new what I would call direct to consumer marketing team.

Speaker Change: Some of the efficiencies that we saw in the end of quarter. One we are a product of that new team trying new things recognizing that we need more performance out of our email channels more performance out of affinity relationships more partnerships with our vendors and that beyond on its own and it's Google spin.

Speaker Change: And can't continue to be the only source of information.

Speaker Change: Again, that's why we also like the relationship with an omnichannel retailer the ability to pick up names in an almost zero cost.

Marcus Lemonis: As we look towards the next quarter, the one that we're in today, the one that we'll report shortly, we are finding that April is turning out to be a pretty consistent month.

Speaker Change: As we look towards the next quarter. The one that we're in today. The one that will report. Shortly we are finding that April is turning out to be a pretty consistent months I wanted to spell any notion for anybody out there that there is this tremendous amount of pull forward demand, we have not seen a tremendous acceleration and site visits.

Marcus Lemonis: I wanted to spell any notion for anybody out there that there is this tremendous amount of pull forward demand. We have not seen a tremendous acceleration in site visits because we're not spending more. We haven't seen a tremendous increase in AOV other than the normal patio increases that we see. And any notion that the customers out there trying to buy as much as they can to hoard it in their garage in anticipation of tariffs, at least in our company, we don't believe to be true. We may see that in the future, but we don't believe to be true.

Speaker Change: We're not spending more we haven't seen a tremendous increase in <unk> other than the normal patio increases that we see and any notion that the customers out there trying to buy as much as they can to hold it in their garage in anticipation of tariffs at.

Speaker Change: At least in our company, we don't believe to be true.

Speaker Change: We may see that in the future, but we don't believe to be true.

Marcus Lemonis: One of the headlines of our press release is that that we believe that we are 60 days away from transitioning from a restructuring company to a growth company. That doesn't mean that we think we're going to make a bunch of money in 60 days. What that means is that we feel at this moment in time. that on the 60 days, 60th day from today, to be very specific, we will have done what we needed to do with our skew count, we will have done what we needed to do, at least for the most part, with new technology being implemented, new platforms being initiated, new layers being laid on top of on the technology side that make us more efficient.

Speaker Change: One of the headlines of our press release is that we believe that we are 60 days away from transitioning from a restructuring company.

Speaker Change: Two a growth company that doesn't mean that we think we're going to make a bunch of money in 60 days what that means is that we feel at this moment in time.

Speaker Change: That on the 60 days 60 days from today to be very specific we will have done what we needed to do with our SKU count.

We will have done what we needed to do at least for the most part with new technology being implemented new platforms being initiated new layers being laid on top of on the technology side that make us more efficient.

Marcus Lemonis: We want to move away from cutting, cutting, cutting, you don't cut your way to a profit, you sell your way to a profit. That is why I came here. But in order to do that, you had to understand what the base was, you had to build the foundation, so that you can understand that we're building a company that can last in the worst of times. As a reminder, we're dealing with a terrible, terrible economy today. Interest rates are at a 20 year high. The 10 year treasury bounces around from 4.3 to 4.6. We know what that does to mortgage rates.

Speaker Change: We want to move away from cutting cutting cutting you don't cut your way to a profit you sell your way to a profit that is why I came here, but in order to do that you have to understand what the base was you had to build the foundation. So that you can understand that we are building a company that can last in the worst of times as a reminder.

Speaker Change: We're dealing with a terrible terrible economy today interest rates are at a 20 year high.

Speaker Change: 10 year Treasury bounces around from four three to four six we know what that does to mortgage rates. We know what home sales were in March and our belief as a management team is that if we could make it we could survive we could find our way to the neighborhood of profitability in this environment.

Marcus Lemonis: We know what home sales were in March. And our belief as a management team is that if we could make it, we could survive, we could find our way to the neighborhood of profitability in this environment. than what we were really setting ourselves up for. is the ability to be so nimble that no matter how tough the economy could get, we could survive. And we could be very much prepared to participate and, quite frankly, accelerate when the tailwinds start to come, which we believe they will.

Speaker Change: Then what we were really setting ourselves up for.

Speaker Change: Is the ability to be so nimble that no matter, how tough the economy could get we could survive and.

Speaker Change: And we could be very much prepared to participate and quite frankly accelerate when the tailwind start to come which we believe they will.

Marcus Lemonis: tariffs are always the elephant in the room these days. And any company that tells you that they know exactly what's going to happen has absolutely no idea what's happening in their own business. If they say that the tone deaf nature, which people are making prognostications about what's going to happen is something that this company will not do. But what we can tell you is that we are in a unique position, unlike a lot of other companies, to be able to deal with tariffs.

Speaker Change: Tariffs are always the elephant in the room. These days and any company that tells you that they know exactly what's going to happen has absolutely no idea what's happening in their own business, if they say that the.

Speaker Change: <unk> depth nature, which people are making prognostications about what's going to happen is something that this company will not do.

Speaker Change: But what we can tell you is that we are we are in a unique position. Unlike a lot of other companies to be able to deal with tariffs as a reminder, we're debt free. So we're not chasing these massive interest payments that scared the crap out of us and we want to continue to stay that way to the best of our ability.

Marcus Lemonis: As a reminder, we're debt free. So we're not chasing these massive interest payments that scare the crap out of us. And we want to continue to stay that way to the best of our ability, unless there's a reason to do it. And it's accretive for our shareholders. We have continued over time to diversify our offering. And if you visit our websites today, you'll see all the things that are built in the USA. Even if it's parts and pieces assembled here, we believe that we have a great strategy and we're continuing to expand that strategy of built in the USA.

Speaker Change: There's a reason to do it and its accretive for our shareholders.

Speaker Change: We have continued over time to diversify our offering and if you visit our website today Youll see all the things that are built in the USA, even if its parts and pieces assembled here. We believe that we have a great strategy and we're continuing to expand that strategy of built in the USA. We're also not naive.

Marcus Lemonis: We're also not naive to think that everything in the USA can satisfy all the categories. It cannot. And so we're working with a number of companies who have in the last four or five years since the last tariff scare, have adjusted their own sourcing. So when you look at our vendor concentration, we don't have as much risk as others may, but that doesn't mean that we aren't susceptible to something. which is partially why we also create that margin band of 24 to 20. We have to be realistic. We're not exempt from everything. We have seen in the last couple of weeks, a number of partners come to us asking for price increases.

Speaker Change: To think that everything in the USA can satisfy all the categories. It cannot and so we're working with a number of companies who have in the last four or five years since the last tariff scare have adjusted their own sourcing. So when you look at our vendor concentration we don't have as much risk as others may but that doesn't mean that we aren't.

Speaker Change: <unk> to something which is partially why we also create that margin band of 24 to 26, we have to be realistic we're not exempt from everything.

Speaker Change: We have seen in the last couple of weeks a number of partners come to us asking for price increases.

Marcus Lemonis: I know, they know, you know, that none of them have actually experienced those tariffs. Those are anticipatory price hikes. Oddly enough, most of that has existed in the jewelry space on our overstock business, which continues to do very well. We haven't seen a big rush on the furniture side, but we anticipate that we're going to see, like many other retailers, an increase in some furniture prices. We're going to work with those vendors and we're going to tighten down our belts even more to ensure that our customers and our shareholders don't take the brunt of that.

Speaker Change: So they know you know that none of them have actually experienced those tariffs those are anticipatory price hikes oddly enough. Most of that has existed in the jewelry space on our overstock business, which continues to do very well.

Speaker Change: We haven't seen a big rush on the furniture side, but we anticipate that we're going to see like many other retailers and increase in some furniture pricing.

Speaker Change: We're going to work with those vendors and we're gonna tightened down our belts, even more to ensure that our customers and our shareholders don't take the brunt of that.

Marcus Lemonis: But it is true that everybody's going to be playing by the same rule book. So if that means that furniture sales are going to slow down, the odd thing for us is that I don't know how much more they could slow down. And we believe that even if they slow down on a macro basis, the TAM is still big enough. The market is still big enough for us to get our fair share and still experience revenue growth in the second quarter of 2025 compared to 2020 to the first quarter of 2025. And we also believe that we could experience revenue growth in Q3 of 2025.

Speaker Change: But it is true that everybody is going to be playing by the same rule book. So is that means that furniture sales are going to slow down the odd thing for us is that I don't know how much more they could slow down and we believe that even if they slow down on a macro basis. The Tam is still big enough. The market is still big enough for us to get our fair share and.

Speaker Change: Still experienced revenue growth in the second quarter of 2025 compared to 2020 to the first quarter of 2025, and we also believe that we could experience revenue growth in Q3 of 2025.

Marcus Lemonis: So we expect some revenue growth in Q2 from Q1, some revenue growth in Q3 from Q2, while we continue to work on stabilization of every other part of our.

Speaker Change: So we expect some revenue growth in Q2 from Q1, some revenue growth in Q3 from Q2, while we continue to work on stabilization of every other part of our business.

Marcus Lemonis: We'll turn the rest of those mic points over to the Q&A, but I'm going to turn the call over to my partner and president, Adrianne Lee. All right. Thank you, Marcus.

Speaker Change: We will turn the rest of those Mike points over to the Q&A, but I'm going to turn the call over to my partner and President Adrianne Lee Alright. Thank you Marcus.

Adrianne Lee: Just wanted to start off with, as a result of our previously disclosed decision to eliminate non-contributory SKUs in vendors and prioritize efficiencies in our marketing channel, revenue declined 39% year-over-year in the first quarter. These actions drove fewer orders and fewer new customers. However, I am very pleased that first quarter AOV increased to $194, a $21 increase year-over-year, and units-per-order increase as we incent a bigger basket size. Order frequency continues to hold as we reestablished spend guardrails.

Speaker Change: Just wanted to start off with as a result of our previously disclosed decision to eliminate non contributory skus and vendors and prioritize efficiencies in our marketing channel revenue declined 39% year over year in the first quarter. These actions drove your orders and fewer new customers. However, I am very pleased that first quarter <unk> increase.

Speaker Change: 294, a $21 increase year over year.

Speaker Change: Units per order increase as we Incent a bigger basket size order frequency continues to hold as we reestablished spend guard rails, we made significant progress on restoring our margin profile and are imminently shifting to a growth mindset and as Mark has outlined aiming for sequential revenue improvement quarter over quarter.

Adrianne Lee: We made significant progress on restoring our margin profile and are imminently shifting to a growth mindset, and as Marcus outlined, aiming for sequential revenue improvement quarter-over-quarter. Growth will be driven by offering customers value on a vast array of home products, trusted brands, and deep discounts on designer items, while improving our site experience, findability, storytelling, and addressing assortment gaps. The acceleration in our gross margin expansion exceeded our internal target. Gross margin landed at 25% for the quarter, a 560 basis point improvement compared to the same period last year. You may recall we targeted a 25% gross margin at our October 2024 investor event, and we achieved that goal.

Speaker Change: Growth will be driven by offering customers value on a vast array of home products trusted brands and deep discounts on designer items, while improving our site experience find ability storytelling and addressing assortment gaps.

Speaker Change: The acceleration in our gross margin expansion exceeded our internal target gross margin landed at 25% for the quarter and 560 basis point improvement compared to the same period last year you may recall, we targeted a 25% gross margin at our October 2024, Investor event, and we achieved that goal.

Adrianne Lee: Sequentially, we delivered a 210 basis point improvement as we were disciplined in our pricing and merchandising actions and improved freight costs. Important to note, and as Marcus discussed, we are testing opportunities to purchase inventory in an effort to improve SKU economics. We will be disciplined and opportunistic in these efforts.

Speaker Change: Sequentially, we delivered a 210 basis point improvement as we were disciplined in our pricing and merchandising actions and improved freight costs important to note and as Mark has discussed we are testing opportunities to purchase inventory in an effort to improve SKU economics, we will be disciplined and opportunistic in these efforts.

Adrianne Lee: We have shown consistency in improving our margin profile over the last four quarters, as we worked the six-part plan I outlined at the beginning of 2024. And I expect the team to maintain our margin guardrails and disciplined approach. Sales and marketing decreased by $37 million, or 430 basis points as a percent of revenue versus last year, and improved 380 basis points versus the fourth quarter of 2024. This decline was mainly driven by the intentional reduction of less efficient spend while improving channels that are more contributory. We know we need to balance our efforts between acquisition and retention.

Speaker Change: We have shown consistency in improving our margin profile over the last four quarters as we work to the six part plan I outlined at the beginning of 2024 and I expect the team to maintain our margin guardrails and disciplined approach.

Speaker Change: Sales and marketing decreased by $37 million or 430 basis points as a percent of revenue versus last year, and improved 380 basis points versus the fourth quarter of 2024.

Speaker Change: This decline was mainly driven by the intentional reduction of less efficient spend while improving channels that are more contributory.

Speaker Change: We know we need to balance our efforts between acquisition and retention.

Adrianne Lee: The team is committed to doing this day in and day out while improving the site experience and sharpening pricing to support conversion.

Speaker Change: <unk> is committed to doing this day and day out while improving the site experience and sharpening pricing to support conversion.

Adrianne Lee: GNA and tech expense of $41 million decreased by $9 million year-over-year as a result of our commitment to reduce fixed costs by an annualized amount of $80 million. I am pleased to report we have identified the entire commitment and have realized 93%, allowing us to reinvest a portion of savings to support growth initiatives and innovation. With our more focused Agile org structure, I expect us to deliver a quarterly run rate of $38 million of tech and G&A expense, excluding special items going forward.

Speaker Change: G&A and tech expense of $41 million decreased by $9 million year over year as a result of our commitment to reduce fixed costs by an annualized amount of $80 million I am pleased to report we have identified the entire commitment and have realized 93%, allowing us to reinvest a portion of savings to support growth initiatives and innovation.

Speaker Change: With our more focused agile org structure I expect us to deliver a quarterly run rate of $38 million of tech and G&A expense, excluding special items going forward.

Adrianne Lee: All in, adjusted EBITDA came in at a loss of $13 million, a 72% or $35 million improvement versus the first quarter of 2024, and an improvement of $15 million versus 4Q 2024. Reported GAP EPS was a loss of $0.74 per share for the first quarter. Excluding losses recognized from our equity method securities, adjusted diluted loss per share was $0.42, an $0.80 improvement year over year. We ended the quarter with cash, cash equivalents, restricted cash and inventory balance of $166 million. In the quarter, we funded our $8 million commitment to Kirkland's Home and purchased Bye Bye Baby for $5 million, which was mostly offset by $19 million of net proceeds from the sale of common stock.

Speaker Change: All in adjusted EBITDA came in at a loss of $13 million a.

Speaker Change: A 72% or $35 million improvement versus the first quarter of 2024, and an improvement of $15 million versus <unk> 2024.

Speaker Change: Reported GAAP EPS was a loss of <unk> 74 per share for the first quarter, excluding losses recognized from our equity method securities adjusted diluted loss per share was <unk> 42.

Speaker Change: 80% improvement year over year.

Speaker Change: We ended the quarter with cash cash equivalents restricted cash and inventory balance of $166 million in the quarter. We funded our 8 million commitment to kirkland's home and purchase buy buy baby for $5 million, which was mostly offset by a $19 million of net proceeds from the sale of common stock cash used in operating activities increased year over year by $16 million.

Adrianne Lee: Cash used in operating activities increased year-over-year by $16 million, mainly driven by a $15 million cash use for our inventory program previously discussed.

Speaker Change: Mainly driven by a $15 million cash use for our inventory program previously discussed.

Adrianne Lee: As Marcus mentioned, with the majority of our restructuring behind us, our teams are organized to be agile and laser focused on delivering on our key operational guideposts with the intensity I expect. We made progress throughout 2024 and accelerated in the first quarter of 2025, creating a foundation to deliver both profitability and growth.

Speaker Change: As Marcus mentioned with the majority of our restructuring behind US. Our teams are organized to be agile and laser focused on delivering on our key operational guideposts with the intensity I expect we made progress throughout 2024 and accelerated in the first quarter of 2025, creating a foundation to deliver both profitability and growth.

Adrianne Lee: With that, back to you, Marcus. Great.

Speaker Change: With that back to you Marcus great well would turn it over to the Q&A and.

Aaron: Well, we'll turn it over to the Q&A and operator, we'll open it up to our first question. Great, thank you very much. And ladies and gentlemen, if you would like to ask a question today, remember it is star followed by the number one on your touchtone keypad.

Marcus: Operator, we'll open it up to our first question. Please great.

Speaker Change: Great. Thank you very much and ladies and gentlemen, if you would like to ask a question today remember it is star followed by the number one on your Touchtone keypad.

Seth Sigman: Our first question for today is from the line of Seth Sigman with Barclays. Your line is live. Hey, good morning, everyone. Marcus, you discussed restructuring and reimagining the business over the last year. Part of that was rebasing the business. You refocus, you rationalize the inventory and the offering.

Speaker Change: Our first question for today is from the line of Seth Sigman with Barclays.

Speaker Change: Your line is live.

Speaker Change: Hey, good morning, everyone.

Speaker Change: You discussed restructuring and re imagining the business over the last year part of that was re basing the business you've refocus you rationalize the inventory in these in the offering.

Marcus Lemonis: I guess I'm focused on revenue specifically, can you talk about the confidence level that this is the bottom, and you're guiding to revenue growth sequentially? here, what gives you confidence in that? Thanks. Thank you for the question. I feel like the revenue that that was achieved in Q1 is the floor, and none of us are happy with the revenue. I want to be super clear. We have been really working towards getting to profitability, and we understand what the levers are. The levers are very simple. The margin needs to be in a range, the tech and G&A needs to be in a range, and the sales and marketing expense needs to be in a range.

Speaker Change: I guess I'm focused on revenue specifically can you talk about the confidence level that this is the bottom and youre guiding to revenue growth sequentially through this year, what gives you confidence in that thanks, so much.

Speaker Change: Thank you for the question I feel like the revenue that.

Speaker Change: That was achieved in Q1 is the floor and none of US are happy with the revenue I want to be Super clear.

Speaker Change: Been really working towards getting to profitability and we understand what the levers are the leavers are very simple the margin needs to be in a range that that tech and G&A it needs to be in a range and the sales and marketing expense and needs to be in the range, but under no uncertain terms.

Marcus Lemonis: But under no uncertain terms is revenue not the absolute most important driver of getting to profitability and getting above that zero number that we all are adamant on getting to. I'm confident because we know how to pull the levers now, and we understand how the marketing infrastructure works. And every single day, we're getting better at email efficiency. We're getting better at ad spend efficiency. We're getting better at site conversion. And because I see those things moving, it literally is very simple. We could spend a dollar and get a positive ROAS. And we haven't been spending the kind of dollars because we weren't confident that we would get the positive ROAS out of it.

As revenue not the absolute most important driver of getting to profitability getting above that zero number that we all are adamant on getting too I'm confident because we know how to pull the levers now and we understand how the marketing infrastructure works and every single day, we're getting better at email efficiency.

Speaker Change: We're getting better at AD spend efficiency, we're getting better at site conversion and because I see those things moving it literally is very simple we could spend a dollar and get a positive Roe <expletive>.

Speaker Change: And we haven't been spending the kind of dollars because we werent confident that we would get to positive ROE as out of it and we're still there are still parts of our business that do not perform up to our standards and we don't lean in yet there are still things about our website. They don't perform the way we want to and we don't lean in yet and what we've learned and created a call.

Marcus Lemonis: And we're still there are still parts of our business that do not perform up to our standards. And we don't lean in yet. There are still things about our website that don't perform the way we want to, and we don't lean in yet. And what we've learned and created a culture of is you don't spend unless you're sure. And the way you're going to tell me that you're sure is you're going to show me small sample sizes, and you're going to show me the efficacy and the proof points. And absent that, you don't spend. So what we've given the team permission to do is in those areas where they have excelled, like retargeting emails late at night, when we have cart abandonment, which we started to really perfect, or picking a specific campaign and building a beautiful funnel around it, and understanding how to chase the funnel and get positive ROAS.

Speaker Change: Sure of is you don't spend unless you're sure.

Speaker Change: And the way Youre going to tell me that Youre sure as Youre going to show me small sample sizes and Youre going to show me the efficacy and the proof points and absent that you don't spend so what we've given the team permission to do is in those areas, where they have itself like re targeting E. Mails late at night, when we have cart abandonment, which we started to really.

Speaker Change: Perfect or picking a specific campaign and building a beautiful funnel around it and understanding how to chase the funnel and get positive ROE as those are the things that give us confidence that once you build that floor, which we tried very hard to tell everybody. We were going to get to once you build that floor than building the blocks from there becomes.

Marcus Lemonis: Those are the things that give us confidence that once you build that floor, which we tried very hard to tell everybody we were going to get to, once you build that floor, then building the blocks from there becomes far easier because everybody's mindset is around you don't spend a dollar unless you're sure, and that dollar better have a positive ROAS. So that's why we're confident that the base of two of q1 of 232 will have growth in q2 and growth in q3.

Speaker Change: Far easier because everybody's mindset is around you don't spend a dollar unless you're sure and that dollar better have a positive Roe <expletive>.

Speaker Change: So that's why we are confident that the base of two of Q1 of $2 32, we'll have growth in Q2 and growth in Q3, and I will reserve my judgment for any quarter after that until I understand the general macro and what's happening with the consumer and how tariffs have affected the customers.

Seth Sigman: And I will reserve my judgment for any quarter after that, until I understand the general macro and what's happening with the consumer and how tariffs have affected the customer. Thank you very much. Appreciate it. Good luck. Thanks for your question.

Speaker Change: Okay. Thank you very much appreciate it good luck.

Speaker Change: Thank you.

Speaker Change: Thanks for your question. Our next question is from a line of Jonathan Matuszewski with Jefferies. Your line is live.

Jonathan Matuszewski: Our next question is from on the line of Jonathan Matuszewski with Jeffries. Your line is live. Great. Good morning, and thanks for taking my questions. Marcus, the first one was just on the road map to break even EBITDA, obviously, some drivers ahead in terms of eliminating some more vendors and rationalizing some more SKUs, you have a streamlined kind of G&A base as well.

Jonathan Matuszewski: Great. Good morning, and thanks for taking my questions. Mark is the first one was just on the <unk>.

Speaker Change: Roadmap to breakeven.

Speaker Change: EBITDA, obviously some drivers ahead in terms of eliminating some.

Speaker Change: More vendors and rationalizing some more skus, yes.

Speaker Change: You have a streamlined.

Speaker Change: G&A base as well I guess, when we put together all all the margin drivers is there a way to help kind of put a stake in the ground in terms of maybe a roadmap or a milestone for reaching breakeven EBITDA.

Marcus Lemonis: I guess when we put together all the margin drivers, is there a way to help kind of put a stake in the ground in terms of, you know, maybe a roadmap or a milestone for reaching break even EBITDA in which we can then sequentially grow for positive EBITDA dollars? Thanks. Yeah, so I, like you said, like to think about the modeling around how investors should understand what the cash uses are, how we're going to get there and really build it.

Speaker Change: In which we can then sequentially grow for positive EBITDA dollars. Thanks.

Speaker Change: Yes, so I like you said like to think about the modeling around how investors should understand what the cash uses are how we're going to get there and really built that we don't provide guidance and we're not going to particularly in light of this but we are going to do a better job of giving people very specific guideposts that will help us get.

Marcus Lemonis: And we don't provide guidance and we're not going to, particularly in light of this, but we are going to do a better job of giving people very specific guideposts that will help us get there. The simplest math that I can give you is that at 25% margin and 13% marketing expense, both which are not totally locked in yet, I think the margin has that range of 24 to 26 and the sales and marketing is 13.5 to 14.75. I think that in order for us to get to where we want to get to, which is positive.

Speaker Change: There.

Speaker Change: The simplest math that I can give you is that at 25% margin and 13% marketing expense, both which are not totally locked in yet I think the margin has that range of 24 to 26 and the and the sales and marketing is 13 five to 14 75, I think that in order for us to get to.

Speaker Change: Where we want to get too which is positive.

Marcus Lemonis: we would need to do 1.2 billion annualized at a 25% margin with 13% sales and marketing. And then once you start from there, you can toggle things up and down. You can move your margin up to 26, you could pull your revenue down, you could take your, your revenue, your margin down, you have to take your revenue up, you could move those numbers all around. But that's actually the abacus that we're using in our business. And as we wake up every day, if we feel like we're short contribution margin, we'll pull back. And we'll pull back from motion.

Speaker Change: We would need to do $1 2 billion annualized at a 25% margin with 13% sales and marketing and then once you start from there you can toggle things up and down you can move your margin up to 26, you could pull your revenue down you could take your year.

Speaker Change: Your margin down you have to take your revenue you could move those numbers all around but that's actually the advocates that we're using in our business and as we wake up every day, if we feel like we're short contribution margins, we'll pull back spend.

Speaker Change: And we will pull back promotion, if we feel like we're not acquiring enough customers, we're going to increase spend and we're going to continue to map out.

Marcus Lemonis: If we feel like we're not acquiring enough customers, we're going to increase spend. And we're going to continue to map out very, very scientifically on a dot plot, exactly what happens when we do those things. So we can build our own mental algorithm. of when we do this, this is what happens. And we need to prove out that thesis over and over again.

Speaker Change: Very very scientifically on a dot plot exactly what happens when we do those things. So we can build our own mental algorithm.

Speaker Change: When we do this this is what happens and we need to prove out that thesis over and over again, so I would use $1 $2 billion on an annualized basis, which is what all of our goals, where we just didn't know what that was to be able to figure out. Okay. When you say you want to get into the neighborhood of profitability what does that look like.

Marcus Lemonis: So I would use $1.2 billion on an annualized basis, which is what all of our goals were, we just didn't know what that was to be able to figure out, okay, when you say you want to get in the neighborhood of profitability, what does that look like? You have to do an average of 300 million a quarter average, some quarters more, some quarters less, if your margins are going to be 25%, and your sales and marketing is going to be 30%. I'm not telling you whether I think those numbers work or not. I think the margins need to strive for 27.

Speaker Change: You have to do an average of $300 million a quarter average some quarters more some quarters less if your margins are going to be 25% and your sales and marketing is going to be <unk>.

Speaker Change: I'm not telling you whether I think those numbers work or not I think the margins need to strive for 27, we're going to work our fannies off over the next many quarters to get there we think that the marketing expense candidly as Adrian Smack me around a little last night and said Hey, we can get to 11, we could get to 10 stop saying 12 and 13.

Marcus Lemonis: We're going to work our fannies off over the next many quarters to get there. We think that the marketing expense, candidly, as Adrian smacked me around a little last night and said, hey, we could get to 11, we could get to 10, stop saying 12 and 13. We have to find that balance. We got to get to 13 before we think about 12. And I think this company has to set realistic goals. That's helpful. Thanks.

Speaker Change: We have to find that balance we got to get to 13 before we think about 12.

Speaker Change: And I think this company has to set realistic goals.

Speaker Change: That's helpful. Thanks, and then just a quick follow up question on buy buy baby, maybe just some quick thoughts on brand activation strategies.

Jonathan Matuszewski: And then just a quick follow up question on Bye Bye Baby.

Marcus Lemonis: Maybe just some quick thoughts on, you know, brand activation strategies to kind of reestablish consumer awareness. And are those embedded in kind of the advertising spend framework that you provided? So we are going to be very careful and very steadfast in not allowing any initiative of our company to cause us to unnecessarily lose money. that, the inverse of that is that we have to be very mindful that to generate revenue and to bring that business back to life, we have to spend The core business in my mind has to be in that 13 to 14 and 1475 range right now.

Speaker Change: To kind of reestablish consumer awareness and.

Speaker Change: And are those embedded in kind of the <unk>.

Speaker Change: Advertising spend framework that you provided.

Speaker Change: So we are going to be very careful and very steadfast in not allowing any initiative of our company to cause us to unnecessarily lose money.

Speaker Change: The inverse of that is that we have to be very mindful that to generate revenue and to bring that business back to life, we have to spend money there.

Speaker Change: Core business in my mind has to be in that 13 to 14, and <unk> 75 range right now and we have to get to 13, but when we launch a new brand or we acquire something there is a separate and conscious spend on what that's going to look like and what we're going to do very well as the company is.

Marcus Lemonis: And we have to get to 13. But when we launch a new brand, or we acquire something, there is a separate and conscious spend on what that's going to look like. And what we're going to do very well as a company is to disclose those things going forward, that when Bye Bye Baby launches on May 8, and has its token get launched and has its grand opening on the same day, there is money that's going to be spent to reintroduce and re-remind people and restart that amount. We expect that revenue to have a nice growth over time.

Speaker Change: To disclose those things going forward that when buy buy baby launches on May eight and has its token get launched and has its grand opening on the same day. There is money that is going to be spent to reintroduce and re remind people and restart that amount, we expect that revenue to have.

Speaker Change: A nice growth overtime.

Marcus Lemonis: We're starting from a $30 million most recent trailing 12 months revenue based on Bye Bye Baby. Over time, we know we can do a lot of damage to that number, but we don't want to build is we don't want to build the model that solely relies on PLA. We want to build content. We want to find moms in communities closer to them. We want to work with organizations like Baby to Baby that really are out there doing good things for families and for children. We want to make sure that the voice of Bye Bye Baby is very much female dominated and mom dominated and community oriented and thoughtful oriented and most importantly, addresses every potential mom, every expecting mom at the income level that they're able to be at.

Speaker Change: We're starting from a $30 million. Most recent trailing 12 months revenue based on buy buy baby overtime. We know we can do a lot of damage to that number but we don't want to build is we don't want to build the model that solely relies on pls, we want to build content, we want to find moms in communities closer to them.

Speaker Change: We want to work with organizations like baby the baby that really are out there doing good things for families and for children, we want to make sure that the voice of buy buy baby is very much female dominated and mom dominated and community oriented and thoughtful oriented and most importantly addresses every potential mob every <unk>.

Speaker Change: Expected mob at the income level that they are able to be at and that the buy buy baby offering satisfies a product and offering for everybody.

Marcus Lemonis: And that the Bye Bye Baby offering satisfies a product and offering for everybody. That takes time. The assortment that we acquired from Dream On Me that bought it out of the bankruptcy state did not have that same ethos. they were focused on selling baby furniture. That's what they did. We can't do that. And together with our partners at Kirkland's, and the merchant team there, as we think about the store, we're going to be starting from the base. We've been working with JLL, the big national firm that designs retail concepts, to think about what it looks like and make sure the website works, build the assortment out so that addresses that.

Speaker Change: That takes time.

Speaker Change: The assortment that we acquired from Dream on me that bought it out of the bankruptcy state did not have that same ethos.

Speaker Change: We're focused on selling baby furniture, that's what they did we can't do that and together with our partners at Kirkland's in.

Speaker Change: And the merchant team there as we think about the store, we're going to be starting from the base. We've been working with J O L. A the big national firm that designs retail concepts to think about what it looks like it's make sure. The website works build the assortment out so that addresses that and we're going to go slow and we're going to be smart and we're going to build the brand that can.

Marcus Lemonis: And we're going to go slow. And we're going to be and we're going to build a brand that can last forever.

Marcus Lemonis: I know that was a lot around buy buy, but I want you to understand that we think about our core business, and we think about initiatives, and we'll be disclosing those separately going forward. Thanks, Marcus. Thank you for your questions.

Speaker Change: Last forever.

Speaker Change: That was a lot around buyback, but I want you to understand that we think about our core business and we think about initiatives and we'll be disclosing those separately going forward.

Marcus: Thanks Marcus.

Speaker Change: Thank you for your questions. Our next question is from the line of Thomas Forte with Maxim Group. Your line is widening.

Thomas Forte: Our next question is from the line of Thomas Forte with Maxim Group. Your line is live. Great. So Marcus, just one for me. So Marcus is a longtime follower of the company in the stock. I appreciate your efforts to position beyond for sustainable, profitable sales growth. I also appreciate your efforts to show value for the blockchain investment.

Thomas Forte: Great. So mark is just one for me so Marcus as a longtime follower of the company and the stock I. Appreciate your efforts to position beyond sort of sustainable profitable sales growth. I also appreciate your efforts to show value for the blockchain investments.

Marcus Lemonis: So can you compare and contrast the tokenization of Overstock versus Buy Buy Baby? What are you trying to achieve and what does success look like, including the valuation of those investors? The blockchain assets have become very crystal clear to me. And in the first seven months of being here, I really couldn't understand why a company like this would have ever invested hundreds of millions of dollars into things that have no direct correlation to their core business. It was our mandate from our shareholders and a lot of big investors who had, you know, some very tough calls with me that they expect the blockchain assets to be fully monetized and fully realized.

Speaker Change: So can you compare and contrast, the toga position of overstock versus buy buy baby.

Speaker Change: Are you trying to achieve and what does success look like including the valuation of those investments.

Speaker Change: The blockchain assets.

Speaker Change: Have become very crystal clear to me and in the first seven months of being here I really couldnt understand why a company like this would have ever invested hundreds of millions of dollars into things that have no direct correlation to their core business.

Speaker Change: It was our mandate from our shareholders and a lot of big investors, who had some very tough calls with me.

Speaker Change: The blockchain assets to be fully monetized and fully realized and so as we spent the holiday Christmas to new year's time crafting out work paper. After work paper after work paper of what needed to happen. It really became clear that we needed to do one thing first.

Marcus Lemonis: And so as we spent the holiday Christmas to New Year's time, crafting out work paper after work paper after work paper of what needed to happen, it really became clear that we needed to do one thing first. We have two primary investments in our blockchain assets that we believe have a tremendous amount of value. The first one is GrainChain. And the GrainChain asset for me is probably the most under-realized, undervalued, under-recognized asset out there. And I blame part of that, quite frankly, on the founder's and leader's ability to clearly articulate in different ways how amazing the business he built is.

Speaker Change: We have two primary investments in our blockchain assets that we believe have a tremendous amount of value. The first one is grain chain and the grain chain asset for me is probably the most under realized undervalued under recognized asset out there and I believe part of that quite frankly on the founders and leaders.

Speaker Change: <unk> to clearly articulate in different ways, how amazing the business. He built is I think part of that is he's busy building his business and that's why they've had revenue growth year. After year after year after year I look at that business, which most people think as an agriculture supply chain business.

Marcus Lemonis: I think part of that is he's busy building his business. and that's why they've had revenue growth year after year after year after year. I look at that business, which most people think as an agriculture supply chain business. That's why it's called grain chain. But as I tease Luis all the time, it's really called to be called supply chain, because the technology that I've learned about that business has the portability to do far more than just agriculture.

Speaker Change: That's why it's called grain chain, but as it is Luis all the time, it's really called should be called supply chain.

Speaker Change: Because the technology that I've learned about that business has the portability to do far more than just agriculture, and whether that's manufacturing parts or that's three PL goods moving across the country through real supply change or whatever that may be I think we're about to see some really solid things in some big announced.

Marcus Lemonis: And whether that's manufacturing parts, or that's 3PL goods moving across the country through real supply chains, or whatever that may be, I think we're about to see some really solid things and some big announcements coming out of grain chain that I'm aware of, but I don't want to spoil his story. I think over time, we as a company want to utilize our direct interest in grain chain. and our direct interest in C0 at ways of understanding how to build value and how to set markers. Part of setting markers is by showing that things work, and people, including myself, have been very critical of TZERO, very critical of its lack of revenue and lack of items on the platform.

Speaker Change: Coming out of grain chain that I'm aware of but I don't want to spoil his story.

Speaker Change: I think over time, we as a company want to utilize our direct interest in grain chain.

Speaker Change: And our direct interests in six zero at ways of understanding how to build value and how to set markers.

Speaker Change: Art of setting markers is by showing that things work and people, including myself have been very critical of T. Zero very critical of its lack of revenue and lack of items on the platform and we decided to take the ball out of <unk> hands, because we're continued to be disappointed by their management of our portfolio.

Marcus Lemonis: And we decided to take the ball out of Pellion's hands, because we're continued to be disappointed by their management of our portfolio, and do the job ourselves. Take the asset, understand what it is, work with the management at TZERO. We've been working very heavily with Alan, who's been an unbelievable leader in our daily activity. And take one of our assets, one of our assets that our shareholders owns, the intellectual property of Overstock, and create a token, a very small token. The idea behind the token wasn't to raise $100 million. We didn't need to raise capital.

Speaker Change: And do the job ourself.

Speaker Change: Take the asset understand what it what it is work with the management at T. Zero, we've been working very heavily with Alan Who's been an unbelievable leader and our daily activity and take one of our assets one of our assets that are shareholders owns the intellectual property of overstock and create a token are very small.

Speaker Change: Okay.

Speaker Change: The idea behind the token wasn't to raise $100 million, we didn't need to raise capital.

Marcus Lemonis: The idea behind the token was to prove out three things. Prove out that the platform works. Understand that it can happen in a very short period of time. And we did the reg CF offering. And we did a simple one because we didn't want to go through the audit process. And we didn't want to have all this crazy expense happening. So we went with a very simple non audited reg CF offering just to prove out that the system works. I also wanted to understand what about the system doesn't work. I went on as a user, and I was frustrated, trying to log on, trying to create an account.

Speaker Change: The idea behind the token was to prove out three things.

Speaker Change: Prove out that the platform works.

Speaker Change: Understand that it can happen in a very short period of time, and we did the Reg CF offering and we did a simple one because we didn't want to go through the audit process and we don't want to have all this crazy expense happening. So we went with a very simple non audited Reg CF offerings, just to prove out that the system works.

I also wanted to understand what about the system doesn't work.

Speaker Change: I went on as the user and I was frustrated trying to log on and trying to create an account.

Marcus Lemonis: Every single day, I would bang on them over and over again, and the T0 team did an amazing job of addressing the issues. But when we went live with the Overstock token, we created a portal where people can give feedback online on X, they can go to the help desk, and over and over, day by day, hour by hour, we were addressing a number of different issues, and they're now, what I would say, fixed. we wanted to also prove out that we can take that information and solve problems. And lastly, we wanted to show that we're going to be we want to see velocity on that platform.

Speaker Change: Every single day, I would bang on them over and over again in the T. Zero team did an amazing job of addressing the issues, but when we went live with the overstock token we created a portal where people can give feedback online on X. They could go to the help desk and over and over day by day hour by hour, we were addressing a number of different.

Speaker Change: Issues and they are now what I would say fixed.

Speaker Change: We wanted to also prove out that we can take that information and solve problems and lastly, we wanted to show that we're going to be we want to see velocity on that platform.

Marcus Lemonis: So we were required by the the regulators to have a minimum of a 21 day offering with the O offering. And it closed date could be October, I think 15. We have made the decision that we are only going to allow the minimum number of days, 21, to pass, we will have reached our minimum when everybody's signed contracts fund, which we already have met the $250,000 number, and we are going to close it. So for those folks that want to participate in it, just know that within 21 days of the launch, it will be closed.

Speaker Change: So we were required.

Speaker Change: Bye.

Speaker Change: The regulators to have a minimum of a 21 day offering.

Speaker Change: With the <unk> offering.

Speaker Change: The close date could be October I think 15th.

Speaker Change: We have made the decision that we are only going to allow the minimum number of days 21 to pass we will have reached our minimum when everybody's signed contracts fund, which are which we already have met the $250000 number and we are going to close it so for those folks that want to participate in it.

Speaker Change: Just know that within 21 days of the launch it will be closed had this be your five day notification, we will issue that as well in a more formal setting as we shift to <unk> will be issuing the buy buy baby token different strategy different audience trying to find new ways to see if we can make that work and quite frankly.

Marcus Lemonis: Have this be your five day notification. We will issue that as well in a more formal setting.

Marcus Lemonis: As we shift to May 8, we'll be issuing the Bye Bye Baby token. Different strategy, different audience, trying to find new ways to see if we can make that work. And quite frankly, a slightly different offering. We when we launched the Overstock Token, we limited the cap amount of investment to $4,000 and a minimum of 100. And the number one complaint that I got over and over again on my text chain and my email mail to my house and everything in between was why did you cap me at 4000 I would have bought 50,000 So in the baby offering, we're going to modify some of our learnings, modify some of the process, and people will see that here coming on May After that, People should expect our company to look at every asset we own.

Speaker Change: That's slightly different offering.

Speaker Change: We when we launched the overstock token we limited the cap amount of investment to $4000 in a minimum of 100 and the number one complaint that I got over and over again and my tax change by email mail to my house and everything in between was why did you tapped me at 4000 I would about 50000.

Speaker Change: So in the baby offering we're going to modify some of our learnings modify some of the process and people will see that here coming on may eight after that.

Speaker Change: People should expect our company to look at every asset we own.

Marcus Lemonis: whether it's a direct ownership or an indirect ownership, and look to continue to prove out the value of that T0 platform, because I believe it's worth something. I believe it's worth a lot. And so the only way to do that is to put your money where your mouth is.

Speaker Change: Whether it's a direct ownership or an indirect ownership and look to prove out continue to prove out the value of that T zero platform, because I believe it's worth something I believe it's worth a lot.

Speaker Change: And so the only way to do that is to put your money where your mouth is so whether it's overstock bye bye baby a direct interest in T zero, a direct interesting grain chain. Some other intellectual property that we buy your own or some other investment that we have we're going to look at every different way to show people all the different types of things that you could do.

Marcus Lemonis: So whether it's overstock, buy, buy, baby, a direct interest in T0, a direct interest in grain chain, some other intellectual property that we buy or own, or some other investment that we have, we're going to look at every different way to show people all the different types of things that you could do on that platform, while becoming the biggest cheerleader to find other companies not related to us to do the same thing. But it's easier to do a show me program than a tell me program. So that's why we did it.

Speaker Change: Due on that platform, while becoming the biggest cheerleader defined other companies not related to us to do the same thing.

Speaker Change: But it's easier to do a show me program then it tell me program. So that's why we did it as it relates to grain chain, we are hopeful that the <unk> of that business well.

Marcus Lemonis: As it relates to grain chain, we are hopeful that the tokenization of that business will give us the opportunity to set a marker of what we believe that business is worth. We believe that business is worth at least six to eight times revenue. That's my belief. I'm not an analyst of what these companies are worth. But when I see the growth, and I see the value that these folks can create for banks, for companies protecting asset value, I don't know how this thing isn't worth a ton of money.

Speaker Change: We will give us the opportunity to set a marker of what we believe that business is worth.

Speaker Change: We believe that business is worth at least six to eight times revenue that's my belief.

Speaker Change: Not at.

Speaker Change: And analysts to what these companies are worth, but when I see the growth and I see the value that these folks can create for banks the company's protecting asset value I don't know how this thing isn't worth a ton of money.

Marcus Lemonis: If you notice in our Descriptor, Bed Bath & Beyond, the owner of Bed Bath & Beyond, Overstock, Bye Bye Baby, and Blockchain Asset Portfolio. That's the first time we've ever, in the history of our company, included it in our descriptor. it will be the last time that it's ever missing. Because we believe that when you look at the market cap of this company, And you look at the cash that it has, and you look at the brands that it owns, and you look at the blockchain assets that it has, we believe that it's materially undervalued.

Speaker Change: If you notice in our.

Speaker Change: Descriptor bed Bath <unk> beyond the owner of bed Bath <unk> beyond overstock buy buy baby and blockchain asset portfolio. That's the first time, we've ever in the history of our company included it in our descriptor.

Speaker Change: It will be the last time that it's ever missing because we believe that when you look at the market cap of this company and you look at the cash that it has and you look at the brands that at <unk> and you look at the blockchain assets that it has we believe that it is materially undervalued.

Marcus Lemonis: Yes, we do have an ATM. And yes, we have used it, because we wanted to be sure that we had cash for survival until we can get to a place. And yes, we do understand that people don't like when we use that. But we ended the quarter with $166 million of cash in inventory, which is much better than $66 million. We ended the quarter with improving results. We also just as a reminder, have a buyback program at $69 million. It's been authorized, it's ready and available. So we have those instruments at our discretion.

Speaker Change: Yes, we do have an ATM.

Speaker Change: And yes, we have used it because we wanted to be sure that we had cash for survival until we can get to a place and yes, we do understand that people don't like when we use that.

Speaker Change: But we ended the quarter with $166 million of cash and inventory, which is much better than $66 million.

Speaker Change: We ended the quarter with improving results. We also just as a reminder, have a buyback program at $69 million, that's been authorized its ready and available. So we have those instruments at our discretion and our job is to deliver value to shareholders by utilizing our cash our brands our IP.

Marcus Lemonis: And our job is to deliver value to shareholders by utilizing our cash, our brands, our IP, our blockchain assets, our ATM, and our buyback to demonstrate that this company is worth far more than what it's showing today. But we know that all that really matters are results. Thank you, Marcus.

Speaker Change: Blockchain assets, our ATM and our buyback to demonstrate that this company is worth far more than what it's showing today.

Speaker Change: But we know that all that really matters.

Speaker Change: Our results.

Marcus: Thank you Marcus.

Steven Forbes: Thank you for your question. Our next question is from the line of Steven Forbes with Guggenheim. Your line is live.

Speaker Change: Thank you for your question. Our next question is from the line of Steven Forbes with Guggenheim. Your line is live.

Steven Forbes: Good morning, everyone. Marcus, maybe transitioning back to the growth playbook here. Can you help us better understand the contribution margin mix and maybe spread of contribution margin between the brands today? And then on that point, has the assortment been tailored within all the brands to a point where you sort of expect all transactions on a go forward basis to carry a positive contribution margin? Or is there still a subset of transactions and or brand itself, right, that you expect to remain dilutive as we return to this growth platform?

Steven Forbes: Good morning, everyone.

Steven Forbes: Maybe transitioning back to the growth playbook here can you help us better understand the contribution margin mix and maybe spread of cod.

Steven Forbes: Contribution margin between the brands today, and then on that point has the assortment been tailored within all the brands to a point, where you sort of expect all transactions on a go forward basis to carry a positive contribution margin or is there still a subset of transactions <unk> brand itself right.

Steven Forbes: That you expect to remain dilutive as we return to this growth platform.

Adrianne Lee: Hi, Steve, it's Adrienne. How are you? Just to go as far as kind of the mix by brand and to set the tone here, you know, the bulk of our transactions are still on the Bed Bath & Beyond site. So we launched Overstock, obviously, earlier, or last year, excuse me, I'm getting my years mixed up. And we're still building that brand backup, still adding categories, merchandising efforts and assortments. So I would say the bulk of our transactions, the vast majority of our transactions are still on Bed Bath. And that's actually the platform by which we've done most of our SKU kind of, I'll say, remediation efforts or removing SKUs and vendors.

Steven Forbes: Hi, Steve It's Adrian how are you just to go as far as kind of the mixed by brand and to set the tone here.

Steven Forbes: Bulk of our transactions are still on the bed Bath <unk> beyond site. So we launched overstock.

Steven Forbes: Obviously earlier.

Steven Forbes: Last year excuse me I'm getting my years mixed up and we're still building that brand backup still adding categories merchandising efforts and assortment. So I would say the bulk of our transactions. The vast majority of our transactions are still on bed Bath and that's actually the platform by which we have done most of our SKU kind of I'll say remediation efforts are removing skus and vendors.

Adrianne Lee: Because that's the platform by which, you know, we had the as Marcus talked about in his scripted remarks, you know, the 12 million or so SKUs that we've now reduced by, you know, over 6 million SKUs. So I would say, again, mix vast of the transactions still on Bed Bath. Bed Bath is really the site by which we continue to tweak our SKU and vendors to have contributory transactions. And I think we're really close to kind of seeing all that through and come to fruition.

Steven Forbes: And because thats the platform by which we had the as Mark has talked about in his scripted remarks, the $12 million or so skus that we've now reduced by over 6 million Skus. So I would say again mix fast of the transactions Dawn bed Bath bed Bath is really the site by which we continue to tweak our SKU and vendors.

Steven Forbes: Two contributory transactions and I think we're really close.

Steven Forbes: To kind of see all of that through and come to fruition, Alex any comments, yes. The only thing I'd add is on the brands right. We're really focused on where the product offering is really competitive and where we can acquire new customers. So I think balancing those transactions was a key piece of the first quarter and will continue to focus on that through the rest of the year, it's not unrealistic to think that.

Alex: Alex, any comments? Yeah, the only thing I'd add is on the brands, right, we're really focused on where the product offering is really competitive and where we can acquire new customers. So I think balancing those transactions was a key piece of the first quarter. And we'll continue to focus on that through the rest of the year. It's not unrealistic to think that we're not going to have, you know, a transaction that loses money. And not because of customer service, because we are a marketplace. And sometimes vendors can manipulate the system. And we're working to create more of a closed marketplace and an open marketplace.

Steven Forbes: We're not going to have.

Steven Forbes: A transaction that loses money.

Steven Forbes: Because of customer service, because we are a marketplace and sometimes vendors can manipulate the system and we're working to create more of a closed marketplace in an open marketplace. So we don't sell random things like water filters.

Alex: So we don't sell random things like water filter. And so we have some work to do there. But I also think it's important that we understand how to capture growth. And one of the things that I think I bring to the table that's unique to this company that hasn't had is understanding the affordability band across customer bases and how to hook people. And you're oftentimes going to create these barn burner ideas, these flash price drops. You can visit the two sites today, and they have a, and Kirkland's is coming soon, where flash price drops becomes really a brand standard for us.

Speaker Change: And so we have some work to do there, but I also think it's important that we understand how to capture growth and one of the things that I think I bring to the table that you need to this company that hasnt half is understanding the affordability band across customer basis, and how to hook people and you're oftentimes, it's going to create these barnburner I'd.

Speaker Change: As these flash price drops you can visit the two sites today and they have and Kirkland is coming soon where flash flash price drops becomes really a brand standard for us we use price fly structure price flash drops to lure people it to get them to buy one thing, hoping hoping they visit the rest of the site. So it doesn't mean that there won't be.

Marcus Lemonis: We use price flash drops to lure people in, to get them to buy one thing, hoping they visit the rest of the site. That doesn't mean that there won't be one item in a cart of six that we lost money, but the goal is to have a profitable transaction with the customer. And so once in a while, Alex and some of the other merchants remind me that we are in the fishing business. And that sometimes we need a little bait to do that. So you're going to see those things develop over time. But as a mantra, we don't sell things consciously that we lose money at.

Speaker Change: One item in a carton of six that we lost money, but the goal is to have a profitable transaction with the customer and so once in a while Alex and some of the other merchants reminds me that we are in the fishing business and then sometimes we need a little bit to do that so youre going to see those things develop overtime, but as a.

Speaker Change: Mantra, we don't sell things consciously that we lose money yet that is like you will not work in this company. If I find you doing that and we have evidence of that by there are certain people that don't work here anymore.

Marcus Lemonis: That is like, you will not work in this company, if I find you doing that. And we have evidence of that by there's certain people that don't work here at If you don't understand that we don't sell things that lose money, you cannot work.

Speaker Change: If you don't understand that we don't sell things that lose money you cannot work here.

Marcus Lemonis: Thank you all for that. Maybe just a quick follow up on the answer, because, you know, as I think back to the investor event last year, I believe there was a comment right made about, you know, sort of 1000 or so basis points spread in contribution margin around selling furniture on overstock right versus the Bed, Bath and Beyond website. And so is the message today that that that sort of has been resolved? And in the learnings around assortment, and maybe the learnings around conversion and acquisition, have really allowed you to tighten that that spreading contribution margin on selling like for like skews between the two for two different websites, to the point that that sort of solidifies your confidence that you're, that you're relaying today?

Speaker Change: Thank you all for that.

Quick follow up on the answer because as I think back to the Investor event last year. I believe there was a comment made about sort of a 1000 or so basis points spread in contribution margin around selling furniture.

Speaker Change: Overstock right versus the bed Bath <unk> beyond our website and so is the message today that that sort of has been resolved and the learnings around assortment and maybe the learnings around conversion and acquisition have really allowed you to tighten that spreading.

Speaker Change: Contribution margin on selling like for like Skus between the two different websites.

Speaker Change: To the point that sort of solidifies your confidence.

That youre that youre relating today.

Marcus Lemonis: Two things. I think there are two very specific things. One is we have to deliver an assortment that speaks to the brand that people expect. And so whether there's great contribution or margin or not, when you go to Bed Bath & Beyond, that assortment, which is not even coming close yet to meeting my standards, we have another 60 days to go there, really needs to address what all of us knew that I would get when I went there. And then it has to balance out the endless aisle that it's created and the brand extensions that it's created through patio, rug, furniture, lighting, all of those things.

Speaker Change: Two things I think there are two very specific things. One is we have to deliver an assortment that speaks to the brand that people expect and so whether theres great contribution margin or not when you go to bed Bath <unk> beyond that assortment, which is not is not even coming close yet to meeting my standards. We have another 60 days to go there.

Speaker Change: Really needs to address what all of us knew that I would get when I went there and then it has to balance out the endless aisle that it's created and the brand extensions that it's created through patio rug furniture lighting all of those things, but what I want to be sure of is that as we get into the endless aisle model the things.

Marcus Lemonis: But what I want to be sure of is that as we get into the endless aisle model, the things that are not historically native to Bed Bath, I don't want to see any experiment. Wedlich rec If you want to test out fitness equipment, you better bring me the business case on why fitness equipment, what the TAM is going to be, what the effort is going to be, how much time it's going to take, what the margins are going to be, what the contribution is going to be, and what it's going to do to confuse So Bed Bath & Beyond has to be locked and loaded.

Speaker Change: Are not historically.

Speaker Change: <unk> two bed Bath, I don't want to see any experimenting.

Speaker Change: When what's reckless if you want to test out fitness equipment, you better bring me the business case on why fitness equipment, what the Tam is going to be what the effort is going to be how much time, it's going to take what the margins are going to be what the contribution is going to be and what it's going to do to confuse people.

Speaker Change: Bed Bath <unk> beyond has to be locked and loaded when we get to overstock that is a place that we are going to test different categories and when I look at what we did with a designer shop, that's really like 60 days old.

Marcus Lemonis: When we get to Overstock, that is a place that we are going to test different categories. And when I look at what we did with a designer shop, it's really like 60 days old. And we're not going to disclose the revenue that it does, but it's shocking. how much revenue people want to spend on getting 40% off Gucci bags or watches. And you can expect that category to expand materially. We have a trip scheduled to New York where we're going to be selling very, very high luxury top name brand watches, top jewelry. The key for Overstock for me is that brand is all about what you want at a value you can afford.

Speaker Change: And we're not going to disclose the revenue that it does but it's shocking.

How much revenue people want to spend on getting 40% off Gucci bags or watches and you can expect that category to expand materially and we have a trip scheduled to New York, where we're going to be selling very very high luxury top name brand watches top jewelry the key for us.

Speaker Change: Overstock for me is that brand is all about what you want out of value you can afford and it has to feel aspirational, but again, we're not going to put things on there that do that now in that particular model you will see us curate a little bit more when we know the margins are good. So jewelry is a great example, this company.

Marcus Lemonis: And it has to feel aspirational. But again, we're not going to put things on there that do that. Now, in that particular model, you will see us curate a little bit more when we know the margins are good. So jewelry is a great example. This company, when it had 28% margin. Had a lot of jewelry in its heyday going through it, selling $100,000 ring. That may sound crazy. We know it's possible. We're seeing people start to look at those things, and we're going to lean into that. But at the same time, we want to be smart about it.

Speaker Change: When it had 28% margins had a lot of jewelry and its hay day going through it selling a $100000 rates that may sound Crazy. We know it's possible. We're seeing people start to look at those things and we're going to lean into that but at the same time, we want to be smart about it and we had a clean.

Marcus Lemonis: And we got to clean up that assortment, continuing to do that as well.

Speaker Change: Of that assortment.

Speaker Change: Continuing to do that as well.

Marcus Lemonis: Thank you all. Thank you for your question.

Speaker Change: Thank you all thank.

Speaker Change: Thank you for your question. Our next question is from the line of Peter Keith with Piper Sandler Your line is live.

Alexia Morgan: Our next question is from the line of Peter Keith with Piper Sandler. Your line is live.

Marcus Lemonis: Hi, this is Alexia Morgan on for Peter Keith. Thanks for taking your question. We were wondering how you think about the ending of the de minimis exemption, which will make retailers like Timu and Sheehan more expensive. Do you think that this will have any positive impact on your business? And then second, with Overstock's focus on closeouts, could growth be hindered in 2025 as suppliers try to maximize margin on non-tariffed inventory? Or how do you think about that?

Alexia Morgan: Hi, This is Alexia Morgan on for Peter Keith Thanks for taking my question.

Alexia Morgan: Wondering how you think about the ending of the de Minimis exemption, which will make retailers like T. New Aegean more expensive can you think that this will have any positive impact on your business.

Alexia Morgan: And then second with Overstock focus on Closeouts.

Alexia Morgan: Could growth be hindered in 2025 as suppliers try to maximize margin on non tier inventory or how do you think about that.

Marcus Lemonis: Yeah, so let me address your second question. First, I actually think I actually think that we're going to see more opportunity that rather than less, we're going to see more opportunity around big retailers. really continuing to struggle. And we've had more contact from banks, where they're looking at ABLs that are constricted and looking at a lot of things. So I think that supply chains are going to be tight. But the vendors that we do business with are great capital. They're really, really good capitalists, and they understand that turning their inventory makes sense. Now, they're tightening up their certain features and benefits that they're giving us around some of the newer stuff.

Alexia Morgan: Yes, So let me address your second question first.

Alexia Morgan: <unk>.

Alexia Morgan: I actually think.

Alexia Morgan: I actually think that.

Alexia Morgan: We're going to see more opportunity that rather than less we're going to see more opportunity around big retailers.

Alexia Morgan: Really continuing to struggle and we've had more contact from banks, where they're looking at <unk> that are constructed and looking at a lot of things. So I think that supply chains are going to be tight, but the vendors that we do business with our great capital as they are really really good capital this and they understand that turning their inventory makes sense now.

Alexia Morgan: Tightening up there, they're certain features and benefits that theyre, giving us around some of the newer stuff, but on the older stuff and price flashed drops a great example, they still need to turn stuff into cash.

Adrianne Lee: But on the older stuff, and Price Flash Drop's a great example, they still need to turn stuff into cash. So I don't think we're going to be, I don't think we're going to be, you know, too concerned about that.

Alexia Morgan: So I don't think we're going to be.

Alexia Morgan: I don't think we're going to be too concerned about that Adrian you want to take the first question I am sure well and I think how we're thinking about it obviously landscapes ever evolving with tariffs and competition, but as far as your first question with the T. Most of the world and de Minimis. What we're seeing right. Now is they are not doing as much performance marketing as they have historically, so theres kind of a spot for us.

Adrianne Lee: Adrianne, you want to take the first question? I sure will. And I think how we're thinking about it, obviously, landscape's ever evolving with tariffs and competition. But as far as your first question with the T-Mos of the world and De Minimis, what we're seeing right now is they're not doing as much performance marketing as they have historically. So there's kind of a spot for us to play there and really try to capture some eyeballs. I think that's the first thing.

Alexia Morgan: Play, there and really trying to capture some eyeballs.

Alexia Morgan: That's the first thing the second thing is we don't sell that junk.

Adrianne Lee: The second thing is we don't sell that junk. Great, thank you. Thank you for your questions.

Alexia Morgan: Great. Thank you.

Speaker Change: Thank you for your questions. Our next question is from the line of Rick Patel with Raymond James Your line is live.

Rick Patel: Our next question is from the line of Rick Patel with Raymond James. Your line is live. I want to break the margin down into two things.

Speaker Change: Thank you and good morning, everyone.

Rick Patel: Question on the timeline. So as we look ahead, what do you see as the primary drivers.

Rick Patel: Sequential revenue growth as we consider customers orders and it will be and is it safe to assume that gross profit improvement is going to follow a similar path.

Rick Patel: As revenue and how do we think about the potential for <unk> to even achieve overdrive goodwill. It sounds like you still have some runway left for further market expansion.

Rick Patel: I'm going to break the margin down into two things up I don't expect the gross margin percentage to continue to accelerate which is why I identified the 24 to 26 band for a while because I want to I don't want to mess with elasticity too much and start deterring people away from our business when other people may need to be liquidating.

Marcus Lemonis: I don't expect the gross margin percentage to continue to accelerate, which is why I identified the 24 to 26 band for a while, because I want to, I don't want to mess with the elasticity too much and start deterring people away from our business when other people may need to be liquidating things for whether it's a company like At Home or anybody else. We don't, we don't know what that landscape looks like. I think ultimately, you know, what we want to really do is get very smart about how we spend our money. And so when we talk about revenue growth, that's a conscious decision as we sit here today, to know that we're going to spend the dollar with a positive ROAS because our system works.

Rick Patel: Things for whether it's a company like at home or anybody else. We don't we don't know what that landscape looks like I think ultimately what we want to really do is get very smart about how we spend our money and so when we talk about revenue growth. That's a conscious decision as we sit here today to know that we're going to spend the dollar with a positive Roe.

Because our system works and as we get more confident.

Marcus Lemonis: And as we get more confident, And as we learn more about the customization, the segmentation, and the audience building, and the journey building, and the Vercel implementation, you're going to see us lean into that. So when you hear me talk about in 60 days, we're going to have a greater growth mindset, it's largely driven by the continual confidence around the data lake, around the audience segmentation, around the journey building, around the funnel creation, around the Vercel customization stack that lays on top of that. So when that journey gets executed, the customer lands on something that speaks to them.

And as we learn more about the customization the segmentation in the audience building and the journey building and their sell implementation youre going to see us lean into that so when you hear me talk about in 60 days, we're going to have a greater growth mindset, it's largely driven by the continual confidence around the data lake around the audio.

Rick Patel: Segmentation around the journey building around the funnel creation around the <unk> customization stacks. It lays on top of that so when that journey gets executed the customer lands on something that speaks to them. Once those things are in place, which they are really starting to fall in line. We're then going to spend more.

Marcus Lemonis: Once those things are in place, which they are really starting to fall in line, we're then going to spend more. And the reason we're going to spend more is because the conversion is going to work, and the ROAS is going to be there. The reason we stopped spending money is because the conversion wasn't there, and the ROAS was negative. So if you have good products in your assortment, and you have great vendors, which, by the way, less is better because you're more important to them, and you have a good email strategy, and you have a good PLA strategy, and you have a very, very solid customer data lake strategy and funnel strategy, then there really isn't a limit to the growth other than how much the market will allow you to spend in a given day based on what's happening in the world.

Rick Patel: And the reason, we're going to spend more because the conversion is going to work and the rollout is going to be there. The reason we stopped spending money is because the conversion wasn't there in the rollout was negative. So if you have good products in your assortment and you have great vendors, which by the way less is better because you are more important to them and you have a good email strategy and you have.

Rick Patel: Have a good BLA strategy and you have a very very solid customer data lake strategy and funnel strategy.

Rick Patel: And then there really isn't a limit to the growth other than how much the market will allow you to spend in a given day based on what's happening in the world.

Marcus Lemonis: Sometimes you could want to spend $300,000 in a day growing your business, and the market just isn't there, and you don't get to the $300,000 unless you break the ROAS curve. We are staying disciplined.

Rick Patel: You could want to spend 300 Grand in the day growing your business and the market just isn't there you don't get to the 300 grant unless you break the rollout curve.

Rick Patel: We are staying disciplined and if anybody breaks that curve. They will not work here until the management team decides that is permitted to do that so guardrails and structure is how we're going to build this company for the future.

Marcus Lemonis: And if anybody breaks that curve, they will not work here until the management team decides that it's permitted to do that. So guardrails and structure is how we're going to build this company for the Marcus Thank you for your question.

Rick Patel: Thanks Lucas.

Rick Patel: Thank you for your question, we have time it looks like for one final question. This is from the line of Bernie Mcternan with Needham <unk> Company. Your line is live.

Bernie McTiernan: We have time it looks like for one final question. This is from the line of Bernie McTiernan with Needham and Company. Your line is live. Great. Good morning. Thanks for taking the question.

Bernie Mcternan: Great. Good morning, Thanks for taking the question just wanted to talk about the path to $1 2 billion of run rate revenue and so is there any discussion in terms of how much of that is just continued marketing efficiency and better Roe as versus adding new inventory in channels like buy buy baby Omnichannel continuing to both build of Overstock and then the second part of the quest.

Marcus Lemonis: Just wanted to talk about the path to 1.2 billion of run rate revenue. And does any discussion in terms of how much of that is just continued marketing efficiency and better ROAS versus adding, you know, new inventory and channels like Buy, Buy Baby, Omnichannel, continuing to build out overstock? And then the second part of the question is the guidance for 13.5 to 14.75 sales and marketing as a percentage of revenue over the next couple of quarters. So we're at the low end of that right now. So implying some incremental investment, but then longer term getting to, you know, 12 percent or even lower.

Bernie Mcternan: <unk> is the guidance for 13 five to $14 75.

Bernie Mcternan: Sales and marketing as a percentage of revenue over the next couple of quarters. So we're at the low end of that right now so implying some incremental investment, but then longer term getting to 12% or even lower.

Marcus Lemonis: Really, like, how does that play out in the real world?

Speaker Change: I really like how does that play out in the real world and whats the timeframe to maybe achieving those lower targets. Thanks.

Marcus Lemonis: And what's the timeframe to maybe achieving those lower Well, the good news is I live in the real world, which is why I took the range higher than we are today, because I didn't like the customer count and the transaction count that we had in the quarter. And we need to transition to a growth mode, which means build the file, learn how to retain them, get more lifetime value out of them. And we can't keep contracting and contracting and contracting. Ultimately, the way that we see revenue growth going, it comes from two very specific areas.

Speaker Change: Well the good news is I live in the real World, which is why I took the range higher than we are today, because I didn't like that the customer count in that transaction count that we had in the quarter and we need to transition to a growth mode, which means build the file learn how to retain them get more lifetime value out of them and we can't keep contracting and contracting in contract.

Speaker Change: Ultimately the way that we see revenue growth going it comes from two very specific areas. One is the continued curation and assortment around the specific brands, including adding product to buy buy baby those things are contributory to the growth.

Marcus Lemonis: One is the continued curation and assortment around the specific brands, including adding product to Buy Buy Baby. Those things are contributory to the growth. But the more important thing to balance with that is the science and the art around how we spend money and how we create marketing efficiency. The marketing efficiency is not where we want it to be today. And the customer file is not where we want it to be today. So what I've told the team from this day forward is that we're going to have a band of flexibility that they're going to be able to play in.

Speaker Change: The more important thing to balanced with that is the science and the art around how we spend money and how we create market efficient marketing efficiency. The marketing efficiency is not where we want it to be today.

Speaker Change: The customer file is not where we want it to be today. So what I've told the team from this day forward is that we're going to have a band of flexibility that theyre going to be able to play in the sandbox is going to be here and over time as the E mails get better as the marketing efficiency gets better as the funnels get better as the categories get better that sandbox is going to come.

Marcus Lemonis: The sandbox is going to be here. And over time, as the emails get better, as the marketing efficiency gets better, as the funnels get better, as the categories get better, that sandbox is going to close and the range is going to go from 12.5 to 13.5, then it's going to go from 12 to 13.

Lowe's and the range is going to go from 12 five to $13 five that it's going to go from 12% to 13, but what I don't want to do is is.

Marcus Lemonis: But what I don't want to do is is. Stop the growth. I don't want to I don't want to decline the company anymore. I don't want to read. I don't want to have revenue go backwards anymore. That doesn't serve our vendors. Right? That doesn't serve our business. Right? That's not good for morale inside of our company.

Speaker Change: Stop the growth I don't want to I don't want to decline the company anymore I don't want to I don't want to have revenue go backwards anymore.

Speaker Change: And that doesn't serve our vendors right that doesn't serve our business right. That's not good for morale inside of our company and we have reached that point, where it is now time to to really think about it another way and I've given the team the flexibility to play in the sandbox because I don't want them to be scared of me or you or anything else, while they're trying to build the business back to one to 152 billion whatever the.

Marcus Lemonis: And we have reached that point where it's now time to to really think about it another way. And I've given the team the flexibility to play in the sandbox because I don't want them to be scared of me or you or anything else while they're trying to build the business back to one, two, one, five, two billion, whatever the number is smartly and intelligently and profitably. Got it. Thanks. Thank you for your question.

Speaker Change: Number is smartly intelligently and profitably.

Speaker Change: Got it thanks Marcus.

Speaker Change: Okay.

Speaker Change: Thank you for your question and that will conclude our Q&A for today, Marcus I'll turn it back over to you for any closing comments.

Marcus Lemonis: And that will conclude our Q&A for today. Marcus, I'll turn it back over to you for any closing comments. Thank you very much. We look forward to the one on calls with our analysts and talk to you then. Thank you. And ladies and gentlemen, this does conclude Q1 2025 Beyond Inc. Earnings Conference Call. Have a great day. We'll see you next time. Please wait. The conference will begin shortly.

Speaker Change: Very much we look forward to the one on calls with our analysts and talk to you then thank you.

Speaker Change: And ladies and gentlemen, this does conclude Q1 2025 beyond Inc. Earnings Conference call have a great day, we'll see you next time.

Speaker Change: Please wait the conference will begin shortly.

Speaker Change: [music].

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: [music].