Financial Data and Key Metrics Changes - In Q3 2025, total sales reached $197.1 million, reflecting a 10.1% increase compared to Q3 2024. Comparable store sales grew by 10.8%, with a two-year stack growth of 16.5% [25][27] - Adjusted EBITDA for the quarter was a loss of $2.9 million, an improvement from a loss of $3.3 million in the previous year [30] - Year-to-date comparable store sales increased by 10%, with a two-year comp stack of 12.3% [31] Business Line Data and Key Metrics Changes - Strong performance was noted across all product categories, with particular strength in children's, men's, and basic apparel [5][14] - The children's division achieved strong double-digit growth, while men's and women's footwear also showed positive momentum [14][15] - The company is focusing on expanding its best tier products and enhancing its offerings in the young men's and plus-size categories [43][12] Market Data and Key Metrics Changes - Sales increases were observed across all store volume groups and geographies, indicating broad-based improvement [6][26] - The company reported a consistent customer traffic increase, particularly during the back-to-school season and the pre-holiday period [5][6] Company Strategy and Development Direction - The company aims to achieve approximately $45 million of EBITDA by 2027, representing a $60 million increase from 2024 levels, driven by consistent comparable store sales performance and strategic new store expansion [4][24] - A three-phased transformation strategy is in place, focusing on repair, execution, and optimization to drive sustainable growth [36][37] - The company is investing in technology infrastructure, including a new CRM and loyalty platform, to enhance customer engagement [10][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround strategy, highlighting strong customer connection and cultural relevance as competitive advantages [8][9] - The company anticipates continued sales momentum into Q4, with expectations for high single-digit comp store sales growth [33][34] - Management acknowledged the need for ongoing improvements in execution and operational efficiency [18][37] Other Important Information - The company remodeled 24 stores in Q3 and plans to open three new stores, bringing the total to 593 locations across 33 states [20][22] - The company has no debt and maintains a strong cash position of $51 million, providing flexibility for growth initiatives [32] Q&A Session Summary Question: What are the biggest merchandising opportunities? - Management highlighted broad-based growth across categories, with significant opportunities in young men's and plus-size segments, as well as footwear [40][42] Question: How did sales trends perform throughout the quarter? - Management noted consistent shopping patterns, with strong performance in August and October, and minimal impact from macroeconomic changes [46][47] Question: What is the current status of extreme value deals? - Extreme value deals currently represent 2-3% of sales, with plans to increase this to about 10% as the company matures its offerings [52][54] Question: What is the plan for store openings in 2026? - The company plans to open stores in three distinct timeframes: early spring, July, and October, with a focus on consistent growth [56][57] Question: What progress has been made on shrink mitigation efforts? - New AI-capable camera systems have been rolled out in a third of stores, with plans for further expansion to reduce shrink rates [60][61] Question: Can you elaborate on the CRM and loyalty program? - The company plans to launch a CRM in Q1 2026, aimed at enhancing customer engagement and providing exclusive access to deals [64][66]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported sales of $190.8 million, an 8% increase compared to Q2 2024, with comparable store sales growth of 9.2%, marking the fourth consecutive quarter of mid to high single-digit comp sales growth [19][20][28] - The gross margin rate for Q2 was 40%, the highest since fiscal 2021, with an 890 basis point expansion year-over-year [20][21] - Adjusted EBITDA for the quarter was a loss of $2.6 million, but an increase of $14.6 million compared to Q2 2024 [22][23] - Total inventory dollars decreased by 12.9% year-over-year, with average in-store inventory down 5.7% [25] Business Line Data and Key Metrics Changes - The product performance in Q2 was broad-based across categories, with strong responses in women's plus and big men's apparel, as well as children's categories [9][10][12] - Transaction growth accounted for the majority of sales gains, with improvements in units per transaction while maintaining stable average unit retails [8][19] - The company is focusing on enhancing its product assortments, including a three-tiered strategy of good, better, and best products, with early success in women's plus and big men's sizes [10][11] Market Data and Key Metrics Changes - The company experienced consistent results across climate zones, regions, and store volume deciles, indicating broad-based improvement [8][19] - The focus on neighborhood-based locations continues to drive traffic, with a strong emphasis on cultural relevance in product assortments [8][9] Company Strategy and Development Direction - The company is undergoing a transformation guided by a three-phase framework: Repair, Execute, and Optimize, aimed at delivering sustainable profitable growth [5][6] - Future plans include remodeling approximately 50 stores per year and expanding square footage in the mid-single-digit range, with a goal of achieving $40 million or more in EBITDA by 2027 [30][31] - The company is implementing AI-based allocation systems to improve inventory management and sales accuracy [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the turnaround plan, noting that the macroeconomic environment remains uncertain but the company is well-positioned for continued growth [26][27] - The outlook for full-year comparable store sales growth has been updated to mid to high single digits, with expected gross margin expansion of approximately 210 to 230 basis points [27][28] Other Important Information - The company sold a 72,000 square foot building in Savannah, Georgia, realizing a gain of approximately $11 million [23] - The company plans to remodel approximately 60 locations in the year and expects to open three new stores while closing three [28] Q&A Session Summary Question: Discussion on expenses and incentive compensation - The average SG&A expense is expected to be around $78 million per quarter, with a slight increase in Q4 due to holiday sales [35][36] Question: Incremental margin flow through on sales - The goal is a 20% to 25% EBITDA flow through on incremental sales, with expectations of around 25% in the back half of 2025 [37] Question: Insights from the new trend director - The trend director is focused on interpreting consumer voice and translating it into tangible styles and trends, which is expected to enhance product curation [38][39] Question: Sustained momentum in Q3 - Sustained momentum is driven by refined preseason planning, better execution, and improved product assortment, including branded deals [45][46] Question: Store remodels and new store economics - Remodel expenses average between $85,000 and $130,000 per location, with expected sales lifts varying by market [59][60] Question: Supply chain initiatives - The company has made progress in optimizing the supply chain, with expectations for further improvements as new systems are implemented [64][66]