Financial Data and Key Metrics Changes - Q3 revenue reached $325 million, reflecting a 0.7% year-over-year increase and a 4.1% quarter-over-quarter increase [20] - Adjusted EBITDA for Q3 was $11 million, representing a margin of approximately 3.4%, up 130 basis points year-over-year but down 170 basis points quarter-over-quarter [22] - Gross margin for the quarter was 44.2%, down 130 basis points year-over-year and down 30 basis points quarter-over-quarter [21] - Revenue per active client was $542, up 3.2% year-over-year and up 1% quarter-over-quarter [20] Business Line Data and Key Metrics Changes - The women's business and overall fixed channel returned to revenue growth, while the men's business and freestyle channel also saw revenue growth [7] - Average Order Value (AOV) grew by 10% year-over-year, with improvements in items per fix, keep rate, and Average Unit Retail (AUR) [8] - The athleisure category saw over 30% growth year-over-year, with notable demand for wide leg denim and spring transitional sweaters in women's and fleece and knit tops in men's [12] Market Data and Key Metrics Changes - Active clients at the end of Q3 totaled 2.4 million, down 10.6% year-over-year and down 0.8% quarter-over-quarter, marking the lowest sequential decline in three years [20][13] - New client growth has been achieved for two consecutive quarters, with new clients spending more, as evidenced by high 90-day Lifetime Value (LTV) metrics [13] Company Strategy and Development Direction - The company is executing a three-phased transformation strategy, having completed the rationalize and build phases and now entering the growth phase [9][13] - Focus on enhancing client engagement features, deepening stylist relationships, and offering a stronger assortment with more fresh styles [10] - The company aims to position itself as the retailer of choice for apparel and accessories by delivering a personalized shopping experience [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges significant external challenges, including a dynamic macroeconomic environment and pressure on consumer discretionary spending [15] - The company does not expect significant cost impacts from tariffs for the remainder of Q4 but anticipates potential impacts in FY 2026 [15][24] - Confidence in the foundation built and the ability to navigate uncertainties while focusing on long-term profitable growth [27] Other Important Information - The company generated $16 million in free cash flow in Q3 and ended the quarter with $242 million in cash and no debt [22] - The outlook for Q4 includes projected revenue between $298 million and $300 million, with adjusted EBITDA expected between $3 million and $7 million [24] Q&A Session Summary Question: Insights on core consumer behavior and keep rates - Management noted strong performance in Q3 driven by AOV growth and positive client engagement, with larger fixes resonating well with clients [30][32] Question: Potential share gain opportunities in the current macro environment - Management believes the current macro environment presents an opportunity for share gain, emphasizing the adaptability of their service to client needs [52][54] Question: Sustainability of AOV increases - AOV growth is attributed to larger fixes and is expected to continue, although tougher year-over-year comparisons are anticipated in FY 2026 [72] Question: Need for increased ad spend to drive new customer growth - Management does not anticipate needing to increase ad spend to achieve active client growth, citing improvements in client re-engagement and dormancy trends [75]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $30.9 million, down from $33.2 million in the same period last year, primarily due to lower retail fuel and merchandise contributions [21] - The net loss for the quarter was $12.7 million compared to a net loss of $0.6 million in the year-ago period [24] - Total capital expenditures for the quarter were $27.4 million [25] Business Line Data and Key Metrics Changes - Retail segment operating income was approximately $40.2 million, down from $46.5 million in the year-ago period [21] - Same store merchandise sales excluding cigarettes were down 5.2%, while total same store merchandise sales were down 6.9% [22] - Wholesale segment operating income was $18.6 million, compared to $18.3 million in the year-ago period [23] - Fleet segment operating income increased to $11 million from $9.8 million in the year-ago period [24] Market Data and Key Metrics Changes - Same store fuel contribution decreased by approximately $3.2 million due to a 6.2% decline in gallons sold [22] - Fuel margin for the wholesale segment was $0.88 per gallon, down from $0.92 per gallon in the year-ago period [23] - Total gallons from channel optimization were approximately 14 million for the quarter, offsetting declines from comparable sites [23] Company Strategy and Development Direction - The company is focused on a transformation strategy that includes dealerization, expansion of high-margin categories, and targeted promotional initiatives [9][10] - The Fueling America Future campaign aims to provide discounts on fuel and enhance customer engagement [10][12] - The company is committed to organic growth and store-level reinvestment, with plans for remodels and new store openings [15][17] Management's Comments on Operating Environment and Future Outlook - Management noted headwinds from lower traffic, consumer spending, and severe weather impacting store visits [6][8] - There is optimism for Q2 2025, with slight improvements in sales observed in April [34] - The company remains focused on execution and is optimistic about the path forward despite a dynamic environment [28] Other Important Information - The company repurchased approximately 1.3 million shares at an average price of $4.1 per share during the quarter [19] - The company ended the quarter with $880 million in long-term debt and maintained liquidity of approximately $847 million [25] Q&A Session Summary Question: How has the business performed recently after winter weather? - Management noted that sales were down 6.9% for the quarter, with February being particularly impacted by severe weather, but there has been slight improvement in April [32][34] Question: Are savings from the dealerization starting to flow through the P&L? - The $20 million savings is expected at scale, with $2.4 million delivered this quarter from channel optimization [36][38] Question: When will the remodel initiative be accelerated? - The first pilot stores are expected to be completed by Q3 2025, with potential acceleration in 2026 based on results [40][42] Question: What is driving the fuel margins? - Fuel margins are influenced by market volatility and the need for businesses to adjust prices to remain competitive [48][50] Question: How is the company balancing share buybacks versus bond buybacks? - Management is analyzing capital allocation strategies but did not provide specific details on the cadence of buybacks [82] Question: What characteristics define strategic retail stores for capital allocation? - Strategic stores are identified based on favorable demographics, competitive landscape, and physical plant conditions [72][73] Question: How has the dealerization program performed against expectations? - The stores pushed to the wholesale channel are performing in line with expectations, with significant incremental gallons being realized [74][76]

Core Viewpoint - HighCo experienced a decline in business activity in Q1 2025, with gross profit down 6.4% year-on-year on a like-for-like basis, as anticipated. The company confirmed its guidance for 2025 despite the downturn, highlighting growth in the Activation division in France [1][4][14]. Financial Performance - Gross profit for Q1 2025 was €15.77 million, reflecting a 6.4% decrease like-for-like compared to €16.85 million in Q1 2024 [2][5]. - The reported decline in gross profit was 16.3%, indicating a significant drop in overall business performance [5]. - The operating margin remained above 11%, although the gross profit for 2024 was restated to €61.03 million, with an operating margin of 12.4% [17]. Division Performance - The Activation division in France showed growth of 1.4%, contributing significantly to the overall gross profit, which accounted for 71% of the Group's total [6][7]. - The Mobile division also experienced a 2% increase, excluding the impact of High Connexion [7]. - The Consulting & In-store media selling division faced a sharp decline of 32.2%, primarily due to restructuring within the Casino Group [6][8]. Regional Insights - In France, gross profit fell to €13.58 million, down 6.4% year-on-year, representing 86.1% of the Group's total gross profit [8]. - International business gross profit decreased by 6.3% to €2.19 million, accounting for 13.9% of total gross profit, with Belgium and Spain also reporting declines [9][10]. Strategic Developments - HighCo is in the process of selling its subsidiary High Connexion, with conditions precedent expected to be fulfilled by June 30, 2025 [11][12]. - The company plans to propose an exceptional dividend of €1 per share following the completion of the sale [13]. Future Outlook - HighCo confirmed its guidance for 2025, anticipating a continued decline in Q2 before a potential return to growth in the latter half of the year [4][14].

Financial Data and Key Metrics Changes - The company reported total sales of €318.8 million for the year, a decrease of 3% compared to the previous year [6] - Gross margin improved to 36.3% in 2024, up from 34.3% in 2023 and 29.7% in 2019, indicating a significant enhancement in profitability [15][16] - The operational loss for the year was €6.3 million, a notable improvement from a loss of €22.5 million in 2019 with higher sales [16][17] Business Line Data and Key Metrics Changes - Branded sales accounted for €289 million, representing approximately 93% of total sales, an increase from 80% in 2019 [7][9] - Direct-to-operator store sales reached €70.1 million, up 4% from 2023 and 18% from 2019, driven primarily by growth in the U.S. market [11] - The company closed two underperforming Natuzzi Italia stores and one Divani Divani store, reflecting a strategic move to optimize retail locations [12] Market Data and Key Metrics Changes - The company noted a challenging and volatile market environment, impacting overall sales performance [6][7] - The U.S. market showed resilience with the opening of a new store in Denver, contributing to the growth in direct-to-operator sales [11] Company Strategy and Development Direction - The company is focused on transforming from a manufacturer to a brand retailer, emphasizing the importance of retail presence and customer experience [10][24] - A significant restructuring effort was undertaken, including the relocation of production from Shanghai to Qinzhou, aimed at improving cost efficiency [14][21] - The company is committed to organic growth and enhancing profitability through improved sales per store and effective marketing strategies [98] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market challenges, highlighting the flexibility of its production capabilities across various regions [61][66] - The management acknowledged the uncertainty in the market due to potential tariff increases but emphasized the company's preparedness to protect margins [62][64] - The focus remains on improving consumer confidence and sales across all geographies, supported by new product launches and marketing initiatives [81][82] Other Important Information - The company has made significant investments in developing new marketing and retail competencies, aiming to enhance customer experience and operational efficiency [24][32] - A strategic divestment of non-core assets is ongoing, with the completion of a transaction involving High Point expected in March 2025 [19][20] Q&A Session Summary Question: How will increased tariffs impact pricing and margins? - Management indicated that they are proactively protecting margins through discussions with partners and implementing surcharges where necessary to mitigate tariff impacts [62][63] Question: What is the company's strategy for increasing revenue? - The focus is on organic growth, improving sales per store, and leveraging new collections and marketing strategies to drive traffic [98] Question: What tools and systems are in place to support the retail transition? - The company has developed analytical tools to diagnose store performance and improve merchandising strategies, enabling faster decision-making [90] Question: What is the outlook for profitability and potential retail expansion in the U.S.? - Management believes that breakeven can be achieved at lower sales levels than in the past, with a focus on nurturing new stores opened in the U.S. [99][100]