Aix-en-Provence, 30 September 2025 (6:00 p.m.) HIGHCO: ACQUISITION OF SOGEC AND BUDGETBOX FINALISED HighCo announces that it has completed the acquisition of the promotion activities of Sogec and of BudgetBox. This acquisition aims to strengthen HighCo’s positioning on the promotions market and boost growth in the Activation division. As a reminder, Sogec is a French agency specialising in omnichannel promotion activation. It offers a range of marketing solutions: discount coupon issuing and processing, dig ...

Financial Data and Key Metrics Changes - Same-store sales increased by 2.1% year-over-year, marking the second consecutive quarter of comp store sales growth [4][12] - Net sales for Q2 were $393.9 million, a 1.8% increase compared to the prior year [12] - Gross margin improved to 32%, an 80 basis point increase from Q2 last year, driven by healthier inventory and higher sales penetration from the fishing department [13][14] - Net loss for Q2 was $7.1 million, compared to a net loss of $5.9 million in the same quarter last year [15] - Adjusted EBITDA improved to $8.3 million, up from $7.4 million in the same quarter last year [15] Business Line Data and Key Metrics Changes - The hunting and shooting sports department grew by 4%, while fishing sales increased by nearly 11% year-over-year [6][12] - Ammunition sales grew by 10%, with average unit retail up in low single digits [6] - Camping sales were down 10% compared to last year, prompting a strategic shift to eliminate slow-moving categories [7] Market Data and Key Metrics Changes - Sales in Alaska grew by high single digits, indicating successful localization of merchandise assortments [5] - The firearms business outperformed the industry despite a 4.9% decline in adjusted NICs checks [5] Company Strategy and Development Direction - The company is focused on four key priorities: inventory precision, local relevance, personal protection, and brand awareness [9][10] - A strategic shift to an everyday low-price model for core ammunition has resonated well with customers [6] - The company aims to improve inventory efficiency and reduce working capital investment [17] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the strategic plan despite ongoing consumer microeconomic challenges [10] - The company anticipates ending the year with lower total inventory than last year and generating positive free cash flow [11][19] - Full-year guidance for net sales has been raised to reflect flat growth, with adjusted EBITDA expected between $33 million and $45 million [18] Other Important Information - Total inventory at the end of Q2 was $443.5 million, compared to $363.4 million in the same period last year, reflecting a strategic decision to prepare for key hunting seasons [16] - The company exercised a $20 million deferred draw feature on its term loan to strengthen the balance sheet [17] Q&A Session Summary Question: Can you talk about the drivers of comp performance and its durability into 2026? - Management highlighted the alignment of strategy around hunting, shooting, fishing, and personal protection as key drivers of performance, with continued investment in inventory to maintain momentum [22][23] Question: Can you discuss margin drivers in the back half of the year? - Management noted that hunting has lower margins due to firearms and ammunition, which will impact overall margins, while fishing has been a beneficiary of margin improvements [26][27] Question: How did demand trend through August and the setup into the back half in terms of comps? - Management expressed satisfaction with August performance, noting acceleration in NICs and a positive outlook for Q3 [32] Question: Can you break down the AOV trend and its potential for improvement? - Management indicated that there is significant room for improvement in attachment rates, particularly in firearms and ammunition, with AOV and UPT both at all-time highs [34][36] Question: How is the company managing potential tariff-related margin pressure? - Management is working with vendors to anticipate cost increases and has flexibility to offset some tariffs through MAP pricing [51][53] Question: Can you provide insight into consumer behavior within the hunt category? - Management noted that average unit retail is down about 4%, but unit sales are up 4.2%, indicating a mixed impact on margins [61][63] Question: Is there an opportunity to increase sales or inventory in suppressors and short barrel rifles? - Management sees significant opportunity in these categories and plans to lean into them in the back half of the year [65]

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]