Financial Data and Key Metrics Changes - Total delivered sales for the second quarter were $522 million, slightly up from the prior year [4][19] - GAAP operating margin was 6.9%, and adjusted operating margin was 7.1% [5][20] - Operating cash flow for the quarter was $50 million, tripling last year's comparable period [5][24] - Diluted earnings per share totaled $0.70 on a GAAP basis, and adjusted diluted EPS was $0.71, flat versus last year's comparable period [20] Business Line Data and Key Metrics Changes - Retail segment delivered sales increased slightly to $222 million, with adjusted operating margin decreasing to 10.7% from 12.6% [21] - Wholesale segment delivered sales increased 2% to $369 million, with adjusted operating margin improving to 8.1% from 6.8% [22] - Joybird's delivered sales were $35 million, down 10%, with an increased operating loss compared to the prior year [22] Market Data and Key Metrics Changes - Written same-store sales decreased 2% for the quarter but showed sequential improvement over the last two quarters [7] - Joybird's total written sales increased by 1% compared to the previous year, indicating improvement in retail store performance [7] Company Strategy and Development Direction - The company is focusing on its core vertically integrated North American upholstery business and has announced the exit of non-core businesses [8][16] - A significant acquisition of a 15-store network in the Southeast U.S. is expected to add approximately $80 million in annual retail sales [9] - The company aims to expand its store network to over 400 stores, with a focus on company-owned locations [11] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer trends remain challenging, but they are agile in their execution [7][17] - The company expects fiscal third-quarter sales to be in the range of $525-$545 million, reflecting a growth of 1-4% year over year [27] - Management expressed confidence in navigating the current environment while positioning for long-term growth [17][30] Other Important Information - The company announced a 10% dividend increase, marking the fifth consecutive year of double-digit increases [5][25] - The distribution and home delivery transformation project is expected to reduce the distribution footprint significantly and improve margins [15][28] Q&A Session Summary Question: Differences in geographic sales dispersion - Management noted no dramatic differences, but Canada remains more challenged due to trade tariffs [33] Question: Extent of pricing actions and unit volumes - Management indicated nominal pricing actions were taken to offset trade policy impacts, with flat volume year over year in the North America wholesale business [35][36] Question: Friction costs related to portfolio and supply chain optimization - Management explained that friction costs are associated with the distribution transformation project and are expected to improve efficiency in the long term [37][38] Question: Expansion into other wholesale partners - Management emphasized the importance of strategic partnerships that align with their brand and consumer experience [40] Question: Impact of the acquisition and non-core business exits - Management confirmed that the acquisition would add $40 million in net sales, while exiting non-core businesses would result in a $70 million decrease in sales [47][48] Question: Inventory management and efficiency gains - Management attributed the decrease in inventory to improved supply chain management and efficiency [51] Question: Integration of the 15-store acquisition and future growth - Management plans to continue expanding the store network and investing in remodels to enhance brand representation [55][56] Question: Case goods offerings and partnerships - Management confirmed the importance of case goods in enhancing the upholstery experience while focusing on efficient sourcing [60]