Financial Data and Key Metrics Changes - The company has seen significant improvement in EBITDA, particularly in Q1 and Q2, as part of its transformation strategy focused on execution and implementation [5][19] - Inventory was down 9.5% while sales decreased by 2%, indicating effective inventory management [46] Business Line Data and Key Metrics Changes - The company is focusing on optimizing its services, particularly in veterinary operations and grooming, to drive traffic and improve efficiency [12][14] - The average store size is about 13,000 square feet, which the company believes is optimal for its operations [23] Market Data and Key Metrics Changes - The company has closed 25 stores last year and expects to close a similar number this year, with a potential for growth starting in 2027 [20] - The competitive landscape is described as fragmented, with a mix of solid competitors and a need for differentiation in the market [15] Company Strategy and Development Direction - The company is in a multi-phased transformation strategy, currently in phase two focused on execution, with plans for phase three centered around enhancing store experience, merchandise differentiation, scaling services, and winning with omnichannel [4][8] - The strategy includes a test-and-learn approach for merchandise differentiation, ensuring that changes are validated before full rollout [10] Management's Comments on Operating Environment and Future Outlook - Management expresses cautious optimism about consumer resilience despite rising consumer debt and potential tariff impacts [39][40] - The company is focused on improving its pricing strategy and managing inventory effectively to navigate potential macroeconomic volatility [46][48] Other Important Information - The company has established a professional procurement team to negotiate better deals with suppliers, which has already begun to yield benefits [27][29] - There is a strong emphasis on improving the customer experience through targeted promotions and better inventory management [24][26] Q&A Session All Questions and Answers Question: How does the company view its store count and performance evaluation? - The company evaluates store performance based on financial metrics and market positioning, with over half of its stores up for lease renewal in the next few years, providing flexibility for future decisions [19] Question: What is the company's approach to pricing and promotions? - The company is focusing on responsible execution of promotions to prevent margin deterioration while still offering value to customers [24] Question: How does the company plan to manage inventory growth in the second half? - The company aims to maintain a healthy relationship between inventory and sales, with a focus on SKU rationalization and effective inventory management [46] Question: What are the expectations for non-tariff related margin drivers? - The company is confident in its position regarding freight and supply chain management, having established medium-term contracts to control pricing [48] Question: How does the company view market share consolidation in 2026? - The company anticipates a return to pre-COVID consolidation rates, emphasizing the need for differentiation and relevance in the retail space [49]