Financial Data and Key Metrics Changes - Dycom Industries reported record revenue of $1.45 billion for Q3 FY 2026, a 14.1% increase compared to Q3 FY 2025 [4][20] - Adjusted EBITDA reached $219 million, marking a 28.5% increase year-over-year, with an adjusted EBITDA margin of 15.1%, up 169 basis points from the previous year [4][21] - The company’s backlog hit an all-time high of $8.2 billion, with $4.99 billion expected to be completed in the next 12 months [5][21] Business Line Data and Key Metrics Changes - Organic revenue growth was reported at 7.2%, driven by fiber-to-the-home programs, wireless activity, and maintenance services [20] - The service and maintenance business continues to grow, with additional agreements totaling over $500 million executed after the quarter [9][22] Market Data and Key Metrics Changes - The demand for fiber infrastructure to support data center growth is increasing significantly, with a projected $20 billion addressable market for outside plant data center network construction over the next five years [6][7] - The NTIA has approved final BEAD deployment plans for 15 states, with $29.5 billion in total spending expected, of which $26 billion will be used for fiber or HFC infrastructure [8][9] Company Strategy and Development Direction - The acquisition of Power Solutions is expected to enhance Dycom's capabilities in the digital infrastructure market, providing comprehensive services from core networks to data centers [12][13] - The company aims to capitalize on the growing demand for digital infrastructure driven by hyperscalers and technology companies, with a focus on long-term shareholder value [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for telecommunications services and the ongoing growth of fiber-to-home builds, projecting continued acceleration in the coming years [5][6] - The company anticipates that the construction of new outside plant data center networks will ramp up significantly in 2026, leading to substantial growth [6][17] Other Important Information - The total purchase price for Power Solutions is $1.95 billion, expected to be immediately accretive to Dycom's adjusted EBITDA margin and diluted EPS [13][24] - The acquisition is anticipated to provide a clear path to deleveraging to two times net leverage within 12 to 18 months [26][28] Q&A Session Summary Question: Improvement in DSOs and future expansion of Power Solutions - Management noted that the 14-day improvement in DSOs reflects strong cash management efforts and expressed optimism about maintaining this improvement going forward [31] - Regarding Power Solutions, the focus will be on leveraging skilled workforce capabilities to meet the growing demands of hyperscalers [32] Question: Customer relationships and growth opportunities with Power Solutions - Power Solutions primarily works with general contractors, but there is significant overlap with hyperscaler end users, providing opportunities for customer diversification [35][36] Question: Fourth quarter guidance and backlog context - The wider revenue range for Q4 is attributed to seasonal factors and the ongoing growth in fiber-to-the-home programs [45] - Power Solutions has a backlog of over $1 billion, with contracts typically spanning 6 to 12 months [47] Question: Future market expansion and M&A opportunities - Management emphasized a strategic approach to growth, focusing on the proven DMV market while also considering future M&A opportunities in other regions [51][52] Question: Data center market concentration and future M&A - The data center contracting space remains fragmented, presenting opportunities for future acquisitions, while Dycom aims to leverage its scale in both telecommunications and data center services [63]

Financial Data and Key Metrics Changes - System-wide store sales increased by 10% to $3.5 billion, marking the 19th consecutive year of same-store sales growth [4][6] - Adjusted EBITDA grew by double digits, reflecting the impacts of refranchising and technology investments [4][6] - For Q4, net sales reached $454 million, a 4% increase on a reported basis and a 10% increase when adjusted for refranchising [13][14] - Fiscal year net sales grew 12% to $1.7 billion when adjusted for refranchising, with same-store sales growing 6.1% [13][14] Business Line Data and Key Metrics Changes - Transaction growth accounted for over one-third of same-store sales growth, with contributions from premiumization, net pricing, and increased NOCR penetration [13][14] - Adjusted EPS for the year was $1.59 per share, at the low end of the guidance range [6][13] - Capital expenditures for the year were $259 million, with 70% allocated to new store additions [17] Market Data and Key Metrics Changes - The company added 170 new system-wide stores, bringing the total to 2,180 across the U.S. and Canada [4][6] - Franchise partners committed to significant development agreements, leading to a 150% increase in new store additions in refranchised markets [10] Company Strategy and Development Direction - The company aims to drive the full potential of its core business, focusing on transaction and ticket growth while enhancing store-level efficiency [6][7] - Plans to continue sustainable network growth and innovate to meet evolving customer needs [7][10] - The acquisition of Breeze AutoCare is expected to close on December 1, adding 162 stores to the network [10][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the core business's performance for fiscal 2026, expecting same-store sales growth of 4%-6% and overall network growth of 330-360 new stores [18][19] - The company anticipates adjusted EPS of $1.60-$1.70 per share for fiscal 2026, reflecting a 4% growth over the prior year [19] - Management noted that the competitive environment remains consistent, with no markets avoided due to competition [36] Other Important Information - The company ended fiscal 2025 with a leverage ratio of 3.4 times, with plans to return to the target leverage ratio of 3.0 times within 18 to 24 months [17][18] - The gross margin rate was flat year-over-year at 39.1%, with operating leverage generating a 60-basis-point improvement [15][16] Q&A Session Summary Question: Revenue and EBITDA contribution from Breeze - Management indicated that the core business is expected to perform well, but specifics on Breeze's contribution are not yet available [24][25] Question: Decline in EBITDA margins for fiscal 2026 - Management acknowledged that the inclusion of Breeze will complicate margin analysis, but they expect continued performance from the core business [24][25] Question: Same-store sales guidance and traffic vs. ticket mix - Management confirmed that the same-store sales guidance reflects a balance between transaction and ticket growth, with expectations for consistency across quarters [41][46] Question: Impact of higher product costs - Management noted that product costs have been impacted by crude oil pricing and supply chain inflation, which may continue into fiscal 2026 [59][60] Question: Interest expense increase and EPS impact - Management explained that higher depreciation and an increased effective tax rate contributed to the lower-than-expected EPS, alongside higher interest expenses [62][63]

Financial Data and Key Metrics Changes - Third quarter sales reached $20.8 billion, with comparable sales increasing by 0.4% year over year, despite a 100 basis point headwind from Hurricanes Helene and Milton [4][29] - Adjusted diluted earnings per share were $3.06, reflecting a 6% increase compared to the previous year [4][28] - Gross margin improved to 34.2%, up 50 basis points from the prior year [30] - Adjusted operating margin rate was 12.4%, an increase of 10 basis points year over year [30] - Inventory at the end of Q3 was $17.2 billion, down approximately $400 million compared to the previous year [30] Business Line Data and Key Metrics Changes - Positive comparable sales were reported in 10 of 14 merchandise divisions, with notable strength in appliances, flooring, paint, and kitchens and bath [15][29] - Online sales grew by 11.4% during the quarter, driven by increased traffic and strong conversion rates [5] - Home services experienced double-digit comparable sales growth, indicating strong performance in this key initiative [24] Market Data and Key Metrics Changes - The U.S. homeowner market remains healthy, with strong balance sheets and continued consumer spending, although affordability and economic uncertainty weigh on consumer confidence [12][13] - The average homeowner has record levels of equity, approximately $400,000, which may lead to increased investment in home improvement projects [13] Company Strategy and Development Direction - The company is focused on its 2025 Total Home Strategy, which includes enhancing pro offerings, accelerating online sales, and leveraging loyalty programs [5][6] - The acquisition of Foundation Building Materials (FBM) aims to expand product offerings and enhance fulfillment capabilities, particularly in urban markets [11][12] - Investments in AI are expected to improve customer engagement and operational efficiency, with virtual assistants significantly increasing conversion rates [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the long-term health of the home improvement sector, despite current macroeconomic uncertainties [14] - The company anticipates that lower interest rates could stimulate demand for home improvement projects, particularly through home equity loans [13][64] - The outlook for 2026 remains cautious, with expectations for flat comparable sales for the year [33] Other Important Information - The company is on track to achieve its multi-year goal of reducing in-store SKU count by 15% by the end of 2025 [21] - The marketplace initiative is showing early promise, exceeding expectations in seller onboarding and customer adoption [72][73] Q&A Session Summary Question: How is the business trend looking in light of recent performance? - Management noted positive comp performance to start the quarter, with improvements in top-line performance since exiting October [37][39] Question: What is the outlook for kitchen and bath categories? - Management believes Lowe's is gaining market share in kitchen and bath, supported by improved technology and product offerings [45][46] Question: Can you elaborate on the improving sentiment among pros? - The small to medium pro business remains stable, with 75% of pros feeling confident in their job prospects [52] Question: How does the company view the current housing market? - Management acknowledged elevated mortgage rates but highlighted the strong equity position of homeowners as a potential driver for future home improvement spending [62][64] Question: What are the early margin scenarios for FBM and ADG? - Initial estimates suggest a 50 basis point impact on margins in 2026, with a focus on gross margin improvements [56]

Financial Data and Key Metrics Changes - Total bookings grew to $515 million in Q3 2025, up 14% year-over-year, driven by robust new user cohorts and better-than-expected results from Base44 [15][22] - Total revenue increased to $505 million, also up 14% year-over-year, exceeding the high end of guidance [15][22] - Non-GAAP gross margin in Q3 was 69%, slightly down from 70% in Q2 [18] - Free cash flow for Q3 was $159 million, or 32% of revenue, an increase from 30% last quarter [21] Business Line Data and Key Metrics Changes - Partners' revenue grew 24% year-over-year to $192 million, driven by traction among professional designers and solid Studio adoption [16] - Transaction revenue was $65 million, up 20% year-over-year, driven by 13% growth in GPV [16] - Base44's share of audience traffic increased to over 10% in October, up from low single digits in June [10][12] Market Data and Key Metrics Changes - Organic traffic improved as more users searched for Wix online, indicating enhanced brand awareness [9] - Base44 serves over 2 million users globally, translating to more than 1,000 new paying subscribers daily [12] Company Strategy and Development Direction - The company aims to democratize software creation through Vibe Coding, enabling users without coding knowledge to build applications [3][5] - Base44 is positioned as a leader among low-code tools, with significant growth potential in the AI-powered app building space [6][10] - The company plans to enhance its marketing efforts to capture stronger-than-anticipated demand for Base44 [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the durability of the core business and the ability to enter new markets effectively [14] - The company raised its full-year bookings outlook to $2,060-$2,078 million, reflecting strong performance from Base44 [22][23] - Management anticipates improved operating and free cash flow margins over time as AI costs decrease and marketing investments normalize [21][24] Other Important Information - The company issued $1.15 billion in 0% convertible senior notes due 2030, with plans to use the cash for business purposes and share repurchases [22] - The anticipated launch of a new flagship product has been delayed to early 2026 due to technical challenges [7][70] Q&A Session Summary Question: Dynamics of monthly vs. annual subscriptions for Base44 - Management noted that most Base44 users are currently on monthly subscriptions, with expectations that they will transition to annual plans over time as trust in the platform grows [28][30] Question: Cost management and AI compute expenses - Management acknowledged that while AI costs are currently high due to new user consumption, they expect to reduce these costs over time through various strategies [31][35] Question: Vision for Wix in the AI era - Management highlighted efforts to ensure that all Wix websites are indexable by LLMs and to continuously add new e-commerce standards to enhance visibility [39][40] Question: Cohort retention trends for Base44 - Management indicated that retention trends for Base44 are similar to those seen in early Wix cohorts, with expectations for improvement as brand recognition grows [42][43] Question: Pathway to improving Base44 margins - Management discussed the need for time to see improved margins as the user base matures and costs stabilize, with expectations for better profitability in the future [48][53] Question: Impact of hyper-growth on margins - Management confirmed that while there will be short-term margin pressure due to high growth and new customer acquisition costs, they anticipate margin improvement as the business scales [56][66]

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]

Financial Data and Key Metrics Changes - For fiscal year 2025, Griffon Corporation reported HBP revenue of $1.6 billion, consistent with the prior year, and an EBITDA margin of 31.2% [3] - Fourth quarter revenue was $662 million, with adjusted EBITDA of $138 million, both consistent with the prior year [9] - Fourth quarter GAAP net income was $44.95 million, compared to $62 million in the prior year, while adjusted net income was $71 million, or $1.54 per share, compared to $71 million, or $1.47 per share, in the prior year [10] Business Line Data and Key Metrics Changes - HBP segment revenue increased by 3% year-over-year, driven by a favorable price index, while volume remained consistent [11] - CPP segment revenue decreased by 10% to $936 million due to weak consumer demand in North America and the U.K., but profitability improved with an 18% increase in EBITDA [4][6] - CPP adjusted EBITDA was $24 million, a decrease of 1% from the prior year, primarily due to decreased volume offset by global sourcing benefits [12] Market Data and Key Metrics Changes - The U.S. and U.K. markets experienced reduced consumer demand, impacting CPP revenue, while Australia showed increased organic volume [5][11] - The company noted that 85% of its business is unaffected by tariffs, indicating resilience in its operations despite external pressures [31] Company Strategy and Development Direction - The company plans to leverage improving market conditions and a pipeline of product innovations to increase long-term volume and profit margins [17] - Capital allocation strategies include share repurchases, debt reduction, and dividend increases, reflecting confidence in the business's strength [8][17] - The company aims to maintain EBITDA margins above 30% for HBP and approximately 10% for CPP in fiscal 2026 [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate strong financial performance despite a challenging macroeconomic environment [16] - The outlook for fiscal 2026 includes expectations for revenue consistency with 2025 at $2.5 billion and adjusted EBITDA in the range of $580 million to $600 million [14][15] - Management anticipates a gradual recovery in consumer demand and housing market conditions, which could enhance future performance [16][39] Other Important Information - The company repurchased 1.9 million shares at an average price of $70.99, totaling $135 million for the year [14] - A quarterly dividend of $0.22 per share was announced, marking a 22% increase over the prior quarter [8] Q&A Session Summary Question: Can you discuss the drivers of the sequential EBITDA margin decline in HBP? - Management indicated that the margin decline was due to product mix variations and expected favorable price trends moving forward [20][21] Question: What is the outlook for CPP in terms of pricing and consumer acceptance? - Management noted that while pricing has been passed through, consumer acceptance remains weak, and they expect 2026 to mirror 2025 [39] Question: How do you see the competitive landscape in the garage door market? - Management highlighted their strong market position and innovation capabilities, indicating confidence in future growth despite current market challenges [37][38] Question: What is the status of retailer inventories in the CPP category? - Management stated that excess inventory levels are present due to weak consumer demand, with no immediate repurchasing expected [44] Question: How does the company reconcile the increase in dividends with share repurchase activity? - Management clarified that there is no conflict, as they intend to continue share repurchases while also increasing dividends and reducing debt [46]

Financial Data and Key Metrics Changes - Total transaction value increased by 35% year-over-year, reaching $1.8 billion, driving processing revenue growth of 33% for the quarter [14][15] - Revenue for the third quarter was $104.3 million, a 26% increase compared to Q3 2024, with organic revenue growth of 25% [15][16] - Recurring revenue grew by 29% year-over-year, reaching $77 million, representing 74% of total revenue [16][19] - Gross margin increased to 49.3% from 45.7% in the prior year, with adjusted EBITDA rising to $18.2 million, representing 17.5% of revenue [17][19] Business Line Data and Key Metrics Changes - Processing revenue grew by 33% to $48 million, driven by a 17% increase in the install base of managed and connected devices [16][19] - Hardware revenue increased by 18% to $27 million, reflecting strong demand for products and solutions [16][19] - The install base of managed and connected devices grew by 17% year-over-year, exceeding 1.4 million devices [15][16] Market Data and Key Metrics Changes - The customer base expanded by 21% compared to Q3 2024, reaching nearly 110,000 customers [14][15] - The company is gaining market share in high transaction value verticals such as EV charging, amusement, and car wash, which drive significantly more revenue per customer [5][14] Company Strategy and Development Direction - The company is focused on profitable growth and expanding its market share in automated self-service solutions [4][5] - Nayax is pursuing acquisitions that align with its objectives of geographic expansion and technology enhancement, including a recent letter of intent to acquire Integral Vending in Mexico [9][10] - The launch of embedded banking products and e-commerce solutions is planned for early 2026, aimed at increasing recurring revenue per customer [9][39] Management's Comments on Operating Environment and Future Outlook - Management reiterated organic revenue growth guidance of at least 25% for the full year, driven by enterprise hardware sales and strong recurring revenue growth [12][20] - The company expects to maintain a robust hardware sales pipeline and is well-positioned to capture larger enterprise opportunities [12][20] - Management expressed confidence in the long-term opportunities ahead, supported by a growing base of connected devices and a disciplined focus on profitability [13][20] Other Important Information - The company has successfully integrated Nayax Capital into its broader embedded payment initiative, enhancing operational efficiency [11][19] - Cash and cash equivalents totaled $173 million, with a solid balance sheet and net cash position [19] Q&A Session Summary Question: Update on EV partnerships and shipment timing - Management confirmed that EV charging partnerships are accelerating, with expectations for significant hardware revenue growth in Q4 [24][25] Question: Smart Coolers market offerings and demand - Management highlighted partnerships in the U.S. and Europe for Smart Coolers, viewing it as a significant growth driver [27][28] Question: Embedded banking and e-commerce opportunities - Management indicated that embedded banking will launch in Q1 2026, with e-commerce solutions following for the EV market [36][39] Question: Average transaction values across different verticals - Management noted that average transaction values are growing faster in higher ticket verticals like EV charging and car washes [42][44] Question: M&A appetite and market dynamics - Management stated a continued prudent approach to M&A, with potential for larger acquisitions in the future while focusing on organic growth [59][60]

Financial Data and Key Metrics Changes - Total transaction value increased by 35% year-over-year, reaching $1.8 billion, driving processing revenue growth of 33% for the quarter [14] - Revenue for Q3 was $104.3 million, a 26% increase compared to Q3 2024, with organic revenue growth of 25% [15][19] - Recurring revenue grew by 29% year-over-year, reaching $77 million, representing 74% of total revenue [16] - Gross margin increased to 49.3% from 45.7% in the prior year, with adjusted EBITDA rising to $18.2 million, representing 17.5% of revenue [17][18] Business Line Data and Key Metrics Changes - The customer base expanded by 21% year-over-year, totaling nearly 110,000 customers [14] - The install base of managed and connected devices grew by 17% year-over-year, exceeding 1.4 million devices [15] - Hardware revenue increased by 18% to $27 million, driven by strong demand for products and solutions [16] Market Data and Key Metrics Changes - The company is gaining market share in high transaction value verticals such as EV charging, amusement, and car wash, which contribute significantly to revenue [5][14] - Average transaction value rose from $2.15 to $2.40, reflecting strong positioning in emerging verticals [14] Company Strategy and Development Direction - The company is focused on profitable growth and expanding its one-stop-shop solution, which differentiates it in the automated self-service space [4] - Plans to launch an embedded banking product in the U.S. in early 2026, aiming to drive higher recurring revenue per customer [9] - The company is pursuing acquisitions that align with its objectives of geographic expansion and technology enhancement, including a recent letter of intent to acquire Integral Vending [10][12] Management's Comments on Operating Environment and Future Outlook - Management reiterated organic revenue growth guidance of at least 25% for the full year, driven by enterprise hardware sales [12] - The company expects to maintain strong recurring revenue growth and has a robust hardware sales pipeline [12][20] - Management expressed confidence in the long-term opportunities ahead, supported by a growing base of connected devices and disciplined focus on profitability [13] Other Important Information - The company completed the purchase of the remaining shares of Tigapo, enhancing its arcade gaming business [10] - Cash and cash equivalents totaled $173 million, with a solid balance sheet and net cash position [19] Q&A Session Summary Question: Update on EV partnerships and shipment timing - Management confirmed that EV charging partnerships are progressing well, with expectations for significant acceleration in Q4 [24][25] Question: Demand and growth in the smart cooler market - Management highlighted partnerships in the U.S. and Europe for smart coolers, viewing it as a significant growth driver [27][28] Question: Update on embedded banking and e-commerce opportunities - Management stated that the embedded banking product is set to launch in Q1 2026, with e-commerce solutions following [36][39] Question: Average transaction values across different verticals - Management noted that average transaction values are increasing, particularly in higher growth verticals like EV charging and car washes [42][44] Question: M&A appetite and market dynamics - Management indicated a continued prudent approach to M&A, with potential for larger acquisitions in the future [59][60]

Financial Data and Key Metrics Changes - For fiscal year 2025, Griffon Corporation reported HBP revenue of $1.6 billion, consistent with the prior year, and an EBITDA margin of 31.2% [3][4] - Fourth quarter revenue was $662 million, with adjusted EBITDA of $138 million, both consistent with the prior year [9] - Gross profit on a GAAP basis for the fourth quarter was $276 million, compared to $263 million in the prior year quarter, with a normalized gross margin increase of 60 basis points to 41.7% [9][10] - Fourth quarter GAAP net income was $44.95 million, or $1.54 per share, compared to $62 million, or $1.29 per share in the prior year [10] Business Line Data and Key Metrics Changes - Home and Building Products (HBP) revenue increased 3% year-over-year, driven by a favorable price index, while volume remained consistent [11] - Consumer and Professional Products (CPP) revenue decreased 10% to $936 million due to weak consumer demand in North America and the U.K., partially offset by increased organic volume in Australia [4][6] - CPP adjusted EBITDA increased 18%, with an EBITDA margin improvement of over 200 basis points despite lower sales volume [6] Market Data and Key Metrics Changes - The U.S. and U.K. markets experienced reduced consumer demand, impacting CPP revenue, while Australia showed increased organic volume [5][11] - The company noted that 85% of its business is unaffected by tariffs, indicating a strong position in the market despite external pressures [32] Company Strategy and Development Direction - The company plans to leverage improving market conditions and a pipeline of product innovations to increase long-term volume and profit margins [16][17] - Capital allocation strategies include share repurchases, paying down debt, and increasing dividends, reflecting confidence in the business outlook [7][8][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate strong financial performance despite a challenging macroeconomic environment [16] - The outlook for fiscal year 2026 includes expectations for revenue consistency with 2025 at $2.5 billion and adjusted EBITDA in the range of $580 million to $600 million [14][15] Other Important Information - The company repurchased 1.9 million shares at an average price of $70.99, totaling $560 million since April 2023 [7][14] - A quarterly dividend of $0.22 per share was announced, marking a 22% increase over the prior quarter [8] Q&A Session Summary Question: HBP margin performance in the quarter - Management indicated that the sequential EBITDA margin decline was due to product mix rather than headwinds, with expectations for favorable price mix in the upcoming year [20][21] Question: CPP performance versus expectations - Management noted better-than-expected volume and favorable price index contributing to CPP's performance [28] Question: Tariffs and sourcing choices - Management confirmed that current tariff policies are reflected in guidance, with ongoing efforts to mitigate impacts through global sourcing and cost management [29][31] Question: Competitive changes in the market - Management highlighted the company's strong position in the market, emphasizing innovation and diversified channels as key competitive advantages [37][39] Question: Retailer inventory levels and purchasing patterns - Management stated that weak consumer demand has led to higher inventory levels, with no immediate repurchasing expected [44] Question: Dividend increase and share repurchase strategy - Management clarified that increasing dividends while continuing share repurchases and debt reduction reflects a strong financial position and commitment to shareholder value [45]

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, triple the amount from the previous year [5][24] - Diluted earnings per share were $0.70 on a GAAP basis, and adjusted diluted EPS was $0.71, flat compared to last year [20] Business Line Data and Key Metrics Changes - Retail segment delivered sales increased slightly to $222 million, with adjusted operating margin at 10.7%, down from 12.6% due to fixed cost deleverage [21] - Wholesale segment delivered sales grew 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% year-over-year, with an increased operating loss [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 range from $525 million to $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 improve efficiency and reduce costs in the long term [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: Pricing actions and unit volumes - Management indicated nominal pricing actions were taken to offset tariff 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 expected in the short term due to the distribution transformation project, with improvements anticipated in the back half of the fiscal year [37][38] Question: Expansion into wholesale partners - Management emphasized the importance of strategic partnerships and compatibility with existing retail growth [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 sales decrease [47][48] Question: Inventory management - Management attributed reduced inventories to improved supply chain efficiency and tighter capital management [51] Question: Integration of the 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 post-exit of non-core businesses - Management confirmed the importance of case goods in enhancing the upholstery experience while focusing on efficient partnerships for sourcing [60]