Financial Data and Key Metrics Changes - For the second quarter ended February 28, 2025, total consolidated net sales decreased by 8.5% to $19.1 million compared to the same period last year [11] - Gross profit as a percentage of net sales was 35.6%, down from 40.0% in the prior fiscal year period, reflecting a less profitable mix of sales [25][26] - Net income for the second quarter was $434,000, or $0.04 per diluted share, compared to $1.7 million, or $0.17 per diluted share, for the same period last year [26] Business Line Data and Key Metrics Changes - Xero's oil and gas net sales decreased by 28.5%, while NatureTech net sales decreased by 11.8%, and Xero's industrial net sales decreased by 3.7% [11] - NatureTech sales were $5 million, down from $5.6 million in the same period a year ago, attributed to order timing and seasonal variation [19] - Xero's oil and gas sales were $1.5 million, down from $2.2 million in the same period last year, but showed a 7.2% increase on a trailing 12-month basis [16][17] Market Data and Key Metrics Changes - Joint venture sales decreased by 15.7% year-over-year to $19.8 million, reflecting high energy prices and regional economic pressures in Europe [12] - NTIC China subsidiary reported an 8.1% increase in net sales to $3.7 million, stabilizing and approaching sales levels from fiscal 2021 and 2022 [13][14] Company Strategy and Development Direction - The company is focused on managing cash, reducing debt, and enhancing flexibility, with a disciplined approach to capital allocation [10][30] - Strategic investments are being made to support expected growth in the oil and gas business in the second half of the fiscal year [25] - The company remains committed to long-term growth opportunities in the Chinese market for industrial and bioplastic segments [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the increasing intensity of headwinds due to changes in U.S. trade and economic policies, but expressed confidence in a rebound in NatureTech and U.S. oil and gas sales in the second half of the fiscal year [7][9] - The leadership team has successfully navigated previous economic challenges and believes the current business model provides flexibility to handle uncertainties [21][22] Other Important Information - The company declared a quarterly cash dividend of $0.07 per common share, with plans to adjust the quarterly dividend to one cent per share to manage cash position [30] - As of February 28, 2025, working capital was $21.4 million, with outstanding debt of $8.1 million [28][29] Q&A Session Summary Question: How are the investments in the oil and gas sales team working out? - The company hired eight people, some of whom did not work out, but expects the impact to show in the second half of the year [34] Question: What are the dynamics behind potential issues in the compostable business? - A large distributor in the U.S. has been added, which is expected to significantly boost business, along with a new line of technology in food packaging [36] Question: Was the employee retention payment an actual cash payment? - Yes, it was an actual cash payment [38] Question: How is the core business performing currently? - The core business is expected to remain flat [41] Question: Can you provide more details on the gross margin decline? - The decline was due to increased pricing pressures in the NatureTech business, leading to a decrease in sales prices [46][47] Question: What is the outlook for the oil and gas business in the second half? - The focus will be on oil storage tank bottoms and pipeline casings, with expectations of significant business from large customers [60] Question: How is the situation in Brazil regarding the oil and gas industry? - Brazil is performing well, with significant business and ramping sales in the oil and gas sector [67]

Financial Data and Key Metrics Changes - For Q4 FY 2025, total sales reached $6 billion, a 7% increase year-over-year, primarily driven by higher volume [12] - Net earnings per diluted share were $0.58, up 81% compared to the previous year, with adjusted EPS at $0.64, doubling from a year ago [23] - Total gross profit was $668 million, reflecting a 14% increase from the same quarter last year [23] - SG&A expenses for Q4 were $611 million, up 5% from the prior year, but leveraged by 770 basis points due to growth in gross profit [26] Business Line Data and Key Metrics Changes - Retail unit sales increased by 6.2% in Q4, while used unit comps were up 5.1% despite one less selling day [12] - Retail gross profit per used unit reached a record $2,322, up from $2,251 in the previous year [14] - Wholesale unit sales increased by 3.1% year-over-year, with wholesale gross profit per unit at $1,045, down from $1,120 [14][15] Market Data and Key Metrics Changes - CarMax's market share for age zero to 10-year-old used vehicles was 3.7% in calendar 2024, consistent with 2023 [13] - The company experienced a recovery in market share during the second half of 2024 after initial pressure in the first half [13] Company Strategy and Development Direction - The company aims to achieve ongoing growth in retail and wholesale unit sales and market share, targeting double-digit EPS growth for years to come [49] - Plans include opening six new store locations and four stand-alone reconditioning and auction centers in FY 2026, up from five and two, respectively, in FY 2025 [33] - The focus is on enhancing digital capabilities and customer experience, with a new marketing campaign planned to highlight omnichannel experiences [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to gain further market share and achieve significant earnings growth despite macroeconomic challenges [14][50] - The company is closely monitoring the impact of potential new car tariffs on used car prices and consumer behavior [78][80] - Management highlighted the importance of operational efficiencies and cost management in response to rising parts costs due to tariffs [80] Other Important Information - CarMax was recognized by Fortune Magazine as one of the 100 best companies to work for for the 21st consecutive year [51] - The company opened its 250th store during the fourth quarter, marking a significant milestone [52] Q&A Session Summary Question: Insights on share losses in the first half and gains in the second half - Management attributed the share losses to a significant price correction in the previous year and highlighted improvements in customer experience and inventory acquisition as drivers for the second half gains [60][64] Question: Quarter-to-date used comp trends and impact of new car tariffs - Management reported strong comp trends in December and January, with high single-digit growth expected in the first quarter [72][74] Question: Inventory acquisition strategy amid tariff uncertainty - Management emphasized their expertise in inventory management and the ability to adapt to changing market conditions, ensuring a robust inventory strategy [128] Question: Service gross profit improvement - Management noted that efficiency improvements, cost coverage, and positive sales contributed to the better performance in service gross profit [134][136]

Financial Data and Key Metrics Changes - The company closed 2024 with a strong cash position of EUR482 million, reaffirming its expected financial runway into 2028 [14][74]. - Revenues for the full year 2024 increased significantly by EUR481.4 million to EUR535.2 million compared to the same period in 2023, primarily driven by a new licensing agreement with GSK [66][67]. - Operating loss for the fourth quarter of 2024 was EUR43.8 million, an improvement from an operating loss of EUR88 million in the same quarter of 2023 [67]. Business Line Data and Key Metrics Changes - In oncology, the Phase 1 study for glioblastoma completed enrollment of Part B, with promising dose escalation data indicating acceptable tolerability and immune responses [10][16]. - The off-the-shelf precision immunotherapy program for squamous non-small cell lung cancer achieved IND clearance from the FDA, with the first patient expected to be treated in the second half of 2025 [11][20]. - In infectious diseases, a new licensing agreement with GSK for prophylactic vaccines progressed, with a EUR10 million milestone payment received for a combined influenza and COVID-19 vaccine [12][62]. Market Data and Key Metrics Changes - The company anticipates significant market opportunities in oncology and infectious diseases, particularly with its proprietary mRNA technology [9][21]. - The licensing agreement with GSK, valued up to EUR1.45 billion plus royalties, is expected to leverage GSK's expertise in infectious diseases for successful development and commercialization [15][62]. Company Strategy and Development Direction - The company has refocused on technology innovation and R&D, streamlining operations and reducing workforce by approximately 30% to enhance efficiency [8][15]. - Future strategies include advancing mRNA therapeutics in oncology and infectious diseases, with a focus on early-stage interventions to improve patient outcomes [19][37]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of mRNA technology to transform medicine, emphasizing the importance of agility and strategic partnerships [73][75]. - The company plans to continue focusing on high-value mRNA opportunities supported by a strong financial position and a broad IP portfolio [75]. Other Important Information - The European Patent Office upheld the validity of the company's split poly-A tail patent, which is crucial for its mRNA vaccine technology [13][21]. - The company has successfully terminated all remaining raw material commitments related to its first-generation COVID-19 vaccine, ensuring no further related payments [65]. Q&A Session Summary Question: What are the early signs of activity for the squamous program? - Management highlighted extensive validation assays for antigens, expressing optimism based on preclinical evidence of immune responses [82][84]. Question: What is the regulatory path for the CVGBM asset? - Management indicated that discussions with regulators would occur after Phase 1 data, aiming for a randomized Phase 2 study if results are promising [95][96]. Question: What criteria will be used to make go/no-go decisions for GBM? - A threshold of overall survival of 50 months or longer and an overall response rate of about 20% will guide decisions [103]. Question: How does the cash runway guidance into 2028 account for ongoing pipelines? - The cash runway includes core programs and clinical phases, but not all Phase 1 and Phase 2 costs are prior to potential cash out [108]. Question: What is the strategy for collaboration in oncology and infectious diseases? - The company aims to focus on early development and technology innovation, with plans to partner for late-stage development in oncology [114]. Question: What are the timelines for the European Patent proceedings? - Upcoming hearings for patent validity and infringement are scheduled, with potential appeals from opposing partners [120][122].

Financial Data and Key Metrics Changes - The company reported revenues of $680.6 million for the fiscal year, down from $700.3 million the previous year, reflecting a category headwind of approximately 9% [54] - Gross margin was nearly 59%, with a solid level that provides options for navigating current macro conditions [55] - Net income for the quarter was $35.3 million, or $2.13 per diluted share, compared to $31 million, or $1.87 per diluted share in the prior year period [61] Business Line Data and Key Metrics Changes - In the fourth quarter, net sales decreased by $9 million or 3.6% to $241.5 million compared to the prior year [56] - Showroom net sales decreased by 1.6% to $154.5 million, driven by a decrease of 9.4% in omnichannel comparable net sales [56] - Internet net sales decreased by 9.7% to $70.5 million, while other net sales increased by 6.7% to $16.5 million due to higher productivity of temporary online pop-up shops [57] Market Data and Key Metrics Changes - The company noted that the home furnishings category continues to face challenges, with a general decline of negative mid-single digits on average for the last five to six months [65] - The company anticipates a 5% full-year category decline, reflecting recent trends [66] Company Strategy and Development Direction - The company aims to reach 3 million Lovesac households by 2030 and build the most loved home brand in America [23] - The introduction of the EverCouch is expected to expand the addressable market significantly, opening up a $14 billion couch category [20] - The company is focused on maintaining a healthy balance sheet to weather macro uncertainties and enhance returns on capital [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism entering fiscal 2026, citing a strong position despite challenging macro conditions [13] - The company is actively pursuing options to manage tariff impacts and has a plan to reduce sourcing from China below 10% [104][108] - Management highlighted the importance of innovative product offerings and strong customer relationships as key growth drivers [26] Other Important Information - The company reported a healthy cash position of $83.7 million, with no borrowings on its recently amended credit facility [62] - The company has made significant progress in diversifying its supply chain to mitigate tariff risks [47] Q&A Session Summary Question: Inventory strategy given the tariff delay - Management indicated that they have built up inventory across all product lines and are actively working to source from dominant countries like Malaysia and Vietnam to stay in stock [78][79] Question: Consumer behavior trends in February and March - Management noted stable performance from customers, with no significant changes in consumer spending observed [82] Question: Clarification on Q1 revenue growth assumptions - Management confirmed that they expect flat to slightly positive growth in Q1, with some noise in year-over-year growth rates due to promotional strategy changes [92] Question: Pricing strategy in response to tariffs - Management is exploring vendor concessions and believes that their structurally higher margins allow for smaller price increases without impacting demand [99][100] Question: Potential for moving sourcing out of China - Management stated that they are actively moving production out of China and are on track to reduce sourcing below 10% this year [108] Question: Impact of lower interest rates on home-related merchandise sales - Management expressed optimism that lower interest rates could unlock housing market demand, allowing the company to participate in growth opportunities [111][113]

Financial Data and Key Metrics Changes - In the second quarter, net merchandise sales reached over $1.3 billion, and total revenue was almost $1.4 billion [14] - Net merchandise sales increased by 0.8% or 7% in constant currency during the second quarter [15] - Net income for the second quarter was $43.8 million or $1.45 per diluted share, compared to $39.3 million or $1.31 per diluted share in the same quarter last year [25] - Adjusted EBITDA for the second quarter was $87 million compared to $84.1 million in the same period last year [25] - Total gross margins as a percentage of net merchandise sales decreased by 10 basis points to 26.6% [21] Business Line Data and Key Metrics Changes - In Central America, net merchandise sales increased by 0.4% or 0.6% in constant currency [15] - In the Caribbean, net merchandise sales increased by 0.4% or 0.6% in constant currency [16] - In Colombia, net merchandise sales increased by 0.6% or 16% in constant currency [17] - Membership accounts grew by 0.1% to over 1.9 million accounts, with a 12-month removal rate of 87% [18] Market Data and Key Metrics Changes - All markets in Central America had positive comparable net merchandise sales growth, except for El Salvador [15] - The Caribbean region contributed approximately 230 basis points to the growth in total consolidated comparable net merchandise sales for the second quarter [16] - Colombia contributed approximately 100 basis points to the growth in total consolidated comparable net merchandise sales for the quarter [17] Company Strategy and Development Direction - The company is focusing on enhancing its distribution infrastructure and plans to open new warehouse clubs in Guatemala and other locations [30][31] - The company is actively seeking ways to improve its distribution network, including operating its own fleet of trucks [33] - The company is investing in technology to enhance supply chain efficiency and improve the member experience [44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing tariff challenges and emphasized the importance of sourcing products locally and regionally [10][11] - The company is developing contingency plans to adapt to the uncertain tariff environment [12] - Management expressed optimism about the growth opportunities in digital channels and plans to continue investing in this area [44] Other Important Information - The company opened its ninth warehouse club in Costa Rica during the quarter [9] - The effective tax rate for the second quarter was 22% compared to 25% a year ago, primarily due to tax optimization initiatives [24] - The company has seven recycling centers open and plans to expand this program [46] Q&A Session Summary Question: Impact of tariffs on merchandise sourcing - Management is not aware of any reciprocal tariffs imposed by Central American countries and believes the impact will be minimal [55][60] Question: Future store openings - Management disclosed that there are up to six locations in various stages of due diligence and permitting, but no specific timing was provided [66]

Financial Data and Key Metrics Changes - Total revenues for Q4 2024 increased by 32.7% to 16.3 billion pesos, while full-year revenues increased by 30.3% to 57.4 billion pesos [5][8] - Same-store sales growth for Q4 was 11.8%, and for the full year, it was 13.4% [5][10] - Net cash flows generated by operating activity reached 3.749 million pesos, a 19.4% increase year over year [5] - The company ended the year with a net cash position of approximately 1.4 billion pesos and retained about 150 million USD since the IPO [6] Business Line Data and Key Metrics Changes - The company opened 138 net new stores in Q4 and a total of 484 new stores for the full year, representing a 21% increase over 2023 [5][7] - Private labels now represent 54% of total sales, up from 47% in 2023 [14] Market Data and Key Metrics Changes - The company significantly outperformed the Antad numbers, with Q4 same-store sales growth of 11.8% compared to Antad's 2.6% [10] Company Strategy and Development Direction - The company plans to open between 500 and 550 new stores in 2025, with same-store sales guidance between 11% and 14% and total revenue growth in the range of 26% to 29% [22] - The company continues to focus on enhancing its value proposition through continuous improvement in product quality and features [11][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience during economic downturns and anticipated a strong year in 2025 despite uncertain conditions [21][23] - The company has a robust strategy for real estate expansion, focusing on increasing store density in existing markets while exploring new geographies [31][32] Other Important Information - SG&A as a percentage of revenue increased by 96 basis points to 15.2% in Q4 2024, driven by sales and administrative expenses [15][16] - EBITDA for Q4 2024 reached 845 million pesos, representing a 51% growth year-over-year [19] Q&A Session Summary Question: Expansion strategy and balance of growth across new and existing areas - Management confirmed a decentralized approach to real estate, focusing on increasing store density and exploring new geographies [31][32] Question: Drivers behind the increase in private label penetration - The increase is attributed to improved value offerings in private labels, leading to higher sales [80] Question: Gross margin expansion and competition outlook - Management noted that gross margin improvements are driven by increased purchasing power and operational efficiencies, and they have not observed significant changes in competition [66][72] Question: Same-store sales growth sustainability - Management expressed cautious optimism about maintaining high same-store sales growth rates, driven by continuous improvements in the value proposition [51][52] Question: Store opening guidance and operational bottlenecks - Factors affecting store openings include real estate availability, capital, and human resources, with confidence in achieving the projected numbers for 2025 [59][62] Question: Optimal expense levels as a percentage of sales - Management indicated that expenses should decrease as a percentage of sales over time as the company scales [88][90] Question: Future of remittances and supplier relationships - Management confirmed that remittances are on the table as a potential service, and long-term planning with suppliers has mitigated current market uncertainties [113][118]

Financial Data and Key Metrics Changes - Net revenue for Q1 2025 was $26.2 million, a 57% increase from $16.7 million in Q1 2024, driven by sales momentum, channel expansion, and broader brand adoption [7][11] - Gross profit for Q1 2025 was $15.9 million, or 61% of net revenue, compared to $9.6 million, or 58% of net revenue for Q1 2024, indicating improved gross margin [9] - Net income for Q1 2025 was $1.7 million compared to $17,000 for Q1 2024, reflecting an overall increase in product sales [11] - Adjusted EBITDA for Q1 2025 totaled $2.8 million compared to $1.2 million for Q1 2024 [12] Business Line Data and Key Metrics Changes - Direct-to-consumer revenues increased by $6.7 million through Burna.com and Amazon, with Amazon sales growing at a faster rate than Burna.com sales [7][8] - Sales to dealers increased by $1.9 million, or 78%, with significant contributions from chain stores, particularly Bass Pro Shops [9] Market Data and Key Metrics Changes - Amazon sales represented 26.9% of Burna's total direct-to-consumer sales in Q1 2025, up from 19.3% in Q1 2024, and climbed to 32.6% in March 2025 [17][18] - The company has seen improved daily sales trends in February and March compared to January, despite general market softness [15] Company Strategy and Development Direction - The company is focusing on expanding its retail presence through partnerships, such as the store-within-a-store program with Sportsman's Warehouse, which has expanded to 54 locations [23][24] - The upcoming launch of the compact launcher is expected to drive significant sales growth, with a production goal of over 25,000 units before the official release [54][59] - The company is transitioning its supply chain to domestic suppliers, which is expected to enhance quality control and reduce costs associated with inventory in transit [33][44] Management's Comments on Operating Environment and Future Outlook - Management anticipates that Q1 2025 was the low point for revenues in the year, with expectations for sequential growth in subsequent quarters driven by the new compact launcher [75] - The company is well-positioned to offset the impact of increased tax rates and tariffs through gross margin expansion and disciplined operating expense management [60] Other Important Information - The company has initiated production of its payload rounds at a new facility in Fort Wayne, Indiana, with an annual capacity of 8 million rounds [46] - The compact launcher is designed to appeal to a broader market, including women, due to its smaller size and ease of use [52] Q&A Session Summary Question: Can you provide insights on early sales trends for Q2 and ROAS management? - Management noted that ROAS is typically lower in the early part of the year, with expectations to focus on existing customer sales for the new compact launcher, reducing advertising spend until later in the year [66][67] Question: What is the rollout plan for the new compact launcher? - The company plans to have 25,000 to 30,000 units ready before the launch, with dealer orders starting to be fulfilled by April 21, leading up to the public release on May 1 [70][73] Question: What are the current operational stores and learnings from the Sportsman's partnership? - Currently, one store is operational, with 13 more set to open by May 1, and the company is optimistic about leveraging Sportsman's existing foot traffic to drive sales [80][82] Question: What is the MSRP for the new compact launcher compared to existing products? - The MSRP for the new compact launcher will be $549.99, compared to $479.99 for the LE and $379 for the SD [94] Question: Will the new compact launcher have different ammo margins? - The new 61 caliber ammo will have similar pricing and margins as existing products, with no significant cost differences anticipated [96]

Financial Data and Key Metrics Changes - Revenue for Q4 2025 grew by $15.4 million, or 49.3%, compared to Q4 2024, totaling $46.6 million [31] - For the full fiscal year 2025, revenues increased by $42.5 million, or 34.1%, reaching $167.2 million [31] - Consolidated gross margin increased by 420 basis points year-over-year from 35.9% to 40.1% in Q4 2025 [32][49] - Net loss for Q4 2025 was $18.4 million, or negative $2.42 per diluted share, compared to a net loss of $1 million, or negative $0.13 per diluted share, in Q4 2024 [32][39] - Adjusted EBITDA excluding FX for Q4 2025 was $6.1 million, an increase of $2.7 million, or 79.4%, compared to Q4 2024 [40][50] Business Line Data and Key Metrics Changes - Fire services product line sales increased by $14.7 million year-over-year, driven by $8.2 million from the LHD acquisition and organic growth of $2.6 million [34] - Disposable sales increased by $1.5 million, or 12%, primarily in the U.S. [34] - Organic gross margin percentage increased to 48.5% from 35.8% for Q4 2024, driven by a positive product mix [36][49] Market Data and Key Metrics Changes - Domestic sales for Q4 2025 were $18.3 million, or 39% of total revenues, while international sales were $28.3 million, or 61% of total revenues [35] - For the full fiscal year 2025, domestic sales were $60.4 million, or 36% of total revenues, and international sales were $106.8 million, or 64% of total revenues [42] - European revenue grew by $10.8 million, or 292%, to $14.5 million [55] Company Strategy and Development Direction - The company is focused on accelerating growth and margins within the global fire turnout gear and industrial PPE markets through strategic acquisitions [7] - Recent acquisitions have expanded the company's footprint in North America, Europe, Asia, Oceania, LATAM, and the Middle East [10] - The company aims to leverage its market position in fire protection premium brands and M&A to accelerate profitable growth in the higher margin fire protection sector [65] Management's Comments on Operating Environment and Future Outlook - Management acknowledges increasing tariff pressures and broader economic uncertainties but views these as opportunities to strengthen operations [20][22] - The company is well-positioned in recession-resistant sectors, providing confidence in its ability to weather near-term challenges [22] - For fiscal year 2026, the company expects revenue of $210 to $220 million and adjusted EBITDA of $24 to $29 million [63][64] Other Important Information - The company completed a $46 million public equity offering to improve its balance sheet and net debt ratio [13] - Goodwill impairment charges of $10.5 million were recorded for Eagle and Pacific Helmets, impacting net loss [32][67] - The company is implementing a company-wide ERP system to enhance operational efficiency [15] Q&A Session Summary Question: Guidance and Tariff Impact - Analyst inquired about the timing of guidance and potential tariff impacts on costs and revenue [79] - Management confirmed that guidance remains unchanged despite tariff uncertainties [80][81] Question: BodyTrack Strategy - Analyst asked about the future of BodyTrack and its sales strategy [84] - Management indicated plans to monetize BodyTrack through patent enforcement and a revised sales strategy [86] Question: Tariff Mitigation Strategies - Analyst questioned the challenges of moving manufacturing to the U.S. [92] - Management discussed exploring options in Mexico and India for manufacturing to mitigate tariff impacts [95][98]

Financial Data and Key Metrics Changes - The company reported pre-tax earnings of $382 million or $0.46 per share, flat compared to the previous year [7] - Revenue increased by 3.3% year-over-year, reaching a record for the March quarter, with an operating margin of approximately 5% [7][16] - Free cash flow was $1.3 billion, with a double-digit return on invested capital [7] Business Line Data and Key Metrics Changes - Premium and loyalty revenue grew approximately 7% year-over-year, with American Express revenue increasing by 13% to $2 billion [18] - Cargo revenue rose 17% year-over-year due to higher yields and volume growth, while MRO revenue increased by 7% [19] - Domestic revenue grew by 1%, impacted by demand softness in the main cabin, while international revenue grew by 7% [19] Market Data and Key Metrics Changes - Domestic market showed softness in consumer and corporate travel, particularly in the Main Cabin [11] - International revenue growth was driven by strong performance in the transatlantic and Pacific markets, with transatlantic revenue growing by 5% and Pacific revenue by 16% [20] - Approximately 80% of international revenues are from U.S. point of origin, with strong bookings for the peak summer period [22] Company Strategy and Development Direction - The company is focusing on managing capacity growth to align with demand, planning to keep second-half capacity growth flat compared to last year [12] - A significant milestone was announced with a 10-year agreement with UPS for maintenance, repair, and overhaul services, supporting long-term revenue diversification [24] - The company aims to protect margins and cash flow while continuing to invest in customer experience and diversifying revenue streams [24][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging macro environment with broad economic uncertainty affecting growth [10] - Despite the challenges, the company remains confident in its ability to deliver solid profitability and meaningful cash flow in 2025 [13][32] - Management emphasized the importance of monitoring demand closely and adjusting strategies accordingly [38][106] Other Important Information - The company repaid $530 million in debt, ending the quarter with gross leverage of 2.6 times [28] - Moody's upgraded Delta's credit rating during the quarter, marking the third upgrade in eight months [28] Q&A Session Summary Question: Context on guidance for the second quarter - Management is closely monitoring the impact of economic conditions on demand, particularly in the price-sensitive U.S. domestic market [36][37] Question: Capacity cuts and their timing - Capacity cuts will begin in August, particularly in the Southeast, as demand is expected to decline [46][47] Question: Performance of different demand cohorts - Premium travel has shown resilience, while Main Cabin demand is more challenged [50] Question: Corporate travel trends - Corporate travel remains flat year-over-year, with some sectors experiencing more significant impacts [102][106] Question: Impact of tariffs on aircraft deliveries - The company is working closely with Airbus to minimize tariff impacts on aircraft deliveries [113][114] Question: Booking trends and cancellations - Initial drop-off in bookings was short-lived, with sales rebounding above last year's levels [70][71] Question: International market performance - Canada has seen a significant drop in bookings, while Mexico's performance is mixed [96] Question: Risks and opportunities in the competitive environment - The company believes its strong brand and loyalty programs position it well against low-cost carriers [80][81]

Financial Data and Key Metrics Changes - Total net sales for Simply Good Foods in Q2 2025 reached $359.7 million, reflecting a 15.2% increase year-over-year, driven by contributions from Owen and organic growth [44] - Adjusted EBITDA increased by 17.6% to $68 million compared to the previous year [48] - Net income grew by 10.9% to $36.7 million, with adjusted diluted EPS rising to $0.46 from $0.40 [50] Business Line Data and Key Metrics Changes - Quest net sales grew by 16.5% in Q2, benefiting from strong retail takeaway and timing of shipments [44] - Atkins net sales declined by 11.5% due to lower consumption and reduced trade inventory [45] - Owen experienced a retail takeaway increase of 52%, with ready-to-drink shakes growing by 53% [36][37] Market Data and Key Metrics Changes - The nutritional snacking category grew by 12% in Q2, marking the 16th consecutive quarter of growth [16] - Quest now represents 60% of the company's net sales, with a strong growth trajectory [18] - Owen's brand awareness and household penetration remain low, indicating significant growth potential [38] Company Strategy and Development Direction - The company aims to lead the nutritional snacking category by leveraging innovation, expanding product availability, and increasing brand awareness [41][42] - Focus on transitioning underperforming Atkins SKUs to faster-turning Quest and Owen products to enhance overall contribution margins [66][70] - Continued investment in Atkins is planned, with new product launches and marketing strategies to stabilize the brand [34][96] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a dynamic environment with consumer sentiment pressures but remains optimistic about the demand for high-protein, low-sugar products [41] - The company expects full-year net sales growth of 8.5% to 10.5%, with adjusted EBITDA growth of 4% to 6% [54] - Management is confident in the long-term growth potential of Quest and Owen, despite short-term challenges with Atkins [110][112] Other Important Information - The company has repaid $100 million of its term loan since the beginning of the fiscal year, with a net debt to trailing 12-month adjusted EBITDA ratio of 0.7 times [51] - The effective tax rate for Q2 was 25%, compared to 23.7% in the previous year [49] Q&A Session Summary Question: What is driving the reduction in sales guidance for Atkins? - Management noted that the reduction is due to lost display space and distribution at a key customer, which was more significant than anticipated [64][66] Question: What prompted the relaunch of Quest shakes? - The relaunch is based on consumer demand for indulgent, high-protein options, with a focus on flipping the macros of traditional shakes [74][76] Question: How will the company build awareness for Owen? - Initially, the focus will be on expanding distribution, with marketing efforts to follow once a solid distribution base is established [120] Question: What is the outlook for the bar category, specifically for Quest? - Management is optimistic about innovation in the bar category, with new products expected to drive growth [125][126]