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Greetings, and welcome to the La-

Thank you, Ali. Good morning, everyone, and thanks for joining us to discuss our fiscal 2026 first quarter. Joining me on today's call are Melinda Whittington, La-

Thanks, Mark. Good morning, everyone. Yesterday, following the close of market, we reported our July-ended first quarter results. During the quarter, we delivered sales growth in both our Retail and Wholesale segments as well as margin expansion in Wholesale, and we accomplished significant Century Vision' strategic milestones even despite continued industry headwinds. Highlights for our first quarter included; in our Retail segment, delivered sales increased 2%, and written sales increased 5%. We opened 2 new company-owned La-

Thank you, Melinda, and good morning, everyone. As a reminder, we present our results on both a GAAP and adjusted basis. We believe the adjusted presentation better reflects underlying operating trends and performance of the business. Adjusted results exclude items, which are detailed in our press release, and in the tables in the appendix section of our conference call slides. On a consolidated basis, fiscal 2026 first quarter sales decreased 1% to $492 million versus the prior year as growth in Retail and Wholesale segments was offset by a decline in Joybird sales. Consolidated GAAP operating income was $22 million and adjusted operating income was $23 million. Consolidated GAAP operating margin was 4.5%, and adjusted operating margin was 4.8%, with margin expansion on our Wholesale segment more than offset by Retail margin compression due to fixed cost de-leverage and investment in new store openings. As a reminder, our first quarter is generally the lowest sales and margin quarter in the fiscal year due to seasonally lower industry sales in our annual weeklong plant shutdown. Diluted earnings per share totaled $0.44 on a GAAP basis and $0.47 on an adjusted basis. As I move to the segment discussion, my comments from here will focus on our adjusted reporting, unless specifically stated otherwise. Starting with the Retail segment for the first quarter, delivered sales were $207 million, up 2% over the prior year's first quarter, driven primarily by new and acquired stores. Retail adjusted operating margin was 6.3% versus 10.3% due to de-leverage in same- store sales and investment in new store openings. For our Wholesale segment, delivered sales for the quarter increased 1% to $353 million, driven by growth in our core North America La-

Thanks, Taylor. We're leveraging our 98 years of experience and our fortress balance sheet to navigate a challenging and volatile environment. And we're doubling down on driving our core businesses to serve our consumers with the comfort and quality they expect from La-

Thank you, Melinda. We will begin the question-and-answer period now. Ali, please review the instructions for getting into the queue to ask questions.

[Operator Instructions] Our first question is coming from Brad Thomas with KeyBanc Capital Markets.

This is Taylor

Yes. We have -- we definitely saw some sequential traffic improvement through our first quarter, and that has continued into early August. It's step by step, and we're managing prudently through that. Too early to call that a trend. As you know, the holidays are big for our industry. And so we're optimistic about Labor Day and with our ability to execute in-store and deliver a great consumer experience. We're focused on making sure our marketing investments are driving traffic to the store. But at the same time, we know consumer fundamentals are challenged right now. That's been true for our industry for a while and I see that growing with an increasingly pressured consumer. So we're sort of navigating prudently as we go forward. But no doubt, we have seen some level of continued trend increase on traffic overall.

That's great. And maybe just on the margin performance, it sounds like some of the newer stores are putting some pressure here on the Retail segment. I guess how should we think about the ramp of those stores to maturity and as it relates to margins in the quarters ahead?

Yes. So as Melinda had mentioned in our prepared remarks, we stood up 13 new stores over the last 12 months, which we're incredibly excited about, which is exactly part of our strategy to expand La-

And I guess one more before I turn it over. Melinda, can you kind of just speak to what you're hearing from your Wholesale customers. In some of our checks, we've heard some of the industry being hesitant to order products just given the uncertainty in tariffs and pricing. I presume that La-

Yes. As we noted, we did see growth in our Wholesale business for the quarter. And again, those trends have continued early into this next quarter. I think to your point, there's a lot of -- there's a level of hesitancy just around where the consumer is going to go. And so that's secondary when that pushes through on our B2B side of things. As you note, the fact that we are -- the vast majority of our product is manufactured here in North America, so we're not as impacted by tariffs. That plays well for us being able to supply those consumers as we go through. And so we're navigating to play with, particularly with those strategic customers, the long-term players like the Slumberland of the world, to some of our newest like the Farmers, that we just mentioned opening up, to make sure that we're providing them a strong, steady supply of product at the right price point for their consumers. And that business has been steady for us.

Our next question is coming from Anthony Lebiedzinski with Sidoti.

So first, just curious, in your North American business, did you guys see any notable geographic differences in traffic and sales? Or was it more or less consistent across the board?

No big differences, I guess, across North America. I'd just call out that on the Canada side of things, with the 25% retaliatory tariff, of course, our product that we sell in Canada is primarily manufactured in the U.S. with a little bit of Mexico. And so we have -- with that pricing going through, we've seen an offsetting elasticity on units. So that business is holding steady but down on units and offset by pricing but around the U.S., no big geographic shifts.

Okay. And Melinda, you spoke about this a little bit this morning also mentioned in your press release that you're evaluating alternatives to address financial pressure from non-core parts of the business. Can you expand on that as to what you're looking forward to do exactly?

Absolutely. So over the time that we have had our Century Vision strategy now for 4 years. We've been very clear that we see our biggest opportunity around our La-

Okay. And then also given the uneven or choppy demand that you guys are seeing as well as some others in the industry, how are you thinking about the pace of new store openings and your distribution, home delivery transformation, are you looking to perhaps slow that down if this type of trend continues? Or are you kind of fully set on the current time line?

I think it's important that we play offense even in challenging times. And because of the strength of our financial position, our balance sheet, our cash, we're in the enviable position to be able to do that. Now to your point, Anthony, we'll continue to monitor. It's been sort of unprecedented in times now, 4 years running for a variety of situations. So we'll monitor that and we'll be prudent. But at this stage, we are committed to our strategy.

Okay. And my last question is, you mentioned higher promotional activity in Casegoods, which is a as you pointed out just now, it's a smaller piece of your business. So near term, are you still seeing pressure there as far as promotional activity? How should we think about that?

It was really more transitory in quarter 1, particularly across both our Retail and Wholesale segments. In Retail, we were just looking to work through, call it, some nonperforming inventories so that we can re-merchandise our stores with the optimal product assortment, particularly as we head into the key furniture buying season and holiday season. And then on the -- our actual case goods business, always we have a good healthy routine of continuing to try to work through nonproductive inventory, and we're able to work through some of that in quarter 1, which is typically a lower demand season for furniture, so a good time to just work through things at value.

Our next question is coming from Bobby Griffin of Raymond James.

I guess moving to first to start, can you maybe just help me understand better kind of the cadence of the written business during the quarter. I think we started out with a good Memorial Day or I think the -- we were mentioning you were pleased with the results on the last call. And then kind of during the quarter, you guys updated towards the low end of the guide. So is it the right way to think like May trends are pretty good and things softened in June and July and then improved in August? Just trying to understand kind of how it plays sequentially versus when we spoke last.

Yes. So if I look at -- to your point, if I go Q4 to Q1 and then into August, we have seen a bit of improvement in traffic trends that played broadly into written. We haven't relative to the last time we spoke, Bobby, we just didn't see that come through quite as significantly as we would have expected, and particularly on those same-store sales for our Retail side, between a softer consumer than maybe we had hoped, investment in new stores and then as Taylor just alluded to, really also investing in some discounting to re-merchandise our floors. The combination of those 3 just came through a little bit more harshly than we had anticipated, which impacted the margins versus the last time we put guidance out there.

Okay. And is that -- was that the big difference on like the EBIT margins this quarter coming in basically 70 bps below the low end when you guys kind of in, I guess, mid-July pointed towards the low end. Did you accelerate some of the discounting or pull forward some of those onetime hits to just get it done this quarter?

I don't know if I would say it was a pull forward other than we wanted to re-merchandise and work through and it was working. So we just continue it because it's right for the business, particularly as we get into the bigger season. And that in combination with the consumer as we exit the quarter, just being a little bit more choppy and uneven than perhaps our expectations contributes to the -- that's coming a little bit lower than what we put out there.

Okay. And then, Taylor, when you kind of gave the -- you talked a little bit about the opportunity on the supply chain rework and then mix with like it's going to take some investment. So is the right way for us when we kind of want to tune these models up. Let's just assume we stay in the similar consumer environment for, call it, the next 6 or 12 months. Should we think we have further margin pressure to go before the benefits start to flow through? Or any way to help us kind of think a little bit maybe -- I know you guys are not giving a long-term guidance, but just kind of how this plays out in terms of the investment side versus the ultimate improvements that can come from the rework supply chain?

Yes. So we -- I would say we just kicked this off in this last quarter. So quarter 1 was our first big step in with the Arizona relocation of the new centralized hub. So as I mentioned, in the first 2 years, we will see a modest drag on adjusted margins just due to transition inefficiencies as we're standing up new sites while operating legacy sites. It's manageable, but it's there. And then into year 3, we'll start seeing some savings than we'll see the biggest impact and the biggest meaningful margin expansion as we're in an exit year 4, which is about 50 to 75 basis points expansion for the segment.

And is that -- that shows up in Retail segment margins, EBIT margins or Wholesale?

Wholesale.

And I guess, lastly for me, just on the store, the new store productivity, the industry is choppy, volatile different ways to characterize it. Are you guys pleased with the ramp-up period? I think you called out it's an initial drag in the first year, which makes sense, but then you get kind of up to in line in year 2 or 3. Is that in line with historical standards? Or do you think there's opportunities to make that a little quicker? Like how do you -- how are you viewing the new store productivity on some of these newer stores?

I think the 2 to 3 years to get to going productivity is the rule of thumb we've had historically, and that continues. Now there is no doubt, particularly as we say, with a choppy consumer that it's important across all of our stores, we are maximizing everything we're doing to make the most of that installed base, which is -- was a challenged consumer, a little bit more challenging. But we are -- we're honing everything we're doing there. We continue to get better every day with what we're doing in retail, and we'll continue to make progress there.

Thank you, ladies and gentlemen. As we have no further questions in queue at this time, I would like to turn the call back over to Mr. Mark Becks for any closing remarks.

Thanks, Ali. Melinda, Taylor and I will be in our offices for the rest of the day to take any follow-up questions. Thanks, and have a great day.