CJ Tipolino: And then, moving to the income statement, looks like, marketing and sales took a sequential step down to about $41 million. Is this, sort of, like, a new run rate that we should be thinking about for the rest of the year? Do you see that picking back up?
Todd Vogensen: No. We’re doing a number of things as we look to control costs, and that cuts across, as Rob had mentioned, some of the things that we’re doing in showrooms to make our showrooms more efficient, all the way to bringing in-house some of our marketing activities. And so this really should be setting the baseline for us as we go forward. We’ll continue to look for efficiencies, but where you’re seeing it is probably a good place to start.
Operator: The next question comes from Brian Nagel at Oppenheimer.
Brian Nagel: I guess, I want to focus my questions, maybe some follow ups, but just on top line primarily. But should you, I recognize that the sales have been, sales growth has been bouncing around here a bit, but there definitely was a nice improvement from what we saw in Q4 to Q1. So, I guess, plus 1 to plus 12, plus 13 or so. The question is, how much of that is, that was improvement on internal improvements at Purple versus did that or did the sector help you out at all?
Rob DeMartini: Well, I mean, again, as you know, Brian, there’s not a great barometer for this category at the consumption level, but I think most of what I’ve heard is that the category is down somewhere between 5% and 10% and maybe closer towards that high range. So I don’t think we got any help from the category. I do think on the compare basis, we got some help from a pretty weak base period as wholesalers were getting ready to consuming at the same rate last year, but shipping in less as they were getting ready to make the product shift. So I think some of that 12 percentage points is comparison, softness versus a little a little more strength. But, clearly, that that’s not more than maybe 3% or 4% of that, and probably 8% of it is sell through. I mean, 25% door productivity improvement in wholesale and 11% comp performance in showrooms. That’s real growth, in a difficult time, and we want to see that continue.
Brian Nagel: Then, we reckon we have the guidance for the year, but I guess, we’re maybe more qualitatively as we think as a follow-up to that question, as we look through the balance of ’24? Assuming just for simplicity that the sector is not going to turn to 8 to have a tailwind, so it’s going to be challenging. I mean, what are the key, from internally, what are the key factors that could help to potentially drive some type of acceleration of that sales growth?
Rob DeMartini: Well, I do think that our marketing messaging needs to work harder than it’s working right now. It’s working, but it can work harder. I don’t think we’re differentiating in it, differentiating our product enough and communicating to consumers what the benefits are. So our marketing team and I are working on that. Again, I don’t want to make promises yet. We like the guidance we have out there, but we’ve got to get that investment to work harder. E-comm is a challenge as well. Our conversion rates of late have been weak, and we’ve got to fix that. I’m very optimistic about the way showrooms and wholesale is performing. I’m optimistic about what we’re seeing in the supply chain and what’s still to come. I’m very optimistic about the way consumers react to this new product.
We get, we do a lot of testing and we’re very, very confident that this product is performing better than whatever they were sleeping on before. And we have to just get better at communicating that. If we do that, it will accelerate our growth.
Brian Nagel: And then just one final question, just maybe more for Todd, on the balance sheet. So, what I think the guidance implies potentially positive EBITDA second half of this year, if I got that correct? I think, but the question I have, you know, with that, how do you view that, the cash balance? Is this sufficient at this point to continue to get you through this choppy period?
Todd Vogensen: Yes. We really do believe it is. So we ended Q1 with $35 million in cash. The cash usage we had in the quarter was less than our EBITDA less cash flow or CapEx. So we’re managing cash tightly. And as you point out, as we get into the second half, all plans are to get ourselves back to breakeven or better from both an EBITDA and a cash flow perspective. So, we believe we’re well positioned from a cash perspective at this point.
Operator: The next question comes from Bobby Griffin at Raymond James.
Bobby Griffin: Just first on your showroom comments, appreciate the detail there, and I apologize if I missed this question as part of the script. But did you comment any on how the profitability is trending among those stores? Or as you’ve seen some of these positive comps? How is the showroom channel profitability trending?
Rob DeMartini: It is trending in the right direction. We got a lot of work left to do, but I think we moved five more stores from negative to positive in the quarter and are now more than half of them are positive. We got a lot of work left to do, and it’s tough. I think as I said on past calls, it’s, when you compare it to the historical pro forma, it’s hard to tease out how much of this is brand, relative brand strength to where it was before versus how much of it’s category consumption. But I talked about in the script, the exposed grid, we’re in high priced locations and we’ve got to find ways to get people into the stores who weren’t otherwise on a mattress shopping trip that day, and we’ve got some encouraging things going on. So, yes, they’re moving in the right direction. Yes, they’re getting more profitable. And yes, we got a lot of work left to do.
Bobby Griffin: All right. Good deal. I appreciate that with especially extra detail with a little over half of them being now profitable. When you look through, now you got 60 showrooms or so. When you kind of look through the part that is comping negative versus comping positive, are you starting to see some interesting trends that can now be leveraged to kind of improve? I believe it would be the other 44% that were still comping down during the quarter? Or is it really just kind of wide-based on the differences among them?
