Chasen Bender: Understood, appreciate that color. And then maybe just dovetailing on the prior question, for — I guess Chris and Laura, both can tag team this, but I — maybe you could just provide some thoughts on the capital allocation priorities for the business, understanding the comment that the water sports businesses might not be for sale, but could we see potentially something on the other side of things, whether that be more tuck-ins or M&A, more transformative M&A, or is the near-term focus more centered on kind of fixing the core brands from the onset?
Chris Metz: Yeah, it’s a good question. And so, capital allocation is always front of mind for myself and any business that I lead. We’re stewards of the capital that investors have given us and we take it as a top priority. So you see last year, one of the things that excited me the most when I looked at the final results is the cash generation we drove which we stated — Laura stated it was at a record level. A lot of it was led by inventory reductions. So think about how hard it is to reduce inventory in a declining sales environment. In my 30 years of experience, I can tell you that’s not easy to do. And that’s one of the advantages this organization has is a terrific fulfillment organization. We never really talk about this that much, but our fulfillment accuracy rates in our facilities are over 95.5% accurate in terms of shipments.
And we do a lot of D2C,1Z, 2Z packages. It’s one of the best assets I’ve seen in an organization. But as it relates specifically to your [Technical Difficulty] allocation, our focus is squarely on building and strengthening on [Technical Difficulty]. Now as part of that, we’re going to continue to [Technical Difficulty] the conversions that we see historically on EBITDA to cash. [Technical Difficulty] We’re not going to take [Technical Difficulty] tuck-in acquisitions and what we call near adjacencies that may make sense. Now perfect example is TerraFlame. So we bought TerraFlame in May of last year and just in the first quarter, it’s a small, small business, but in the first quarter, we were able to generate almost a full year’s worth of sales.
And that is simply because it was a perfect fit for Solo Stove. If you look on our website, we’re able to integrate it into the website itself. So the company went from having a couple hundred thousand eyeballs looking at their product every day on their website to millions looking at it, and we’re able to generate sales from core Solo Stove customers. So those are the types of acquisitions that are small, that are tuck-in, that make perfect sense for our brands and can be highly accretive to our investors. But that would be the only other element of capital allocation that we would look at beyond just building and strengthening the foundation in our core businesses.
Chasen Bender: Got it. Appreciate that color. I’ll pass it on.
Chris Metz: Thank you.
Operator: Our next question comes from Anna Glaessgen with B. Riley. Anna, please go ahead.
Anna Glaessgen: Hey, good morning and, Chris and Laura, welcome to the team. Nice to hear from you, Chris.
Chris Metz: Thanks, Anna.
Anna Glaessgen: My first question is on guidance. What are we assuming — what’s being assumed in terms of the D2C channel? Should we expect that to return to growth at some point in the year?
Chris Metz: Well…
Laura Coffey: Go ahead.
Chris Metz: Yeah, I mean, just — I mean, so Laura provided some good color on the guidance previously. But, Anna, the way — as you can imagine coming in it’s difficult being new and needing to provide guidance. So it was one of the things the Board really pushed on Laura and I is to really get into the business quickly and make sure that the guidance that we give is our best, best estimate. Now historically, we’ve driven kind of two-thirds, one-third D2C wholesale or what we call retail business. I think that split will continue as we look into 2024. And I think the way I would think about our D2C business is, we came off a very challenging fourth quarter, but I do have to say in fairness to the team, this past fourth quarter was an extremely hard comp.
The previous year in 2022, we did almost $200 million of sales in the fourth quarter, which was a 12% growth over 2021. So coming off that comp, we didn’t perform well. And there’s a number of reasons that Laura and I and team have dug into to understand why, but those trends aren’t likely to change anytime soon this quarter or next quarter. And that’s our job, is to reverse those trends. So I think as you start to see us move through each of the quarters, you’re going to see a strengthening D2C business, so as we get into the holiday period in the fourth quarter this year, you’re going to see improvements in the D2C business. The only thing I would caution us on is the fact that it’s going to take some time to get our product development flywheel going.
It’s one of the hallmarks in my career in developing new products, but I also understand that there’s some time to take consumer insights to feed those through our product development system, to get it into manufacturing, to get it into warehouse, to get it into that marketing flywheel as well. That’ll take some time, but I’m highly confident that as we move through the year, you’re going to start to see improvements in our results in direct-to-consumer.
