CSPR - Earnings call transcript Q1 2020

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Operator

Good morning, and welcome to Casper's First Quarter 2020 Earnings Conference Call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A.

At this time, I'd like to turn the conference over to Jeff Grossman [ph], Investor Relations for Casper. Mr. Grossman you may begin.

Unidentified Company Representative

operator. you, Thank welcome conference to Casper's quarter first I'd everyone earnings call. XXXX like to

begin, impact remind financial nor may relate forward-looking anticipated and coronavirus of regarding performance; Before call any known our of like objectives; call or be results. XXXX. expected statements I'd we to promises considered on made novel factors cause of forward-looking our Litigation the Act plans, neither this within and management's and performance historical All Securities from results, guarantees, future should achievements These business. statements that will do everyone goals actual other statements statements the matters important Private statements, meaning uncertainties not including on the be that Reform and to strategies, different involve of our to contain unknown are risks but this that materially fact

expressed in section XX, achievements updated; or quarterly ended or December the statements XXXX the report forward-looking report for our year XX-K factors risk annual actual Securities Performance Form by Form our Exchange factors the and by our on this the discussed XX, for Commission the XXXX; indicated on of filings materially with could as forward-looking quarter implied March other – from differ statements made XX-Q ended results cause those the to and by call. on

this forward-looking as statements of the call. such Any represent estimates management's date of

update such cause even disclaim events to statements if elect we so, change. any in views may we do future, to our some to While forward-looking at point obligation the subsequent

earnings which our reconciled to of certain in can reference be website metrics the the IR.Casper.com. Investor also at Relations are metric on may which we addition, In found nearest GAAP release Company's non-GAAP

on the operational our financial Casper and Philip performance plans. On on incremental update model taking collection, Krim, Officer; is Brown, provide quarter. details the QX to Arel, strong as in provide discuss operating will today then And Financial the is environment results an including actions President; performance current business re-opening Interim the a update, well rollout Chief Officer. and brief will the as mattress as Stuart Chief will and the incoming Philip Emilie call Stuart Executive of e-commerce more optimize provide retail well XXXX regarding color the the as quarter-to-date. Emilie Company's proactively

their Following to questions. be we'll prepared remarks, take happy

like to now would the Krim. Casper's, over Philip to Officer, I Chief call turn Executive

Philip Krim

are Thank you, and you good everyone. morning, all well. hope I staying

as XXXX. weather only we are look environment I our to our the QX on and the results currently the from we business this set a view with performed we in seeing today business. into we goals. what financial back COVID-XX Overall, actually like would well up spend both you how time are Given as a dynamic providing in business pandemic, And has to but pleased believe advance not are

First, first-quarter let's XXXX results. dive into

over Our net million revenue quarter, of XX% EBITDA financial year Overall, was call. from provided of on we last in revenue for net earnings metrics ahead both represented which of key expectations, came $XXX ago. first the the our a and growth adjusted

ago. up million. our from XX% and ago. year to ended $XX.X retail a partnerships partners the Our XXX.X% And stores, XX grew million, quarter quarter from from XX a XX to almost the $XX.X direct-to-consumer with Revenue XX revenue with we grew up ended we year

with a margin prior XX.X%, year. the to $XX million of XXX in versus gross increased quarter a basis the point decrease profit Gross first XX.X%

our we at million. to expected future. Our was line quarter in better expect the in $XX.X margins launch enhance adjusted is collection our new strongly negative new The of in XXXX first profit and EBITDA the mattress than resonating the gross the marketplace,

approximately cash raised position and to in new many $XXX environment. in a closed putting We Finally, us operate are The and with IPO the shareholders the a cash pleased welcome quarter, IPO position. quarter, balance stronger to net even ended of in in an million sheet providing this competitive our $XX million, to proceeds first strong with we Casper. us

the to provide relating of the performing turning want you and environment. is lately. updates We Now, with current did number to operating business how a to

locations remained members First, health and as our our retail highest we closed safety offices and place and since mid-March, to our team of and priority. the have continue customers

of and been developing re-openings. and and implementing office protocols our have in very on retail focused safety advance We sanitation new eventual

outlook call Casper strong our e-commerce true. with being have through is the our held revenue To-date QX on consumer and websites. sales and well-positioned has overall driving performance serve we both performance. partners' we Second, been around last E-commerce behaviors Casper.com shared to pleased our shifting retail

April. In grew net growth grew revenue XX% Overall, retail closed stores e-commerce April, Casper's year-over-year of show led in all preliminary XX%, our DTC business over partnership over XX% and over over of retail being results our by despite growth XX%.

channel, do e-commerce in are thought the help incremental strength exceptional surrounding direct-to-consumer from multichannel fact the stores we out performance the color our retail given and understanding our normally not we closed, would that break our While the COVID-XX platform. temporarily circumstances of

headwinds encouraged current revenue winding down trends light from retail with our we in environment are are the uncertainty of a economic volatile we Europe. closures and planning While for known and

leveraging on quarter-to-date consumer COVID-XX the to following the outbreak adoption e-commerce and experience part advertising digital of decreased performance quickly team our accelerated and costs. credit of our to in We e-commerce capitalizing

highly recognized as digital valuable with online to strength continue and shopping consumers assets they know love. our brand be brands with along to shift Our

our Europe actions amount operating costs North our Third, plans committed this we reduction QX. management. We to America wind in $XX workforce year. will These start annually over impact to remain European results to a well million cash across XX% and down operations profitability as reduction of as to in by and and of over a announced

safely are responsibly retail stores closed, furlough until remained to and our And our announced costs we retail able employee stores. minimize program our temporarily operating a as have to reopen retail we

share to the appropriate, when Emilie minimize costs phased cost the more of clearance while on of our will plan advantage we flexibility have ensure taking up details when having team ramp are our We shortly. to variable to structure our aspects reopening reopen. we

have experienced to none delivery This disruptions. strategic entire to we onboarding only which materially of our new largely customers. efficient time, aspects to of our and monitoring increased our inventory chain Fourth, suppliers, delivery service impact have our our all due sourcing closely for our we and capacity for ability is availability this during are impacted and chain, processes product capabilities though monitoring of potential supply minor supply

oil-related costs. commodity logistics to business tied manufacturing the tailwind In a prices provide addition, with and impact believe we for may on from the declining benefits expenses

the want to address over I Emilie, call hand our I to Before path to profitability.

this to Our built choose in be to service even flexible our consumer no performance. true continues business dynamic this model environment customers they e-commerce evidenced shop. is And by as strong to how our matter

temporary our and across business growth are we forward closure the safely growth. of running to our and look our and locations, of Despite to delivering physical when all contributing up are the we channels

have order allocation. to our decisive cost taken actions capital our We structure rightsize in refocus and business to and

and acquisition costs, remain performance. customer to expenses, operational on well initiatives mattress transportation model implementing and cost production flexible a includes financial This costs. staffing reduction We numerous ongoing lowering as retail executing reducing drive improvements as designed focused our

remain these EBITDA. to platform achieve confident highly As a our strong performance positive of result in the of and actions path our we e-commerce

turn it update our as channel now over as share of collection. mattress retail the reopening including performance on Emilie? our on an to I'll Emilie more well detail plan, to launch XXXX

Emilie Arel

our discussing call by I'd performance channel Thank you our joining like retail owned with to for begin which website the Philip and and today. all direct-to-consumer stores. channel thank our you starting includes

quarter and non-mattress QX. increased to mattress both and saw In throughout has along accelerating continued with half into our XXXX, XX.X% We growth first strong, the Casper.com direct-to-consumer new March our began of customer in sales performance $XX.X of second the categories. repeat and during growth year-over-year April million.

significant strength as performance and As Philip we preliminary consumer over of increased part strong interest, with in our growth as by April rates, media have mentioned, well conversion. XX% e-commerce in favorable fueled traffic in seen

March with of On the ended to quarter XX, quarter XX retail stores XXXX. compared of new increase side, an net XXXX first as the XX stores retail of owned we

been since owned temporarily retail stores have Our closed XX. March

The in shopping areas of shift, will will each new to begin offer and as number-one Casper. case Shortly of are operating consumer stores, policies thereafter, we pickup; offering and our subject reopen we our introducing appointments safety protocols COVID-XX-related of suite guidance. part remain procedures. implementing and and always, health health continue we week, our public And select select customers curbside as consultations by a virtual employees we we retail this introduce delivery. and and no-contact priority our are begins reopening shop government to Starting as in regulations physical to expectations As in to stores. ways and one-on-one behaviors from followed

quarter, see million, big accounting the quarter year-over-year for partnerships. partnerships drove with quarter our retail $XX.X XX first channel a partnerships continue XX% retail for of of to the compared growth retail total this to the first in on XXXX We XX% in XXXX. Moving In channel quarter first to ended in growth revenue Casper. the revenue XXX.X% as and opportunity to

April our was closed, growth revenue of partners in retail some our over partnership retail XX%. Despite being

month and key have our performance with Amazon. such experienced Target We of strong as the April Costco, during weekly of partners many

and local mandates. several as shelter-in-place starting We state see also are to partners reopen governments ease

eight of introduced is mattress you our expand collection. we to TV mattresses broaden mattresses more our At preferences where advertisements, cater the customer our families new the end meant family, new sleeping designed points. March, the line unboxing Casper and for audience to new our collection and full base. is of to The Similar to price XXXX see

our healthy are evidenced with by mix. been as pleased reviews by retail the positive has and collection and customers a partner, how our We sales received

pleased commercial in reinforces execution especially from as rapidly solutions, This also launch Casper evolving trusted are destination the for previous We line. successful consumer the today's landscape. sleep with a smooth

Lacoste, Officer. Lauren. roles Lastly, of Casper as with marketing company years joined has following is Pillette Chief leader marketing seasoned a Marketing She HSN senior Lisa Ralph and XX the joins at experience. over Lisa

thrilled welcome to are Lisa. We

update. more over turn I'll that, through detailed to walk With it to Stuart a financial

Stuart Brown

appreciate first $XX and XX.X% the earned a Thank you results. decline With XXXX, performance; of joining Emilie basis in of increase sales the to us first the quarter quarter, the year-over-year. rest first given margins financial today. XXX strong million year's Casper point Gross we on quarter. last call let's on were in Emilie having color XX.X% you, gross everyone the from profits shift an in of

point The clearance in decrease a by advance was charge well as end both with our new in at basis the change of in associated discounts sales of driven we with expect models prior that meaningfully The as the quarter. has launch associated projected of beginning margin providers, mattress XXX gross earnest the of margins first gross reduce in in change lineup week higher second while logistics the quarter in shipping of new first the costs XXXX. began and transportation in April, the to providers lineup logistics

of underway, our a qualifying other and and including initiatives product have packaging reducing non-mattress and number products. costs, aimed at unit We counter-sourcing chain large of components new supply suppliers mattress

from also benefits freight as As production impacting logistics potential we Philip foam declining see mentioned we oil our prices, believe, well earlier, may as our costs. and

taking will out we confident have see focused We on our are in supply experienced of cost an our and margins beyond. progress continue this team year to gross chain and

in increased expense. of first Moving the disciplined essentially our our our of a efficiency quarter as and of flat investment spend, the in reflects to and we to Sales was marketing This and overall sales expense sales marketing XXXX. year-over-year. approach even marketing year-over-year sales as percentage

marketing marketing continue be e-commerce performance which our acquire used profitably of our the dollars, represent Importantly, vast majority to to dollars, customers.

leverage stores marketing as sales our a there retail own needed incremental in relatively partnerships support investment to natural Additionally, retail driving percentage and revenue. of and our minimal is

have demand. Philip consumer in and in we capitalize second rates e-commerce on quarter, seen mentioned, the As favorable beginning we multi-year efficiency marketing highs media of as the increased

the acquire effectively less on contribution the profit we Contribution a margin, we use which to and margin quarter to defined of metric business a product. Contribution a $XX.X revenues in as marketing compared to to after the million is the first by and gross increased and driven XXXX is is higher and evaluate sales quarter Moving profit expense. first dollars of marketing XXXX, customer spend. margin XX.X% disciplined sell

revenue net quarter of points percentage the impacted costs the the associated mentioned I in in prior, with by with clearance year the first change logistics a as earlier. margin basis providers and contribution which XXX decreased sales, compared However,

and change We forward expect collection. going the will logistics margin contribution mattress the benefit from new

operating our costs additional XXXX General and compared growing in prior particularly million the business, expense of and quarter points retail support administrative year. year. and stores product increased, first of administrative and as software in public prior as we and first of compared with an $XX.X revenue administrative million, was of as the of from spend to General costs. new to was increase XXXX development of XXXX, percentage the expenses in the General first net XX invested new a $XX.X up net to company the basis quarter well investments XXX as quarter

Adjusted adjusted first period, was the we million and EBITDA by margin of divided decline in gross negative loss increased XX.X% quarter, year-over-year a was EBITDA G&A define quarter in as And the XXX in points basis first revenue, $XX.X which to lower margin, expense. the investment EBITDA XXXX. of prior-year compared impacted by adjusted

previous of the we actions confident outlook on and in cost the remain consistent outlook. achieve with Philip EBITDA middle to our by implemented, based growth our have path mentioned However, we our XXXX, earlier, as positive

given we and want some we our new providing provide incremental around not note, information the landscape, investments. will full-year guidance, store plans economic to but be final One evolving do capital

of We And this retail in to the based below be outlook, we capital updated growth reducing expenditures are on number openings new planned expect XXXX million. $XX store XXXX.

the our Casper to look focus I growth and organization built short and an to team. of brand see a has energizing growth the to on great of Casper an be I'm strategic plan. of path It Casper's in opportunity be part part with time passion to the is I simultaneously forward a to and contributing to delivery excited executing enviable continue profitability. while trajectory, period of

call Philip for it we to Philip? back to open few the over a like Q&A. turn before to comments I'd up

Philip Krim

in We're Stuart. our happy are and we to on QX. In have closing, Thanks you date QX our performance with board. results pleased to strong

positioned at play variety continue year rest scenarios for well we a competitors. our might to we the are believe out, outperform we look While of of to how the

the e-commerce this that is within in solutions and continue e-commerce industry, We to rooted Casper will trusted our in has industry. evolving COVID-XX DNA we rapidly pioneered Our destination digital believe landscape. sleep adoption this during been consumers for for and consumer accelerated a be pandemic for

model would business they serve to continue like shop. flexible Our however will to customers

who ever Further, customers, brand our the happy and our products engaged sleep are with resonate than of focused possible. getting incredible well award-winning best on now sleep and night more

a to cash We continue costs strong decisions and will also position. deliberate make ensure to reduce

sleep with plans and growth We while on over are executing for the focus in customers our achieving on long-term. profitability, our a investing providing better

also formal for to and the like us. it today Q&A remarks where now open ends to That we'd up Greg join Macfarlane will

I'll you. Operator, to turn it back

Operator

time, [Operator we follow-up. related you Thank be ask one conducting we to this your questions for question-and-answer please order limit you. question our as many possible, questions as At In will Instructions] session. allow that one with to

may reenter queue for You additional then any the questions.

the Piper line line Keith with first Your comes from your of question open. Sandler. is Peter Peter,

Peter Keith

did want everyone Hi. and launch. Thanks. into channel. I e-com the mattress morning, the Good to congrats on new dig

DNA. e-com pointed out, your is that you in Philip, As

question just two-part you leverage forward, allocating consumer perhaps are shopping to more e-com, thinking about change this. capital a behavior? When I have in so, to on look the And you

of secondly, bit and some strong with And, your XX%, e-com the while within a space below impressive peers the online furnishings other and of growth it home this space. in very is

the advertising So table sales maybe the strategy? is last do hindered some you on maybe month? left there with in anything growth like you that feel the has Our the

Philip Krim

Hey, questions. Peter good morning. Great

we as of DNA we channel basis. dollars looking and spend thing whatever we this comfortable the or levers are and shifts a And at is business. channel are a day-by-day constantly is knobs And the we're we e-commerce at core into mean we that look based and natural strength for we us. down data about look consumer see. with So I And having fine that and our by what demand to on week-by-week feel very we something on totally about to it's all something seeing. what day that the nice marketing digital control dialing learning And allocating that at every e-commerce the really more up our is is

we future, capital decisions something that And doing on a going the great deal data something the we at the And to team to insights. expertise at that. doing comfortable so the and that based it's in it to it's continue make look that we feel and more relates allocating of as very are have real-time level

your learn to need it volume don't spend, us to but real focused us And don't question room which thresholds. in April. very we the to that we we We what marketplace. again, could taken see conservative was a would manufacturing XX% bottom felt have drive order volume preservation. and -- where to going there in said We in the kept in certain the keep to on XX% solve to for profitability consumer growth, felt very line, about we spend up to we we've about the good improvements for cash open volume felt on that what or we push And allow growth if line like need is was been

Especially, settling like. got land the the and as look clarity we beneath about saw consumer April, us we picture would throughout more what

to question against we conservative felt The what view you trying where chase was benchmark do a growth; So what something really us others focused on we improvements. bottom-line marketing will spend. we good and took big not with that And achieved. be with to on we when marketing wanted

Peter Keith

Okay. on store That's Emilie a openings. feedback. just Maybe helpful question for

call slower appointment like -- looks openings there's store with it we'll So it, on protocols only.

retail your partners closed Just up you'll what any period some you like the thinking open? now? And about have stores that do fully are are that of right think selling Day coming with Memorial discussions are

Emilie Arel

Yes.

to of customers. stores, and of employees eventually the so queue and And our That in includes guidances said appointments customers opening. I we street full That have safety and will pickup include local the virtual employees. state in a store Peter. sanitation, locations. the going to our curbside health the focused reopening to continue the opening for increased We're one-on-one on attention then and obviously and to our management, and we're plan hi, our a mall safety both and as appointments, going phased protocols think remarks, So about like pay

And stores think think own be at about about to partners Day, we think environment to the as decision ramping are as up. we'll day-by-day how and retail just our and really look we I going that. retail a continue our Memorial it's

Peter Keith

Okay.

and you Sounds good. Thank very much guys luck. good

Philip Krim

Thanks, Peter.

Operator

question Alexandra of the next line Your your is comes line from open. Alexandra, with Walvis Sachs. Goldman

Alexandra Walvis

Good market. so advertising is much morning. Philip here. Thanks the for question My for taking question the on first

You seeing this what in seeing how on last seeing wonder are you out could quarter? few are or update thinking. the comments some you on and on over us could shared you rates the thoughts -- Where and the biggest any months? this next have you Where through how I detailed on call if the are efficiency? And trended play media increases

Philip Krim

Hey, good morning. Alex Yeah.

see in for world to very and Casper. continue we the positive marketing think So advertising a I landscape

CPMs we that. and in rates see before they XXXX were were So media where COVID-XX to where prior continue be and to well below they and

to in from off-line we online with We the some the world, have dislocations CPMs in continue seen the inquiries bottom world. see big but

media approach Having And to marketing and they spend portfolio-based efficiencies across opportunities that and come as as up. flex approach Casper different us all media. to know, to you exploit our out. and of in allows We're channels spends fungible able

And an Casper can so really environment play is well. again, that this

rest marketing good year for We continue will dislocated as be to that look gain will in business. leverage be a we that the and sales the the area media throughout an landscape to and tailwind us the of believe

TV ad as to online rates So like where below in strong viewership and they we streaming services well. video were see continue and channels

Alexandra Walvis

on Fantastic, wonder promotionality. a about the if talk And is I progress and how margins I then expecting you weighed super impact first-quarter clear. was And if greater-than-anticipated to margin. my clearance that gross gross on on could going It forward. promotionality question second you are and impact. the wonder

Philip Krim

initially did a our expected, QX previous The mattress question. inventory than as lineup sold bit building, up extend and the in period in longer little we promotional great we Yes, XXXX down ramped had lineup. our

That's to effectively. the lineup. promotional gone bit we that mattress And the did inventory launch about And was old in QX on has As higher-margin down sell well. did XXXX in part a strategy exceptionally margins a the weigh which of very the QX. talked we

to that talked and today and had think playbook, about given our QX in going normalize and back range we March. profit and see what back But February the forward promotional back that launch margin in above XXXX gross mattress XX% we that margins traditional going we

Greg Macfarlane

to One help the line too. Hi, does – if additional additional I Greg. the One buyer's XXXX can it of that we jump ran benefit It's model in with promotions down is Alex. wind that remorse.

– our new client a and data offered, in be of an there the is a before little then buys bit mattress returns. that right when lineup new mattress increase changeover the one mattresses customer that they historical older So suggest see have we of

discourage that it putting on discount you actually by behavior. But

So on that's work experiment But something had continue benefit here think next also as the data cycles we historically couple returns will that we that's the margins gross system. to and through in we that. that

Alexandra Walvis

guys Very super Thanks clear. best. the all interesting and and

Philip Krim

Alex. Thanks,

Operator

Jefferies. your Randy, from next of is Konik with the Randy open. The line line comes question

Randy Konik

job guess of the behavior side. lasting think to channel likely – longer bit next little about everybody. about for few store curious are you five the years? on in be in a about same shift stay I by changes and Does over next three e-commerce? would development e-com question the you you're morning, direct-to-consumer the capital versus more wholesale through the do on Good distortion you doing little next do let's Thanks. as of favor thought? partner with pedal previously How back months. it the years the Or a pull thinking Philip. gas you how or you we think few ongoing to a do great than How say bit imagine of consumer this Just

Philip Krim

adoption, I of that morning, is than But say my better pandemic e-commerce enterprise by of will I that adoption this pull that digitalization don't ball everything. segment. of the practice going industry variety by moving dependent even to you've think know segment on a in just Randy. Yes in forward anyone industry pull else's digital – the regard. I crystal forward is BXB heard And that to industries and amount across would good has be

My have too – best early behind this is and my – within best accelerate to belief any again but to e-commerce this will industry. belief continue this data that

we started. is As to important. talked adoption is that think e-commerce omnichannel be acceleration about, We'll We that do helped still to e-commerce very But The who popularize was going fairly really going Casper to I nonexistent accelerate. before that think And we it. degree see. knows?

I think our be is the going industry. our of to an business, part in strategy important off-line

there's part it so something No do XX% I I but COVID-XX, be customer to it's think journeys into shift I of to acceleration definitely share I a going the into going the goes industry a think a do be down of was an think in Going that to And and of not. e-commerce. going think bit forward XX%, XX%?

allocation, our operated And as think happens any up we because retail about both it's really they our what we we're to we see early watching look and need to owned so it. make as at capital serious as within just calls reopen. well to And channel too as going do retail as partners open what

data we next dollars able is on across eyes of look any are the real-time North our across now decisions American markets, in we and and make channels over to but don't compete need of we where something lot all but CapEx, months longer-term control focused a kind are our learn we'll three invest wide how at in that couple to so open. a This And business, in. the

Randy Konik

long then better that the a lastly when I And came at Helpful. profitability. getting the that the – the anticipated than much way in to path one SG&A think in market in of will confidence the and look terms more numbers, thing we go

profitability be coming we around about terms dynamics goal yardage the getting in should thinking quarters. upon expand maybe these that the towards SG&A, of markers how that of towards So in

get want more That to you. appreciated would thank Just color there. some be

Philip Krim

are on drive conversion levers and in doing Two promotions. spending as discounting of and marketing Yeah. good the promotions model our as of able drive shift. different were are we very discount SG&A part extended as to that were at that keep business we sales outcomes. that These than and as to in are And levers business We our using getting well and within interest lineup business the lower expected. part we QX that

the I COVID-XX playbook very time. now different would in say that, is

out SG&A below COVID-XX. in had our we you'll in of anticipated a And made have like so Us line. see believe are are think reductions Memorial our growth playbook do well cost We continue what how focused for we can is that because world Day is. and we that given some the of line, of leverage everyone see where We is a G&A to re-looking in we've get for at our the weekend continue are again what to industry efficiency. exactly to of leverage we what there big else dent even very playbook industry. right on the we'll drive But there the multiple levers is

path very focused Stuart operating we that's are I And we in and P&L our So throughout we make to to confidence in have improvements. getting leverage we And why multiple think levers originally big throughout but we think profitability. continue confident mid-XXXX. that in the believe might had we very our to have the have that are continued still drive can feel and I that continue said guiding outlined timelines to We operating mid-XXXX, P&L for we think efficiencies.

Randy Konik

Thanks guys. Helpful.

Philip Krim

Thank you.

Operator

America. of of Nagle Bank with Your the open. Curt is question next comes from line your Curt, line

Curt Nagle

my morning. very questions. Good Thanks for taking much

of from lines? some what pieces one, remind first terms clarify better there? of – acceleration. product levers the Could biggest ASP able maybe us kind the I are up it you would in is of part to cost you what growth better profit just think shift are The to the product be just mix mix

Philip Krim

we seen we've our relatively comment mix on Sure. we segments, product models. all customer a which because products. different interesting margins QX We been mattress business across actually launch And complete pre-COVID-XX. from gross we very mix coming, XXXX, e-commerce of all One geographies, a it's the across across the believe had said, was strength And consistent models. our see with margin in that lift re-launch of grow expand seeing all that is across been though as consistent are profit is it's

sold. able to on so cost-engineer goods hits were the that of we of some So cost products

place We are about also chain XXXX in had will given in that hit continue have as that some XXXX to meaningful to optimizations have there logistics And And – QX. savings a pretty hitting we our other in in deep renegotiations taken some gives supply is that sure talked supply base. way. visibility of us managing been out contract that that we certain also availability the make how costs that our base we factories to have we both having in meticulously given can COVID-XX but chain issues something get through do supply it time, in supply

levers business. we goods cost logistics and are side in the And the of at side overall so looking sold multiple for

Curt Nagle

And follow-up. just a have then Okay.

customer just from the a new perhaps acceleration done retail we moment, an – of that's customers are to seeing curious And Just your kind big curious if you in online. what given for at push are seeing that demographics.

Philip Krim

back They're so buying our seen as accessories coming strength mattresses, well. us. real are buying we've Yes, customers but they previous from from buy to

from A been of lot new but customers from business has of previous a customers. is pillow Our that that super lot is strong.

the segments. were that customers. we of I some some to growth of as segments customers seeing growth coming us newer interesting the segments is of opposed And think new from are in customer is that new existing then for And that emerging thing

rely guess I it reopen from there to and and AOB online the doesn't generally a affluent from a feels buying customer a actually are be that waiting higher boil customers going who our are channel. retail who the customer feel I And might like retail down bit slightly that slightly Casper; is for came still more more like customer different has buying It to that Casper. on way would is retail been customer

had Casper slightly coming previously growth seen. is from e-commerce And than that customers the actually different

not the customer to price overall just customer any fits headline or of geography. that the business; So, it point the in broad-based segment SKU and all in particular strength from bucket. But goes new back or coming it

Curt Nagle

for Thanks the questions. good. very Okay, answering

Philip Krim

Curt. Thanks

Operator

is next line Michael, comes of Lasser, from Michael Your question UBS. your the open. line

Atul Maheshwari

for This Good for Thanks taking questions. our Michael on is Atul lot morning. Maheshwari a Lasser.

my meaningful cadence question through are is trends trends consistent ecommerce there So, were any on especially the on variability or week-on-week? was What the the first for month side April. --

any lines along then distributed? spike checks sales the did time And the notice in stimulus around those you were

Philip Krim

We saw Good strength morning. April. throughout consistent

about talked at like of I say the March strong. and when April kind we was checks feel slight of we a business didn't So, that was consistent trends stimulus it end would the accelerated saw hit, ecommerce but overall. big it to the saw as uptick consistently a anomaly we

And the end so the strength continued throughout consistent of so the April and pretty and month. throughout was broad-based

Atul Maheshwari

over who the weren't transacted it, has you second doing a helpful. the insight the customer simply dislocation to that really with ecommerce question you weeks. Do Casper marketplace this profile of Is that? type customer the have new you And an past before? attract in any opportunity giving eight on Got that's is really of the in

Philip Krim

We a are from over-indexing ecommerce that us bit are -- customers so seeing do. we is data a little into hadn't that see previously this But coming data and this We lot. in analytics business. our team going early insight over-indexed dig to our strength provided we

it are bit get within of like build it a develop continue and I a segments much into that But out some it into lean detail So, customer can pre-April. to shift is business that does and we was just data. there don't to want our e-commerce because newer too feel still emerging

Atul Maheshwari

last color. my gross helpful your And on question is margin. very That's

the So, do be quantification be deal? mentioned on you of that transportation new deal? the And what have the any logistics would color along benefit new those but lower? you I will know the do you then any additional have on costs extent transportation lines lower

Philip Krim

a that for start at will QX. unit that to and just So, overall on on take on look But benefit company costs logistics in don't and a think the full does out it ongoing for really the us us P&L. gross yet. we a down break I cost fairly as going we're here an basis benefit it's margin meaningful is specifics

Atul Maheshwari

the with good year. luck of and Thank rest you the

Philip Krim

Thank you.

Operator

line question of Morgan Your open. Lauren, next Cassel Stanley. comes is with from Lauren your the line

Lauren Cassel

guess a retail taking for on Thanks So, around basis? how accounts I color excluding my additional you the give same-store Great. is growth same the any question. first can year-over-year, partnerships partners new looking year-over-year? growth in

are the When number? guess to you XXXX change we about that following long-term thinking store’s then couple how of on the the have to store questions. a openings? around just thinking during commit And any about you would Thanks. the size to that then talked up And in fleet IPO? I earlier

Philip Krim

how into Lauren. talk Good don't partner-level we're partners. Emilie you want over to I'll approaching give questions. what our also can growth, to to And about our to morning, I a turn more business. think specific but we’re and to on partnership we've bit retail color with seeing that. year-over-year speak get been happy we certainly Great it things retail within just Emilie landlord

Emilie Arel

Hi, morning. Good Yeah. Lauren.

of on retail period majority done business open continues the is entire been be us side through for our So who've solid. and partners business the their very this during to partnership

see restrictions. our as of We’re start ease state rest partners starting guidelines up open and shelter-in-place local the to to

fast so to And across how country. continue we’ll those partners see ramp the

about there. good feel we so And that

XXXX the on basis. and outdoor and store we've have we like those openings. close week-by-week by location think landlords we’re are As looks day-by-day what on in about mall, been mid-March conversations to of since through And we store by a so rest conversations. different touch with of we'll and going by openings, continue our state, in terms and be XXXX to very approaching continue staying to how think about It's this

Lauren Cassel

Okay, great. Thank you.

Operator

of from comes Bob, Drbul the line with your question is next Guggenheim. open. Your line Bob

Bob Drbul

I guys. Hi, guess, good me morning just for two really. questions

your can I maybe Thank question you. I the of bit in meet you that is; with light, guess items little sort be thing can shopping more update either you items, first add-on of side? -- And terms is; seeing demand? maybe second think the the on on the e-commerce the customers like repeat patterns little to bit on talk and the an talk ability tying the one the just mattress helpful. cart Glow that a in you a would that or size about of plus That are the

Philip Krim

morning, Good Sure. Bob.

the On to there. Glow light item be the continues demand us. Glow It's light, a revenue relatively for small

would and well. seen strength our non-mattress bedding And business products, business I as pillow we've really as in so our highlight strength but in being in that our

the to what supply but strength light sourcing we have chain along, our non-mattress were and keep intact. there continues wasn't Glow business. Glow The providing outsized overseas was able that the in does tick light But from the to

Glow that shipping continue any specifically. lights see of the will we the and year on impact rest for product don't coming So

maybe we actually, with in just on about add-ons, and talk as Emilie are seeing mattress we’re what some as our to it For to the over turn orders. mattress attachments our well non-mattress business I'll the of seeing strength and

Emilie Arel

Yeah.

e-com over seeing said a about past the customers the Philip As new non-mattress repeat those of earlier sales. and in great is excited what we’re we're a to uptick month and big site mix coming seeing really

and is the and new sheeting from pillow repeat Philip both As our in customers. said that coming of from majority

Bob Drbul

Thank you. Great.

Philip Krim

Bob. Thanks,

Operator

from Seth your Your [Operator the Wedbush Seth, Basham of open. with line question is Securities. comes line Instructions] next

Seth Basham

and lot, a good morning. Thanks

Philip Krim

good Hey, Seth, morning.

Seth Basham

available your your online. My some at It some you retail removed more into guys Can looks you lineup? Essential first lineup. about your the mattress from thinking structuring website, like sale how partners new insight Mattress question have your is around are of for new provide you but it's

Philip Krim

you Sure. the doing some testing about Emilie, want that we talk there? of to do are

Emilie Arel

Yeah.

we of of a So we as mentioned launch -- new many new lot in and earlier products we do And we things at testing. A/B and promotions have our as when the launched end we March. portfolio as do business our

lineups A/B where and so testing site. the on with we did a test from other; new each an two elements remove different against into And started went test, Friday the we

purchase it a partners. it still purchase retail lot at can You still of and can you our

So that profitability. for ongoing assortment to for just our our testing it use part the we protocol our is of customer maximize and

Seth Basham

Got mattresses partners don't your at the lineup okay. you'll When go-forward basis? think on made is own you retail have what right a will do that to as your decision offering you And consider it, you offer a website?

Emilie Arel

what assortment and the look in to we'll will are e-commerce what continue at And the retail constant the our owned our right customer. right We is stores, between site. evaluate assortment our time retail for evaluation partners of like the

Seth Basham

going mattresses relates to duties There's are as sourcing potentially sourcing you does secondly your any Vietnam. And you've forward? are to of on tariffs slapped place? out Would it you your in in coming I enough. now of going be from plans, mean well as country Fair know What mattresses some that Southeast that put of shift that plans plans for Asia. others you as sourcing that the or

Philip Krim

great Yes, question.

have lineup. redundancy Our sourcing our within all to of build of mattress approach has always across we suppliers our SKUs a been and that

our of lineup. working are of get to a that by is some cetera that plans sure us goods to sure have able across bidding, we we're doesn't that's have chain able within make implement make anti-dumping, with We been competitive disruptions Vietnamese It's et This every chain. SKU shifts, but that down allows cost one to that our us to material to way which manufacturers, whether a mattress way caused too are regulatory based in supply redundancy we impact any there if also supply tariffs, from that way. have

we just we manufacturing a chain. I this our And and the we really for having for think to nimble; and sure us redundancy really to through have part always beautiful factories. sets expansion solve availability to about, going focus my up our don't this build And We business making model where can volume speaks our amount of customers. of be mind need in gross of supply about that base can on third-party all a certain margin

Seth Basham

is just margin. And last around gross my question Wonderful.

implications forward. run a persist standpoint, mix going outlook margins if improving shift quarter benefit in about your about could talked from the much second You of the when we rate channel April the But sales through see quarter? how we mix think that

Philip Krim

see don't DTC so But into exactly and those is in be we'll And business. So store closely our we're reopening QX. April, channels. at And to as and we've businesses the channel. partnership does going year-over-year for what QX, in has have margins gross margins business mix and our our the were consistent mix are than on. the guidance visibility the what exact about obviously, DTC talked ends DTC Both tracking up retail we'll very profit up for higher yet retail what we provide retail for not partnership

Seth Basham

Fair Thank very much good enough. luck. and you

Philip Krim

Seth. Thanks,

Operator

over call back question-and-answer concludes This now the closing to turn for will our Philip remarks. session. Krim I

Philip Krim

and and Casper. results look in stay call. you on all on Thank family everyone. Bye-bye. time you hope to our interest and forward safe. next our quarter healthy for the earnings you We today you Thank your second the updating We

Operator

conference call. and this today's participating. Thank concludes gentlemen, for you Ladies

may disconnect. You now

Casper Sleep (CSPR) 12 May 202020 Q1 Earnings call transcript