JOAN - Earnings call transcript Q1 2022

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Operator

Welcome to the First Quarter Fiscal 2022 Earnings Call for JOANN, Inc. My name is Adrian, and I'll be your operator for today's call. [Operator Instructions] Please note this conference is being recorded. And I'll turn the call over to Ajay Jain, Director of Investor Relations.

You may begin.

Ajay Jain

good and operator you, afternoon. Thank cause to I management's today risks current that results could made expectations. everyone include would and differ forward-looking from that significant like may to statements, comments subject actual remind which materially company's the uncertainties to are to to circumstances. speak today reflect new or future obligation subsequent statements revise any company undertakes and events, These or the forward as no of update looking statement information release in Please recent review and statements the company's filings and the press SEC. risk factors with the earnings contained cautionary

the today, at the financial filed was can earnings the relations investor non-GAAP During call to company's investors.joann.com. management certain JOANN’s to which measures measures. GAAP with section may of non-GAAP the financial be refer the release, between found SEC in A today website reconciliation press posted and and

Wade? is the call and Officer will Susz, Chief the from On over today call Miquelon, to now President and Officer. Executive Wade Miquelon. Chief I turn Financial Matt Joanne Wade

Wade Miquelon

for what as it's the financial location I Good into equity our to be its him thank us back start in the gratifying Ajay you with nation's crafts origins a as return background leader public JOANN welcoming is going with than Ajay fabric extremely stakeholders. investor part efforts know truly be an really the would become I of to to markets. know shop and Many years JOANN more retailer. the if Relatedly, an largest story you and will potential single afternoon. from getting history didn't team. Cleveland relations current to you in JOANN to be the may leading humble Jain has company's remiss markets. talented and XX familiar our I of by already And joining be will extensive today. enjoy share we

a strong growing the our in crafts are spirit new category nation's each legacy are the with leader who to one robust in the arts great as our selling, a story, fastest platform. in of to of retailers is JOANN, omni-channel and inspire a us those with at we For mission category also

Our leader merchandising a find on experience. superior and inspirational relentless through an everyone customer to vision that place, happy strong execution, service their focus assortments, is be and helps

Our our company a full expectations. first quarter public successful was and as one exceeded internal

last Our sales quarter, with over trends across strength and XX% merchandise strong spread channels that year's remained categories, customer at growing our segments, broadly first geographies.

basis adjusted also year's and net last to by margins margin XXX $XX.X drove XX% adjusted in of million to sales, in resulting EBITDA expansion expense controlled points, increase and million versus income XXX% gross EBITDA the expand We $XX.X quarter. increase or first a

past I While sheet reduction $XXX our provide performance. balance anticipate our proceeds debt Driven the Matt our recent to million from IPO, more from we also and reduction long-term initiatives in to to of a detail to million year year. $XXX net of financial want on by quarter. over fiscal at the million many last And end debt reduced same of momentum debt XXXX. our the end highlight will million our further period the by level $XX briefly $XXX by our net million latest $XXX we’ve in

sustainable been customer experience we've Over the transform will creation. and differentiated past JOANN that truly several journey growth and a years, to define on a value to lead

key JOANN years, dealt the laying retailers, over all experience across past elevate we've including several foundation challenges, initiatives. to pandemic many the JOANN been the the While several

retailers growing past the was us store opportunity crisis pandemic in being this And in the and the the intersection us, of over online of one in made turn year. preparation. fastest For has

one are create. strong traditional be sewing net to that to refresh promise is is expand we driving well. out and space We we When into they for connect as enormous base are impressive inspired attract our truly right, further customers success lifts experiential. and the and large of and it extremely because, repeat wallet with to customers and to that Disneyland. literally attracting go experiencing believe top-line promoter we our as Our of stepping are get relevant our We many and bottom-line place validate customers to in visits we show share new future their part new customers. The far the more initiative in craft scores store believe continues arts we traditional our

across of In are this phase significantly the our As our it we now new store we assortments relates capital the initiatives, and improving payback and estate stores the program majority invested. enhancing seven years to ramping vast a customer beyond will four-year the targeting phase, our next experience over overall renovation total pilot are and expenses JOANN our of and into are project phase. to on XX real execution be

million experience more craft trusted of by be retailers are whom mass service-oriented number friendly members. to-date. significant our customers widely-used also we and reinforce our through reinforced and of want. they Customers than relocations a redesigned points part a play sewing our whenever generated of believe real us Customers who data-driven further application with team part for overall We our refresh differentiation capabilities. number digital not enthusiasts, our interact and however online downloads newly significant could our website, These A the strategy. can program, brand pure we'll replicated mobile relationship that offer our estate store mobile-first do connect As knowledgeable, by or that are our has of joann.com customers with through our as of XX retailers. and with

too heavily the is years, over past have We our not capabilities several invested this customers. and in unnoticed going our by omni

offerings. retailer of for as JOANN which to rapidly cash a our XXXX. fact, of our in a XXX never on the XXX% in nearly and one In e-commerce curbside flow Essentially, we by while value growing our positive, convenient the year business reason to we customers robustly give number fulfillment was omni-channel JOANN’s BOPUS, field customers continue our greatly XXX including manner Commerce serve our fastest leave ecosystem. stores stores want with X,XXX invest we ship-to-home recently growing the options, differentiated Digital And to offering several by recognized pickup best-in-class in we

omni-channel of net picked last of quarter, has location at the platform to XX% revenue same past store now directly year. achieved Our curbside. the by sales significant over is with X% billion In in-store compared scale period in XX% the $X.X fulfilled roughly our or approximately XX% omni-channel the physical year, and either up in contributed in the latest a fiscal sales

and as capabilities our as highly in-store omni-platform profitable leverages central our efficient Importantly, third-party and is well network. fulfillment

overall currently supply network. that fulfillment in investing are and growth capability We omni both support chain additional will our

expect additional fiscal ramp to throughout capability fully complete We XXXX. the and year this of up by fulfillment be spring

our prints. customers, total by strongly sales at sales and component the be In We've to of high success. were our our customers shop based CRM effectively our to We volume engagement. of relevant customers target drive comparable X and frequency contributes top one-third is of generated roughly business ability a customer frequency and positive margin and best million customers on market another data these our robust latest us to leveraged segment our gross allowing further to tier to our purchase. critical Our customers, store quarter,

we customers, strong feel frequency being crafting crush the Our who also have members recent customer the evidenced on JOANN serve and their allies, also favorable And driven our market be generate our backdrop strong quarter. trends including and a second as our our ticket latest success, assortment. novice we margin overall on competitive rate what customers this size. unparalleled of new a you're Why to tiers. and or of shop believe in by by growth of an success segmentation, at expert, all it's appeal which whether account help to as a the high across sewing or services true friendly we gains highest remains have sales average team cannot customers newer sales for is Based broad-based offering share an seen variety skill contribution We continued gross journey. and customer Most that we classes shopped. directly our because customer levels, clever

share on share including growing which including to us the market they the the to be to this With good believe year. even younger for have and momentum both sewing ongoing customer price and the so foundation on more are a supplies as businesses. Encouragingly can arts related crafting half significant. JOANN’s we sewing and depend customized, business, will or the We that will of the the leader fact to profitable and many core. which the successful so our customers vibrant eBay, technical a trends, the their on we craft based platforms technology provide and personalized coolest industry and with such to for years even These right provide as sewing Etsy, they been forward demographic is favorable entirely rise own our XX% at grow. customers of combined machines in the the these need business are exchanges reaching Underlying in innovation come. so driver our across make operate work sales other includes XX% machines and in now that those growing sales in Shopify continue major the moving we new follow-on approximately category the rapidly category, our market a of is with past and an and in that the sell customers company seasonal sales also for These factor crafts of

of these sharing process, I'll exciting into us during subsequent new lucrative will We markets tap more several series be also we and growth and and allow abroad, domestically calls. have to believe a about and overtime initiatives which

risk, that, are internal and potential XXXX, largest increases we feel and for the that fiscal many particularly remain on Inflation of said balance is QX, ways of area within the are for disruptions general the we the there vigilant chain for issue on great able we things to certainly in to be in are deliver plan and of accounting to year. but for ahead costs, delivered our risks plan supply should we a freight. about, That we the mitigate. While believe XXXX fiscal the ocean

first quarter costs supply a as margin chain newly to be summary, by company. results be the exciting should our foundation In additional should strong able robust ahead the year continued set product public offset for expansion. these With

to to about our discuss to to future. and and inspire to first team our Our and And has vision been I'd along The find our customers, ourselves of your leadership detail. journey. like support results turn to the quarter that, with enthusiastic more Matt over all you our Thank for never call in creativity their more team members in true remain JOANN mission help place. our customers our happy

Matt Susz

for JOANN. our Thank grateful Wade. our quarter field, entire communities center and resulted on focus distribution our and I strong corporate you, organization, first too results wavering truly for collectively efforts the in customers serving on of teams

compared $XX.X compared of year. year. earnings adjusted Now, $XX.X per per Net share last quarter income in first first the internal share in year of me performance, fiscal the first let plans Adjusted quarter $X.XX $X.XX last per loss line to of $X.XX operating loss was to to performance, a of bottom margins, profit. of year. share XXXX, million highlights our last of which and period sales on same top-line exceeded our diluted Diluted in a earnings $X.XX fiscal XXXX an quarter the share compared loss was million was

now growth total by manage adjusted the to by EBITDA million was increasing expanded color by driven last driven quarterly last to our sales transactions. comparable mentioned, we for sustainable strong basis last increase detailed million Adjusted XXX% Net results. That and $XXX.X will margin primarily in net also year customer gross sales as to in expenses a sales. the and in increase quarter on by EBITDA momentum growth year. the ability XXX sales with As sales driven our experienced the compared year. to Wade an of percent engagement and points below more I quarter in XX% our by well XX%, XX% to increased increased period compared growth to provide same same customer $XX.X

business Our omnichannel reaching strong our also remained part total for sales. $XX XX% the quarter, a representing and million of of important

shrink year earnings first for of the quarter. Gross margin compared Gross throughout $XXX.X last broad-based regions. was dollars gross we restrictions the significant to last year's rebounded margin a ongoing basis levels the of improvement. growth to XX.X% unit driven million, our gains discounting have XX.X% period several inventory per direct to increased XX.X% import retailers. reflecting a by have all quarter, optimal costs compared clearance sales in As strategic country, had geographic rate efforts, and our higher and a that were cost that U.S. lessened the These driver COVID-XX across and point same quality saw improvement our key in This of margin freight reduction improvements expansion driven a XXX economy on offset partially impacted by reducing have markdowns. a impact average by gross promotional variety and more including margin was sourcing factors, in of

recur not year, in to offset expenses by our reduction First a quarter relating the sales year. SG&A COVID-XX first first X.X% due as incentive that fully increased selling from the did higher in partially costs Growth and incurred to primarily by to growth, well quarter was $XXX.X costs million as compensation to given XX% higher response quarter accruals. expenses strong this slightly last the pandemic

first growth of XX.X%, an have the investments first Interest quarter consistent quarter, $X.X technology. expense closing our the of cost the expense a million XXXX, expenses basis was leveraged a continue primarily quarter pre-opening million of $X.X last sales was by in to This year, levels fixed last compared last prior expenses an compared quarter quarter. in $XX.X identify As XX% $XX.X operating quarter the versus in last decrease first compared driven year. of efficiencies. for million, SG&A first totaled decline quarter XXX was to were information percentage first the decrease by amortization and as with against the quarter driven for increase or a expense and improvement points for debt primarily first net for fiscal and year's million Depreciation to XX% we interest year's first and average $XXX,XXX the the year. to of Store sales implement

proceeds I will sheet interest declined balance to rate few our now items. interest off term highlight we a blended pay also IPO as from Our utilized tranche highest in March. debt selected

May long-term debt $XXX.X million decrease XXXX. XXXX, from $XXX.X of as XXXX a million was a of January and X, from as XX, million Our May of X, further decrease the $XXX.X

overall to compared proceeds debt, quality in in decreased and quarter used improve our primarily the in has or improvements Our We've generated due retire offering reduction of initial a first inventory, strong year. term million $XX inventory net in turn XX.X% in Merchandise has which public of which continued by inventory to lower XXXX, and our been were shrink XXXX, million year-over-year full. from repaid to fiscal last loan inventory clearance of our penetration markdowns. and $XX.X

inventory based We continue Cash were equivalents the at of year. our was repaid in additional credit of stock asset revolving year. $XXX healthy The ability lower carried the last store quarter cash our overall on May XXXX to from end million a of last company maintain which X, be and reflected at draw positions second pleased last from the during the online million first quarter and figure with to investment. cash on $XX.X this balance sheet year locations down down as and from the our facility,

first of trailing EBITDA end common of the adjusted reported is record declared was share. a June cash of resulting June business, XX-month net XX, less close of May reported credit the EBITDA Directors XXXX a leverage On million payable to XX, shareholders Board XX, the The under X.X adjusted ratio XXXX, per quarterly of XXXX. dividend a to our facilities of $X.XX debt for As times. our of dividend as in $XXX.X quarter,

retailing quarter our In financial are strong of reflects the very was in March margin year. driven this in consumer performance our quarter This broad-based sales we top-line dividend and sentiment. growth summary, and on on sustained by with be will our since improvement momentum trends continued first, listed pleased this first XXth we The company's NASDAQ improvement. gross operations across

we'd on chain your variety we these the mentioned higher to a take Wade in headwinds costs As enhancing ability be supply contain of environment, happy through are prepared margin based our With very near-term initiatives. incur expect to remarks, questions. to while in that his comfortable current operating we

Operator

Thank you. Liz question Instructions] of And [Operator Bank America. first comes from Suzuki from our

is Your line open.

Liz Suzuki

the the that Can or guess, of the good Great. sourcing either just shrank, you efforts, the gross drivers order or quarter through gross you. impact biggest strategic and margin activity, other and Thank I quantify walk rank any this us of guys to promotion or margin?

Matt Susz

driven This margins. by internally what would quantify is Liz. Sure, product Yes. as Primarily do Happy to that. Matt. we

fruit. So number a just inventory. I our us. factory say primary discounting followed we’re helpful I after been to that we values say terms ongoing big or stores negotiate has of the being to the inventory closely would is I penetration that total excited by in able what that bear then definitely overall able do our in terms ability in I strength would the to that, of clearance we’ve think is there, been the also say one year longer-term lower relative And would driver pretty overall over success being the to but a better Again, but are many were of would ago. of with put win something existing XX really to to direct months, to what’s wins shortly direct our After sourcing controls implemented I for is a to of just XX the initiative carrying our go starting vendors. about optimize quite months that, last cases

one be of tailwinds of If down for a to going going total that’s coming you actually us feel at about XXX forward. the our We points. the basis to for left goods sales look actually markdown quarters nicer

Liz Suzuki

is nature to temporary or the benefits continue seems it likely one-time anything of a a those in lot quarters. I of that would theoretically a subsequent And should continue? benefits mean, like or of we think about there Great. these lot

Matt Susz

am I Matt, in jump here.

again, seeing one I’d they’re their we’re news freight fade is news bad the now nature, is massive really will not a And normalcy. say, they’re these in will increases. sustainable, they’re some these go back benefits think to going unprecedented the I point ocean these – and thing to at are probably likely the continue good is primarily but

Wade Miquelon

kind feel environment Yeah, I it we tailwinds of promotional rest could the to do I Certainly talked change. think they’re sustainable. of the

I we of and the their sustainable. but portion think have the of customers our that just in would and our number attribute to a own high-low to unprecedented I model reading understanding most the of really much that benefit of our do We analytics we’re is coming really seeing, that’s space of new to and that ability to sensitivity feel promotions against leverage that. also

Unidentified Analyst

A very thanks - much. Thank Great, you. Wade Miquelon

Operator

our from Barclays. question comes Kearney And Paul next from

is Your line open.

Paul Kearney

for and my the Hi taking out everyone. gate. congrats on Thanks good first question of a quarter

Wade Miquelon

Thank you.

Matt Susz

you. Thank

Paul Kearney

what growth categories a the momentum? you Can and continued of some talk drove where seeing about bit you’re little sales

Wade Miquelon

our as we’re actually optimistic in are biggest but up of has sewing businesses on were really divisions mean especially nicely side still were was than the stronger – bit one on But but of the pretty what I was results of arts Yeah, a all seasonal really about core balance, is wasn’t up and crafts stack. two-year and sewing nicely, and things broad-based, some stronger our broad-based. is shutdown. even growing Sewing actually though much strong, our a very our

in come lot our fashion hasn’t So, largely those that apparel, with construction, shutdown, cosplay been of and seeing as but been actually these sales obviously because things. tailwind events, geographies things be of terms start sewing haven’t the our we’re weddings, our businesses program, there’s special going have that occasion there now see been [indiscernible], kinds to get normal. And we there like to see we a for to zip as too, different that’s little us back blossom, up, we nice open those and businesses new of codes then

Paul Kearney

on for Great, if you. in just follow-up, of lift kind us store the on how expected maybe a plan, can returns would plan remind you on maybe see you Thank profitability? what what this just thanks. the be do store quick refresh And broadly, do program terms just front timing the and comp a many you year, of or projects refresh

Matt Susz

investments. XX end blended starting per to our mode in in plan earlier initial A to up given this this ability into well them terms of of We’ve pretty ramping projects projects a and year, impairment payback refresh construction to great modest strategy question, rollout in four-years our stores have our modest getting are in of so those projects way to many this on of and quickly at about have review projects fiscal we’ve a just XX about completed, somewhere the next, blend year. projects crews in year is projects XX and year that, fairly that’ll relatively pandemic those just will more this a a moving thorough a those number on bit Matt. really markets. talked our as investment of be XX into the to where that will we’re the return the those our ability chain healthy full early bit on an lot completed We for result lifts between projects, for endeavor a to of those them We’ll of of have to on some longer whole than

Paul Kearney

you much. Thank very

Operator

our with Guggenheim. And next from question Forbes comes Steven

open. is line Your

Steven Forbes

mentioned update two machine last holistically? expect in year year about Hi, like trends year sort relatively or the call – any you, change what or good out the of updated to consistent prepared those before? year you a this any but spending to quarterly we've sales during trend to color then versus talked on machine one And you provide if just could Maybe on for you here, curious sales, evening. performance, how thoughts remarks follow-up some

Wade Miquelon

the very board across the have sales been machine Yeah, strong.

house of are a the be year long or plus I they seeing mean, the And, and we're side versus continue feel up. very they art gone. of and coming stopped consumers stack think learning of and the I that and to lot experienced you good, know on basis so two trade young in On XXX% evolving we mass of machine, a from continue making kind strong. still in consumers the so. October, to September, days around very, sewing

the side coming. running the very seeing, craft are And innovation of a house pipeline customers strong, follow-on very good metrics other of engaging We're machine now the to On sales. we're good very the still house, and see if happening that the again, because they're it's a of historic, a starting same as is but not distorted selling lot a these bit events little selling I of major yet, are do think lot to.

And happening. good not to that these life so pretty to optimistic here seeing, that we're And where are off these. is trends see But drop that going big we're stay. on we're a

Matt Susz

still Yeah, did some we're our tracking of twice seeing XX% average we about their customers ticket We're XX% and what is about higher. to of visit their our newer at customer still seeing frequency average recently. –

yeah, bought seeing good machine last in activities follow-on we're So still very their those year. customers that first

Steven Forbes

how the Any out specific P&L. seem on And of saving goals? plan, that broad-based did the of achievement just update to you those it of just side internal on a targets relative was laid spending sort on expense relative tracking the against here those you a expenses something beat or because a to quick like follow-up sort you're indirect that call out, maybe to

Wade Miquelon

also we definitely we're say little some projects to I and stores. run a great a our seen for carry be we've nice that's well done distribution would both. that and good labor more bids And lower us think traction I ability job this our centers, Yeah, seeing provides efficiencies on of pretty leveraging nice I on say have a, as those. a good efficient would that year. some It's question. we've our inventory as

tailwind we I inventory also to be a to think well manage of potential continue that lower that's on as pretty able us a bit for investment.

Steven Forbes

Thank you.

Wade Miquelon

you. Thank

Matt Susz

Steve. Thanks

Operator

And our Sandler. question from comes Keith next from Piper Peter

Your open. is line

Peter Keith

talked felt and machine, good cohort afternoon. XXXX see just we're past with Steve's guys XX% historical the two, in would all out with a that we're sewing as recent continuing comments know most XXXX about on measures. to the Matt I sales view new XX% the of see on, of to getting we've off of machine was some that customers first well. you for lapping a average either into the in customers quarter as QX based or the question those spend that follow-up of your My Cricut from congratulations customers. year about about Hi, year bought and these are one on Is true? on customers compares retaining hold and a align that still those something to that now, increase Maybe

Matt Susz

also in mid-XX% to think Officer as Probably at least we're the was definitely, to from this XX% seen of retention talking retention I with in week. bit in that value frequency Customer Chief piece, is and as on bit customer a our a the Yeah, I kind rates. little early earlier, earlier be tell basket mentioned that if the going to say the we've we've strong would as historically on I what hoped.

able these and some we've on Just were quarter because that the be trend expect last for – customers fourth we're to in year, that. but of achieve certainly added to

Peter Keith

growing at And the quarter, formal have your QX where XX%. least And sits but coming guess Okay. basis All there's sales where a would sales right. XX%. basis consensus number no that's on about at second guidance on off for of grew the a I two-year two-year

or So acceleration decline we the nuanced off with of a do on coming anything think could trend or steady where will you is see two-year hold there some QX? two-year conversely, QX maybe basis

Wade Miquelon

some And ago, of trend sales of the two was probably years at kind by this us. period. what to actually about years are our terms we that quarter first think a thing quarter is really quarter for somewhat what is our in normalize second strongest with for going two-year you our pretty the about the We trends I feel year, two look would quarter-to-quarter quarter is need actually in trends So second like, that ago or this and weak of was that say of that to time so far quarter, year. that, the year

is, that as to maybe things the I category, due on. go – been still mentioned, do our like have one Wade think we so businesses and celebration COVID have that shutdown, deal we occasions, piece would against some special that

the some hopeful; are we through those move steam We year. as will pick-up

Peter Keith

one year. year-on-year Okay, well. gross were Maybe for last looking we great. question, margin some through of forward rest just the thinking I as expansion ongoing the believe

imply highlighting a the still are you costs You more see in freight Does gross you to expect offset probably quarters? will do year-on-year, flat-ish now that headwind, year-on-your or think to and run you gains expect margin those. as coming

Wade Miquelon

Yes.

offset So we're to really able expectations. our to being relative speaking to

to have expectations grow would have bit have cost. that some we expectations margins. be optimistic. we're We to more softened even maybe to margins. supply are Those really tailwinds had a going it, had chain grow the by we is So still saying What

Matt Susz

mean, perspective now paid. historically is is what as the seeing of broken we're that XX freight, high what for the some we're on on containers I ocean getting as times

again, That that's thing going in anomaly to then we'll didn't first really misses will us but the and that's probably the know the the of much and subside, is throughout very expect, quarter. ultimately year issues, So are we normal. hit return similar to others that seeing I balance one that ultimately

a don't by margins expect on but not gross of all quarter. for balance that be year. grew in certainly to of first XXX the basis strong We back, we give that basis So points over-over-year the the

Peter Keith

Yeah.

so Okay. Thanks much. Very helpful.

Operator

Wells And next question Fargo. Fadem Zach comes from from the

open. is line Your

Zach Fadem

good Hey, afternoon.

trends May model? de-leveraging on through any side, the comparing about? costs to on again SG&A the SG&A you're walk of us better to is you your tougher manage any able could you profitability? impact And could QX; talk flex then your And So the there extent to what the on the color down on

Wade Miquelon

may of to the which surge, someone one a long of kind now mean, compares had competitors for company, I'll also has largest for had the last in newer other year not huge I stores It this such only gone. PPE just be space, been QX our while. our Yes.

trends that us I kind really customers there's that we that But middle good. enjoy and finished against. we part fading. that's mean, month. anomalous May strong the that QX we're So are these of been up nothing that But we've of feel feel of and underlying the low just for makes to able incremental May, always really these in

So…

Matt Susz

on also historically think as try and quarter. control occurs unusual I of The in the make need cost, one the half do last absent. in side. say We of the prepare year even QX back a – SG&A we already and year. trend that from the quarter. we would for tend up the our point, lot The is we're slower we what do de-levering our on to I second thing to against allowed to

us. and expectations to at at in going be us shared the stronger back may ready around while do are we to costs business allowing what not to half. internal our So to the below going we're allow risk to also earlier we cut They're able SG&A, and put trying to have manage or by bank be

Wade Miquelon

year. really I thing would expense run through and one standing in guess I we're the make stock and strong being we've say really that our no seasonal, to is, spared our able positions too, sure to

to being strong about good not feel save or the trying be opposite relevant we that to So of as as our customers. to, to able costs and versus

going and it's we've choice it's the made think serve as well. to we So

Zach Fadem

quarter, then Got e-com compared it. then on has get That e-com any offsetting and Maybe up bit customers impact year, you to whether a margin any the the your with plan. down to that to mix could that, the expect whether gross we assume to margin to as was gross result? sense. you expect about back in little through step step move mix back there as we makes returning that And should talk do And of a a stores. taking I mix

Wade Miquelon

into were we forward, On the stores got year, move of many then, visitors we to and last as our as thing April remember had that shutdown we the e-com, is to completely entering.

So I at a all point, back. can way of if not mean higher see our them the the you a but The is only normalized we're of now; was we stores of online. coming are fully more this quarter, quarter will. customers much But one numbers I'm are our e-com, opened. for you serve now

you, you view good are getting of here. normal grow like as thank So what a from I we looks

Matt Susz

Yes.

the penetration I We would pandemic bit what economy. of we've the But place so it's may So is half seasonal, from We see we and say would typically a be. even has to – penetration a basis on that minor. other in early it to our we have little back to the But environment that on the some where talked the pretty have e-commerce consumer is it's a freight about, grow in higher we initiatives margins. an us relative There's certainly freight typically for to year, normalized XX% relative the year. things part annualized to think in a of primarily that bit future. view XX% healthy direct related with

Wade Miquelon

it e-com a moving we're so our big at more cost top we've we profitable are as new know, well business from can got line, encouraged by couple is very now kind leavers even that. a and of that so we make as now and that the perspective normal You forward, the of very

Zach Fadem

Appreciate the That time tonight. all sense. it. Got makes

Operator

[Operator Advisory Instructions] from Cristina And your next question Telsey Fernandez to comes Group.

open. is line Your

Cristina Fernandez

good afternoon, quarter. a and congratulations good on Hi,

You stimulus you didn't mention Do you had in think in government any and benefit it a perhaps, the quarter that? from the prepared remarks. could benefit quantify during there your

Wade Miquelon

$XX to never I would did it's right. we But the of that and didn't of automotive, if probably purchase likes. have, I than, I appliances for very very customers we say it's measure. the a benefit, hard any under mean say we and kinds have would, different

think normalized quarter meaningful we distorts any there a that the nothing there's one So in way. versus

Matt Susz

shutdowns on when COVID up already of this a we expected were was quarter occurred for part as when last the us specifically, by we to the those are quarter. against be Particular year-over-year It's year. basis. the what worst in the, of kind store It's strongest

earlier which this in our has had beneficial also We year, Eastern to business.

Wade's a the I of little that the kind that even of of period again, So stimulus. sort really was that's much it us due strong quarter makes think point to how out muddier for to

Cristina Fernandez

product, promotions. this the And across what that then industry? to on a historical question follow you're pattern? versus seeing And at extent some had the bring promotional competitors you promotions. with on feel you historic you back your can in and sort of you to your follow-up comment Can Thanks. or you. your Thank I a stay industry them, think lower do differentiation traditionally of data level been your Would has compelled

Wade Miquelon

can opinion, why and throw promote, we we're his, Yes. we're but to a I rational how and but smarter promote it's we of getting Maybe promote. think – my pretty I'll still when always throw and think seeing, and Matt smarter we're I environment out there going

customers accepting customers for and to lot I think our We great want way don't of time. importantly both Our haven't a robust. maybe we and the They're think been it's new the that historic get us, but very be customers proposition. us, us promote with still promote seem are with We with value value. do very we long to a of now,

changing. I personally a I never, that mean, see be I good but anticipate So right I'd think for now say the don't it's I environment and time. never some

Cristina Fernandez

agreed. Totally

Operator

turn no Miquelon we Mr. And for Wade remarks. over to back have further the closing questions. I'll call any

Wade Miquelon

results and all feel been are all you market, want ago this our can well. raising JOANN of of you takes year. and it It's of who here behalf. we've those to committed moving thank of every we're on grateful that and we're working been all day. of heights. here talent. transformational lot aspects the or just company a single very for A and doing it's one We've And times. journey. our our hopefully – employees because I'm omni-digital our to great we're been capabilities, be, crazy started you it think years seeing, part are you. for work really every we your know their we I all experience, we're all possibly assortment, of for look, forward here hard I really families; it's game and as But We several good We to that as a to And store brighter even day Well, got and got it's want to your really stakeholders them higher take we'll every just hard of as XX,XXX we I'm sure

Operator

today's ladies and concludes you you, participating. conference Thank Thank gentlemen. This call. for

You may now disconnect.

JOANN (JOAN) 4 Jun 212022 Q1 Earnings call transcript