Good morning, ladies and gentlemen, and welcome to the Roots Corporation Q1 2024 Analyst Conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Monday, June 10th, 2024. I would now like to turn the conference over to Meghan Roach, President and CEO. Please go ahead. Good morning, everyone. Thank you for joining our Q1 2024 earnings call. As a reminder, the first half of the year remained seasonally small for Roots, with Q1 typically representing approximately 15% of annual sales. First quarter sales came in at CAD 37.5 million, compared to CAD 41.5 million last year, with direct-to-consumer sales of CAD 31.4 million relative to CAD 35.4 million in Q1 2023. Direct-to-consumer gross margins grew 80 basis points, and strong cost management drove a decline in SG&A of 3.1% year-over-year. Adjusted EBITDA losses amounted to CAD 8 million in Q1 2024, compared to a loss of CAD 5.8 million in Q1 2023. Notably, free cash flow improved by 1.7% year-over-year, and we reduced net debt by 22.7% compared to this time last year. Despite a small financial impact, we made significant progress across several important strategic initiatives this quarter, which I will highlight before turning the call to Leon to review our financial performance in more detail. We saw positive traffic on an omnichannel basis, driven by the continued performance of our paid media investments, SEO enhancements, and several dynamic partnerships in Q1. We maintained our positive brand momentum and customer engagement by improving our creative assets, partnerships, and events. In the first quarter, we marked Barbie's 65th anniversary on International Women's Day, with a special collection and an event in one of our Toronto flagship stores. Our second collaboration with Barbie generated strong engagement with new and existing customers. We raised awareness of our sustainability efforts significantly through a focused campaign showcasing the preferred fibers and materials used in our products, such as organic cotton. As we shared last quarter, over 90% of our products are now made with these sustainable materials. We also recently completed a renovation of one of our flagship stores in the CF Toronto Eaton Centre. With the renovation, we now have a dedicated location for our iconic sweats, nods back to our heritage in association with nature throughout the store, a refreshed facade, digital screens, and a merchandising layout to better showcase our collection. At the end of the quarter, we also introduced our brand ambassador program. The main objective of the program is to increase brand visibility through genuine and relatable representatives who reflect our brand values, build a stronger connection with our target audience by using the personal touch of our ambassadors, and to drive increased consideration of Roots across several key categories. The initial engagement with our ambassadors has been excellent, and we look forward to strengthening these partnerships in the third and fourth quarter. From a product perspective, several categories such as Activewear, One, and Cloud had double-digit growth in the quarter. However, we faced some inventory challenges in our Cooper fleece category, which performed very well in Q4, but left us with insufficient supply to satisfy demand in this quarter. Leon will provide more details on this later in our discussion. Over the last few years, we've also been working on enhancing the infrastructure at Roots and investing in the technology that will enable our value creation initiatives from an operational standpoint. In the first quarter, we debuted our data warehouse and our first of several AI initiatives in 2024 focused on inventory optimization and allocation. Although it is still in its initial stages, our AI-based inventory allocation system should optimize inventory distribution at stores and account for local variations in demand as it learns over time. In our next phase of AI implementation later this year, our focus is to enable more personalized and relevant content and recommendations to our customers online. From an international perspective, our performance in the U.S. and Asia also remains strong, with both regions achieving growth in this first quarter. As we reflect on the quarter and the remainder of the year, we are pleased with the progress our team has made towards our strategic plan and initiative. We continue to be cautious around the broader macro environment, with consumer discretionary spending remaining under pressure despite the recent reduction in interest rates. Our focus remains on driving growth through enhancements to our product portfolio, increased marketing efforts, improved engagement with consumers, and longer-term international expansion. I will now turn the call over to Leon Wu, our Chief Financial Officer. Thanks, Meghan, and good morning, everyone. Total sales were CAD 37.5 million in Q1 2024, as compared to CAD 41.5 million in Q1 2023. The decline in year-over-year sales was driven by the direct-to-consumer segment, while sales in our partners and other segments were flat year-over-year. DTC sales were CAD 31.4 million, down 11% relative to CAD 35.4 million a year ago. The decline in sales was entirely driven by lower discount sales, as our inventory position was much cleaner than a year ago. Growth in full price sales partially offset the decline in markdown sales. However, this growth was negatively impacted by the stronger sell-throughs of our Cooper fleece collection during Q4 2023, which resulted in lower inventory of our core styles and missed full price sales in Q1. During the quarter, we also temporarily closed two of our larger stores as they underwent renovations to improve the customer experience with our brand. This accounted for CAD 0.6 million of the year-over-year DTC sales decline during the renovation period, and we have since seen strong year-over-year growth from these two stores since reopening. Partners and other sales were CAD 6.1 million, largely flat to last year. The segment drove positive wholesale sales to Asia, to both our Taiwan operating partner and through our China Tmall platform. This was offset by lower royalties from licensing our brand to select manufacturing partners. Total gross profit was CAD 22.1 million in Q1 2024, down 9.7% compared to CAD 24.5 million last year. Total gross profit margin was 59% in both Q1 2024 and 2023. The decrease in gross profit was driven by lower DTC sales, partially offset by margin expansion in that segment. As Meghan mentioned, we are very pleased with the progress made on improving our product margins. DTC gross margin was 62.1% in the quarter, 80 basis points higher than 61.3% in Q1 2023. The increase in DTC gross margin was as a result of over 250 basis points improvement in our product margin, driven by improved product costing and lower discount sales. This margin improvement was partially offset by an unfavorable foreign exchange impact on US dollar purchases and a lower year-over-year accounting inventory provision taken at the prior year-end, which would have benefited Q1. SG&A expenses were CAD 32 million in Q1 2024, down 3.1% from CAD 33 million last year. The reduction in SG&A expenses was driven by savings from ongoing cost management initiatives and lower variable selling costs, partially offset by higher store personnel costs as a result of legislative minimum wage increases in 2023. In Q1 2024, net loss was CAD 8.9 million, or CAD 0.22 per share, compared to a net loss of CAD 8 million, or CAD 0.19 per share in the prior year. Adjusted EBITDA was a loss of CAD 8 million compared to a loss of CAD 5.8 million in Q1 2023. We continue to make good progress in strengthening our balance sheet and cash flow. At the end of Q1, our inventory was CAD 35.4 million, down almost 30% as compared to CAD 50.4 million at the end of Q1 2023. The year-over-year decrease in inventory was primarily driven by the strong sell-through of our pack-and-hold inventory over last year. In addition, stronger-than-expected Q4 sell-throughs of our core Cooper fleece styles drove an amplified year-over-year inventory decline of over 50% in this collection, which led to missed full price sales this quarter. We expect to replenish these styles ahead of the second half of our fiscal year. Notwithstanding the replenishment opportunities, we are pleased with the lower inventory balance achieved. Through continuous rebalancing of our assortment and AI-powered improvements to our inventory allocation and replenishment capabilities, we expect that sales growth can be attained through improved inventory productivity without having to revert back to the historical inventory levels. Our free cash flow was CAD 14.6 million outflow in Q1 2024, improving from CAD 14.9 million in Q1 2023. The improved free cash flow reflects our ongoing efforts to manage our working capital components. Net debt was CAD 31.7 million at the end of Q1 2024, down 23% as compared to CAD 41 million at the end of Q1 2023. Our net leverage ratio, measured as net debt over trailing 12-month adjusted EBITDA, was just under 1.8 times at the end of Q1 2024. In closing, we remain optimistic about the long-term profitable growth opportunities for Roots. In addition to the benefits from the execution of our strategic initiatives that Meghan outlined, we expect that product gross margin tailwinds will continue through the rest of 2024 as a result of product cost reductions attained through improvements made to our sourcing strategy. Furthermore, we anticipate that the replenishment of our core collections by Q3 will support full price sales growth ahead of our two largest selling quarters, which historically represented over 70% of our total sales. This concludes our prepared remarks for Q1 2024. With that, operator, please open the line for questions. Operator, just checking in that you can hear us. Sorry, everyone. We've had a few challenges this morning with the phones. Operator? Thanks for your patience, everyone. We're just figuring out a few meeting issues on the operator's side. Give us a few minutes. Apologies for the technical difficulties. I am now back. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by the number one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star, followed by the number 2. If you are using a speakerphone, please lift your handset up before pressing any keys. Our first question comes from the line of Brian Morrison from TD Cowen. Go ahead, please. Oh, thank you. Good morning, Meghan. Good morning, Leon. Good morning. Morning, Brian. Question for either of you, actually. In terms of the comp in the quarter, I'm wondering if you might be able to break down, to the best of your ability, what you think was caused by tightening of consumer discretionary spend and what was caused by your inventory sell-through from Q4. And Leon, maybe just confirm the store closures that you referred to. They're not in the comp. Yeah, Brian, why don't I jump in, and then Leon can comment on this also. So the store closures are not in the comp, which is why you see the difference between the comp and the total decline in sales, and the comp is obviously better. A couple of things I'd highlight. So it's still early on in the quarter in Q2, but we have seen improvements in trends with the renovated stores reopening and also the newness coming in. We have continued to be impacted by the Cooper fleece inventory, last of it, in comparison to Q4, but we do expect to have replenished that core fleece before the start of our third quarter. And then I would say, generally, we saw an omnichannel increase in traffic, and we doubled the growth in app and online from the Q1 perspective. So we are seeing, and we did see an improvement in trends in the quarter as we got closer to April with the stores reopening and just the newness coming in from a product perspective also to offset the lack of Cooper fleece. So in terms of how much of it is discretionary spending versus the broader inventory, I mean, from our perspective, it's difficult to kind of pull those out entirely. We noticed in the quarter we did see a decline in markdown sales. So obviously, with consumer discretionary spending being more pressured, if we had more inventory to put on markdown, obviously, we think that could have potentially risen sales a bit more. So we do think there is an impact from the macro perspective, but part of it, and the biggest part, we think, is really the Cooper fleece inventory and the lack thereof. Yeah, and just echoing Meghan, so the two stores are not included in comp. Okay. And maybe just take that one step further, Meghan, in terms of what you're seeing at the consumer level with respect to traffic and basket and conversion. Maybe just elaborate on those drivers, please. Yeah. I mean, I'd say from our returning customers' perspective, I'd break it into two pieces. So we are seeing new customer acquisition, and that's positive from our perspective. It's great to see that customers are attracted to the products we're showing, the new campaigns we have, and just kind of our overall increased engagement. Our returning customers, what we are seeing there is that when they are coming and shopping with us, which we're seeing some great frequency of that, the overall basket sizes are a little bit lower. Now, from our perspective, that's really, again, driven by the fact that Cooper fleece is one of our core product categories. And again, there's not as much inventory there in the first quarter and into the second quarter as we would like. But we are seeing some great performance, as I mentioned, again, with Active, with One, and with Cloud. And so it's predominantly conversion-driven for us as opposed to traffic-driven at this point. Okay. And Leon, maybe you can just elaborate the investment in working capital, maybe dollar terms, or what you think is required in order to get yourself back to, I realize it's lower than previous, but what is the optimal level in terms of how much working capital will be required? And was the message that you tried to convey on the call there is that you expect that this is going to drive year-over-year sales growth as we get to the back half of the year? Yeah, Brian, that's a good question. I'll take it as a regard to inventory because that's our largest working capital component. So when we think about inventory, the message I want to emphasize is that we aren't looking to get back to prior levels of high-end inventory. When we call out the inventory shortages, it's really in very specific pockets, namely being Cooper fleece. So when I think about our inventory, we are down from CAD 50 million down to about CAD 35 million. We do want to get it back up. I would say probably CAD 4-5 million would have been the ideal point. But again, it isn't going back to the historical levels. As we talked about in our recording, we are looking to receive a large component of the replenishment ahead of Q3, which will help us go into the peak selling period. Maybe if I can add on here, Brian, going back to our fourth quarter, we did see really good performance in Cooper fleece in the fourth quarter. Just from a timing and inventory purchasing perspective, what we had done is because we saw such great performance in the fourth quarter, we pulled forward a portion of our Q1 inventory into the fourth quarter sell-out, and we just couldn't replenish that Q1 inventory fast enough to be able to take advantage of the demand in the first quarter. Understood. Meghan, maybe last question. You talked about your improvement in data analytics capabilities in the omnichannel. What are the benefits from this? I mean, it sounds like AI personalization. It sounds like inventory optimization. But what are some of the key benefits you expect from your improved capabilities? Yeah, I think there's quite a few, actually. I'd say from the inventory perspective, it goes everywhere from reducing the amount of dormant styles within the different stores because, obviously, the AI-driven platform is enabling us to make sure that we're moving inventory around between the stores that are best utilizing it. We also, as an example, right now, our stores, if you go into our store and you don't find an item in our store, you're able to order that online and have it shipped to you. We're actually now taking into consideration in this new platform the items that are ordered online in stores to make sure that those stores in the future fulfill those items. It's really a wide variety of things from an inventory perspective. So everything around replenishment, allocations, and then from a future perspective, helping us think about our order cadence in terms of what we should be ordering upfront to make sure we maximize sales. So it should theoretically improve inventory terms over time. And then from the broader AI perspective, I mean, the data warehouse investment was obviously quite key. That should really help us continue to have that one view of the customer, which is really important to improving our engagement with them on a go-forward basis. It also improves overarching the underlying ability for us to drive analytics from a company perspective, which is really important. And then as we go forward into the year, when we think about other AI platforms, obviously, the investments, as you mentioned, on the personalization from an online perspective is key. That should impact us from an email perspective, from a search perspective online, the carousels of the products that you see. So pretty comprehensive, again, there in terms of the positive benefits we anticipate. And then on the go-forward from that is thinking about how do you drive further engagement from a customer service perspective too through different AI platforms that are present. So really, when we looked at where we could make applications of AI, our focus, as I think I've mentioned in some previous calls, was around identifying areas we saw value creation drivers for the business and then going back and thinking about how to invest in those places from an AI perspective to really drive growth and improvements from a sales perspective and a profitability perspective over time. Okay. That's all for me. Thanks very much and good luck. Thank you. Thank you. There seems to be no further questions at this time. I'd now like to turn the call back over to Ms. Roach for final closing comments. Thank you, everyone, for joining us for our Q1 2024 earnings call. We hope you all have a great summer, and we look forward to seeing you in the fall. Thank you, ma'am. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.