Good morning. I'd like to welcome everyone to Sleep Country's Q1 2023 results conference call. Yesterday, Sleep Country released their financial results for the first quarter of 2023. A copy of the earnings disclosure is available on their investor relations website and includes cautionary language about forward-looking statements, risks, and uncertainties, which also applies to the discussion during today's conference call. I would now like to turn the call over to Stewart Schaefer, President and CEO. Please go ahead. Thank you, good morning, everyone, and thank you for joining us. With me today is Craig De Pratto, our CFO. Looking at the 1st quarter of the year, despite ongoing tightening in consumer spending and macroeconomic uncertainty, our results were very solid. When compared to Q1 2022, which was the best Q1 in our company's history, we were pleased to maintain steady revenues while continuing to drive our business forward to deliver on our multi-year strategic plan and maintain our position as Canada's leading sleep retailer. With our strategic plan in place and the strength of our balance sheet, our team continued to execute well with a focus on building the country's best sleep ecosystem of multiple leading retail brands that continue to disrupt and reimagine Canada's sleep space. As a spotlight on the quarter, we continue to see our brick-and-mortar stores contribute strongly with online sales softening as consumers choose to shop more in person. We expanded our retail footprint by opening two new Sleep Country stores in Shawinigan, Quebec, and Thunder Bay, Ontario, bringing our store count to 290 locations. We continued to invest in our brand portfolio and officially welcome Silk & Snow at the start of the quarter. The brand and the team have been an incredible addition to our family of brands as we continue to focus on growing the brand through differentiating it in the market with its aesthetically appealing, unique products and its world-class digital marketing. Subsequent to the end of the quarter, we were thrilled to acquire 100% of Casper Sleep's Canadian operations. Casper is the original disruptor of the mattress industry in North America and invested over $1 billion globally to build a leading brand focused on delivering a frictionless and elevated sleep experience. This acquisition aligns perfectly with Sleep Country's strategic omni-channel journey. With Casper, we are adding one of North America's leading retail brands to our growing family of sleep brands, which now includes Sleep Country, Dormez-vous, Endy, Hush, and Silk & Snow, reinforcing our 29-year brand statement of why buy a mattress anywhere else. We are incredibly grateful to our entire team, who have worked tirelessly over the last few years to transform our business into Canada's leading sleep ecosystem and deliver on our purpose-driven strategy to ensure all Canadians get a great night's sleep. We are proud of the team's efforts to drive awareness and own the conversation around the importance of sleep to Canadians' well-being with a five-week digital and influencer campaign for Sleep Awareness Month and World Sleep Day this past March. We are also very proud of Endy for winning Best Workplace for Women by Great Place To Work for the second year running. We continue to focus on our commitment to equity, diversity, inclusion, and belonging across our workplaces. Our strategic investments have enabled us to create the ultimate omni-channel sleep experience for our customers. We continue to establish a loyal customer following as our business and brands continue to grow along with our channels and product lineup. With ongoing investments in supply chain, distribution, logistics, and digital platforms, we are well-positioned to deliver a seamless customer experience and grow our market share for years to come. Looking ahead, we remain cautiously optimistic for the back half of 2023 while focusing on our multi-year strategic plan, investing in our house of brands, innovative products, our people, and delivering a best-in-class experience for our customers. Thank you once again to our fabulous teams at Sleep Country, Dormez-vous, Endy, Hush, Silk & Snow, and now Casper, and to all our partners for their commitment and support for all our businesses. With that, I now turn it over to Craig to discuss our financial results. Thank you, Stewart, good morning, everyone. As Stewart noted earlier in the call, we are pleased with our Q1 2023 results, especially considering the macro environment we operate in. We saw a decrease in our revenues by $ 0.5 million or 0.3% from $ 207 million in Q1 2022 to $ 206.5 million in Q1 2023. This change was mainly driven by a 6.2% decrease in same-store sales, partially offset by incremental revenue earned from the Silk & Snow acquisition in early January 2023. One net new store opened in 2023, as well as our wrap stores opened in 2022. Although we had a negative same-store sales growth in Q1 2023, we achieved a strong three-year stacked same-store sales growth of 21.1% for the period ended Q1 2023 and achieved a CAGR of 8.5% from Q1 2019 to Q1 2023. Our Q1 revenues from our e-commerce platform increased 150 basis points from 20.8% in Q1 2022 to 22.3% in Q1 2023. Moving on to gross profit. Our gross profit margin decreased by 30 basis points from 34.6% in Q1 2022 to 34.3% in Q1 2023, mainly due to deleveraging occupancy costs tied to lower sales, which were partially offset by an increase in average unit selling price. Going forward, we expect the sequential step ups we have seen over the past year in gross profit margin to settle and be more consistent going forward and fluctuate based off of the seasonality in our business. Total G&A expenses increased by $5 million or 11.6% from $43.1 million in Q1 2022 to $48.1 million in Q1 2023. This change was mainly driven by an increase in media and advertising costs impacted by the incremental spend by Silk & Snow acquired in Q1 2023, as well as increases in warehouse occupancy costs, credit card and financing charges driven by higher finance sales, compensation, and intangible depreciation expenses. As a reminder to the market that our D2C brands, Hush, Silk & Snow, are earlier in their growth cycle, resulting in a deleveraging on marketing and fixed costs in the near term. EBITDA decreased by $4.5 million or 10.3% from $44.2 million in Q1 2022 to $39.7 million in Q1 2023. Adjusting our EBITDA for LTIP, ERP and acquisition-related costs, our operating EBITDA decreased by $5.3 million or 11.5% from $46.7 million in Q1 2022 to $41.4 million in Q1 2023. It should be noted that Q1 2023 adjustments to EBITDA of $1.7 million came in lower versus $2.5 million in Q1 of 2022, resulting in our operating EBITDA margin decreasing by 260 basis points quarter-over-quarter. Finance related income and expenses increased by $3.5 million from $3 million in Q1 2022 to $6.5 million in Q1 2023. This change was mainly due to an increase in interest expense on the company's senior secured credit facility as a result of higher effective interest rates and the change in fair value on the interest rate swap year-over-year, and lastly, an increase in interest on our lease obligations. Net income attributable to the company decreased by $ 7.1 million from $ 18.4 million in Q1 2022 to $ 11.3 million in Q1 2023. Adjusting for LTIP, ERP, and acquisition-related costs as well as accretion expense related to Hush and Silk & Snow, adjusted net income attributable to the company decreased by $ 7.6 million from $ 20.8 million in Q1 2022 to $ 13.2 million in Q1 2023. Diluted adjusted earnings per share decreased by $0.19 or 33.9% from $0.56 in Q1 2022 to $0.37 in Q1 2023. On to some capital allocation items. During the first quarter, we repurchased for cancellation 299,000 common shares for total consideration of approximately $7.3 million. We received approval for a new NCIB, which commenced on March 9th, 2023, to purchase up to a maximum of approximately 2.6 million of the company's common shares, representing approximately 10% of our public float. Additionally, we received TSX approval and established a new automatic share purchase plan in connection with our NCIB. We intend to continue to execute against our NCIB as opportunities arise in 2023. On May 8th, 2023, the board approved a 10.2% increase in our quarterly dividend to $ 0.237 per share, which will be payable on May 31st, 2023, to the shareholders of record at the close of business on May 24th, 2023. Regarding our capital, CapEx spend for 2023, we plan on opening a minimum of six new Sleep Country Canada Dormez-vous stores. Once we finalize our new and innovative store formats later this year, we plan on renovating a minimum of seven new store or seven stores in 2023 under this format. Later this month, in May 2023, we are opening our new Kitchener warehouse, and we plan to consolidate two of our existing warehouses later this year. Additionally, we will continue to invest in our ERP technology to further enhance our digital capabilities, omni-channel experience, and spend approximately 1% of our revenue for ongoing store and DC maintenance. Thank you, and I'll now pass the call back over to Stewart for closing remarks. Thank you, Craig. Our performance demonstrates our unwavering commitment to our strategic plan and our team's ability to adapt and thrive in challenging times. We continue to invest in our business by building a remarkable house of brands with the most innovative and expansive product lineup, a strong focus on expanding our channels of distribution and our touch points with all Canadians, and the most robust omni-channel sleep experience for our customer. As we close out the quarter and we look ahead to the remainder of the year, we continue to be cautiously optimistic of the macro environment while remaining steadfast in our commitment to drive efficiencies and results, seeking out the best opportunities that support our long-term strategic goals with a constant focus on managing our strong balance sheet while growing and returning value to our shareholders. Thank you again to our teams, partners, shareholders for all your support in the first quarter. With that, we conclude our remarks and open the floor for questions. Thank you. Ladies and gentlemen, we'll now conduct the question-and-answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment for your first question. Okay, your first question comes from Martin Landry from Stifel GMP. Martin, please go ahead. Hi, good morning. Morning, Martin. Morning. My first question is on your sales of accessories. They continue to perform well. They were up 6.5% this year. Hearing, you know, how do you ensure that those customers that are buying these accessories come back to your store when they're ready to purchase the mattress? I would assume you have a customer database and you do some outreach, but it'd be great to hear more about your strategy on that. Sure. Great question. Just also gonna touch on strategically how we look at our accessories, Martin. You're correct that crossing the lease line, whether it's online or within our stores for customers to engage with our brands on accessories, for us is a huge lead generator when the confidence returns to make the bigger purchase, which is the mattress. In anticipation of a softer Q1, that we were feeling a little bit from Q4, there was a strategic shift on some of our marketing to be able to generate traffic in our stores with the accessories as well as obviously our mattresses. That paid off really well for us, and as you noted in your report with 1,000 basis points higher in terms of the gross margin. accessories is a very important part of our business, is a very profitable part of our business. For us, as long as we are continuing to have customers engage with our brand, that is the most important thing that we watch for. Okay. That's helpful. I'd like to switch gears a little bit and talk about Casper. You know, it looks like a great acquisition, a great brand for you guys. Wondering what's the first steps for you to integrate Casper or to work on Casper this year, and what are the long-term plans for that brand? We're about three weeks in, so we'll give probably more color as time goes on. Forgive me. I will tell you the first thing is to welcome the team and make them feel a very important part of our entire ecosystem. That's happening right now. We're also gonna learn from Casper and see the Casper personality and make sure that we preserve the Casper personality, which is one of the reasons why we bought this retail brand. Slowly we will learn with the team side by side on how do we engage the brand with more Canadian consumers. We do believe that the brand awareness of Casper is well under developed, the brand is very well developed compared to the revenue that this brand is creating. We're excited about the opportunity of expanding both its retail footprint, as well as its digital footprint. More on that to come, probably over the next couple of months. Okay. You're talking about an expansion of the retail footprint. There's a potential for you guys to add more store to their network. 100%. Well. Okay. This for us is a perfect, besides that the brand and the awareness of the brand, and the fact that they only have six stores in all of Canada, of which four are in Toronto, we see great opportunity to be able to expand that re-retail footprint. That being said, we like to walk before we run, and we are gonna plan methodically in terms of how we're gonna execute that and what markets and what customer segmentations that we wanna particularly drive. You should see more of that happening within Q1 of 2024. Okay. That's it for me. Thank you. Thanks, Martin. Thanks, Martin. Your next question comes from Stephen MacLeod from BMO Capital Markets. Stephen, please go ahead. Thank you. Good morning, guys. Morning, Stephen. Just a couple of quick questions. Just wondering if you can give a little bit of color just around the outlook. Specifically, if you can give some color around Q2 to date, and the wording in the press release is such that you talk about cautiously optimistic for the back half of the year. I'm just curious what kind of, sort of confidence or visibility you have into that, into that outlook. I guess our visibility is as good as yours, Stephen. Unfortunately, nobody has a crystal ball. The Q2 started off similar as Q1 finished, so which is why we talk about the back half. We do feel that we have easier comps in the back half because we did see the market begin to slow down and consumer confidence drop at midsummer last year. We had Q3 and Q4 that we saw the momentum of this slowdown. We are cautiously optimistic that the back half will be better. I also believe, and hopefully this is the case, that the Bank of Canada and the Fed have now stopped with the interest rate hikes and maybe this is the new norm, some conversations about them cutting. Even if this is the new norm, I think consumers are healthy. We're still seeing that. We're seeing that by even the accessories that they're buying and the price points that they're buying. Unemployment is still incredibly low, this is unusual slowdown/recession, whatever it is. Our past experience has shown that consumers need to get comfortable with the new norm, and if this is the new norm, we're more positive of how the consumer is gonna return in the back half. Right. Okay. That's helpful. Then I'm just curious, just along those lines, you know, how... Same-store sales being down, you know, 6.2%, which was better than we were looking for and better than a sequential basis too. Like, is there anything in the macro or, you know, in the general news flow cycle that you see in either more negatively or positively impacting consumer sales? Like, is there anything you can correlate strongly to based on what you can see? Yeah. I mean, we're all watching the same thing unfold in the news and on TV. I have no scientific proof of this, but when you see banks failing in the United States, when you see defaults and debt rising, I mean, the news hasn't been so great yet, and that usually has an impact on consumer confidence. In this past quarter, Q1, and even into April and May, a lot of things that are happening to United States definitely spills over in terms of the confidence of the consumer. More than that, no, because, I mean, we saw a little tick up in unemployment, but still, these are fabulous numbers, and the world seems to be very hot in terms of employment engagement, so not bigger signs than that. Yeah. Great. Maybe just one more, if I could. Just wondering if you can give a little bit of color around how sales unfolded through Q1 on a month-to-month basis. I know you've given that color in the past, which has been very helpful. Then any strength you're seeing on a relative basis by price point? Yeah. On the quarter, on Q1, January actually was the strongest of the three months, which was a bit of a spillover that came in 'cause we report on delivered business from the end of the year of Q4. February and March were consistently softer, both about the same thing. April was about the same thing as February and March. On the high end, to answer your question on price points, the high-end consumer seems to be holding in well. Our lifestyle beds, which is usually for our mid to higher end consumer, was actually up on the quarter. Pillows were up on the quarter. Headboards and footboards were up on the quarter, and off of a strong Q1 of 2022. On the low end, in our Bloom collection, we saw some interesting shifts that started to grow again, reignite, which we actually look at as a positive sign, because that was the first consumer to back away as of last year. It was the low end that stopped buying, or slowed down on their buying, a lot quicker than the mid and to the high end. It's a little bit of a barbell effect that we're seeing right now. The middle consumer, which is usually a price point between $1,000 and $1,500, which is a very important price point, that one seems to have slowed down, except those customers were the greatest purchasers of our accessories this quarter. They've been still engaging, but they didn't buy the mattress. That's great. Thank you for the color. Cool. Pleasure, Stephen. Your next question comes from John Zamparo from CIBC. John, please go ahead. Thanks. Good morning, guys. Morning, John. Morning, John. I wanted to start on the renovation plans. It looks like there was a change to those. You'd previously targeted 20-30 renos. Now that's a minimum of seven. It was a similar change to the warehouse plans where you were gonna consolidate four, now it's two. I wonder, is this just a function of leverage following the Casper deal, or was it related to your outlook for the year or something about analysis of return to those projects? Just would like some more color there. Yeah. It's less about the leverage. It's more about watching the macro environment and testing our two new stores. We're gonna be opening our new 4.0 design. Two stores are gonna be opening in this in the next couple of months, the next two to three months, one in Montreal and one in Toronto. We're gonna test and we're gonna learn. We don't renovate just for the sake of renovating 'cause our stores look pretty good. We renovate to make sure that we're driving a higher dollar per square foot in those stores. There's a plan specifically about driving more of our accessory business and bringing in a little bit more of our digital footprint into the stores. We need a little time and data to watch that happen. If all goes well, we have a smaller window for the year to be able to do it. We won't do it in the fourth quarter because fourth quarter has turned out to be growing in strength for us over the years. Q3, which is our biggest quarter of the year, doesn't give us that much room either, and we're gonna be selective in terms of the markets and the regions that we do it. We just don't wanna close too many of the stores. On the warehouses, Montreal's original warehouse. Leases coming due, and we had two additional warehouses that we opened over the last few years. One that was out in Vaudreuil in the West Island, and the other one in the East End to support our growing business in Quebec. We closed down the Vaudreuil one already, and the one in the East End was just lined up to expire this year with our Montreal facility. It was really like three, and I know Craig said two because there's only the second one now, three becoming one in the West Island that's going to handle that and years of growth. John, on the change in the outlook, it's just that the Montreal consolidation, it's likely to push just into Q1 of next year, and that's why there's the adjustment on the outlook. There's no fundamental, you know, variance from the original plan. It's just more of a timing of when that renovation will be complete. I wanna add one last thing around how we look at our capital allocation. We do believe these are very interesting times and we do believe it allows for interesting opportunities. We like to have keep our war chest full and the strength of our balance sheet does put us in a unique position in a market that is a little bit more difficult. As we deploy capital, we are very thoughtful in terms of the return on it for our shareholders, whether it's a dividend increase, whether it's NCIB, whether it's another acquisition, or whether it's deploying that capital in terms of renovations or IT investments. We're just watching and waiting how the world unfolds and making sure that we deploy our capital in the best possible way. All right. I appreciate the color. One quick follow-up on that. Is there any current plan to change the capital you allocate to buybacks this year given the Casper deal, or are you still targeting that $50 million level? Yeah. I mean, we're gonna continue to be opportunistic, but, you know, the returns on buying back shares and the lack of any sort of execution risk against buybacks, we still think that's a very attractive use of capital. I think you can expect, you know, similar ranges to last year or to that target that we disclosed a year ago. Got it. Okay. On your Walmart Express, or sorry, your Sleep Country Express stores, in the past you've said you'd potentially look at 80 to 100 locations that you could open over time. Given the change in your renovation plans, has there been any change to the total number or the pace of store openings for your Express stores? No. We count that as growth and not our renovation. We're still having conversations with Walmart to make sure that we position ourselves in the best locations within the Walmart space. That plan is gonna continue to unfold. Got it. Okay. Thinking longer term about your store footprint, you'd spoken on the Q4 call about potentially looking to open up stores for different brands under the Sleep Country portfolio. Is that kind of related to pausing renovations that you might wanna introduce these stores sooner rather than later for your other brands, or you're looking at ways to integrate them with your current footprint? I'm curious how you're thinking about expanding brick and mortar for your other brands. Yes, and yes and yes, John. There is going to be a couple of tests that we're going to be doing over the next few months with a store within a store. There is going to be a test on taking one of our digital brands and creating a first test footprint for them in a store location. And we're very close to launching another concept that we are going to test on the high-end side in a category that we're going to talk about a little bit more next quarter in the Yorkdale Mall. We got a... I think what the pandemic showed the whole world is that there's a reason why whatever it is, 65%, 70% of GDP is consumer spending. Consumer spending, it's an activity and people love to shop, and especially for our tactile items in the brick and mortar. The D2C component businesses are very important to our entire ecosystem, but that brick and mortar omni-channel component is important too. We do see wonderful opportunity ahead for us for each one of our retail brands, and that's how we look at our business. Sleep Country, Dormez-vous, Endy, Hush, Silk & Snow, and Casper are all retail brands that we believe we're gonna be very thoughtful in terms of geography, very thoughtful in terms of customer segmentation, and very thoughtful in terms of merchandising hierarchy that we believe we have lots of room to grow. All right. That's very helpful. Thank you for that. One last one, just 'cause it's topical. I wonder if we could get your thoughts on the Mattress Firm acquisition this morning, if there's any relevant implications for Sleep Country. I'm sorry, did they announce it this morning? 'Cause I didn't hear yet. Oh, yeah. Tempur Sealy is buying Mattress Firm. Well, it's about time. I'd love to get your very first impressions. Yes. Yeah, exactly. Well, it's the worst kept secret 'cause I've been hearing about it since last October. First of all, let me reach out and say congratulations to the Tempur Sealy team, Scott Thompson, CEO and Monty, the president of Canada. I think that's fantastic. I think they'll do an amazing job with that business and they're very important partners to us. I think it shows a very interesting path in terms of how partnerships between retailers and manufacturers, which is why we've never gone into the manufacturing business, is key to the future of this industry. That's a big congratulations out to that team. Okay. Got it. Thank you very much. Thank you. Ladies and gentlemen, as a reminder, should you wish to ask a question, please press star followed by one. Your next question comes from Brian Morrison from TD Securities. Brian, please go ahead. Hi, Stewart. Sorry, I wanna follow up on that because the acquisition was done at a multiple of 9.3x EBITDA, which is significantly higher than you are trading currently. I wonder if you think there's any desire or if there's anything preventing the suppliers to have more direct access to the consumer in Canada. I'm sorry, in Canada or in the U.S., Brian? What was your question? I'm sorry. specifically in Canada. Like, is there any risk- Yeah. These guys potentially come in and are interested in having more direct access to the Canadian consumer? First of all, let me comment on the first part of that. At a 9.3x EBITDA, it should send shockwaves to Canadian investors how cheap Sleep Country's stock is for the one of the most profitable mattress retailers out there. Put that as in your bonnet for a second. Second, no, I don't think so. I actually think there is some cost efficiency that happens when. I mean, we buy from manufacturers, and they add a premium onto it, and then they sell it to us, and then we add a premium onto it. For example, this acquisition with Casper, which is a retailer, we're also gonna be now having others manufacture the product and not buying it from another retailer who's doing it. You're gonna see the Casper prices come down as the new lineup rolls out. The consumer's actually gonna do better on that. The fact that Tempur Sealy bought Mattress Firm, Scott Thompson and the team are very smart guys, and they understand that brands are important to the consumer. I don't know what their plans are for their floor, but even if that happened within the Canadian landscape, brands matter, and being able to maximize that for the consumer is very important. Keep in mind, Tempur Sealy also sells to all the other retail brands within Canada, and that's a huge part of their business. Same thing within United States. This is not the first for them. They did an acquisition of Dreams in the U.K. Again, I don't wanna comment on their business, but the landscape in the UK hasn't changed much. I actually think it's a good thing for the consumers in the end because it should reduce cost for the consumer longer term. Well, I certainly do think it highlights your valuation. I wonder, just in terms of the number of acquisitions that you've done recently, whether you're content just digesting what you've got right now or if there are more opportunities on the horizon? You must have been in our board meeting yesterday, Brian. The answer is for the moment, yes. Listen, the Casper deal was opportunistic. And it was a fast and quick deal because of the timing on that, which we were really excited to do. We really believe that our portfolio now, in terms of how we are going to serve the Canadian consumer from all different price points, from all different choices, from all different brands, is gonna add more choice in terms of product pricing. We think it's time to buckle down and take what we have and really take the magic of Sleep Country and put that together. We see our D2C brands forming interesting relationships and partnerships and efficiencies that we're looking to drive within that category. Our wheelhouse has always been brick-and-mortar, and our D2C brands are excited about that, and we see a long runway for that within Canada. To answer your question in a very long way, if the next six months, our only focus is to drive efficiencies within our business, focus on the growth of these fabulous brands that we have, we are very excited and our hands will be full. Right. Stewart, can you update us with the acquisitions that you've completed, what you think your market share is in both mattresses and accessories currently? So hard to tell. We get some of the data from Canada. We get some of the data from United States. I'm gonna say 40%. Maybe it's more, maybe it's less. Part of me wonders if also part of our success in Q1, besides our marketing shift that we did on our accessories, was also because of Bed Bath & Beyond closing. That is a $ 500 million business that just disappeared within Canada, and we do hope that we are going to pick up part of that business. We've always said that our accessory business, we thought, was around 8%-10%. For sure it's growing. I mean, Silk & Snow, 50% of their business is accessories and 50% is mattress, and Hush is also a strategic point. I don't have, good numbers, Brian, around that, but if you, if you get something, please share it with us. We just know it's going in the right direction. Understood. Last question, Craig. Can you just comment on the timing of the closure of the convert and the asset purchase of Casper, why they're separate or why would the convert looks to be backdated? It was essentially group up as a package deal, but there was, you know, a diligence period required in addition to the convert. The diligence on the convert was fairly quick. On the broader asset purchase deal, and putting together the transition services agreement and master services agreement, because the two parties do need to work together as we transition, is why there was an additional amount of time tacked on. You will see in the financials that a portion of the convert is actually treated as a prepayment of part two of that deal. That's why there's a little bit of a difference in terms of the timing was, you know, really tied to some of the diligence required just on the second portion of the deal. All right. Thank you both very much. Thank you, Brian. There are no further questions at this time. I'll turn it back to you. Well, thank you very much again for all of your support and, have a great summer, and, we'll chat with you folks in August. Be well. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.