Ladies and gentlemen, welcome to The Aaron's Company, Inc. Second Quarter 2023 Earnings Conference Call. My name is Glenn, and I'll be the operator for today's call. If you'd like to ask a question during the presentation, you may do so by pressing star one on your telephone keypad. I will now hand you over to your host, Marc Levee, VP Finance and Investor Relations, to begin. Marc, please go ahead. Thank you, good morning, everyone. Welcome to our second quarter 2023 earnings conference call. Joining me today are Aaron's Chief Executive Officer, Douglas Lindsay; President, Steve Olsen; and Chief Financial Officer, C. Kelly Wall. After our prepared remarks, we will open the call for questions. Yesterday, after the market closed, we posted our earnings release on the investor relations section of our website at investor.aarons.com. We also posted a slide presentation that provides additional information about our second quarter results and full year 2023 outlook. During today's call, certain statements we make may be forward-looking, including those related to our outlook for this year. For more information, including important cautionary notes about these forward-looking statements, please refer to the safe harbor provision that can be found at the end of the earnings release. The safe harbor provision identifies risks that may cause actual results to differ materially from the content of our forward-looking statements. Also, please see our Form 10-K for the year ended December 31, 2022, and other filings with the SEC for a description of the risks related to our business that may cause actual results to differ materially from our forward-looking statements. On today's call, in the release, and in the supplemental investor presentation, we refer to certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, non-GAAP net earnings, non-GAAP EPS, adjusted free cash flow, and net debt, which have been adjusted for certain items which may affect the comparability of our performance with other companies. These non-GAAP measures are detailed in the reconciliation tables included in our earnings release and the supplemental investor presentation posted on our website. With that, I will now turn the call over to our CEO, Douglas Lindsay. Thanks, Marc. Good morning, everyone. Thank you for joining us today and for your interest in the Aaron's Company. I'm pleased to report that we delivered consolidated company earnings for the second quarter that were ahead of internal expectations, driven in part by our ongoing focus on cost controls. We also benefited from a healthier lease portfolio, resulting from optimization of our lease decisioning model in prior quarters. The recurring revenue nature of our Aaron's business and its strong cash flow dynamics continue to be an advantage. During the quarter, we generated $53 million in cash flow from operations and improved the strength of our balance sheet by reducing net debt by over $30 million. Over the last four quarters, we've cut our net debt nearly in half while continuing to invest in our strategic growth initiatives. Now, turning to the business segments. In the Aaron's business, I'm pleased to report that we ended the quarter with a larger-than-expected lease portfolio size. We've also made great progress on our market optimization initiatives by adding more GenNext and Hub and Showroom stores. Our lease decisioning enhancements continue to improve portfolio performance. These items contributed significantly to our strong bottom line performance in the second quarter, offsetting continued challenging customer demand trends. As we look to the back half of the year, we expect these demand trends to persist, but we expect to see sequential improvements as we begin to lap our lease decisioning cuts made in the back half of last year. Now, turning to BrandsMart. Macroeconomic factors continue to impact our customers' retail purchasing decisions at BrandsMart to a greater extent than in the Aaron's business. Meanwhile, we are focused on managing profitability through enhanced cost controls and strategic procurement and pricing actions. We recently celebrated our one-year anniversary of the BrandsMart acquisition. We remain confident in BrandsMart's compelling value proposition and our long-term strategic growth opportunities, including expanding into new markets and growing our e-commerce channel. As we discussed, the customer demand environment remains challenging in both business segments. This is reflected in the updated outlook we provided yesterday in our earnings release. We lowered our consolidated revenues for the year but maintained our adjusted EBITDA and non-GAAP EPS outlook. We have also increased our adjusted free cash flow outlook for the year. As we look ahead, we remain focused on optimizing profitability in both businesses, and we continue to make progress on the execution of our multi-year strategic plan. We are confident that the investments we are making will continue to enhance our distinct competitive advantages and allows us to increase market share at both Aaron's and BrandsMart. Before I turn the call over to Steve, I want to let you know that we've posted new videos on our investor website that showcase both our Aaron's GenNext and BrandsMart stores. I encourage you to watch these videos. Our stores have a unique retail format, a broad product assortment, and an enhanced in-store shopping experience. We believe our Aaron's and BrandsMart stores provide the most compelling customer value proposition in the markets we serve. Now, I'll turn the call over to Steve. Thanks, Douglas, and good morning, everyone. The Aaron's business delivered second quarter earnings ahead of our internal expectations. As Douglas mentioned, we executed well on our cost reduction initiative, which more than offset continued challenges in customer demand. Lease merchandise deliveries were down approximately 10% year-over-year. This was largely due to fewer lease applications in the quarter, actions we took to tighten lease decisioning in prior quarters, and approximately 4% fewer company-operated stores as compared to the beginning of the prior-year quarter. Our lease portfolio size ended the quarter with a value of $119.6 million. This was 8.6% lower than the prior-year quarter, but larger than we expected. Now moving to our key lease renewal metrics. The lease renewal rate for the quarter was 88.2% for our company-operated Aaron's stores. This rate was down 30 basis points year-over-year, but in line with pre-pandemic averages for the second quarter. Our 32 plus day non-renewal rate was 2.5% at the end of the second quarter. This rate increased 10 basis points year-over-year and reflects a sequential increase of 90 basis points from Q1 of this year, primarily due to normal seasonal trends. We continue to be pleased with improvement in our write-offs. The provision for lease merchandise write-offs as a percentage of lease revenues, was 5.4% for the second quarter. This reflects a 30 basis point improvement year-over-year. Now, let's talk about our important strategic growth initiatives for the Aaron's business. Our GenNext store strategy continues to deliver meaningful financial performance through the transformation of our in-store customer experience and operating model. In the first half of the year, we opened 19 GenNext stores, bringing our total to 230 company-operated GenNext stores. At the end of the quarter, these stores accounted for approximately 29% of lease revenues and retail sales. That compares to just over 17% in the prior year quarter. Lease originations in GenNext stores opened less than 1 year, continue to grow at a rate of more than 20 percentage points higher than our legacy store average. Our GenNext stores have stronger revenue performance than our traditional stores, and we look forward to opening new GenNext stores in the future. In addition, we continue to execute our new Hub and Showroom program. Far this year, we have converted 72 showrooms, bringing the total number of converted locations to 101 since we launched the program last year. Turning to the Aaron's e-commerce channel. We continue to focus on improving our digital marketing strategies, enhancing the online shopping experience, and expanding the assortment with over 10,000 products on aarons.com. In the quarter, revenues generated from leases initiated on aarons.com increased 5.5% year-over-year, and now represent 17.9% of total lease revenues, as compared to 15.4% in the prior year quarter. We are also pleased that we experienced a year-over-year increase in both the volume of lease applications completed on aarons.com and the conversion of these applications. Recurring revenue written into the portfolio from e-commerce decreased 10.7% compared to the prior year quarter. This decrease was a result of tighter lease decisioning in prior quarters and lower average ticket. During the quarter, we also launched a weekly payment option on aarons.com. As a reminder, we rolled out weekly payments in stores in Q3 of last year. We are pleased that we can now offer our customers the flexibility to choose a low weekly payment option wherever they prefer to shop. Now, turning to BrandsMart. As Douglas mentioned, we recently celebrated our 1-year anniversary of operating the BrandsMart business. I'm proud of our team as we work to achieve our synergies and implement our strategic initiatives to drive future growth. Starting this quarter, we will be reporting a comparable sales metric, which reflects sales from stores open for the last 15 months. Please see our 10-Q for a more detailed definition. Comparable sales for the second quarter were down 20.9% as compared to the prior year quarter. This is a result of ongoing weaker customer traffic and customer trade down to lower priced products across our major categories. Throughout the quarter, comparable sales improved, especially during key promotional periods, Memorial Day and July Fourth. As we seek to attract new BrandsMart customers, we continue to invest in our e-commerce channel and digital marketing strategies. Consistent with overall sales performance, we experienced pressure in the e-commerce channel. E-commerce product sales represented 8.1% of total product sales, down from 9.0% in the prior year quarter. Despite the demand challenges, we remain focused on optimizing the profitability of the business. For the second quarter, our product cost margin improved by approximately 50 basis points as compared to the prior year quarter. This was a result of direct procurement savings and strategic pricing actions. Finally, I'm excited to report that we are on track to open our first new BrandsMart store in Augusta, Georgia in Q4. We are confident that our brand and customer value proposition will resonate in this new market. I'll turn the call over to Kelly to provide further details on our financial performance. Thanks, Steve. We filed our Form 10-Q earnings release and investor presentation yesterday after the market closed. These documents can be found on our investor relations website. Please refer to these documents for additional detail regarding our financial performance and outlook for the consolidated company at the two business segments. Unless stated otherwise, any comparisons I make to prior periods will be on a year-over-year basis. Consolidated revenues for the second quarter of 2023 were $530.4 million, compared with $610.4 million. This year-over-year decrease is primarily due to lower lease revenues and fees and retail sales at the Aaron's business and lower retail sales at Brands Mart. Consolidated adjusted EBITDA was $42.4 million, compared with $61.2 million. This year-over-year decrease is primarily due to the lower revenues at both business segments, partially offset by lower personnel costs and other operating costs. In addition, as Steve mentioned, write-offs were lower at the Aaron's business. As a percentage of total revenues, adjusted EBITDA was 8% compared to 8.4%. On a non-GAAP basis, diluted earnings per share were $0.39 compared to $0.79. Despite the lower adjusted EBITDA in the quarter, we were very pleased with our adjusted free cash flow. It was $36 million, an increase of over $30 million. This increase was driven by higher cash provided by operations as we managed merchandise inventory levels at both businesses to reflect the current demand environment. Adjusted free cash flow also benefited from improvements to working capital efficiency and lower capital expenditures. During the quarter, we continued to return capital to shareholders, declaring $3.9 million in dividends and purchasing 66,000 shares of the company's common stock. In addition, we ended the second quarter with $38.4 million of cash and $186.1 million of debt. Our net debt balance at the end of the quarter was $147.7 million, a $30.2 million reduction from the end of Q1 2023. Since the end of the second quarter of last year, we have reduced our net debt by over $130 million. As a result, our net debt to adjusted EBITDA leverage ratio ended the quarter at less than 1 times. Turning to our updated outlook. In the second quarter earnings release, we provided an update to our full year 2023 outlook. This updated outlook reflects our expectation that total revenues for the consolidated company will be between $2.12 billion and $2.22 billion. We have lowered revenues to reflect our consolidated results in the first half of 2022, and to also reflect expected lower product sales at BrandsMart in the back half of the year as compared to our prior outlook. We have maintained our outlook for adjusted EBITDA and non-GAAP EPS for the consolidated company. We've also maintained our adjusted EBITDA at both business segments as we continue to invest in our growth and cost efficiency initiatives. In addition, we currently expect that earnings in the second half of the year will be weighted more heavily in the fourth quarter. This is in part due to additional investments in marketing and other initiatives designed to further drive new lease origination activity in the Aaron's business segment. Finally, we have increased our adjusted free cash flow outlook. This increase reflects our strong cash flow in the first half of the year and continued inventory and working capital efficiency improvements in the last 2 quarters of the year. With that, I will now turn the call over to the operator for Q&A. Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two to withdraw the questions. When preparing to ask your question, please ensure your phone is muted locally. We have our first question comes from Kyle Joseph, from Jefferies. Kyle, your line is now open. Hey, good morning, guys. thanks for taking my questions. I wanna get a sense for sort of the consumer behavior during the quarter. You know, I think last quarter you guys highlighted that, you know, there were fewer early buyouts and that benefited margins. Despite that, you saw stable credit. Obviously, we saw stable credit continue this quarter. Can you give us a sense for, you know, what buyout trends were and expectations for the rest of the year to give us a sense where you think margins will go on the Aaron's business? Yeah, Kyle, I'll start. I mean, demand, I, I would say demand trends, as you noted from our call, have been challenging. We, we saw that in the quarter, this down 10% at Aaron's and down 20% at BrandsMart U.S.A.. I think when you look within the Aaron's business, that 10% is really a real, like negative 5%. Within that negative 10% is about half is real demand, half is decisioning and closed doors. What we're really encouraged about is the lease-to-own business is really holding up better than retail, I would say. I think that's because of the payment price points at which our customers are shopping. We're not seeing as much trade down in the lease-to-own business as we are in retail, and Steve can talk a little bit more about that. You know, the customer continues to adjust to this inflationary environment. Early buyouts were lower in the first quarter, and they continue to be slightly lower in the second quarter. As you know, the second quarter is not a huge early buyout quarter. I'd say generally, in terms of the consumer, the consumer has remained resilient and I think is acclimating to this challenging economic environment. If you look at our renewal rate, the renewal rate was, was pretty strong relative to pre-pandemic levels, coming in right where we would expect in Q2 for pre-pandemic. Importantly, we really haven't seen any sign of a trade-down yet. We are seeing a slightly higher quality customer coming into Aaron's, but we have not detected either through our BrandsMart waterfall or through our data at Aaron's, a significant trade-down. We still continue to believe if that happens, it'll benefit us. The last thing I would say, and I'll let Steve touch a little bit on, BrandsMart, is that, you know, we're really focused right now on getting our shop in order, right-sizing and innovating our cost structure. We believe if we do that, going forward and the actions we've taken over the last 12 months, we've positioned ourselves really well, particularly with this direct-to-consumer, high operating leverage business, to enjoy the benefits of the rebound when that does occur. You know, challenging demand trends, full forward of demand. Steve will talk about that a little bit, but we feel good about what we can control and how we set up the business for the future. Great. Thanks, Douglas. Good morning, Kyle. Just quickly touch on BrandsMart. You know, we believe that the retail customer, obviously in these large ticket discretionary purchases, obviously is more sensitive to macro trends. When you think about demand on the BrandsMart side, that -20%, it really can be broken down into about half that is related to just transactions, so transactions down approximately 10%, and the other half is our average transaction value, down about 50, down about 10% as well. What we're facing is not only a demand trend challenge truly on transactions, but, but just a step back in our average transaction value, you know, versus what we saw last year. Average transaction value is still well ahead of pre-pandemic averages, double digits well ahead of that. We're just facing a little bit step, step down, especially in appliances. In addition, I'd just say that we are really focused on profitability in the BrandsMart business and not chasing those unprofitable sales that sometimes happen in, you know, especially in the consumer electronics category. We still believe in the business, and team's focused really hard to find ways to continue to find growth. Yeah, I mean, I just reiterate that we're, we're super excited about the long-term potential of BrandsMart. We, we are going through a cycle, and Steve and his team are doing a great job controlling costs. Got it. Very helpful. Just, just to follow up on BrandsMart, can you give us a sense for what the, the 2-year stack of the comps looks like, and then give us a sense for, you know, when you anticipate the comp really easing? If I recall, BrandsMart had a, had a very strong 2 Q22, do those comps get a little bit easier in the, in the back half of this year? Hey, hey, Kyle, it's Kelly. I'll, I'll answer the first part of that. As it relates to a, a 2-year comp, you may recall, we, we acquired the company just over 1 year ago, and so we've not provided, you know, detailed financials on the period prior to us owning them, so we don't have a 2-year stack comp to provide to you here. What I would say is we think about going through the rest of this year, you know, Steve, you wanna speak to kind of comps and, and what we'd expect to lap over as we go into Q3 and Q4? Sure. As Douglas referenced and I've referenced, you know, we, we expect continued demand challenges in the back half of the year. With that said, we do believe we will see sequential improvement in comparable sales and into Q3, into Q4 as we lap some numbers. Got it. Thanks a lot for answering my questions. Thank you. With our next question comes from Vincent Caintic, from Stephens. Vincent, your line is now open. Good morning, thank you for taking my question. Nice to see the additional counts of the hub and spoke model and the GenNext stores. I was just wondering from a productivity perspective, if you can talk about the benefits of that hub and spoke and GenNext model as it relates to when we think about, say, for example, EBITDA margins. Thank you. Yeah, thanks, Vincent. It's Douglas. You know, we opened 11 GenNext stores in the first quarter and 8 in the second quarter. Our target is 50 for this year, and we're on track for that. I believe we opened 72 showrooms since the end of 2022, 59 of which were in this quarter. You know, our... We're right on track for 100 showrooms this year. The beauty of the hub and showroom model is all this innovation we've put in place over the last five years, building larger, more relevant GenNext stores, and then creating digital platforms for our customer to interact with us where they want to be served, has allowed us to build this platform in which we can optimize the markets we serve, not... We're serving the same markets, but we're doing it with a more efficient cost structure. I think at the time of spin, we articulated fewer larger stores and bigger e-com, and I think what I'd add to that now is potentially having further reach within the markets to these showrooms. Showrooms are effectively just sales stores. They're typically staffed with two people. They're smaller box. They don't have a warehouse. The hubs that feed them are larger stores, many of them are GenNext, but there are some legacy stores. Those stores house our distribution, our logistics and delivery, and returns. They also house all of our servicing for the market, we're able to put a central hub in place and a county seat, but then-... have one or two showrooms around it to gain greater productivity in the market. In terms of cost effectiveness, it is EBITDA-enhancing for that group of stores. We're typically taking out a few headcount when we do that, but it's between $120,000 a year per store that we showroom in terms of cost efficiency. Some of what you're seeing coming through this quarter in our cost efficiency is the benefit of hub and showroom, but there's also obviously benefits of marketing analytics and supply chain that are in there as well coming through. Okay, great. Thank you for that. It's nice to see the expense efficiency in this quarter's results. This second question, just if, so you, you highlighted you're not really seeing the maybe trade-down activity yet, but if you could maybe talk about how you expect that to play out over time and maybe what sort of consumer behaviors you expect to see as we go through the next couple of quarters if in tough times. Thank you. Yeah. Hey, Vincent, it's Kelly. I'll, I'll speak to, to the trade down and, and then how it impacts the outlook that we've provided. Similar to, to last quarter, we've not assumed that we'll see any, any significant trade down in the numbers that that we've put out. That would be upside to our outlook if we do see that continue to happen. I mean, we do continue to believe that the customer is, is a bit constrained relative to what they were certainly during the, during the pandemic. You know, from a renewal rate perspective, while we are seeing improvements, year-over-year or, and we expect to see that in the back half of this year, so slightly better renewal rates than what we saw in Q3 and Q4 last year, but not quite back to the levels that we'd expect going into 2024. Yeah, I would say that's squarely on the back of. Okay, great. ... decisioning, the decisioning we put in place and then the customer acclimating, as I mentioned earlier. I do wanna say one last thing. While we haven't assumed a trade down, and we're not prognosticating on that, but we do think it would benefit us. This pull forward of demand will release at some point, and particularly in the BrandsMart business, where we're down 20%, 55% of our sales mix is appliances, which is an important household category that has a regular replacement cycle, and so that we expect to drive future revenue. That has a little longer tail than the replacement cycle for computers and electronics, but yeah, we feel like both of those businesses will return. We've got a competitive advantage in those brands as well. Okay, great. Thanks so much. Yep. Great. Great. Thank you. Thank you. We have our next question comes from Scot Ciccarelli from Truist. Scot, your line is now open. Hey, guys, this is Joey on for Scot. Thanks for taking my questions. Given that you're seeing some of the demand hold up better in the LTO side of the business, can you talk about integrating that solution into the BrandsMart channel? Sure. Hi, this is Steve Olsen. Be glad to answer that. Just a reminder, we implemented our BrandsMart leasing solution last year in the May time period, and we continue to be very pleased with the results of that and the continued improvement growth on the teams integration, the BrandsMart Store team with the BrandsMart Leasing team, as well as process and technology improvements. From a performance standpoint, we continue to see the portfolio grow on the BrandsMart Leasing side, as well as the customer payment activity. It's a key focus for us, and one that we, we, we hope and expect to drive, you know, further growth. Gotcha. Cool. Just on the 5.5%-6.5% write-offs for the year, is that still what we should be thinking about? If any color you can give on the cadence between 3Q and 4Q would be super helpful. Thanks. Yes. We are still expecting write-offs in the range of 5.5%-6.5%, so no change there in what we had updated you on on the last call. We are very happy with the performance in the fourth quarter and happy with the trends as we move into Q3 and beyond. As it relates to write-off trends in the back part of the year, you know, there is seasonality in the business, so we would expect that write-offs would increase, but we expect them to continue to be below write-off levels that we experienced in the same quarters of 2022. Got it. Great. Thanks, guys. Thank you. With our next question comes from Bobby Griffin, from Raymond James. Bobby, your line is now open. Good morning. This is Alessandra Jimenez on for Bobby Griffin. Thank you for taking our questions. First, on the Aaron side of the business, despite ending the quarter with a larger than expected lease portfolio size, you left the year unchanged. Is that primarily driven by some caution, given the unknown impact on how customers that chose not to utilize the 90-day buyout will behave longer term, or is there something else? Yeah, I think what, what we're seeing there, Alessandra, it's Kelly, is, we continue to expect, you know, demand to be challenged going in the back half of the year. We talked about that earlier in, in the call. What we're seeing is, as we go into Q3 and Q4, with the, the lower EPO activity, early payout activities in, in Q1 and Q2, those deals are kind of rolling into Q3 and Q4 and paying off. Higher levels of, of, of payoffs relative to the prior periods. That continues to impact demand in, in the second half of the year or the lease portfolio size in the second half of the year. And, you know, again, we're, we're focused on, in Q3 and Q4 on, on growing that portfolio as we head into 2024. Okay, that's very helpful. Then maybe on the BrandsMart segment, can you walk us through the puts and takes to get to consistent EBITDA in the segment despite lower expected revenue? The puts and takes to get to consistent EBITDA, I, I would say that the, on the BrandsMart side, what we're focused on is, you know, implementing the, kind of the, the cost necessary to run the business and to set the company up for sustained growth going forward, one. Two, I think the team's done a great job in a declining revenue environment, managing the costs that we can control to preserve margin. As we come out of the current, you know, depressed demand environment and return to some level of normal, we feel very good about the, the leverage that we're gonna pick up as the top line starts to grow, and we continue to maintain. Between that and the addition of the new store going into next year and the new stores thereafter, as we grow top line, we would expect margin to expand as we're leveraging those fixed costs. Yeah, this is Douglas. The last thing I would say is Steve and his team have done a great job on both the purchasing side and then on the pricing side of maintaining that business and preserving a margin. As you know, it's a sort of a mid-20% margin business, and so while the revenue declines hurt, there are ways to offset that, and they've done a, they've done a good job with that. Steve, I don't know if you want to comment a bit on that. Douglas mentioned, one of the key drivers of the BrandsMart value proposition is our ability to purchase great products at great deals. The team continually, as we mentioned in the prepared remarks, we continue to focus on strategic pricing actions, and manage the business where there's opportunity to adjust pricing for a margin improvement. We do that as well as obviously those that we want to focus really on a value price to make sure we're competitive in the market. We do that as well. We will continue to focus both on the procurement side, through continued improved purchasing power, as well as the pricing side through strategic pricing actions. Then just to reference what Kelly further expense management as we, as we move through this, challenging demand environment, just continue to focus on, you know, any areas of the expense side of the business, including store labor, to align it with the demand cycle. That's very helpful. Then lastly for me, it's a little bit hard to parse out, given, you know, the difference between consumer electronics and appliances in the BrandsMart segment, but do you believe that BrandsMart comp was performing relatively in line with the industry average in Q2? You know, I, I, I don't really wanna speak about the, you know, the industry average, but I will tell, I'll give you a little more context on, you know, the breakdown, you know, the BrandsMart comp in Q2. appliances, you know, under pressure being 50% of our business, and the majority of that pressure is in the average selling price, which, you know, was down approximately 10%, you know, versus the prior year, where the overall average selling price for the business is down, was down about 6%. We're facing, you know, headwinds in consumer electronics, you know, across categories, especially in TVs, and that more a result of the significant pull forward in demand that occurred in the prior few years. The categories that, that we're seeing, you know, slightly better performance in, you know, are small, small appliances and, and other household goods, seeing what we believe, obviously, lower ticket products, some improvement in trend. The team has done a great job to continue to expand out that assortment and ensure we, we have the right prices and the right inventory levels. Thank you so much, and best of luck in the back half of the year. Thank you. Thank you. Our next question comes from Anthony Chukumba from Loop Capital Markets. Anthony, your line is now open. Good morning, thanks for taking my question. I guess my first question was on the weekly payment option. You mentioned that you had rolled that out to aarons.com. I know you've had it, you know, in your stores for quite some time. I guess two questions related. First one, what have you seen in terms of uptake on that weekly pricing option or weekly, weekly payment option? Then, as far as you can tell, how much of that is incremental customers as opposed to, you know, someone who would have paid monthly and is, and, and is instead taking advantage of the weekly payment option? Thank you. Sure, Anthony. Hi, this is Steve Olsen. Be glad to answer that. First, I just want to say we're really excited about offering this weekly payment option across our channels, both in store and online. We think it really gives the customer flexibility, and we know from research that flexibility is an important decision driver as they, as they decide what, what categories and products to lease. From a, from a performance standpoint, really hard to break down, you know, what's truly incremental. What we really look at this leasing business is, you know, what are the benefits of it? What do we call success? It's really allowing us to land and deliver our strong value message, with very competitive lease rates, you know, across the business that we're using, both on our e-commerce channel, as well as all of our traditional marketing. Weekly, at, you know, is still a small piece of our overall business, less than 10%, but we think it's a key driver in landing our value proposition our, in our low price message. Yeah, Anthony, this is Douglas. I mean, we're not gonna disclose our penetration online or in stores, but it has been growing, and we do think that these weekly price points we put out are very competitive, particularly in our key core assortment, and we're excited about that. I mean, as you know, this isn't about us trying to become a weekly shop. It's about us trying to put forward the best price point we can in the market and show the customer our value. So we believe over time, we'll take share by doing that. Got it. Just one quick clarification. Is the weekly payment option available for leases that are originated in BrandsMart stores? Not, not at this time. Focused, more on the 18 months and 24, 24 month lease, lease options. the pay- Sorry, sorry, the, the 12 and 18 months. I apologize for that. Yeah, that's term, but the pay frequency, there, there is flexibility in pay frequency within the within the BrandsMart stores, Anthony. That's helpful. Thank you. Welcome. Thank you. We have our last question comes from Jason Haas from Bank of America. Jason, your line is now open. Hey, good morning. Thanks for taking my questions. I'm curious to know how you're thinking about the lease portfolio size in the remainder of the year. Yeah, what are you expecting there from like a, you know, where it should end the year at, or, you know, what the, what the growth looks like in the rest of the year? Hey, Jason Haas, it's Douglas Lindsay. I'll, I'll just give it to you high level. As you know, we started the year down a little over 7% lease portfolio size, and at the time, we communicated that that number would, would, be more negative towards the middle of the year as we had more, churn in the first part of the year and because of the demand environment we were in in the first part of the year. Then would improve throughout the rest of the year, but still to a negative number. We're still seeing that curve, of, you know, sort of dropping in the middle of the year and improving to the back part of the year, but it's not as much as before. Y ou know, we're not giving a number for the end of the year, but we still expect the lease portfolio to be down at the back part of the year, but more influenced by incrementally softer demand in the second half of the year. Got it. That's helpful. Thank you. As a follow-up, I'm curious to get a sense for what happened with BrandsMart through the quarter, because you had guided at the end of April for the BrandsMart, the prior BrandsMart revenue guidance. If I called the commentary right, it sounded like BrandsMart got better through the year, but now you're lowering the revenue guidance. Had you always been anticipating an acceleration through the quarter, it just wasn't as much as you hoped for? Which I guess, yeah, Like, why did you expect an acceleration through the quarter? If it's not that, you know, what's changing, and how are you thinking about the back half of the year there? Yeah, Jay I'd be glad to answer that. This is Steve. You know, as we said in Q1, we, we were experiencing pressure in demand. As we, you know, got into Q2, deep into Q2, we, you know, obviously, that, that demand pressure continued. We did see a slight improvement in demand as Q2 progressed, especially during our key promotional periods around the holidays. With our original guidance, we, we, we were expecting, you know, improvement in demand throughout the back half of the year, really tied to replacement cycle of products, and, and as we've stated previously, using just consumer electronics as a base, you know, that replacement cycle is typically in that. When you look back, at obviously at the pandemic, years, you'd expect some of those purchases now that, that occurred a few years ago, would, would customers would be coming in for replacement. We're, we're just trying to be a little cautious, you know, with, with the BrandsMart demand. We, we do believe the back half of the year will improve, from, from the first half, as we lap, you know, some, some, some easier, comps in the business, going forward. But one is we just want to see some, some consistent improved trends in demand. Mm-hmm. Got it. That's helpful. Thank you. Thank you. We have no further questions on the line. I will now pass back to Douglas Lindsay for closing remarks. Thank you, operator. We appreciate everyone who's joined us today. As we wrap up, I want to thank our team members at Aaron's and BrandsMart and Woodhaven, and our franchisees for their relentless focus on delivering exceptional value and service to our customers while continuing to innovate our business and control costs. As a company, we remain focused on executing our multi-year strategic plan and by investing in our growth strategies before us. Thanks again for joining us today, and we'll talk to you soon. Thank you. Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your line.