Greetings, and welcome to Conn's, Inc. First Quarter Fiscal Year 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chandra Holt, President and Chief Executive Officer. Thank you. You may begin. Good morning, and welcome to Conn's First Quarter Fiscal Year 2023 Earnings Conference Call. I'll start today's call with a review of the quarter and an update on our strategic priorities before turning the call over to George, who will review our financial results in more detail. As expected, our first quarter retail performance was impacted by overlapping stimulus programs, third-party lease-to-own tightening, and a challenging macro environment. Our first quarter performance was also affected by higher year-over-year supply chain costs, including fuel and freight. Since we last spoke in March, economic conditions have worsened, and our outlook for the remainder of fiscal year 2023 has become more cautious. As a result, we are making adjustments in our business to navigate a more difficult operating environment over the near term while continuing to pursue multiple growth initiatives that strengthen our core, enhance our differentiated credit offering, and transform Conn's into one of the first unified commerce retailers. We remain focused on providing our customers with a premium shopping experience while pursuing our growth initiatives, and I'm encouraged by the progress we have made so far against the long-term strategy we laid out in January. I'm confident our growth initiatives will position Conn's to become a leading destination for home-related products, and I believe we are on track to achieve $2 billion-$2.2 billion in annual revenue and high single-digit EBIT margin by fiscal year 2025. During the first quarter, overlapping stimulus programs, tighter underwriting from our third-party lease-to-own partners, and worsening economic conditions were the primary drivers of the 9.5% decline in first- quarter same-store sales. These factors disproportionately impacted first- quarter sales for our financial access customers. While the macro environment also affected fast and reliable customers that utilize cash and our private label credit card payment options, total sales for this customer segment increased approximately 2% year-over-year in the first quarter after increasing 67% in the first quarter last fiscal year. In fact, total sales for our fast and reliable customer segment have increased on a year-over-year basis over the past 12 consecutive quarters and represent approximately 39% of our retail sales over the last 12 months, compared to 26% in fiscal year 2020. The overall reduction in retail sales resulted in lower gross margin due to deleveraging our fixed distribution costs, which was compounded by higher fuel costs. Retail gross margin was partially offset by higher RSA commissions. To counteract some of the impact lower sales are having on profitability, we are implementing several near- term cost savings initiatives that we expect to impact the remainder of the fiscal year. Turning to our credit segment. Our team continues to produce strong credit results, which provide us with the flexibility to simultaneously navigate the current economic environment and pursue long-term growth opportunities. Indicators of portfolio health remained positive during the first quarter, including the weighted average credit score of outstanding balances, re-aged accounts, and annualized net charge-offs. In fact, re-aged accounts as a percent of the portfolio are at the best levels in over four years. Disciplined underwriting and credit strategies have driven strong portfolio performance, and the first quarter credit spread was over 1,000 basis points for the fourth consecutive quarter. We expect to maintain an annual credit spread of approximately 1,000 basis points going forward as we continue to closely watch credit trends while looking for new credit opportunities that support sales and manage risk. With this overview, I want to spend the remainder of my time reviewing the long-term strategies we are pursuing to drive growth both in our fast and reliable and financial access customer segments, which we believe will create significant long-term value for our shareholders. In terms of updates on our strategic initiatives, I want to start by sharing we've entered into a strategic partnership with Belk, Inc. to pilot a store within a store concept beginning in Q3 of this year. As I stated when I joined the company approximately 10 months ago, I was impressed by the fact that almost all in-store and online orders at Conn's receive next- day white- glove delivery. This fulfillment capability is a key competitive advantage, and I believe our established infrastructure can be the foundation for a much larger business. Belk also recognized the value of our best-in-class distribution, logistics, and service capabilities, as well as our high-quality assortment. Our partnership and pilot with Belk is exciting because it expands our retail strategy by providing access to retail markets that over-index to fast and reliable customers. We believe our store within a store program will successfully serve this customer segment by showcasing core differentiators. Belk is one of the largest regional department store chains with nearly 300 locations in 16 states and also has a strong e-commerce presence through belk.com. The new store within a store concept will be approximately 10,000-25,000 sq ft per store, and we are planning to enter 10-20 Belk locations this year. Pilot will focus on Belk locations in existing Conn's markets and on belk.com. Both of which will feature a name brand assortment of all major Conn's product categories under a new brand we plan on introducing in the coming months. This partnership provides us with the opportunity to serve Belk's customers with Conn's complementary product categories, as well as our industry-leading next-day white glove delivery and in-house repair service capability. It will also introduce a reimagined brand, giving us the opportunity to pilot a new brand identity and broader value proposition. We believe Conn's can maximize the value of our key differentiators through additional partnership opportunities in the future. Moving to our e-commerce growth strategy. e-commerce sales for the quarter increased 71.7% to a first quarter record of $18.3 million. As we mentioned last quarter, we are upgrading our digital infrastructure by replatforming our website. phase I of our online replatforming began during the first quarter, and we successfully enhanced the front end of our website, including our homepage and product listing pages. Phase II will get started in late Q2 and is focused on improving the cart and checkout experience. The final phase of our digital transformation is focused on functions that make it easier for our customers to apply for credit and make payments. We expect to complete the replatforming of our website this fall, and once complete, our customers will see an enhanced website with improved functionality across their online journey. We are also successfully increasing our online product assortment to enhance our core retail experience and increase online conversion. During the first quarter, we doubled the number of SKUs available online through our recently launched drop ship program. By having vendors ship directly to customers, we can add entirely new categories of merchandise, such as patio furniture and lighting, without increasing our inventory. Finally, during the first quarter, we took a significant step forward in our pursuit of becoming a leading unified commerce retailer by enabling our store associates to add online-only items to in-store transactions. These investments will strengthen our core, and we continue to believe Conn's is uniquely positioned to become one of the first unified commerce retailers because our back-end supply chain is the same for both stores and e-commerce. Looking at the initiatives that enhance our differentiated credit business, last quarter we announced a transformative acquisition of a technology platform that will enable us to originate and service lease-to-own transactions in-house. We believe we accelerated our in-house lease-to-own roadmap by 12-18 months by acquiring an established lease-to-own platform. The integration is on schedule, and we expect to begin originating leases under an in-house lease-to-own offering during the fourth quarter of this fiscal year and to be originating the majority of lease-to-own transactions with our in-house offering next fiscal year. The transition will take approximately three years to be fully reflected in our financial statements. We believe that our in-house lease-to-own offering will add approximately $25 million of incremental annual operating income by fiscal year 2025. We believe this will help us achieve our fiscal year 2025 revenue and EBIT margin goals. We are excited by the opportunities this acquisition will have on our business and the value an in-house lease-to-own offering will have for our customers. We also expect an in-house lease-to-own program to have strong cash-on-cash returns that are higher than our traditional in-house credit offering. Our lease-to-own transition is an important initiative as we create a platform that supports the volume of retail sales we expect to achieve through this payment option. Continued tightening by our lease-to-own partners has been a significant headwind to our retail performance over the past quarter. To improve our lease-to-own performance, we have chosen to consolidate our lease-to-own business under one partner that is committed to supporting a certain level of lease-to-own sales. We expect our expanded strategic partnership with American First Finance to benefit lease-to-own sales once it goes into effect in the coming weeks. Having diverse payment options has been the cornerstone of our differentiation. Our new vision is to have a payment option for everyone. For example, each year there are over 130,000 applicants that apply for lease-to-own at Conn's and are turned down. There are also customers that don't want to use credit for a variety of reasons. With this in mind, we decided to launch a layaway program that provides these customers with a payment option and provides us with an incremental opportunity to serve additional customers. I'm pleased to report that after a successful pilot of a layaway program in Q1, we are planning to roll this program out to more stores this fiscal year. While recent economic uncertainty has impacted our near-term retail performance, I am confident in the strategic direction our business is headed and our ability to achieve our fiscal year 2025 financial goals. With a challenging macro backdrop and tighter underwriting from our third-party lease-to-own partners, we saw retail sales decline throughout the first quarter as well as into May. As a result, we now expect total annual revenues to be down high single digits in fiscal year 2023. To help navigate a more challenging macro environment, we are implementing near-term cost savings initiatives, including reductions in certain marketing and labor-related expenses that are expected to offset some of the impacts lower sales will have on profitability. To conclude my prepared remarks, our transformation is progressing and I am encouraged by the strategies underway to create sustainable value for our shareholders. We are making prudent adjustments to our cost structure while simultaneously investing in our long-term growth initiatives and maintaining stable credit trends. We believe this will allow us to successfully navigate near-term economic challenges and emerge from this difficult period stronger and better positioned for profitable and accelerated growth. I am excited by the strategic direction we are headed and proud of the hard work and dedication of our team members. I want to thank our entire team for their commitment to our company, our customers, and our local communities. Now, let me turn the call over to George to review our financial performance. Thanks, Chandra. On a consolidated basis, total revenues were $339.8 million for the first quarter of fiscal year 2023, representing a 6.6% decrease from the same period last fiscal year. For the first quarter of fiscal year 2023, net income was $0.25 per diluted share, compared to net income of $1.52 per diluted share for the same period last fiscal year. As a reminder, earnings in the first quarter last fiscal year benefited from lower costs as a result of the COVID-19 pandemic and a $17.1 million benefit in our provision for bad debts associated with the release of a portion of our economic reserve. Reconciliations of GAAP to non-GAAP financial measures are available in our first quarter earnings press release that was issued this morning. Looking at our retail segment in more detail. Total retail revenues for the first quarter were $272.5 million. The 6.5% year-over-year decline in retail revenue was primarily due to a more challenging retail environment, lapping the benefit stimulus had on first quarter sales last fiscal year and tighter underwriting from our lease-to-own partners. We opened three stores during the first quarter, including two stores within the state of Florida, and ended the quarter with a total of 161 stores across 15 states. For fiscal year 2023, we are now planning to open 10-14 standalone locations and 10-20 store-within-a-store locations, all within existing markets, which will leverage fixed costs. We expect the store-within-a-store locations will require approximately $100,000 of capital investment plus display inventory, making them a highly capital- efficient way to expand our footprint. Retail gross margin for the first quarter was 34.5%, a decrease of 200 basis points from the same period last fiscal year. The decline in retail gross margin was primarily driven by deleveraging of fixed costs, the impact of increased freight and fuel costs, which was partially offset by higher RSA commissions. SG&A expenses in our retail segment increased by 5.7%, primarily due to labor and occupancy costs associated with new store growth, higher stock compensation expense, and investments in our e-commerce growth. As a percent of retail sales, SG&A expenses were 35.2% for the first quarter, compared to 31.2% for the same period last fiscal year. As we discussed throughout today's call, lower retail sales and higher costs contributed to a retail segment operating loss of $2.1 million, compared to retail segment operating income of $15.7 million for the same period last fiscal year. Seasonality also impacted retail segment profitability in the first quarter, as the first quarter typically has the lowest quarterly retail sales during a fiscal year. Turning to our credit segment. Finance charges and other revenues were $67.3 million for the first quarter, a 6.8% decline from the same period last fiscal year. The decline in credit segment revenue was due to a 6.5% reduction in the average balance of the customer receivable portfolio over the prior fiscal year period, as our underwriting strategies remained disciplined and we focused on maintaining 1,000 basis points of credit spread. The positive performance of our receivables portfolio is encouraging, which we believe will help us navigate the evolving economic environment. As a percent of the portfolio, the 60+ day past due balance was 10.3% at April 30th, 2022, and is in line with our expectations. This compares to 9.1% for the same period last fiscal year, which benefited from stimulus programs. The balance of re-aged accounts as a percent of the portfolio was 16.4%, compared to 23.8% for the same period last fiscal year. For the first quarter, net charge-offs as a percent of the average portfolio balance were 11.9%, compared to 15.3% for the same period last fiscal year. During the first quarter of fiscal year 2023, the credit provision for bad debts was $14.6 million, compared to a $17.2 million benefit to our provision for bad debts last year. For the first quarter last year, the provision for bad debts benefited primarily from a $20 million release of a portion of our economic reserve. With a smaller average portfolio balance, we deleveraged fixed credit segment SG&A expenses and credit segment income before taxes was $10.5 million, compared to $43.8 million for the same period last fiscal year. The reduction in credit segment income before taxes was primarily due to lower credit segment revenue, higher SG&A expenses, and a higher provision for bad debts, partially offset by an improvement in interest expense. Turning now to our balance sheet and capital position. Our balance sheet and capital position remains strong, and we continue to benefit from significant year-over-year growth in cash and private label credit card sales and robust cash collections on our customer receivable portfolio. This continues to produce meaningful operating cash flow. We ended the first quarter with $529.9 million in net debt compared to $434.7 million at the end of the first quarter of last year. In addition, net debt as a percent of the ending portfolio balance was approximately 50% at the end of the first quarter, compared to approximately 39% at the end of the first quarter of last year. We continue to believe our liquidity and access to capital provides us with flexibility to navigate the challenging economic environment while investing in our long-term growth initiatives. Before we open the call up to questions, I want to review our expectations for the remainder of fiscal year 2023. As Chandra mentioned, we expect total revenue to be down high single digits for fiscal year 2023. Our expectations include a high single-digit decline in annual retail revenue and a high single-digit decline in credit revenue as our portfolio contracts due to lower retail sales financed through our in-house credit offering. We now expect operating margin for the fiscal year to be between 3% and 4%, which reflects deleveraging on lower sales and the negative near-term impact from our lease-to-own platform acquisition, partially offset by cost reductions as compared to our previous guidance. The change to our guidance reflects more challenging macroeconomic outlook, consistent with recent trends and lower consumer spending, particularly for our financial access customers. Reductions to expenses are underway, including to marketing and labor as we look to offset the impact of lower sales in a more challenging environment. Lastly, while our guidance reflects a softer economic environment, we are excited by the initiatives underway, including strategies to drive e-commerce growth, enhance our credit offering, and expand our value proposition to more customers, including our store- within- a- store strategy with Belk. We believe these initiatives will improve sales trends in the back half of the year and help us achieve our long-term financial goals. Finally, I also want to share my thanks to all our team members for their continued hard work, service, and dedication. With this overview, Chandra and I are happy to take your questions. Operator, please open the call up to questions. Thank you. Ladies and gentlemen, at this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Brian Nagel with Oppenheimer. Please proceed with your question. Hi. Good morning. Good morning. Good morning, Brian. I've got a couple of questions. I mean, first, with regard to, I guess, retail and, you know, just the comments that you made about the current environment and then which led you to lower your guidance for the balance of the year. I guess the question I have is, it may be a little if you could elaborate further on what, you know, what you're seeing right now. If I look at, you know, I know, you know, the comparison was extraordinarily challenging with last year's very strong result. If on a two-year basis, your comp sales actually rebounded rather significantly here in Q1. I guess what the question I'm working towards is, I mean, how do you. When you're looking at your business right now, how much of it do you think is just simply that the really difficult comparison last year versus a true underlying weakening in the consumer? In Q1, we are overlapping the stimulus, and that was definitely one of the drivers of our decline in Q1. Some of the stimulus money will continue to impact future quarters. We are seeing a deterioration in the macro environment, as I'm sure you've heard from other retailers. We've seen softness in consumer spending as consumers have shifted spending away from discretionary categories due to inflation and an overall decline in consumer confidence. One of the things that we have seen and continue to see is consumer payment activity remains strong at Conn's, resulting in strong credit portfolio performance. Specifically, net charge-offs for us last quarter were 11% this year versus 15% last year, and our re-aged balance continue to decline. Okay. I guess the second question just on the new Belk relationship you're announcing. Is you I think you mentioned, Chandra, you mentioned in your comments that, you know, the Belk stores are located in existing Conn's markets. The question I have is, with this relationship, are you basically catering to a new customer or is the potential you actually could cannibalize your Conn's stores business? Yeah. If we take a step back and look at what we're doing with the Belk relationship, one of the things that drew me to Conn's was our best-in-class supply chain for non-conveyable goods. Today, that best-in-class supply chain is mainly serving a pretty narrow market segment of the market. My ambition is to be able to utilize our supply chain and service capabilities for a much broader market. To do that, we either have the option of changing or bifurcating our own real estate and marketing strategies, or we partner with retailers who are already over-indexed in an incremental customer segment, which is where we see Belk having a customer segment that we don't necessarily serve today. Even though we're in the same geographic locations, the customer is very different at Belk than at a traditional Conn's store. I believe this partnership model will prove to be a profitable growth segment for us and allow us to add density both to the markets that we're in today and eventually expand geographically. We're, you know, we're excited to have Belk as our first retail partner as they over-index in our fast and reliable customers and their stores have a high geographic overlap with our supply chain, so it makes it an easy partnership out of the gates. In terms of, you know, where we're going with Belk in terms of the number of stores, we're starting with a pilot in Q3 of 10-20 stores. You know, we're excited for that pilot to learn, you know, to see how many stores are likely for the long term. All right. I appreciate it. Thank you. Our next question comes from the line of Kyle Joseph with Jefferies. Please proceed with your question. Hey, good morning. Thanks for taking my questions. I guess just to stay on Belk for the time being. If I heard you right, is that primarily targeting a fast and reliable customer and, you know, like, I guess, how much of Belk sales would you expect to be financed either in-house or LTO? We expect Belk to be a high percentage of sales being the fast and reliable customer. We will have the capability to offer financing to Belk customers. Out of the gates, we expect the majority of sales to come from cash and credit card. If I could just add to that, Kyle. If you think about our real estate strategy today, right, we place stores in markets that have a high density of the financial access customer. What this Belk partnership allows us to do is solve for a real estate strategy that allows us to be closer to the fast and reliable customer segment from a real estate standpoint. Okay. Can you just give us a sense for expectations of productivity of a store within a store versus a traditional Conn's store? Yeah. I mean, we expect a store within a store to be generally lower volume than a Conn's store. You know, the CapEx for a store within a store is also much lower than what a Conn's store is. Yep. Okay. You know, obviously you guys have a lot going on with the in-housing, the LTO, Belk, et cetera. You know, longer term, can you update us on how you envision your sales mix shift in terms of cash, private label, in-house and LTO? In terms of our core Conn's business, you know, we don't see any type of major shift in terms of balance of sale. You know, the partnership model if we do end up using that to drive a significant amount of growth, that is where we will see over-indexing in cash and personal credit cards. Understood. Thanks very much for answering my questions. Thanks, Kyle. Thanks, Kyle. Our next question comes from the line of Vincent Caintic with Stephens. Please proceed with your question. Hey, good morning. Thanks for taking my question. One more on Belk. Just to clarify. I guess Belk, in terms of revenues, that won't come in yet in fiscal 2023. I guess the expenses to ramp that up would be. First, is that right, and is that one of the things that are maybe driving the lower margin expectations for fiscal 2023. We're starting our Belk partnership in Q3 of this year. We'll open 10-20 stores by the end of Q3. We will see some. Okay. Revenue from the Belk partnership this year. It is. We don't anticipate Belk being a driver of negative profitability. If you think about, Vincent, drivers of the margin change compared to our previous guidance, I would think about it in a couple ways. The first is that obviously, with the lower sales outlook, we're deleveraging on some fixed costs. Now, we expect to partially offset that, as we've mentioned, with some cost savings initiatives. On the margin side, the retail gross margin side, we also expect some deleveraging there as well. What else has changed since we last spoke, a couple months ago is the dynamics around fuel, which are significantly higher than they were. Our expectation for the year is that the impact of higher fuel costs will be greater than it was at the beginning of the year. The last point is on provision expense, which we now expect to be lower on a smaller portfolio balance, but deleveraging as a percentage of sales. Okay. That's really helpful. Thank you. Second question on, so the credit segment performance was actually really strong this quarter, and I'm impressed that net charge-offs are actually down to 11% versus 15% last year, and your spread was much higher than the 1,000 basis points that you guide to. I'm wondering kind of the interplay between kind of the credit segment versus the retail segment. Are the maybe credit tightening or improvement in credit driving maybe some of the sales, retail sales weakness? Or maybe if you could talk about your thinking about the interplay between the two. Thank you. Yeah. Overall, the weakness in sales are really being driven from macro factors. Obviously we wanna be you know in a time where it's a challenging macro environment, we wanna be appropriately conservative with credit. We're always making adjustments both to drive sales and to limit risk to our underwriting based off the real-time trends that we're seeing. Overall, if you know when you look at the sales declines in our business, they're being driven from macro factors with you know customers with inflation higher, customers shifting away from home-related categories and specifically discretionary home-related categories. Okay, gotcha. Very helpful. Thank you. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. Yeah. Thanks, everyone, for your time and interest in Conn's. I wanna thank our associates for their hard work and dedication, and I look forward to updating investors in the coming quarters on our strategic priorities and business performance. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines now, and have a wonderful day.