All right, thanks, everyone. So we'll get started. My name is Peter Keith, Senior Research Analyst at Piper Sandler, covering hardlines and leisure companies. Very pleased today to have Solo Brands with us. This is making the debut appearance at our Growth Frontiers Conference here in Nashville. And they've been going through a lot of change, which we're gonna dig into. So representing Solo Brands is John Merris, who is CEO. And they came public in 2021. I got to know John earlier that year, so we've been pretty close to the story, and there's a lot to talk about. So let's get started. Thanks for coming, John. Great. Thanks, Peter. So, Solo Brands has effectively four, now five, I guess even six, actually, if we're trying to keep up with you. We'll talk about some of the acquisitions, but what I wanna talk about is just the, the strategies around being direct-to-consumer versus wholesale. When you came public, it was basically, we're gonna be 80% DTC, and we'll kind of guardrail wholesale at 20%. That guardrail has been lifted. Wholesale has been growing nicely. So just talk about the evolution over the last year or two on how you've approached wholesale and why that is ramping up more quickly. Yeah, so just for context, at IPO, which was October of 2021, we were 92% direct-to-consumer, online direct-to-consumer, and we talked at that time about allowing that 92% to creep its way down to about 80%, and we expected that to happen over a two to three year period. If you fast forward from IPO, which is October of 2021, to the spring of 2022, we started doing some analysis around contribution margin by channel, and we had this really interesting unlock. Because of what's happened with customer acquisition costs and direct-to-consumer online, as well as the fact that we offer free shipping in our direct-to-consumer consumer channel through our website, we found that while gross margin was lower with our wholesale business, our actual contribution margin looked very similar. So we started feeling like potentially there's an opportunity to be somewhat agnostic about which channel we're selling into, with the one exception that we really needed to figure out how to unlock the ability to still have a direct-to-consumer relationship when consumers were shopping through stores, which is such an important part of our model. And so we started talking to retailers a little bit more strategically, talking about this direct-to-consumer relationship and how we might be able to maintain that relationship, all while driving more business that direction. And ultimately, at the end of last year, we had some really great conversations with what we call our tier one partners or retailers. So Dick's Sporting Goods, Ace Hardware, Scheels, Academy, and then eventually, also Costco, brought Costco into the mix. And ultimately, it was a combination of getting some comfort with the retailers around putting inserts in the boxes that drive consumers back to our site for follow-on purchases, as well as being strategic about the merchandising, so what products we're putting into the retailers, so that a consumer has a pretty good reason to come back to the site to buy an extra accessory for the fire pit or something like that. So, we've been really pleased with how things have gone, but ultimately, that's what really lifted the guardrails, if you will, that you were talking about, from feeling like we 80%-20% was the right mix, to feeling a stronger appetite to go to something more like 70-30, which is where we're at today. Okay, great. So yeah, I'm intrigued with that that you're putting in, maybe an insert or a coupon for an accessory. Give examples. This would be for Solo Stove, which in itself is a great product, but you've done a lot of innovation around the Solo Stove. And what can someone buy, and how might that work? Yeah, so the pro and con of a retail store is lots of eyeballs, lots of foot traffic, lots of exposure to the brand. The downside to brick-and-mortar compared to online is that in brick-and-mortar, you have limited shelf space. You can only put so many products on the shelves. Online, you can presumably put an unlimited amount. And so, what we decided to do with our retail partners is be strategic about what products they were carrying, higher-margin products that are more foundational. So take our Bonfire fire pit, which is our top-selling fire pit, it's the middle-sized fire pit, merchandising that, but then holding back key accessories that we have data, of course, on our website, that we know most consumers buy when they also buy a Bonfire. So take a fire pit stand or a Heat Deflector, or the lid, which basically is a cover to keep the rain out. Those are accessories that have very high attach rates, like over 50% attachment rates. And depending on the retailer, none of those accessories are carried in the full breadth from any of the retailers, but many of them don't have any of them. So ultimately, they buy the fire pit, the Bonfire at the retailer, and then they get home and go, "Oh, I want to leave this outside. I need to keep rain out of it. I'm gonna use that coupon, and I'm gonna go back to Solo site and buy the lid, and now I can put that lid on top and keep the rain out. Okay, great. And then you talked about some of your tier one retail partners. There's been some wins over the last 12 months. Just what comes to mind, you talked about Costco, started about a year ago. Dick's Sporting Goods, you had Solo in for a while, and then you've now introduced Chubbies. So talk about how some of these key retailer relationships are progressing. Are you growing? Can you get more shelf space as you continue to innovate and bring product to market? Yeah, I think the biggest story for this year for us has been that in an environment where, especially with outdoor retailers like Dick's Sporting Goods, this has been a year of right-sizing inventory. So you're hearing more news about: "We're not doing a lot of purchasing, we're discounting, we're getting through inventory." And at the same time, for Solo, Chubbies has been no exception to this either. We are seeing more sell-in and more sell-through in the replenishment order. So it's been an odd year for us. Getting calls from other CEOs like, "Oh, you know, I heard you guys are doing some retail stuff, but are you hitting the same headwinds that we're hitting?" And I think different for us is that this has been a year of sell-in for us to get more exposure, and we've seen great sell-through because of the newness that our brands have been to these retailers. And so we didn't go into this year in an over-inventory position like a lot of brands did, and that's allowed us to grow at a faster rate. Okay. All right. And with advertising, so there's a heavy direct-to-consumer-focused business where you've been, you still are today. You do spend a lot on advertising, but you talked on last quarter that you're pulling back a little bit on advertising and just kind of letting that wholesale revenue pick up. So just walk us through the thinking behind that and maybe how long you might be in this position of advertising pullback. Yeah, we went into this year feeling like this push into wholesale was going to cannibalize some of our online business. So we were eyes wide open, and part of our strategy at the beginning of the year was to pull back a little bit on advertising. In the beginning, it wasn't to pull back nearly what we have, and I'll talk about what we saw and why we changed the strategy and became even more profitable than we thought. But we expected this year to be a sell-in or a product placement year for retail, and to cannibalize some of our e-commerce business, and then expected that by 2024, the new eyeballs and the newness from all of the retailers picking up the product would then create momentum behind the D2C business, and that would be the year that we lean back into the marketing spend. What's been surprising to us in a positive way is our marketing has gotten more efficient since we started placing more product and creating brand awareness via retailers. So our D2C business year- to- date is down 20% on a year-over-year basis, but our advertising spend is down 30%. So we actually have been able to drive strong profitability, and replace the headwind on e-commerce with a 58%-60% growth rate in wholesale simultaneously. So ultimately, we're still driving growth, we're doing it more profitably, and we're kind of saving these advertising dollars for the time when the consumer really starts showing up again online, in an efficient manner. So it's been the best of both worlds for us, leaning into wholesale at the same contribution margin, being able to pare back some of our ad spend and get ready to really lean into that when the consumer's ready. Okay, great. Yeah, I guess you did sort of with Q2, you reiterated your sales guide, and then you raised your EBITDA- That's right. and EBITDA margin guide. So So That's, that's the primary driver of that. Yep. Okay. So, I think product innovation is another important topic for you. Where is product innovation focused across the Solo Brands that you have, the Solo Stove, Chubbies, et cetera? And then what are some of the big wins that have come out of the last 12 months? Yeah, I think first it's important to point out that for us, success with newness and innovation is based on a percent of our total sales. So we target any given year, 20% of our revenue to come from new product innovation, and we define new product innovation as anything that was launched in the prior calendar year or the current prior-year or calendar year. So basically, you know, January first of this year, anything from 2022 would roll off, anything from 2023, and then anything new that comes out in 2024 would roll in as new. And we want, in any given year, for 20% of our revenue to come from that newness, and it drives this culture of innovation with our product and engineering and design teams. That innovation is primarily focused around certainly all the brands have a level of innovation, but we're very focused on Solo right now, on the stove business. We believe we have permission to play in a lot of categories, outdoors, outside, in the backyard, and that's where we've been really focused. So we've even done a couple of acquisitions. I know you alluded to just a few minutes ago, that are both really tuck-ins for Solo, that are just an accelerant to us being able to grab new capabilities and new categories for the Solo brand and the Solo Stove business. And then in addition to that, all of our internal incubated products. So you asked about, you know, where have we seen some successes and what are some of the hits? So just in the last. If I take what we categorize as new, so anything last year and this year, we kicked off 2022 with Heat Deflector. It has been the top-selling fire pit accessory that we've ever launched in terms of revenue. We followed that up with the Pi Pizza Oven, which is the most successful new category that we've ever entered into after fire pits. And then we came out in August, September last year with the Mesa tabletop fire pit, so the smallest of our units. All three of those have been remarkably successful launches. We've had a really nice run here for the last 18 months or so with those. And so, you know, like I said, those three were all 2022, and those are rolling off. 2023, we always knew the back half of the year was gonna be the heavy hit on the innovation. So we've done a little bit of product innovation. We launched the Mesa XL, so the bigger version of the Mesa in Q1 this year. But we just launched the Mesa Torch, which is essentially a Tiki torch equivalent. So think of, you know, just staked little Tiki torch es that you'd put around your backyard with live fire. We have several that are coming out here in the next 3 weeks-6 weeks, ahead of the holidays, that we're pretty excited about as well, that we haven't disclosed yet. But innovation and newness is gonna continue to be a focus for us. Okay. All right, good. I do like the look of the new Tiki torch es. And then I do have the Heat Deflector. So anyone who has a Solo Stove, I highly recommend the heat deflector. Game changer. Well, let's now dig into acquisitions and M&A. It does seem like there's a bit of a change in your approach to making acquisitions. So in 2021, you acquired Oru Kayak, Isle Paddle Board, and Chubbies. So different categories, different brands. Now, as you're pointing out, you're acquiring TerraFlame, is a good example, so still kind of built around the flame of Solo. So how has the approach to acquisitions changed overall, and what can we expect to see going forward? Yeah, that's right. So if you go back to 2021, the, you know, different categories, different product types, there wasn't a lot of commonality, on paper. The commonality was that these were all heavy direct-to-consumer e-commerce businesses. And the thesis in 2021 was, let's build a D2C platform, leverage the customer bases and the data, and ultimately cross-pollinate these customers to grow the businesses. We have executed on that, and the businesses have done, especially the Chubbies business, has done quite well, since we put that platform together. But I think, you know, in the last six months or so, we've started having a lot of discussions around the idea of even a D2C platform, and in this environment, with the direction that things have gone, is a D2C platform the way to go? I think it's made acquisitions, more unpredictable for investors. It's like, how do we know what you're gonna do next? What kind of stuff are you gonna buy? Like, anything that's direct-to-consumer, or is there a specific... You know, is it just outdoor, or is it just at home, or is it soft goods or hard goods? There's been a lot of question marks around that. And so, you know, and that really isn't just with investors, frankly, it's also internally with our team. So there's just been confusion about who we are and where we're going in this environment, and I think we came into this year feeling like we wanna be more predictable and more concentrated on our strategy. If you look at the two acquisitions we did this year with TerraFlame and with IcyBreeze, these are both brands that we believe tuck in nicely underneath Solo Stove. I think if you look out a few months from now, you're likely going to see both of those brands be rebranded to Solo. Solo Stove probably just becomes Solo, and we start concentrating our efforts more around the Solo brand, which, you know, formerly would've been known as the Solo Stove brand. We really emphasize where we have permission to play within that brand, which is heavy in the backyard, in kind of owning the backyard experience, but also taking the conveniences of home away from home. So if you think IcyBreeze with a portable air conditioner and a cooler, going to the ballpark or going camping when it's hot outside, and being able to take a portable air conditioner with you, or obviously taking your portable fire pit and taking heat with you away from the house when you go camping or tailgating or anywhere else. So we're gonna really hone in and double down on the Solo brand, is I think, directionally, where you're gonna see us going. Where you're not going to probably see us going in the future from an M&A perspective, is acquiring brands that have a lot of brand equity or very well-known brands. Because of this focus around Solo and probably tucking things underneath that brand, it doesn't make sense for us to pay up for a well-known brand. We're gonna be more focused on capabilities, products. So if you take TerraFlame, we were able to take the flame inside, the fire inside, and we also were able to pick up the capability of concrete. TerraFlame owned its own manufacturing and concrete, and we wanted to have access to that material, to be able to take to the backyard. And then with IcyBreeze, we were really acquiring the IP that they own around a portable air conditioner attached to a cooler, which they're the only company in the world right now that can do that because of their IP. Okay. All right. What about product knockoffs? I know that's been an ongoing concern. I get this from investors a lot, that you have a great high-margin product, premium brand, so there have been some knockoffs that have come to market. What have you guys done to protect your IP? Yeah, probably the most notable, we take down, I think last year, the number was something like 1,700 fraudulent sites. Those ones, you know, we take them down, but there's no brand equity in them, and they're normally just complete frauds. Like, they're marketing a large fire pit, and then if you, like, get duped and you buy it, you get, like, a tiny little, like, thing, like something to put on your desk as a paperweight or something. So we do take those ones down. But in terms of formal knockoffs, probably the most notable is Duraflame. Everybody knows the Duraflame brand. They're most well-known for their starter logs that you would use in your fireplace. They knocked off our Bonfire fire pit. And, you know, obviously, IP is only as good as your ability and willingness to protect it, and so we made the decision to go after Duraflame. It was a very quick experience, and it led to a settlement and a payout of 150% of their profits, and a redesign of the product to something that doesn't look like our product. And frankly, I don't think they've sold very well since then. So, we had a lot of success very early and fast at protecting the IP that we have around our products, and since then, we've actually had very little to worry about domestically. We've seen some knockoffs, similar to that pop up over in Europe.... We've protected there as well, and are in the midst of doing some litigation with a couple of things out in the Nordic region. But in the U.S., it's actually been quite good since then. Okay, great. You win one fast, and- Make a statement. Yeah. Yeah. People tend to not waste their time and money. Yep. Okay. I have not seen Duraflame at the Home Depot this summer. Yeah. So it's worked out. How about, you mentioned Europe. Let's talk about the international expansion opportunity. You do sell into Europe. What countries are you in? What's particularly strong percent of sales today, and maybe where that could go over time? Yeah. So, we haven't segment reported the international business, so pretty telltale sign it's less than 10% of the overall business, but growing. I think, three years from now, I'd like to see the international business be, you know, roughly 50%, the size of our U.S. business or a third of our business. And five years from now, I'd love to see it be, the same size as our U.S. business or 50% of our overall business. Europe and Canada have been good first moves for us. The businesses have done well. I'd say Canada is exceeding our expectations at this point in time. Europe is on par with our expectations at this point. They're similar margin businesses, so we operate them like we do in the U.S., similar gross margin profile and similar contribution margin profile. I think the big surprise for us in Europe has been the U.K., probably from you guys' perspective, won't feel like a huge surprise. But actually, if you talk to European brands, especially in the outdoor, outside categories, Germany tends to be the takeoff point, the Nordics then fast follow, and the U.K. actually kinda comes in a distant third. The U.K. business for us came out of the gate, probably because of the language barrier. They're also a little bit closer to the U.S., in terms of being Westernized, towards American products and kind of tied into American products. But it's, you know, the UK has been 70%-80% of our business in Europe, and that is exciting for us, actually, because what we're told about what Germany should be compared to the size of our UK market is drastically better, and, we're barely scratching the surface in Germany. So we do have live sites in Germany, in the UK, in Norway, Sweden, Denmark, France, but it's been very passive outside of the UK and the Nordics, where we have a really nice distributor. And I'd say 2024 and the rest of this year and next year is really heavily focused on Germany. Okay. And can you do retail or slash wholesale? We can. In fact, we just got our Distribution ... hot off the press, we just got our first POs from a retailer called Globetrotter, which is kind of the equivalent of a Dick's Sporting Goods in the U.S. over in Germany. So super excited about that. Great. Okay, we'll watch for that. Maybe time for two more questions. So, you know, great brands often drive repeat purchase activity, and I think you guys do a great job of innovating and driving a lot of newness, moving into new categories. What does the repeat purchase activity look like for you today? How many products does a customer buy on average, maybe over the first year or two? Yep. So, I think first and foremost, over the last 18 months, our repeat purchase rate is continuing to climb, which is something we're really excited about. We peaked, not surprisingly, in January and February. So coming out of the November and December timeframe, where we have heavy direct-to-consumer and a lot of new customer acquisition, January and February this year, like, we had repeat purchase rates up in, like, the 55%-60% range, which is the highest that we've ever seen it in an isolated period like that. Year- to- date, on average, we're seeing repeat purchase rates north of 40%. So very happy with where it's settling out on an average basis. And just as exciting is over the last year and a half or two, we've gone from 1.2 items per customer to over 2 items per customer on average. So we're seeing customers buy more things from us and come back and buy from us more frequently. So, looking really good on kinda all fronts in that regard. Great. Okay. So lastly, let's just dig into the profitability. So your EBITDA margin guide for this year, it's a very healthy 17%-18%. So it's what I love about your company is high margin, asset light, you generate a ton of cash. But where could that EBITDA margin go over time, if you're in the high teens today? Yeah, 20%. We see a really clear path to 20%, EBITDA margins in the medium and long term. I think by the end of next year, you'll see us at 20%, barring something crazy and unknown to us today. That's where I would expect to see it. And, you know, we'll see from there, you know, as we continue to launch new products. But we're... You know, we price our products, you know, with gross margin in mind. Obviously, this D2C wholesale mix is not impacting contribution margin, as we see that channel shift, so, you know, nothing to worry about there in terms of EBITDA margin. I believe in what we've seen from July of 2022 to now, that customer acquisition costs have also leveled out, in terms of what it's costing us to acquire a customer. I think the pressures are behind us, when we think about the puts and the takes on EBITDA. Okay. Well, that's great. Well, we are running out of time, so we'll wrap it up there. Love the Chubbies shirt you have on. I'm a big fan of the brand overall. So John, thanks so much for joining us. Thanks, Peter.