Good afternoon and welcome to the fiscal first quarter 2025 earnings conference call for Leslie's. At this time, all participants are in a listen-only mode. Following the prepared remarks, management will conduct a question-and-answer session. If you require any operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded and will be available for replay later today on the company's website. I will now turn the call over to Matt Skelly, Vice President of Investor Relations. Thank you and good afternoon. I would like to remind everyone that comments made today may include forward-looking statements, which are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from management's current expectations. These statements speak as of today and will not be updated in the future if circumstances change. Please review the cautionary statements and risk factors contained in the company's earnings press release and recent filings with the SEC. During the call today, management will refer to certain non-GAAP financial measures. A reconciliation between the GAAP and non-GAAP financial measures can be found in the company's earnings press release, which was furnished to the SEC today and posted to the investor relations section of Leslie's website at ir.lesliespool.com. On the call today are Jason McDonell, Chief Executive Officer, and Scott Bowman, Chief Financial Officer. With that, I will turn the call over to Jason. Thanks, Matt, and thank you for joining us this afternoon. Before we begin, there are many people I want to thank since I joined Leslie's in September. From our frontline field leaders providing me thoughtful feedback when I'm out in the field, to our corporate team members being all in, and to our board of directors for their level of partnership, perspective, and support, I say thank you. As I mentioned during my first quarterly call last November, as soon as I joined the company, I embarked on a listening and learning tour. I spent time in stores listening to our valued customers, team members, and suppliers. After reporting year-end fiscal 2024 results, I spent time with fellow shareholders and analysts, and they shared thoughtful questions, perspectives, and feedback. I've continued my tour over the past couple of months, bringing my stores visited to over 65 across nine states. This has been a critical part of my time spent at Leslie's. My listening and learning tour also took me to the recent Pool & Spa Show in Atlantic City, where I met with suppliers and customers. My experience there reinforced my confidence in the pool and spa industry and its future potential. These experiences have also helped us confirm our strategic themes and prioritize the resulting set of initiatives that I will outline for you today. I mentioned during the last earnings call that our team is going to be laser-focused on the fundamentals, putting the customer at the center of everything we do. As I mentioned, we intend to perform while we transform. Before I review some initiatives on how Leslie's will transform, I will give you a high-level summary of our performance from the first quarter of our fiscal year. Our revenue came in at the top end of our guidance, with sales of $175 million, up 0.7% compared to the first fiscal quarter of 2024. Even excluding a few million dollars of sales we estimate from the serious storms in Florida in the quarter, our results still would have fallen within the guidance range. Across our consumer groups on a year-over-year basis, pro-pool sales grew 9%, residential pool sales declined 1%, and residential hot tub sales declined 5%. Our Adjusted EBITDA was at the bottom end of our guide at a loss of $29 million. We would have been at the middle of the guide, but we made additional inventory optimization decisions and incurred additional professional fees to support the transformation as we lay the foundation for growth in the pool season. As a reminder, Q1 and Q2 are seasonably small quarters for us, where we typically produce losses. Digging deeper into our sales results, we saw improvement in a number of key areas. This past quarter, we produced sales growth for the first time in two years. That said, this is early days, and we are on a continued journey of transformation at Leslie's. Traffic at Leslie's improved to flat compared to down mid-single digits both a year ago and in the fourth quarter of 2024. Conversion was up in the first quarter by over 160 basis points versus the year-ago period. This is driven by the great work from our team members to ensure we meet the needs of our customers every day. Helping our conversion rate, you may recall from our last earnings call, we have challenged our team members to be more focused on the fundamentals of retailing, and they are answering the challenge. Most notably, a key initiative was driving precision inventory to improve our in-stock position on our top 600 items, which include our newly defined never-outs or critical SKUs. I'm pleased to share that we've already seen significant improvement in in-stock levels, with most categories up over 300 basis points since the end of fiscal 2024. This improvement is helping us convert more customers. I'm also pleased to report that even with increased in-stocks, we've lowered our overall inventory by $63 million, or 19% versus a year ago. This is due to a sharp focus on inventory improvement throughout the year as we look to improve our working capital and pay down our debt with excess free cash flow. Returning to our core categories, our core chemical sales were positive in both dollars and volume versus the same period a year ago. The same was true for our specialty chemicals. Equipment sales are stabilizing versus a year ago and sequentially versus last quarter. Equipment sales were down 4% compared to down 18% a year ago and down 15% last quarter. Excluding post-storm demand in Florida, equipment sales still showed an improving trend in both cases. Lastly, we were pleased with our Pro results at 9% growth. The results were driven by our better in-stock positions and our double-digit increase in pro-partner contracts. In summary, our team remained focused to start fiscal 2025. I would like to credit the whole Leslie's team for their performance this quarter, which I'm pleased with considering we are executing on a transformational change at Leslie's. Now that we've covered perform, I would now like to update you on the transform part of our efforts. When it comes to Leslie's transformation, it starts with a principal appreciation of the Leslie's legacy. Since 1963, our company has had a strong history of market leadership stemming from a simple notion: leveraging our pool and water expertise through elevated care for our customers to help them achieve a clean, safe, and beautiful pool. As I mentioned last quarter, Leslie's does a lot more than just sell pool supplies. We provide customized pool solutions to a broad range of DIY and Pro customers on a national scale. Our scale and footprint are unmatched by any other provider in the United States. We are also closest to the pools. This means we're able to serve a customer, DIY or Pro, more conveniently and quicker than anyone else. A great differentiator for Leslie's is our potential to leverage our national omnichannel capabilities. We expect to continue to expand these capabilities and drive same-store sales growth with our leading product portfolio and best-in-class service and installation, expert advice, and a personalized relationship with our customers. Our goal is to not just win the customer during that visit, but to win them for life of their pool and spa care needs. With that backdrop, I want to remind you from last quarter that our transformation initiatives are going to be pursued with three key strategic themes in mind: customer centricity, convenience, and asset utilization. I mentioned that I would update you with a set of initiatives to begin our transformation. I shared one of these last quarter, which had to do with our focus on inventory optimization, including reducing overall inventory while also getting to a place of precision inventory. This includes introducing our new never-outs category, or critical SKUs, that we expect to always have in stock. We have had strong improvement already on in-stocks and with continued reduction in inventory levels. Now, I will detail the next set of initiatives that are currently underway. The first initiative I would like to share with you is that we are establishing local fulfillment centers, known as LFCs. In some retail subsectors, this is also known as a hub network. There are two main goals of LFCs. One, consolidate additional quantities of key SKUs in our hub or LFC locations, and two, leverage our inventory in a market and the store network to better serve our customers. Our initial plan entails enhancing 12 commercial service centers and 14 stores from our existing footprint to also make them local fulfillment centers. We believe our store network and our proximity to pools are a key competitive advantage for Leslie's to serve our DIY and Pro customers. This further enhances this advantage. I'll share an anecdote on why this is important. Early on, I visited a store on the west side of Phoenix that was out of a key product in our portfolio. That same day, I visited a store on the east side of Phoenix that had plenty of the same key product. Why wait for the next shipment from a DC? Let's solve this locally. It is clear we need a more flexible network to overcome this challenge. This is a clear opportunity for us, and local fulfillment centers will help us capture it. For decades, Leslie's has operated under a traditional model of using distribution centers to send large trucks to different regions of the country to supply our stores. This can be inefficient, and sometimes in between shipments, we risk being caught out of stock on items that can impact winning the sale with our DIY or Pro customers. This is especially true when our business significantly increases during our peak pool season. In peak season, it is critical that we have a localized solution to ensure our stores are in stock all the time. With LFCs in key markets, we can serve DIY and Pro customers better by being in stock more consistently. We expect this to improve customer frequency and, in turn, help traffic to our stores and improve conversion rates. This initiative of establishing local fulfillment centers, or LFCs, touches on all of our three strategic themes. The solution makes it possible to better serve our customer, be more convenient for the DIY or the Pro, and, as you will hear, is a good example of asset utilization. Specific to asset utilization, we believe this initiative will help us move some of the stock depth in slower turning and higher ticket inventory from our stores to the LFCs. To be perfectly clear, we are not adding new locations for our LFCs or reducing selling square footage or adding net inventory overall. These locations will also continue as a commercial service center or retail store, and they serve dual purposes as an LFC. We are utilizing our existing footprint to leverage proximity to better serve our customers with little capital expenditure required. We also do not expect it to materially impact our SG&A. Through better asset utilization, we will use our store and supply chain network more efficiently and better serve our customers. The initial markets we've chosen for LFCs are high-volume markets that will benefit most from this initiative. I am pleased that we have already completed many of the changes necessary to enable these capabilities and look forward to having all 26 locations open in advance of pool season. We will also be looking at other locations in the future to further add LFCs where needed. We expect the use of LFCs to be a key initiative to meet the needs of our customers over time. Our next initiative supports a strategic growth area for us: winning with the Pro customer. In connecting with our team members and talking to pool owners about their customer journey, it is clear that the customer chooses how they are going to keep their pool clean, safe, and beautiful. They choose to do it themselves because they have the capability or want to save money. Others are looking to have weekly Pro service for their pool as they may not have the time or the experience to get the job done right. We need to be focused on serving the DIY or the Pro in any way they like. As mentioned last quarter, we have the largest footprint, and our stores are within 20 mi of 80% of the pools in America. That means we believe we have the ability to win a larger portion of the Pro business as we meet their needs. Over the past number of years, we have converted some stores to Leslie's Pro stores. In my travels, I've observed that these conversions really meant opening these stores a bit earlier, and we added a Pro sign to the Leslie's logo on the front of the store to send a message in the market that we were in the Pro business. It is clear to me we have the capability to cater to Pro's, not just in our Leslie's Pro stores, but in our entire thousand-store footprint. Today, the majority of our stores have some Pro customers, whether it has a Leslie's Pro sign out front or not. With a customer-centric approach and a focus on enhanced omnichannel capabilities, we aim to make it clear that we are open for business with all pools across America, whether serviced by a Pro or a DIYer. In essence, we have shifted our mindset from our previously defined 100-plus Pro stores to now leveraging our entire thousand-store footprint to serve Pros. Our year-to-date performance in Pro has been strong, and we want to continue that momentum. As a part of this initiative, we have already put a focus on Pro assortment with a customized list of never-out Pro SKUs, and we're looking to expand our assortment further to fill in any remaining gaps by leveraging our new LFC network. As you can see, similar to our introduction of LFCs, our rethinking of our Pro business covers all three of our strategic themes as well. We're increasing our customer centricity for the Pro, adding a higher level of convenience with store-level assortment changes, and leveraging our footprint more effectively to drive same-store sales. In addition, our LFC initiative also provides a valuable local resource for our Pros so we can better meet their needs. We're excited to deploy this new holistic way of thinking about serving our Pro customers in advance of the pool season. Our next initiative is focusing on winning in DIY by building DIY omnichannel loyalty. To accomplish this, we've enhanced our Leslie's mobile app. We believe this is a key area to build stronger relationships with our DIY customers. We saw strong growth in performance in mobile app purchases in fiscal year 2024, and our conversion rate on this platform was over 30% higher than the website alone. Our latest update on our mobile app has added multiple benefits for our DIY customers, including new and improved search and shopping with a recommendation engine, new voice search to find products faster, and get order status updates, easier access on the homepage to see pool perks rewards, including personal barcodes for quicker checkout in store, and better base technology upgrades to improve the experience and reduce load times. In addition to the mobile app upgrades to help drive DIY loyalty, we are looking to continue to connect with our DIY customer and build future technology enhancements to better meet their needs at Leslie's. To enable this, we have refreshed a couple of key senior executives to help bring this to life: Scott Davis, our new Senior Vice President of Marketing and E-commerce, and Mary ann Byrdak, our new Senior Vice President of Technology. In addition to heading their respective departments, they will oversee additional DIY-focused initiatives, and we will share additional information about those initiatives in the future. In conclusion, I mentioned last quarter that there were three strategic themes that were going to be key focus areas for our team: customer centricity, convenience, and asset utilization. Inside those strategic themes are key initiatives that I've just outlined. In summary, they include precision inventory with never-outs, launching local fulfillment centers, growing pro, and building DIY omnichannel loyalty. With these initiatives, we expect to deliver on our vision of Leslie's being the number one choice for customized pool care solutions for the DIY and the Pro customer. We expect these initiatives to contribute to our results this year. While we are not going to quantify the impacts of these initiatives in these early days, we will provide progress updates and proof points of those benefits as we move forward. Our team is laying the foundation for future benefit during this smaller volume quarter, and we expect the fruits of our labor to be more visible when higher volumes materialize during the peak second half of our fiscal year. Our financial focus is crystal clear: continue executing against strategic initiatives that support sustainable revenue growth and margin dollar expansion to drive incremental cash flow to strengthen our balance sheet. I will now turn it over to Scott for his prepared remarks. Scott. Thank you, Jason, and good afternoon, everyone. I would like to remind everyone that my comments on our quarterly performance are on a year-over-year basis unless otherwise indicated. Overall, we finished the first quarter within our guidance. We were at the top end of our revenue guidance, and we're at the bottom of our range on Adjusted EBITDA. I will share specifics on this during my commentary, as well as provide our second quarter and full-year guidance. First, I'll take you through our first quarter performance. We reported total sales of $175 million and an increase of 0.7%, driven primarily by strength in Pro and growth in core chemicals. Our comparable sales increased 0.2%. With respect to sales trends by consumer group, Pro pool increased 9%, residential pool declined 1%, and residential hot tub declined 5%. The results were driven by better in-stock positions and a double-digit increase in Pro partner contracts. As Jason mentioned, we will continue to focus on Pro as a strategic area of growth in the future. Another area of strength in the quarter was in core chemicals. Sales were up approximately 4%, which included positive unit volumes. The key driver was our strong improvement in in-stocks and our focus on supply chain to meet the needs of our customers. Gross profit was $48 million compared to $50 million in the same period last year, and gross margin rate decreased 180 basis points to 27.2%. The decline in rate was mainly due to 95 basis points of increased inventory adjustments as we optimize our inventory and 75 basis points of deleverage on occupancy and distribution costs. SG&A was $87 million for the quarter and was negatively impacted by payroll costs and professional fees, offset by favorability in equity-based compensation and executive transition costs. As mentioned, our first quarter Adjusted EBITDA was a loss of $29 million compared to a loss of $24 million in the same period last year. The decline was due to higher occupancy costs, payroll and benefits, and, as Jason mentioned, higher transformational costs that included inventory adjustments and professional fees. Interest expense was $16 million in the quarter, down $1.3 million versus a year ago due to reduced debt levels and lower interest rates. Adjusted net loss was $41 million compared to a loss of $37 million in the same period last year, and adjusted diluted loss per share was $0.22 compared to a loss of $0.20 in the same period last year. Diluted weighted average shares outstanding were 185 million. Moving to the balance sheet, we ended the first quarter with cash and cash equivalents of $12 million compared to $8 million in the first quarter of 2024. The sequential decrease in cash versus the fourth quarter of last year is typical for our business and is mainly due to investments in inventory as we build for pool season. In addition, we paid down $27 million of debt in the quarter. Also, as Jason mentioned, we are focused on in-stocks and continued inventory optimization. Our inventory ended the quarter at $271 million, a decrease of $63 million, or 19% compared to the prior year quarter, even as our in-stock position, service metrics, and net promoter scores remained very strong. At the end of the quarter, we had $757 million outstanding on our secured term loan and $40 million outstanding on our revolving credit facility. This compares to $788 million on our term loan and $38 million on our revolver at the same time last year. Overall, our debt levels were $29 million lower than a year ago, and the effective interest rate on our term loan was 7.6% compared to 8.2% in the prior year. With that, I'd like to turn to our fiscal 2025 outlook. We've had a constructive start to the year, with top-line growth showing much improvement sequentially versus a year ago. We realize that our first and second fiscal quarters are smaller in terms of full-year contribution but are very important as we lay the foundation for us to win during pool season. We are looking forward to the early initiatives that were rolled out during the quarter and to further improvements as we prepare for the start of pool season. Given the timing of our new initiatives that Jason articulated and to provide perspective on year-over-year comparables, we have decided to give both second quarter and full-year guidance at this time. Our outlook reflects a balanced view of year-to-date company performance, the current macroeconomic environment, and a realistic view of the timing of costs and benefits from our recently undertaken initiatives. Additionally, our outlook includes favorable comparisons for the fourth quarter as we cycle one-time impacts related to rebates and warranties from the prior year. Turning to our 2025 outlook, our main financial goal remains to maximize free cash flow and reduce our overall debt levels. For the second quarter of fiscal 2025, we expect sales up $179 million-$189 million, implying a range of flat to - 5% versus the prior year. Gross profit of $44 million-$48 million, inclusive of higher inventory adjustments and DC costs, a negative impact from rebate timing, and a higher degree of fixed cost deleverage due to a lower volume quarter. Adjusted EBITDA of - $38 million to -$33 million, which reflects a lower gross margin rate and includes increased professional fees and a higher incentive compensation accrual. Adjusted net loss of $46 million-$42 million, and adjusted diluted earnings per share of a loss of $0.25-$0.23. As we shift from the smaller first half to the more meaningful second half, we expect better operating leverage, favorable impacts from the timing of rebates, lower transformational costs, and the cycling of one-time impacts from last year. For full-year fiscal 2025, we expect the following: sales of $1.3 billion-$1.37 billion, implying revenue in the range of a decline of 2% to growth of + 3% year-over-year. This includes an estimated contribution of approximately 1.5% due to the 53rd week in fiscal 2025. Gross profit of $473 million-$505 million, Adjusted EBITDA of $96 million-$116 million, adjusted net income of - $2 million to + $13 million, adjusted diluted earnings per share of - $0.01 to + $0.07, and CapEx of $35 million-$40 million. From a balance sheet perspective, we will continue to look for opportunities to optimize our inventory with the goal of having better in-stock positions as we pursue our new precision inventory approach while reducing our overall inventory levels in fiscal 2025. Our number one capital allocation priority remains reducing our overall debt and lowering our leverage profile. We will keep a sharp focus on maximizing free cash flow to pursue this objective. From a growth standpoint, we will pause on M&A activity but will continue with our prior commitment to open three new stores in fiscal 2025. I am looking forward to the future, and I'm confident we have the right plan to execute on our initiatives. I will now turn it back over to Jason for closing remarks. Thanks, Scott. I've laid out on this call the first wave of initiatives we are executing on. As you can see, Leslie's has embarked on a transformation journey with a clear focus on the fundamentals of retailing. We are being very deliberate on both the choices we're making and the initiatives we are pursuing. There will be more to come. Every decision we make every day is done with putting the DIY and Pro customer at the center of everything we do. The next three months will be critical to make sure we are set up to win the pool season better than before. I'm humbled and proud to lead this positive change, and I'm appreciative of all of our team members who continue to perform while we transform. It's a new era at Leslie's, and I'm looking forward to our future. I will now turn it back over to the operator for Q&A. Please proceed. Thank you. We'll now be conducting a question-and-answer session. If you'd like to ask a question, please 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'd 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 keys. One moment, please, while we pull for questions. Our first question is from Jonathan Matuszewski with Jefferies. Please proceed with your question. Great. Good afternoon, and thanks for taking my questions. Jason, as you look at the initiatives you laid out for us on the transformation journey, do you have any early signs of progress you're seeing from their implementation you can share? Yeah. Thanks, Jonathan. Thanks for the question. Obviously, we've been very deliberate to share information with initiatives once they've actually started being implemented. I am seeing some nice progress on some of the initiatives, so maybe I'll take you through some of those. Firstly, as a reminder, our initiatives are directly tied to support our three key strategic themes of customer centricity, convenience, and asset utilization. I'll give you a couple of examples of where we're starting to see some green shoots of performance as we look to the future. The first one's in the area of asset utilization. We've established our local fulfillment centers, and our teams are already adjusting the depth levels of the inventory in the stores. Over the past year, the team's made nice progress on improving inventory turns per store, and we plan on doing this going forward. The team is currently pulling larger, higher-ticket equipment depth, like a, say, like a heater, back from our stores to the LFC and our DC. Specifically, we don't need to have four heaters in a store. We could have one, and it can get replenished the next day or even the same day from an LFC. LFCs cover about 20 stores in the market as a backstop. What this is going to allow us to do in the future is it's going to allow us to improve our working capital, obviously reduce inventory per store, and it's going to free cash up because our number one capital priority is to make sure that we're paying down the debt. As a reminder, we didn't add any new stores here. LFCs are not new builds. They are using the existing footprint and low capital investment at that. It's a good example of asset utilization that we're already seeing some green shoots on. The other one would be convenience. I've seen this firsthand in the marketplace. If we just look at the data, the 300 basis point improvement that we mentioned in the prepared remarks on in-stocks has been helpful. In addition, our in-stocks are improving overall in a variety of key categories. That is going to make us more reliable, and this is a need-based category. It is one that, as you get more reliable, you have the opportunity to help people solve their problems in minutes and hours, and that is a critical focus for us. The LFC on convenience, I have already witnessed having been in stores, has an advantage. The first LFC I went to here in Arizona, and NG, our general manager, told me that the LFC helped the market, already helped the market that day, where she got a call and a notification for two more pumps as a store in the local market needed two pumps, and we had those pumps in the LFC. Instead of waiting for the next truck, we were able to satisfy and not lose that sale. We are witnessing signs of progress both from an inventory efficiency standpoint or asset utilization, and obviously in convenience from an in-stock standpoint. We're at the early stages, and we are laying the foundation right now, and we anticipate a larger benefit to come in the height of the pool season in Q3 and Q4. That's really helpful. Thanks for that color. I guess that leads to my next question on out-of-stocks. I'm not sure if you can help us put our arms around just the size of that issue in terms of rampant out-of-stocks. I guess theoretically, even if it's a Pro customer, if they need 10 items and maybe you guys are out of stock on one, theoretically, you could lose that entire sale. How common is an occurrence like that in a typical store? I guess relatedly, you mentioned the 26 LFCs this year. I think you mentioned each LFC can service 20 stores. Do you imagine over time dozens and dozens of more LFCs to service the entire fleet? Thanks so much. Yeah. Thanks, Jon. That's a good question. First on in-stocks. To me, the reliability and inventory availability is critical to this business in this category because it's one of the key elements of building trust with the customer. Whether it be because of the length of the pool season, especially if you're up in the north, you're under time pressure. The time pressure is making sure that when you have a problem, you need to solve it fast. Therefore, for us, we've just put a lot of focus on it. We talked about 300 basis points of improvement that we've already seen. I'm very pleased to where we're at right now. We've had our never-outs are in a much better position. Those are the most highest priority in-stock position we need to have across our SKUs. I'm actually also pleased where we are right now as we are about to enter the pool season. We believe that this is a critical focus area for us and provides a good opportunity to build loyalty with our customer, both for the Pro and the DIY. What LFCs do is they allow us to maintain the level of depth that we need in a market. What takes place, especially during pool season, is you get a variability in demand. When you have that variability of demand, it's important that it's not just centered and that pressure of that variability sits in the store. It needs to sit in the market so that the market as a team can work together to satisfy the needs of the customer. We've decided to start with 26 LFCs at current. We're going to capture the learnings in those critical markets. We've prioritized them in the Sun Belt region. Over time, we'll expand more, but we want to learn from our ability to do so out of these before we announce a further expansion of more LFCs. Thanks for the question. Thank you. Best of luck. Thank you. Our next question is from Sean Colman with Bank of America. Please proceed with your question. Hi, guys. Thank you for taking my question. Just first, can you walk us through the assumptions in your revenue outlook? Because it seems like pretty flat. Just anything on what you're expecting for market volumes, share gain or loss, and then price on equipment versus chemicals? Maybe I'll start it just from a we were very purposeful and deliberate on making sure that we provided not only the Q2 guide but also the full year guide. Q2, as referenced, is one of the smallest quarters that we have. It's also a very unique quarter in that because what quarter two does is actually a majority of our sales and volume actually come in the back end of this quarter. I'll let Scott talk to specifically around the revenue in terms of the year. I wanted to give you a bit of context on Q2 and why it's important for us to why we shared a Q2 guide and a full year on this question. Yeah. Thanks, Jason. A couple of comments on the full year guide related to sales. I think the important thing is we're not expecting a significant impact from our initiatives in the back half. The reason for that is, number one, we feel really confident about these initiatives, but what's a little more uncertain is just the timing and the magnitude of the benefits, especially with shopping patterns and frequency of our customers. We are being a little careful there just to make sure that we do see some green shoots. As we get more traction, we'll feel more comfortable forecasting that out. It's just early days right now. We kind of had that thought going into our guidance. We also looked at just last year's results. Last year, our first half of the year was down around 11%. In the back half, it improved down seven. We take that into account too. We kind of look at a two-year kind of stack on growth. That had a place to play as well. As you think about it, the midpoint of our guide may on the surface look a little conservative, but if you look at the high point of our guidance, it does reflect more robust growth. In our thinking, if our initiatives take off a little bit quicker than expected, then there's possibility on the upside in the high end of the guidance. Okay. Got it. Chemicals are obviously very important for you guys. How should we think about the potential impact of tariffs on that market? Do you have any exposure to imported chemicals? How does that compare to your estimate of the industry overall? Yeah. From a tariff standpoint, obviously, it's a fluid conversation right now, but our exposure from a tariff standpoint is minimal. We are domestically sourced. Therefore, the impact is small and minimal on that. We'll pay attention to indirect costs when it comes to a tariff situation, but we'll manage that and work with our vendor partners to minimize the impact to the customer. Thank you. Our next question is from Ryan Merkel with William Blair. Please proceed with your question. Hey, everyone. Thanks for taking the questions. I wanted to ask on gross margins. We had a little bit of a miss this quarter, and it's been a source of miss for the company for a while. Should we be comfortable that you finally are in a place where you think you can start expanding gross margins? Scott, you mentioned a few things. Could you just walk us through that again? The guidance sort of assumes that gross margins kind of start to increase year over year in the second half, and just have not seen that in a while. Yeah. Sure. Sure, Ryan. By the way, that is one of the reasons why we gave Q2 guidance in full year because there are some timing differences here that are important. Quickly on Q1 margin, two main impacts. Number one was inventory adjustments. Number two was deleverage on fixed costs. The deleverage on fixed costs, that is obvious. Our occupancy costs do not change, although our sales are much lower in the first half versus the back half. On the inventory adjustment side, they were higher. We have a laser focus on our inventory right now, both in the reduction of our inventory and making sure the quality of our inventory is high. It has gotten more focused this year. In the past, I mean, we always have done inventory adjustments. I would say that we're taking a look at our inventory more frequently now. We're making those adjustments as we go along. What that does is that limits the impact of those inventory adjustments because last year, they were more concentrated in the back half, especially right before physical inventory. I think that's a good thing for us, but it does cause some timing differences. As you look at the guidance for the full year and the implied guidance for the back half, you can see pretty significant improvement in margin, okay, and actually well above last year for the back half and for the full year. All good things to do right now. It gives us more visibility on our inventory, and it does spread those costs out over the year versus more concentration in the back half. Let me kind of transition that conversation into the Q2 guide. First off, SG&A will have some pressure with professional fees and some incentive comp and accruals, especially as we get some of these initiatives kicked off. Those additional expenses will mostly dissipate in the back half. Let me kind of hit gross margins specific to the Q2 guide. Similar to first quarter, the overriding reason for the shortfall in the Q2 guide is the timing of rebates and inventory adjustments, which, as I said, both of those will be offset in the back half. The midpoint of our guide for the full year will be about 70 basis points higher than last year. If you look at the trailing four quarters of margin, it will be about 100 basis points higher than the trailing four quarters. First off, the timing of rebates, that's about a third of the difference. This is mainly because last year, our rebate contracts were more heavily weighted in the first half. This year, we have some new agreements, and that gives us a more even spread of those rebates, more aligned with our sales cadence. The headwind that we'll see in Q2 will be a tailwind in the back half. The remainder of the margin impact in Q2 will be distribution center costs and inventory adjustments. When you think about DC costs, those are going to be higher in Q2 because Q1 was used to build inventory. Just keep in mind that we started this year with almost $80 million less in inventory than the prior year. What that means is we were building inventory for most of Q1. Now in Q2, we're shipping that inventory to the stores to prep for pool season. That time window is a little bit more compressed this year because we had to build it first, and now we're shipping it. Much more activity in the distribution centers and getting that freight to the stores. That is more of a timing difference, and that will normalize in the back half. The inventory adjustments, as I mentioned, same type of impact in the second quarter that we saw in the first quarter, but that will offset in the back half of the year, specifically in the fourth quarter. Got it. Okay. That's encouraging. Thanks for all that. I wanted to ask on the Pro. It stood out to me. It was a nice growth rate this quarter. Was there anything driving that in particular? What's the rollout look like for serving both do-it-yourself and Pro out of all the stores? When does that happen, and will it impact growth this season? Yeah. Thanks for that. I think from a growth standpoint for the we got really good focus in the quarter from the team on the Pro customer. In the early stages of focusing on never-outs through that quarter, I'd like to say some of the in-stock benefits that we've been seeing in the quarter since the end of the quarter four of last year has helped impact it. That would be a critical area of focus that, in addition to the focus, but also having inventory in stock has been a help. As we look to the future, one of the best things about this initiative is today, in all of our 1,000 stores, we do currently have Pro business. The thought here is, how do we make sure that we are leveraging the entire network of 1,000 stores to be able to do so? It is a really clean focus on asset utilization around being where they are. We are where they are, right? We have 80%. We are 20 mi away from 80% of the pools in America. The other part that is already being done from a convenience standpoint is around assortment. We have not only added never-out Pro SKUs into the mix, but we have also had Pro assortment breadth. That is also improving. We are looking at the LFCs that are going to help support it. The other piece is looking at hours of operation. This is already in progress. We do believe the benefit of this initiative and the benefit of all the initiatives will take place more in the third and fourth quarter as we roll these out across the country. Thanks for the question. All right. Thanks. I will pass it on. Best of luck. Thank you. Our next question is from Justin Kleber with Baird. Please proceed with your question. Hey, good afternoon, everyone. Thanks for taking the question. Just first, a follow-up on the Pro business. Can you break down the 9% growth between transactions and AOV? And then what's your outlook assumed for Pro pricing as we move across the peak pool season this year? Yeah. Justin, I'll take the first part of that. The increase in Pro is predominantly transactions. That is what's encouraging about that. We feel like we have some good momentum there. More importantly, we have a lot more to do to reduce friction and to make sure that we're in stock for the pro. That means having kind of those job lot quantities. There is much more to do, but we're encouraged by the early signs. I think on the pricing side for us is when it comes to the Pro, we do not plan on any changes right now to pricing strategy that we have done historically. We are very focused on the fundamentals of making sure that we are in stock, available, and providing the best service for the Pro. It is really about those focused areas of fundamentals versus any other customized promotional strategy at this time. Got it. Thanks for that. My follow-up is just on the you talked about the transformational expenses that are included in the profit guide for the full year. I do not know, Scott, can you size the dollar impact for us from these expenses just as we think about what maybe the right go-forward EBITDA base should look like as we move into fiscal 2026? I cannot give you an exact dollar amount, Justin. What I can say is some of those expenses will dissipate in the back half. I think as we get in, I think the way to think about it is if you kind of look at our run rate, especially with what I talked about with rebates and inventory adjustments, we're kind of setting kind of a new normal there, I think, and having a more even flow of those expenses throughout the year. I think the cadence that we finish the year with those two big expense line items should be relatively consistent as we go into the next year. The other transformational expenses that we see, those will dissipate a bit in the back half and even a tick lower as we enter 2026. I think the takeaway here is if you kind of look at the construct of the back half of the year that's implied by the full year guide, it should set us up really well, especially the margin profile going into 2026. Probably getting more traction on these initiatives should give us a really good opportunity to start strong in 2026. All right. Fair enough. Thanks, guys. And best of luck. Thank you. Thank you. Thank you. Our next question is from David Bellinger with Mizuho Securities. Please proceed with your question. Hey, everyone. Thanks for the questions. First one, I just wanted to address wage growth. Within your new full year guidance, can you talk about what's in there in terms of what you're looking at in terms of wages? Secondly, within this, do you have exposure? Is there any way to quantify just some of these states where you're seeing the minimum wage rates start to move higher? Yes. Yeah. Thanks for the question. Yeah. We keep an eye on states with minimum wage growth. That's something we look at every year. In terms of overall wage growth, pretty moderate, mid-single, maybe a touch lower than that. As we've kind of distanced ourselves from kind of the COVID years, we're seeing a pretty nice normalization of wage rates overall. Great. Thanks, Scott. Maybe just a bigger picture question. Jason, I think you mentioned some of the square footage. You made a comment earlier on the call. At this point, have you considered looking at any type of store closure program? Is there any way to think about stores that are underperformers, whether free cash flow negative or just unprofitable? Is that a source of potential capital unlock as you continue to pay down this debt load? Yeah. Thanks for the question. Taking a strategic capital approach to this business is something I'm really pleased that the team does on an ongoing basis in terms of how they look at all the assets. When we looked at asset utilization as a key strategic theme for us, we are sort of looking at all areas. The team has a nice disciplined approach as to how they look at the stores, how we think about future areas of opportunity of where we could expand, but also areas where we may need to either move or close a store. We have nothing to share at this time, but it is something that we are continuously looking at and will be a key element on either side as we look to the future about investments or changes that we make in our assets. Nothing to report at this time. Got it. Thank you both. Thank you. Thank you. Our next question is from Simeon Gutman with Morgan Stanley. Please proceed with your question. Hi. This is Lauren Ng for Simeon. Our first question is just on the comps. Comps inflected to + 0.2% after eight quarters of declines. I guess, why should the run rate you guys saw this quarter mean that you'll be successful in the critical pool season coming up? There have been false positive rates in the past. I guess, what do you see now that might be a little bit different? Yeah. I can start off on that. Good question. A couple of things we're seeing that is encouraging. Jason talked about the Pro business. Big growth lever for us. We're super happy to see some positive growth there and some momentum there even before we've kind of rolled out more initiatives to kind of spur that business. Secondarily, we noted some strength in core chemicals. That's kind of the milk and bread of our business. Whenever core chemicals inflect positive, that's always a good sign for us. We're really pleased to see that. In some of the discretionary businesses as well, we've seen some improvements. That's another indicator for us, just kind of the health of the consumer. Our discretionary growth was about - 3% for the quarter. It was - 11% last year. When you think about hot tubs down 5% last year in first quarter, they were down 18%. We have good examples of some of these discretionary categories doing better. You couple that with the strength in Pro and our core chemicals business gives us a few different areas to be more confident about the future. Just building on Scott's point would be the nice green shoots around the core chemical business at mid-single digits with the other pieces balancing that is also the non-discretionary performance. We were at - 8% a year ago, and we are at + 2% this past quarter. Both of those are areas that we are looking at as green shoots, I guess, of promise for the future as we start thinking about trends or trajectory. You put that on top of our initiatives to get us ready for the pool season in period three, sorry, quarter three and quarter four. Thanks. That's helpful. Our follow-up is just on the Pro versus DIY segment. It's nice to see the continued strength from Pro while I think DIY still appears slightly pressured. Could you work out what's maybe driving the continued weakness in DIY? Are you maybe seeing any early signs to get back to positive growth for DIY? Thank you. Yeah. Thanks for the question. For DIY, it will continue to be a key focus for us. I mentioned that with just the focus of DIY and the focus on loyalty. I'm really pleased with our team's work on conversion rate. The conversion rate at the store when people are coming in, I think we said in our prepared remarks that we were up 160 basis points on conversion. Feel strong about that. Our area of opportunity is traffic. That is an area. What is going to help us in the future is definitely going to be some of the work and the focus and dedication of the team on in-stocks. We are not going to disappoint a customer when they come in. That is going to help us buoy up the conversion rate. The second is we look forward to, in the next call and over the next quarter, talking more about the marketing initiatives that we look to put in place to kickstart the pool season. I am excited about the new hire we made with Scott Davis. He's bringing a new way of thinking in terms of how we bring marketing to this industry. I am excited about the team working together to develop those plans to get us off to a strong start in the pool season in a very efficient way. I am pleased with that as well. I think that's going to help us on our efforts to improve DIY traffic. Great. Thank you. Thank you. This concludes our question-and-answer session and today's call. You may disconnect your lines at this time. Thank you for your participation.