Greetings. Welcome to the La-Z-Boy Fiscal 2025 Q2 C onference 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. Please note this conference is being recorded. I will now turn the conference over to your host, Mark Becks, Director of Investor Relations and Corporate Development of La-Z-Boy Incorporated. You may begin. Thank you, Holly. Good morning, everyone, and thanks for joining us to discuss our fiscal 2025 Q2. With us today are Melinda Whittington, La-Z-Boy Incorporated's President and Chief Executive Officer, Bob Lucian, La-Z-Boy's SVP and CFO, and Taylor Luebke, VP Finance and Treasurer. Melinda will open and close the call, and Bob will speak to segment performance and the financials midway through. We will then open the call to questions. Slides will accompany this presentation, and you may view them through our webcast link, which will be available for one year, and a telephone replay of the call will be available for one week beginning this afternoon. Before we begin the presentation, I would like to remind you that some statements made in today's call include forward-looking statements about La-Z-Boy Incorporated's future performance and other matters. Although we believe these statements to be reasonable, our actual results could differ materially. The most significant risk factors that could affect our future results are described in our annual report on Form 10-K. We encourage you to review those risk factors, as well as other key information detailed in our SEC filings. Also, our earnings release is available under the News Events tab on the Investor Relations page of our website and includes reconciliations of certain non-GAAP measures, which are also included as an appendix at the end of our conference call slide deck. With that, I will now turn the call over to Melinda Whittington, La-Z-Boy Incorporated's President and Chief Executive Officer. Melinda? Thanks, Mark, and good morning, everyone. Yesterday, following the close of market, we reported results for our October-ended Q2. We were pleased with the strong results, led by our retail segment, despite a continued challenging macro environment and sluggish home furniture and furnishings industry. Our total delivered sales grew for the second consecutive quarter, despite these headwinds driven by our iconic brand and outstanding execution across the company. Highlights for the quarter included consolidated delivered sales of $521 million, up 2% versus the prior year. Within these results, our retail segment sales increased 3%, led by acquisitions of independent La-Z-Boy Furniture Galleries, new store openings, and record Labor Day results, GAAP and non-GAAP diluted EPS of $0.71, quarterly dividend of $0.22, an increase of 10%, and continued progress against our Century Vision growth strategy, including opening three new company-owned La-Z-Boy Furniture Galleries and completing the acquisition of a two-store independent La-Z-Boy Furniture Galleries network in Florida during our Q2, and signing an agreement to acquire another two-store independent dealer in the Midwest, which is expected to close in our Q3. Our results for the Q2 exceeded guidance on both sales and non-GAAP operating margin. This demonstrates the impact of our outstanding execution and strategic investments, controlling what we can to drive positive outcomes even against an uncertain consumer macroeconomic backdrop. Consumers are gravitating towards our comfortable, high-quality custom furniture with strong speed to delivery. And in our furniture galleries, our associates build on this foundation and wow the consumer with a superior shopping experience. We're optimistic that we will build on our progress and continue to outperform the industry in the back half of our fiscal year and beyond as we benefit from our strategic investments. The furniture industry remains challenged. Home-related spending continues to be impacted by higher mortgage rates and lack of housing affordability and availability. However, our strong performance is further proof that consumers are choosing brands they trust during these tough times. And La-Z-Boy Incorporated, with its nearly 100-year heritage of delighting the consumer with comfort and quality, stands apart. While recovery of industry momentum to more historic levels is certain, timing of that recovery continues to be deferred. However, I am more confident than ever that we are favorably positioned to capture a disproportionate share of consumer demand in the fragmented furniture and home furnishings industry. We continue to play offense with our Century Vision strategy, and we are winning. Shifting to forward-looking trends, as demonstrated within our written sales, total written sales for our company-owned retail segment increased 6% versus last year's Q2. Written same-store sales for our company-owned retail segment, which exclude the benefit of newly opened stores and acquired stores, declined 1% versus the prior year's Q2, an improvement sequentially versus our down 3% year-on-year in Q1. Consistent with recent trends in heightened consumer interest around key holidays, same-store sales were strongest during the Labor Day sales period as traffic accelerated. Once again, across the quarter, our superior in-store execution led to increasing conversion rates, average ticket, and design sales relative to the same period last year. Written same-store sales for the entire La-Z-Boy Furniture Galleries network of 358 stores was also down just 1% versus the prior year. According to the U.S. Census Bureau data, the furniture and home furnishings industry grew 1% during our fiscal Q2, driven by relative strength in the sundry furnishings subcategory of that measure. Given recent widening disparity in performance between the furniture and furnishings subcategories, I'd like to provide some additional commentary on this externally sourced measure. The measure includes both furniture, which is our primary focus for our business, as well as furnishings, Sundry items related to the home, which are not our company's primary focus. The furniture portion of the U.S. Census Bureau measure, most relevant to us, is reported on a one-month lag. To note, within the U.S. Census Bureau data, furniture results have trailed home furnishings results in five of the past six quarters, and in August and September, that gap widened to over 800 basis points. Therefore, we have provided additional perspective on both the all-in furniture and furnishings data, consistent with what we have provided in previous quarters, as well as perspective on the two months of furniture-only data, which was down 5% across August and September for the industry. Turning to Joybird written sales, Joybird increased 1% on the quarter versus a year ago, as conversion improved versus the prior year. Looking to the longer term, I want to recap our progress during the quarter to strengthen our enterprise for the future. Recall, Century Vision is our strategic framework setting up La-Z-Boy Incorporated for the next 100 years as we celebrate our first century in 2027. This is measured by our plan to grow top line at a pace double the market and deliver consistent double-digit operating margins over the long term. As one of the largest furniture brands in the United States, we are well-positioned to continue to strategically grow our iconic La-Z-Boy branded business. We have consistently expanded La-Z-Boy's brand reach over the past two years, supported by our North American manufacturing footprint, which allows us to offer the highest quality on-trend products with both breadth and depth as we bring to market fully personalized solutions in a wide variety of fabric and leather options. A key pillar of our expanded brand reach is our total furniture galleries network, which ended the quarter with 358 stores, and we remain on track to grow the total La-Z-Boy Furniture Galleries network to approximately 400 stores over the next several years. Additionally, we are expanding the company-owned portion of that network. Our retail segment has increased to 193 stores, up 16 from prior year, and now represents 54% of the total La-Z-Boy Furniture Galleries network. We are excited to have opened three new stores in the quarter in Topeka, Kansas, Fayetteville, North Carolina, and Saskatoon, Canada. Furthermore, we acquired two stores in Florida during the quarter, and we recently signed an agreement to acquire an additional two-store network from an independent dealer in the Midwest, scheduled to close in our Q3. Growing our company-owned La-Z-Boy Furniture Galleries stores is important as we control the entire end-to-end consumer experience and are able to develop more sophisticated consumer insights. And these store acquisitions are immediately accretive to our profitability, allowing the company to benefit from the integrated wholesale and retail margins. We're also growing the business through our refined channel strategy. The La-Z-Boy brand is showing up in more showrooms as we continue to grow share of voice with major dealers and provide a broader range of consumers access to the La-Z-Boy brand. Our strategic partnerships with national and regional retailers like Slumberland, Furniture Row, Rooms To Go, and Gardner White help us reach a broader audience and bring beloved products like the iconic La-Z-Boy recliner into more homes. In October, we opened our newly renovated showroom for our wholesale customers and our supply partners at the industry's High Point furniture market. It was a pleasure to welcome our key stakeholders and supporters of the company over the years to our reinvigorated floor space. We introduced new products that demonstrated our integration of consumer insights that enable us to design more on-trend merchandise in our core upholstery categories, particularly reclining and motion furniture. Consumers are looking for more functionality and modern streamlined motion styles, and with our foundation in North American manufacturing, we are able to design and manufacture this with strong speed to market. Another core pillar of our Century Vision growth strategy to expand La-Z-Boy brand reach is our Long Live the La-Z brand campaign, which launched in August 2023 on National La-Z Day. A little over a year into the campaign, we have been successful in increasing unaided awareness, consideration, and purchase intent among those who have seen Long Live the La-Z and connected to La-Z-Boy. I'm also delighted to share that over that same period, we have lowered the average age of our consumer by two years, reflecting our broadening appeal. During our Q2 this year, we activated our second National La-Z Day on August 10th with media takeovers across New York Times Games, Amazon, ESPN, Meta, and Pinterest. We also had a satellite media tour with influential thought leader Dr. Sue Varma promoting the health benefits of laziness. And as we continue to drive the Long Live the La-Z campaign, we are focused on broadening the impact to achieve our goal of connecting with both new and existing consumers. Joybird is another core pillar of Century Vision, where we are optimizing the brand to deliver a balance of sales growth and profitability. Joybird had a solid quarter with positive delivered and written sales trends and operating performance improving against prior year comparable period. This resulted in profits at break-even for the quarter as we continue to get more efficient with targeted marketing and advertising, as well as a more profitable product mix. We continue to believe in the long-term growth prospects of Joybird and will implement a disciplined approach to growing the business and have begun exploring additional store expansion. Strengthening our foundational capabilities, including building a more agile supply chain, is our final pillar of Century Vision. Clearly, there have been and will likely continue to be a significant amount of disruption to global supply chains. We are well-positioned to design and manufacture our comfortable, customized furniture with strong speed to market across our business on the foundation of our North American footprint. As we enter the Q3, we continue to expect a challenging macro environment for the remainder of our fiscal year. While there is a recent disconnect between interest rate cuts by the Fed and long-term interest rates, which correlate to mortgage rates, we believe ongoing Fed rate reductions will eventually filter through the economy and positively impact housing activity. In the meantime, we remain optimistic about our ability to continue to outperform the market while investing in our business through our Century Vision so that when trends rebound, we are poised to disproportionately benefit. Now, before I turn it over to Bob, as many of you know, this will be Bob's last earnings call as our CFO, and I want to recognize and thank him for the impact he has made at La-Z-Boy Incorporated. He has been an exceptional partner to me and a strong leader for our entire team. We wish him all the best in his retirement at the end of the fiscal year. Now, let me turn the call over to Bob to review the results in more detail. Thank you, Melinda, and good morning, everyone. As a reminder, we present our results on both a GAAP and non-GAAP basis. We believe the non-GAAP presentation better reflects underlying operating trends and performance of the business. Non-GAAP results exclude items which are detailed in our press release and in the tables in the appendix section of our conference call slides. On a consolidated basis, fiscal 2025 Q2 sales increased 2% to $521 million versus the prior year, primarily driven by higher delivered volume within our retail segment and Joybird business. Consolidated GAAP operating margin was $39 million, and non-GAAP operating margin was also $39 million, a decrease of 4% versus last year's Q2. Consolidated GAAP operating margin was 7.4%, and non-GAAP operating margin was 7.5%, reflecting a 40 basis points decline versus last year due to demand challenges in our case goods import business and a significant temporary customer disruption in our international wholesale business. GAAP diluted EPS was $0.71 for the Q2 versus $0.63 in the prior year quarter. Non-GAAP diluted EPS was $0.71 versus $0.74 last year. As I move to the segment discussion, my comments from here will focus on our non-GAAP reporting unless specifically stated otherwise. Starting with the retail segment, for the quarter, delivered sales were $222 million, a 3% increase over the prior year's Q2, primarily due to growth from acquired stores. Importantly, conversion rates, average ticket, and design sales all remained strong, improving year over year. Retail non-GAAP operating margin was 12.6% versus 13% in the prior year quarter. This was driven by slightly lower same-store sales and an increase in selling expense and fixed costs supporting our long-term strategy of growing our retail business through new and acquired stores, partially offset by gross margin improvements resulting from a favorable shift in product mix. For our wholesale segment, delivered sales for the quarter were flat at $364 million, as higher sales to our retail segment mostly offset lower delivered sales in our international wholesale business. Non-GAAP operating margin for the wholesale segment was 6.8% versus 7.7% in last year's Q2. This was driven by demand and macroeconomic challenges in our case goods import business and fixed cost deleverage on lower sales in our international wholesale business, partially offset by an improvement in Non-GAAP operating margin for the core North America La-Z-Boy brand wholesale business. I want to spend a moment on our international business. If you recall, last quarter, we called out a temporary customer disruption negatively impacting this business. I'm excited to report that in September, we announced a major partnership with DFS, the leading U.K. furniture retailer. Our brands are closely aligned in the mission of delivering high-quality, comfortable furniture. This is an exclusive partnership in the U.K. and Ireland, where DFS will introduce a range of La-Z-Boy reclining furniture in store and online. The product has begun to reach DFS showrooms, and we expect sales to begin to accelerate in the Q4 of this fiscal. For Joybird, reported in corporate and other, delivered sales were $39 million, up 20% versus the prior year quarter, on stronger sales trends in Joybird retail stores. Joybird operating margin performance saw a year-over-year improvement from higher gross margins driven by favorable product mix and fixed cost leverage on higher sales. This resulted in break-even operating margin for the quarter. Moving on to our consolidated non-GAAP gross margin and SG&A performance for the quarter. Consolidated non-GAAP gross margin increased slightly across all reportable segments, up 10 basis points versus the prior year Q2. Gross margin expansion was primarily driven by the positive shift in consolidated mix towards our retail segment, which has a higher gross margin rate than our wholesale segment, mostly offset by lower gross margins in our case goods business. Non-GAAP SG&A as a percentage of sales for the quarter increased by 50 basis points compared with the same period last year, primarily due to reduced leverage in our wholesale segment due to a significant temporary international customer disruption and the mix shift to our retail segment, which carries a higher fixed cost structure relative to wholesale. Our effective tax rate on a GAAP basis for the Q2 was largely unchanged at 26.3% compared to 26.5% for the prior year. Turning to cash, we ended the quarter with a strong balance sheet, $303 million in cash and no externally funded debt. We generated $16 million in cash from operating activities in the quarter, and year-to-date cash flow from operations was $68 million, up 20% from last year's comparable period. We invested $17 million in capital expenditures during the quarter, primarily related to La-Z-Boy Furniture Galleries, including new stores and remodels. We also spent $11 million on acquisitions during the period. For the quarter, we returned approximately $28 million to shareholders via dividends and share repurchases, including $8 million paid in dividends. Additionally, we repurchased 467,000 shares in the quarter, which leaves 4.3 million shares available under our existing share repurchase authorization. Year-to-date, $70 million has been returned to shareholders, approximately double the same period last year. Finally, subsequent to quarter end, reflecting the confidence in the company's long-term growth prospects, the board of directors increased the regular quarterly dividend by 10%. This takes our per share dividend to $0.22. We continue to view share repurchases and our dividend as an attractive use of our cash and a positive return to shareholders. Our capital allocation target is to reinvest approximately 50% of operating cash flow back into the business and return approximately 50% to shareholders in share repurchases and dividends over the long term. Now, before turning the call back to Melinda, let me highlight several important items for the back half of fiscal 2025 in our Q3. Looking forward, we expect the industry to continue to be challenged by lower consumer demand driven by higher mortgage rates and low housing turnover. Against that backdrop, we expect to continue to outperform the market throughout fiscal 2025, similar to our performance in fiscal 2024. Consistent with our Century Vision strategy, we continue to target sales growth double the industry growth rate and double-digit operating margins over the long term with the benefit of more normalized industry growth rates. Q3 delivered sales are generally lower than the Q2 due to multiple holiday periods of downtime at our North America plants. Additionally, recall that we experienced adverse winter weather events in January last year, which shifted some sales from the Q3 into the Q4. Taking this into account, we expect Q3 delivered sales in the range of $505-$525 million, representing growth versus last year. Further, we expect Q2 non-GAAP operating margin to be in the range of 6%-7%. As we continue investment in our Century Vision pillar of growing retail, we expect near-term margin compression versus the prior year, primarily driven by expected negative same-store sales trends from the continuing challenging demand environment, which will more than offset the margin accretion from independent La-Z-Boy Furniture Galleries acquisitions in our retail segment. Additionally, wholesale margins will continue to be negatively impacted by our case goods businesses and the startup of our new partnership with DFS in the U.K. for the balance of the year. We continue to expect to open 12-15 new La-Z-Boy Furniture Galleries stores for the fiscal year. We expect our tax rate for the full fiscal year to be in the range of 25.5%-26.5%. We anticipate non-GAAP adjustments for purchase accounting charges for the year to be in the range of $0.01-$0.03 per share. We continue to expect capital expenditures to be in the range of $70-$80 million for fiscal 2025 as we invest to strengthen the company for the future, consistent with our Century Vision strategy. This includes land and building investments in stores to maintain the growth rate of our retail network. And finally, presuming no significant worsening in macroeconomic trends, we expect to continue share repurchases at dollar amounts consistent with pre-COVID levels. Finally, last month, it was announced that I will be ceding the role of CFO to Taylor Luebke, effective January 1st, and retire at the end of our fiscal year. It has been an absolute privilege and honor to lead this company with Melinda. I am proud of the progress the company has made towards realizing our Century Vision and am very excited for what is in store next. I've known and worked with Taylor for over a decade. He has a thorough understanding of this company, and I am very confident he will continue to deliver on our Century Vision and financial success. It will be a positive and seamless transition. With that, I'll turn the call back to Melinda. Thanks, Bob. And congratulations again to you, and welcome to Taylor. In spite of the challenging industry backdrop, we continue to make progress towards achieving our Century Vision goals and outperforming the industry. Our focus remains on the expansion of our La-Z-Boy brand, driving growth of our company-owned retail segment, improving agility across our supply chain, and driving efficiency and margin expansion throughout our business, both now and as our industry rebounds. I'd like to congratulate our entire team for yet another quarter of outstanding execution at both the tactical and strategic levels. Finally, I'd like to wish you all a happy and healthy holiday season, and thanks for joining us today. With that, I'll turn the call back to Mark. Thank you, Melinda. We will begin the question and answer period now. Holly, please review the instructions for getting into the queue to ask questions. Certainly. At this time, we will be conducting a question and answer session. If you would 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 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 keys. One moment, please, while we poll for questions. Your first question for today is from Bobby Griffin with Raymond James. Good morning, buddy. Thanks for taking my questions. I guess, Bob, since this is your last call, I got about six or seven. I'm just going to fire off and make sure I get a little bit more out of you before you go. Thank you, Bobby. No, but in all seriousness, congrats on your retirement. It's been fun working with you the last couple of years. I hope to see you down here in Florida. And Taylor, great meeting you in High Point. Look forward to working with you over the next group of years. Likewise, Bobby. So I guess first, maybe can we just talk a little bit about the wholesale side of the business? I understand there's some transition going on internationally. So when we look at the difference of the year-over-year stepdown and EBIT margins on that segment, how much of that international transition and kind of what I would deem as short-term disruption was the driver of that year-over-year stepdown in margins? I'd say about roughly half. It was roughly half in between the case goods impact that we've been seeing as well as the international impact that we saw with moving from ScS to DFS in the U.K. Yeah. Said another way, if you strip out those sort of unique businesses that we usually don't spend a lot of time talking about, our core La-Z-Boy branded North America business was actually positive on margins for the quarter. They've always been positive, but they were positive that there was an increase. Yeah. Correct. Okay. That's very helpful. And is that growth in the core La-Z-Boy branded margins, is that a reflection of some of this manufacturer efficiencies in the work we've been doing on the plants? Is that starting to show up now? I know we are targeting, I believe, 50-60 basis points of total improvement once we are done with some of the manufacturing footprint changes. Yes, it is. Okay. And are we tracking towards that goal, 50-60 by, I guess, by early fiscal year 2026, early fiscal year 2026? Yes. Okay. Perfect. Just switching gears a little, Melinda, we got to see the High Point showroom, the new High Point showroom, which was great to see. Can you maybe just talk a little bit about kind of the mood from some of your dealers, kind of how their dealers are thinking about calendar year 2025, what kind of view of the new products were, initial orders? We saw some of the new introductions as well. Yeah. We were pretty excited about the buzz in our showroom, and we heard that from a lot of our customers, and as you say, importantly, those general dealers that carry a lot of brands. I think across the industry, and I've been at multiple industry events even since market, across the industry, everyone's still cautious, right? I think the recovery of the consumer, while we know it will be out there eventually as housing availability and affordability improves, we're not seeing a lot of turn on that yet. So like us, people are planning prudently. But we were incredibly pleased, again, as a lot of these things that we're doing around really understanding the consumer, making sure we're listening to our consumer and our customer, and having that play back into the products that we are offering, and then the selling experience, and then the messaging experience, really across all of our businesses, particularly in our La-Z-Boy showroom. We received really positive feedback. There's also a level of just in this ongoing, somewhat tumultuous market of the safety of our prudent management of our financials and a hundred-year history and the North America footprint that drove additional interest and continues to. Clearly, a lot of going on during the quarter. We had the holiday period, obviously, started, then you had the kind of election noise towards the end of it. Anything post-election interesting that you've seen in either orders or commentary from customers that's worth calling out? I understand it's a very short period, but just obviously with all the noise leading up to the election, just curious if anything's leveled out and has returned a little bit more normal or something posted. Yeah. I mean, obviously, as you say, we're super early into this next quarter, and we're pleased with another solid start. As we go into the holidays, that's where the devil will be in the details on that side of things, and we're super excited about where we're positioned going into the holidays. I still think the consumer is going to be bumpy for a while. Certainly, for many, having the election behind us just provides some level of at least knowledge of where we are and just less noise in the system to be able to get back on air. So I think those are all positives, but I don't think anybody's going to declare victory just yet. I think we will continue to control what we can here, and we feel good about that piece of things going into some of the bigger selling seasons. Okay. And then, Melinda, maybe one last one, notable callout, Joybird back to break even. You guys have owned it now for a good bit. Just kind of curious on, with it trending back towards break even, what you think the game plan is for that brand, the opportunity for it? Is it moving to more of an accelerated growth type investment phase, or are we kind of still on the plan that we've been talking about before? Yeah. For Joybird to be achieving what it is right now, which is positive sales trends and at least balancing out to that break even in a time when a lot of companies like it are actually shuttering, we feel pretty good about that. But obviously, we still have work to do. So we're pleased with the discipline of how we're now operating that business. We're pleased with the consumer reaction, and even as we strengthen execution across kind of all phases of Joybird, including even what does the brand stand for and what is that messaging to the end consumer. One thing we know for sure is across the stores that we do have, those stores are accretive to our business model, and that's why we are now actively pursuing a slow, but back to pursuing expansion for Joybird stores as we start to look into next year. So again, it'll be prudent. It'll be slow and steady. The consumer's still bumpy, and that doesn't make any business easy, but we are a little bit more into growth mode now in Joybird. Okay. I appreciate the details, and congrats on the quarter. I think as we round out earnings season here, we'll see that you're down one. Same-store written sales looks very good versus a lot of peers. So congrats on that performance. And Bob, again, congrats on retirement, and look forward to staying in touch. Thank you. Thanks, Bobby. Your next question is from Anthony Lebiedzinski with Sidoti & Company. Good morning, everyone, and likewise, Bob, best wishes for your upcoming retirement, and look forward to working with you, Taylor, and the rest of the La-Z-Boy team. Thanks, Dan. So I guess first, in terms of my first question here, looking at the guidance for Q3, as far as the margin guidance that you provided, is that looking at the high end of your, if you were at the high end of your revenue guidance, it still implies that the margin would be down from where you reported for Q2, so is that mostly just really what's going on in the case goods business, or what else is driving that? It's that. What I mentioned in the prepared remarks, it's the case goods business, the continued margin compression there, as well as the continued transition with getting DFS up to speed. We're not nearly at the sales rate that we'll be within long term. We probably won't hit that until the end of the Q4 because we've got to get into all those stores and get into their merchandising rotation, etc. So that's the biggest compression from a margin standpoint that we're seeing in Q3 versus last year. The other thing, and I also mentioned that our Q3 margins are generally always a little bit lower just because we have so many holidays during that period where our plants are down. So if you just look historically in what I'll call non-disrupted years, if we ever had one of those, probably in 2019. A non-snow. You'd always see that Q3 is slightly lower on margin than Q2 just because we don't have the plants running as much, so we're not able to, there's more inefficiency in the system there. Okay. Thanks. And then you guys have talked a while as far as increases in average ticket, and also the design piece, obviously, is a very critical and important piece of your business. Can you provide more color on that? And do you think, given the industry headwinds, that you guys can continue to increase the average ticket? Yes. I always go back to five, well, yeah, five years ago, we had a goal of getting to $4 million a store. And that was an incredibly aspirational goal. Now we're looking at $5 million a store, right? And it really comes down to, it's each one of those things. It's the absolute execution in the store. It's every measure around how much we're doing in the way of design, how equipped our sales associates are to really meet the needs of the consumer and make that a really positive selling experience. But it also wraps around making sure you've got the right product, making sure you've got the right messaging to get people into the store, and then making sure you can deliver on a timely basis. And our custom furniture into your home in four to six weeks is compelling for consumers, and it's something that you can't get too many places. So I do believe we still have room to go there because each time we achieve one set of goals, we find the next one. And even to your point on it, it is just a tough environment right now. What our sales associates have done is taken that slower traffic that we're seeing across the industry and making sure they're using that as an opportunity to really invest in the individual consumer that does come in and make sure they get an absolutely outstanding experience. And I just add, think about discipline and inspiration. On the discipline side, the way the stores are operating with their sales process, with their associate training, etc., are helping us to deliver those things. But on the flip side, on the other side, there's inspiration, and we're continuing to spend money on remodels to make that consumer experience that much better. And the focus that we have internally on the design and continuing to increase that design, those are two things that will ensure that what Melinda just said will continue to allow us to grow. Gotcha. Okay. Yeah. Thanks for that. And then as far as your inventory, it was up 8% from last year, so a bit higher than what we would have expected. What drove that increase, and do you think your inventory is in good shape? The inventory increase was a planned increase. We have been spending a lot of time on ensuring that we have the raw materials that we need to make sure that when consumers or customers order product from us, we're able to get that turnaround time and get it to them as quickly as possible. So we've invested in that. Our stock levels in our regional distribution centers for in-stock product, we've taken that to a little bit higher level going into this season. And we've done that with the expectation that this is the busy season, and we want to make sure that we're winning with consumers on delivering to them on as fast as possible timing. And then we typically will always see a little bit of a bump up in Q2 and into Q3, just getting ready with materials coming in from China or Vietnam due to the Chinese New Year and the Tet New Year shutdowns for those suppliers. All right. Well, that makes a lot of sense. Well, thank you again, and best of luck. Thank you, Anthony. Thank you. Your next question for today is from Brad Thomas with KeyBanc. Hi. Good morning, everyone. First of all, nice quarter, great results in a still tough environment for the industry. Bob and Taylor, congrats to both of you on new opportunities. Thanks, Brad. I guess maybe to jump in on the tariff topic, could you just help us think about how much exposure you might have, how that kind of flows through the business model, how it may impact the P&L, if at all, if we do start seeing tariffs next year? Yeah. I'll take that one. Obviously, a lot of uncertainty right now on how that will all play out. For us versus our competition, we're in a pretty good position given that the vast majority of our consumer base is U.S.-based and then North American, U.S., Canada, and that the vast majority of our products are manufactured, final assembly here in the U.S. Net versus competition, that puts us in a pretty good spot with some of the tariff expectations that are out there. Certainly, when you get into, we do have operations in Mexico. We do some of our cut and sew there and so forth, and that's an important part of our business. We've managed through tariffs before, and as an industry, those costs have generally been pretty much passed through to the customer and then the end consumer through surcharges. And so we've got some experience with that, and I think the key is to stay agile on that. But overall, I think we're positioned relatively well. That's helpful. And Melinda, you all have done a really good job, I think, of working with your wholesale partners. Can you just talk a little bit more about how you're thinking about that opportunity over the next year in a backdrop where many of your manufacturing competitors are, I think, really struggling because of volume levels out there right now? Yeah. It's definitely an opportunity for us. I think, in particular, like last quarter, you saw year on year that general dealer, those retailers that sell multi-brands, came on particularly strong year on year in our business. So there's maybe a couple of things at play. One, the folks that we are already doing business with are looking, in many cases, to expand their play with us, additional vignettes, and so forth. But then also, we really are building those strategic partnerships. And over the last year or two, we've added some important new partners. We've talked a lot about Rooms To Go, Furniture Row, some of those. And we're looking for compatible distribution that's going to help us reach a consumer base that we're not going to reach with our furniture galleries, right? Truly compatible. And ideally, they are retailers that advertise a lot. We talk about them being noisy so that they continue to kind of spread the word of La-Z-Boy and keep that top of mind regardless of where the consumer wants to shop. But to your very specific point, given that we can provide that surety of our sound financial base and our North America footprint, we are definitely in some additional conversations. And we saw it at this last market that maybe we haven't been into for a while where folks are seeing that flight to safety. And again, build on that by strong product, on-trend, high quality. So it's not a hard sell. That's helpful. And maybe, Bob, not to let you off the hook, we'll try and rope you in here for one last question. Thanks, Brad. Just as we think about the balance sheet and the cash balance, you all seem to have some pretty nice momentum halfway through your fiscal year to be growing sales and seeing a trough in earnings. Can you all just talk a little bit about how you think about the appropriate level of cash balance to have going forward? Longer term, we expect that pre-COVID, we were in the $100 million range on average. Longer term, we think with the shift of our business, some more retail business, more customer deposits on the balance sheet, that we should probably have somewhere in the low 200s range from the millions of dollars of cash on the balance sheet. Over time, I expect us to probably migrate that way. We are also heavily investing in new stores. We've got other capital projects that we're doing. And then we're always looking for opportunities for the furniture gallery acquisitions. So I expect a combination of spending on the business and spending on share repurchase will be how we glide past that down to that level over time while we continue to generate some pretty healthy operating cash flows year over year. Very helpful. Thank you so much. Thanks, Brad. Thanks, Brad. We have reached the end of the question and answer session, and I will now turn the call over to Mark for closing remarks. Thanks, Holly. Melinda, Bob, Taylor, and I will be in our offices to respond to any follow-up questions. Thanks, and have a great day.