Good afternoon, ladies and gentlemen. Welcome to Purple Innovation second quarter 2021 earnings conference call. At this time all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator's assistance during the conference, please press star zero on your telephone keypad. Please also note today's event is being recorded. It is now my pleasure to introduce your host, Brendon Frey of ICR. Please go ahead. Thank you for joining Purple Innovation's second quarter 2021 earnings call. A copy of our earnings press release is available on the investor relations section of Purple's website at www.purple.com. I would like to remind you that certain statements we will make in this presentation are forward-looking statements. These forward-looking statements reflect Purple Innovation's judgment and analysis only as of today, actual results may differ materially from current expectations based on a number of factors affecting the company's business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements included in our second quarter 2021 earnings release, which was furnished to the SEC today on Form 8-K, as well as our filings with the SEC referenced in that disclaimer. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise. Today's presentation will include reference to non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income, and adjusted earnings per share. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is available within the earnings release, which can be found on our website. With that, I'll turn the call over to Joe Megibow. Thank you, and good afternoon, everyone. With me on the call today is John Legg, our Chief Operating Officer, and Craig Phillips, our Chief Financial Officer. Following our prepared remarks, we'll be happy to take your questions. Demand for the Purple brand was strong during the second quarter, particularly in our wholesale channel as the economy more broadly reopened and consumers increasingly returned to shopping brick-and-mortar retail. As we previously disclosed on June 29th, during the latter part of Q2, we experienced isolated production challenges caused by unanticipated mechanical and maintenance issues as we brought our Mattress Max machines back online following an unfortunate accident and the implementation of additional safety measures. Based on our backlog at the end of Q2, if we had been able to fulfill against this demand at our pre-incident production levels, we would have been within the guidance ranges we established on our Q1 call in May. Throughout July, our team made significant progress toward restoring production to full capacity. I'm pleased to report that, as previously projected, our entire fleet of machines was back up and running at planned production levels during the last week of July. Over the past several weeks, we've been able to begin working down our order backlog, particularly in our digital channels. We are reiterating our expectation to be out of backlog and back to leaning into our continued strong consumer demand by the end of August. I'm very pleased with the performance of the team across both Georgia and Utah to get us back on track. Since we announced preliminary Q2 revenue results in June and previously discussed the internal manufacturing challenges, I'm going to spend just a few minutes reviewing some of the additional details of the quarter. I'll walk through our strategic priorities for the remainder of this year. Second quarter revenue ended up at $183 million, towards the high end of our revised range, and adjusted EBITDA was $11 million, reflecting the pressure on gross margins from a higher mix of wholesale revenue and the impact from the isolated manufacturing issues, partially offset by lower than planned advertising expense as we pulled back spending in June in conjunction with our shortage of inventory. Looking at our performance in more detail, DTC sales were $116 million versus $145 million a year ago, but up 82% compared with $64 million in the more normalized second quarter of 2019. The combination of an anomalous year-over-year comparison when comparing prior year shifts from wholesale to DTC and this year's impact on inventory from the production shortfall led to the expected decline. Among our channels, digital was most impacted by the events of the second quarter as consumers increasingly returned to physical retail, and based on the change in traffic trends and in support of meeting our customers' preferences, we made the decision to allocate more of our limited inventory to our wholesale partners where demand remains very strong. That said, until we get out of backlog, the demand from wholesale partners to expand into a significant number of new doors is still meaningfully slowed. Meanwhile, our Purple brand showrooms, which are included in DTC, performed very well in Q2, helping offset some of the aforementioned pressure on digital. Results were driven by a combination of easier year-over-year comparisons, a significant uptick in traffic versus earlier in 2021, and the addition of eight new locations compared with a year ago. In the second quarter, we opened four additional showrooms for a total of 13 showrooms at quarter end. All locations are performing very well, with our older showrooms now exceeding pre-pandemic sales volume. As to our newest locations, they have scaled faster than any of our original locations. Our new store design continues to look amazing and resonate with our customers with elevated presentation and an opportunity to tell the full brand and technology story across our complete assortment. Switching to wholesale, revenue increased 233% year-over-year to $66 million and was up 69% versus the second quarter of 2019. Following a strong first quarter, our wholesale channel further improved on a sequential basis, despite the impact on inventory driven by increased store traffic, as more consumers were out shopping at brick-and-mortar retail compared with earlier in the year, combined with door expansion and higher conversion as our brand and products are increasingly relevant with a broader audience. Like Q1, weekly sell-through was very strong in our existing doors, while newer doors like Sleep Country Canada, which now has all doors open, and our first 36 doors newly launched with Ashley Furniture, continue to meet or exceed expectations. As two current examples, Sleep Country Canada had their biggest month ever with us in July, and one of the new Ashley Furniture licensees sold double our average sell-through across their stores during their first six weeks of launch. Looking at our product performance, our innovative mattresses continue to lead our business. Within mattress, demand continues to be strongest for our Hybrid Premier product line, underscoring the progress we have made advancing the consumer recognition of the premium benefits of the Purple products. As to our non-mattress products, our disruptive pillows have continued their rapid growth trajectory, increasing nearly 50% in Q2 over the same period last year, helped in part by the success we have experienced launching Harmony with our wholesale partners. In June, we launched four new Harmony pillow models with three heights each, now in both standard and king sizes. We also launched our innovative Twin Cloud pillow at an attractive price point, which has been very well received. Seat cushions have grown into a much more meaningful category over the past year, as we've capitalized on the momentum that started early in the pandemic. While growth decelerated in Q2 as we lapped a prior year home office-boosted comparison, we continue to remain very bullish on the prospects for this business as we further evolve our product assortment, merchandising, and marketing strategies. Meanwhile, our new adjustable base continues to perform exceptionally well. Since launching in April, it is generating an attach rate 3x greater than our previous model, reflecting the right mix of style, functionality, ease of shipment, and price point. We are very pleased with our progress in driving non-mattress products, led with pillows and seat cushions as standalone products, and continue to sell the majority to new-to-file Purple customers who have not yet purchased a mattress. We remain bullish on the CRM opportunities this is creating and anticipate further investment in repeat business opportunities in the back half of this year. Before we shift into discussing our plans for growth, and in order to help wrap up the challenges faced with the recent production issues, we have attempted to calculate the overall impact based on backlog, prior trends, and our forecast. Across both Q2 and Q3, we estimate approximately $50 million in lost sales and an estimated $22 million in reduced gross margin dollars. The lost sales have been incurred as a consequence of significant delays in fulfilling mattresses across both DTC and wholesale, as well as significant deferments in opening additional wholesale doors. Regardless, demand across all channels remains incredibly strong. We have just unfortunately been unable to meet that demand during this period. As we expect to get out of backlog this month and move back into a position where we can fully leverage the power of our vertically integrated manufacturing platform to capitalize on the unmet demand for our business, we will be able to return our full attention to the strategic plan we presented on June 29th and the three big moves across product, expanded distribution, and increased margins, with the goal of achieving $2 billion- $2.5 billion in annual net revenue within the next three to five years. Starting with product, our biggest current focus is obviously on increasing our availability by expanding manufacturing capacity. With Max 8, the first machine at Purple South, online in February, followed by Max 9, which came online in May, our Georgia facility is already meaningfully contributing to our overall production levels. We have been very pleased with our ability to staff this facility and have already hired more than 400 employees in Georgia. Max 10 and Max 11 are both on schedule for later this year, and we are still projected to increase our mattress production by over 65% by the end of 2021. This will further expand as we bring on Max 12 and 13 next year. Also, as I mentioned last quarter, we continue to make progress on our entirely new next-generation Max machine, which we are calling the HMax. HMax 1 is already making Purple Grid in limited capacity. While it is limited capacity, the Purple Grid is production quality and is already being used in finished goods. We anticipate HMax 1 coming online full time in Purple South later this year. It is also worthy of note that the state-of-the-art automated fulfillment capabilities we have been building at Purple South are now in production, and we are building up inventory and fulfilling small parcel shipments currently. Continuing on with product, I'm also thrilled with our recent hire of Patrice Varni as our Chief Marketing and Digital Officer. Patrice is working diligently with the team on sharpening the product roadmap, clarifying our message about our remarkable consumer benefits, and building stronger overall brand awareness, which will improve our overall marketing efficiencies. Over the remainder of this year, look for line expansions and upgrades to our pillows and cushions, as well as higher margin and higher price points on our mattresses that we believe will fuel significant opportunity into 2022. We are also underway on the design of our new Purple Labs facility, which will house our expanded R&D capabilities. Specific to R&D, with our healthy balance sheet, we are now equipped to appropriately invest in both shorter and longer-term opportunities and are very pleased with the continued progress. We have already been fortifying the innovation team and have an active search for a new chief innovation officer to lead these efforts. Moving on to the second big move, expanding distribution, the first initiative I will discuss is growing our wholesale presence. With our current inventory constraints, our primary objective has been on servicing our more than 2,300 existing partner doors, where demand continues to be strong. Once we are out of backlog later this month, we'll resume our planned wholesale expansion in earnest and now expect to open between 400 and 500 new doors in the second half of 2021. While this figure is lower than initially planned, it is inventory-related and not at all indicative of our current momentum in the channel or what we believe to be the wholesale opportunity for the Purple brand. To that point, we continue to have a long list of wholesale partners we are expanding with. I previously mentioned our expansion into Ashley Furniture, and we have other expansion already underway with great furniture stores, such as 26 Living Spaces stores and Berkshire Hathaway's Nebraska Furniture Mart. Shifting to the rollout of Purple showrooms, we opened four more showrooms in Q2 and are on track to open another eight in Q3. For the full year, we remain on schedule to add 20 or more, bringing our total to around 30 by the end of the year. We are very pleased with the performance of this growing, high-margin part of our business. As we presented in the strategic plan, we intend to expand our footprint in the U.S. to more than 200 locations over the next three to five years. Importantly, our showroom economics continue to track very favorably toward our stated planned average annual sales per door of approximately $2 million and a payback period of less than 15 months on a $600,000 initial investment. Moving on to our third big move, improved margins, we have a number of initiatives already underway. We anticipate additional price increases in Q3, partially to offset increased labor and material costs. As previously stated, we are working on assortment expansions with improved margin profiles. Regarding manufacturing operations, we emerged from the recent process with a much better understanding of the long-term maintenance needs of these machines and now have a very good process in place to reduce downtime and extend their high-yield output while also creating a much safer work environment for our employees, all of which should improve margins and availability over the long term. One of the most beneficial things we've learned over the last couple of months is how much opportunity we have to meaningfully increase yield and reduce labor dependencies. We have kicked off a series of significant initiatives to advance our capabilities. In addition, we continue to roll out autonomous and semi-autonomous improvements in raw material feeds, mattress assembly, and fulfillment. Based on our results year-to-date and incorporating our projected timing on exiting our backlog position, combined with the recent shift in consumer demand back toward brick-and-mortar, we now expect full-year revenue to be in the range of $820 million-$850 million, an increase of 26%-31% over 2020, and adjusted EBITDA to be between $78 million and $88 million. Craig will provide more detail momentarily. To reiterate what we stated in June, this revision to our 2021 growth rate doesn't change our view, nor have we identified any negative impact on the long-term outlook from the recent isolated production issues. In fact, with what we've learned and are now implementing, we have increased our confidence in our ability to produce against the strategic plans we've outlined. I'll now turn it over to Craig, who will review the financials and our outlook in more detail. Thanks, Joe. For the second quarter of 2020, providing extraordinary context due to the impact COVID had on consumer behavior and advertising rates, I'm going to provide certain comparisons to the second quarter two years ago. For the three months ended June 30th, 2021, net revenue was $182.6 million, up 10.6% compared to $165.1 million in the prior year period, and up 77.3% versus the same period two years ago. For the quarter, wholesale channel net revenue grew 233.2%, reflecting the consumer shift back to brick-and-mortar retail and an easier comparison to 2020, as many of our wholesale partner locations were closed in the year-ago period. Meanwhile, DTC revenue declined 19.9% due to the consumer shift back to wholesale and very atypical prior year DTC growth when most brick-and-mortar was closed. On a two-year basis, wholesale revenue increased 68.9% and DTC revenue increased 82.4%. For 2021, both channels were negatively impacted by the recent production issues we discussed that limited our available inventory in the second quarter. Had we been able to maintain average mattress production rates experienced in March and April for the entire second quarter, and assuming a consistent channel and product mix, we believe we could have potentially recognized additional revenue in excess of $20 million. Gross profit dollars were $81.7 million during the second quarter of 2021, compared to $81.6 million during the same period in 2020, with gross margin at 44.7% versus 49.4% in the second quarter of 2020 and 41.5% in the second quarter of 2019. The 470 basis point decrease in gross margin over the prior year can be attributed primarily to channel mix shift toward wholesale, combined with the impact from the recent production issues. Again, assuming we were able to maintain average production rates and channel and product mix for March and April, we believe we could have recognized additional gross profit of approximately $9 million during the second quarter. Wholesale net revenue is comprised approximately 36% of net revenue for the quarter, compared with approximately 12% in the same quarter last year, and 38% in the same quarter two years ago. Operating expenses were 46.1% of net revenue in the second quarter of 2021 versus 30.1% in the prior year period and 43.8% in 2019. For the current year quarter, marketing and sales expense as a percentage of net revenue was 32.8%, compared to 23.9% a year ago and 34.9% two years ago. The change over the prior year was driven by an increase in advertising costs due to higher advertising rates in 2021, as rates were historically low in 2020 due to the unprecedented environment created by the pandemic, combined with lower than planned revenue in Q2 this year due to the impact from the isolated production issues. We did pull back on our ad spend in late June to align with our production capacity during that period of time. General and administrative expenses were $22.5 million, compared with $8.7 million last year and $7.9 million in the second quarter of 2019. The increase was primarily due to higher legal and professional fees, including $7.9 million related to underwriting discounts and commissions we incurred for the secondary offering Coliseum Capital conducted in May, combined with lower expenses in the prior year period when we deferred certain costs in response to the pandemic. In the second quarter, we reported an operating loss of $2.5 million, compared to operating income of $32 million in the second quarter of 2020, and an operating loss of $2.4 million in the second quarter of 2019. Net income for the quarter was $2.6 million, compared to a net loss of $97.1 million in the year ago period, and a net loss of $11.3 million two years ago. As disclosed earlier this year, based on the SEC statement dated April 12 of this year regarding warrants issued by SPACs, we determined that our outstanding warrants should be accounted for as liabilities and recorded at fair value on the date of the transaction and subsequently remeasured to fair value at each reporting date. For the three months ended June 30, 2021, we recognized a non-cash gain of $4.9 million associated with the change in fair value of warrant liabilities. While for the three months ended June 30, 2020, we recognized a non-cash loss of $130.3 million. Excluding the impact from the change in fair value of the warrant liability items, tax receivable agreement expense, and secondary offering costs, adjusted net income in the second quarter of 2021 was $3.6 million or $0.05 per diluted share based on an adjusted weighted average diluted share count of 67.3 million, compared to adjusted net income of $22.7 million or $0.35 per diluted share based on an adjusted weighted average diluted share count of 64.1 million in the prior year period. Adjusted net income for the second quarter of 2019 was $2.3 million or $0.04 per diluted share on an adjusted weighted average share count of 65 million. Adjusted net income has been adjusted to reflect an estimated effective income tax rate of 25.4% for the current year period and 25.6% for the comparable periods in 2020 and 2019. EBITDA for the quarter was $3.9 million compared to negative EBITDA of $129.1 million in the second quarter of 2020, and negative EBITDA of $9.1 million in the second quarter of 2019. Adjusted EBITDA, which excludes certain non-cash and other items we do not consider in the evaluation of our ongoing performance, as detailed in today's earnings release, was $11 million, compared to $35.2 million in the same quarter last year and $6.2 million in the second quarter of 2019. Moving to our balance sheet. As of June 30, 2021, the company had cash and cash equivalents of $110.1 million, compared with $123 million at December 31, 2020. The decrease was driven primarily by planned CapEx of $26.2 million related to manufacturing capacity expansion and showroom expansion, partially offset by $11.5 million in cash provided by operations due mainly to cash operating income, a reduction in accounts receivable, and an increase in customer prepayments, partially offset by a decrease in accounts payable. Net inventories totaled $64.8 million at June 30, 2021, compared with $65.7 million at December 31, 2020. On a year-over-year basis with our inventory mix, finished goods were down meaningfully due to the isolated production issues, offset by increases in raw materials and work in progress. Turning to our guidance. Based on our second quarter results, our performance third quarter to date, and our view that we'll be out of the backlog position created by the isolated production issues by the end of August, we currently expect 2021 net revenue to be between $820 million and $850 million, representing an increase of 26%-31% over 2020 results and an increase of 91%-98% over the 2019 results. Due to the inventory constraints that are expected to last until later this month, we anticipate a significant portion of our revenue growth in the second half of the year will occur in the fourth quarter. Considering our second quarter results and the impact on third quarter margins from the isolated production issues, EBITDA for the full year 2021 is now expected to be between $78 million and $88 million. This includes consideration for recent trends indicating an even greater channel mix shift toward wholesale in the back half of the year, which will put additional pressure on current margin rates. We expect capital expenditures for 2021 to be in the range of $55 million-$60 million, an increase over our original estimates as we invest heavily in expanding production capabilities in the Georgia manufacturing facility. I'll now turn it back to Joe for his closing comments. Thanks, Craig. This has been a tough few months for us, on top of a challenging prior year. We are nearly through the recent production issues and thrilled to be getting back to normal. We are a values-driven organization with deep focus on both our employees and our customers and improving the lives of both. It has therefore been legitimately hard to have unmet customer demand because of lack of inventory of our amazing mattresses. To those customers, both retailers and end consumer, thank you for your patience, and our apologies for any delays. That said, over my nearly three years here, I've seen the Purple team tested over and over, and my confidence in what we can accomplish, and my earned respect toward the capabilities of our more than 2,000 employees now, has never been stronger. In June, we put forth what we believe to be a grounded and achievable strategic plan to produce $2 billion-$2.5 billion in annual net revenues with 14%-15% adjusted EBITDA margins within the next three to five years. We remain incredibly optimistic toward those goals and are laser-focused on the product, channel, and margin advancements in front of us. We are continuing to invest this year in both midterm and long-term initiatives and look forward to sharing the results with you over the coming quarters. At this time, we will open the call to questions. Thank you. We'll now begin the question and answer session. To ask a question, please press star then one on your touchtone phone. If you're using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then two. We also ask that you please limit yourself to one question and a single follow-up per time in the queue. Today's first question comes from Seth Basham with Wedbush Securities. Please go ahead. Thanks a lot, and good afternoon. My first question is just around the margin trends in the quarter. You mentioned that you prioritize wholesale over direct-to-consumer, when you had these manufacturing challenges. Just trying to understand why you would do that, given the margin differential in two segments? Hi, Seth. Thanks for the question. These aren't easy decisions, of course, it really comes down to optimizing for the long-term opportunity and health of our business versus short-term optimization, certainly through DTC, and we proved this last year quite literally, and again, as we've seen the pivot back into wholesale, have seen the math very clearly flow through the other way. Our margins are much better on DTC, as true with many on the channel businesses. That said, right now, we are a consumer-led business. We try to make sure we're meeting the consumer on their terms. The strongest demand channels right now are brick and mortar and wholesale in a predominantly brick and mortar category. We've been underservicing our terrific partners there. In the spirit of making sure we're putting the units where the highest demand is and preserving the long-term opportunities with our partners, we have put more of our mattresses there. I'd say, even there's been significant delays. To even suggest this does not imply that our wholesale partners have gotten the units they've wanted. Everyone in every channel has been constrained. It's just been making sure that we are prioritizing as many of the units as we can in our important channels. Got it. That's helpful. Just to follow up on that year-over-year margin decline, the gross margin declining some 430 basis points, could you help quantify how much of that was from this mix shift versus the manufacturing challenges or otherwise? Was more than half the decline from the mix shift, for example? Craig, do you want to take that, or I can? I was just thinking. I would say the bulk of it came from the channel mix, because if you remember last year in the second quarter, we were at 88% DTC and 12% wholesale. This quarter, it's much closer to the 70/30 normalized, where we normally are. Also, the production issues that we had came later in the quarter, so it didn't impact the full quarter. I'd say it's primarily related to the channel mix. Got it. Thank you very much. We have been carrying an enormous amount of labor that has not been producing units over the last few months, which you'll see bleed into Q3 presumably as well. Craig's, of course, correct on the channel shift, but there's still been meaningful increase in COGS as a result of the labor we're carrying against significantly diminished units. Understood. Glad to hear that business has bounced back so strongly. Yeah. Thank you. Thank you. Our next question today comes from Curtis Nagle, Bank of America. Please go ahead. Great. Thanks very much for taking my question. Maybe just if you could, a little bit more context into second half sales cadence, right? I think, Craig, you said significantly higher growth in 4Q. I guess just trying to sort of triangulate this, should we still expect quarter-over-quarter growth, from 2Q to 3Q on a dollar basis? We did not give specific guidance to Q3. What I would point to is we were still quite inventory constrained through July. We are not out of backlog until end of August, as we have been communicating for a bit now, which means any growth, we are opening doors or pushing into expansion when we do not even have the beds to support prior sales. It is not a great plan. We are limited on the quarter for leaning in in Q3, and that is why we have indicated that a substantial portion of the growth then pushes into Q4, which is really just deferred against our initial plan. What that means for Q3, I do not know. Craig, if you have anything you want to comment on there. I would say, following up on my comments in the prepared remarks, there will be a slight amount we expect of incremental growth quarter-over-quarter or sequentially. The bulk of it's going to come in the fourth quarter, as we start opening more wholesale doors, and that's a bigger holiday period. That's the way I think about it. Okay. Thanks very much. Our next question today comes from Brad Thomas at KeyBanc Capital Markets. Please go ahead. Hi, good afternoon. My question was a follow-up just on raw materials and supply constraints. Obviously, there were some manufacturing dynamics at play that were things that you were focused on, but could you talk a little bit about product availability, input availability, and how you all are working through that, and maybe incremental risk you may have going forward here as you meet the strong demand? Yeah. With some of the constrained output, we've been able to shore up some of our raw materials positions. I'd say in order, our challenges have been just raw machine capacity as we've gotten the machines back up to full production levels. Labor is what I would put behind that, and then raw materials and assemblies coming in. Labor continues to be a challenge for everybody. We are making significant progress, and having the facility in Georgia has helped dramatically as our labor pool there is substantially more attractive. I'd say that labor's been the biggest challenge over raw materials. For raw materials right now, other than increasing costs, which the whole industry is feeling, we feel like right now, against our plan, we're in pretty good shape. That's great. To follow up on that, you referenced it yourself, the cost dynamic. It does seem like we're seeing record levels of price increases in the industry. Can you talk a little bit about what you're hearing from retailers on the ability to keep passing through higher prices? Yeah. We've always been working with our retailers to make a more attractive margin profile for them as well. Anywhere there's opportunity for us to raise prices, allow for a better markup for them, and allow them to lean into our product more, has been a win-win over and over again. Yeah, we know for a fact that with our inventory constraints, more often, they're able to sell up into higher priced mattresses anyway. There's definitely appetite for higher price points, which we've been saying for quite some time. What we've heard, and we feel pretty emboldened by this, is there is opportunity for us to take some price actions, both to offset some of the increased costs we have, as well as to capture demand that's out there. As we said in the prepared remarks, we anticipate taking some price actions in the back half of the year. Great. Thanks so much, Joe. Thanks, Brad. Our next question today comes from Jeremy Hamblin at Craig-Hallum Capital Group. Please go ahead. Thank you. Wanted to just follow up on just understanding a little bit on the sales trends. It sounds like you're expecting pretty significant impact to your July results, and that still be impacted in August. If we were just to assume, let's say, $200 million-$210 million in revenues in Q3, then you'd still be looking at, based on your guidance, $240 million-$270 million in Q4 revenues. I want to understand where that pickup comes from. Obviously, you're going to add some doors, but that would imply that that DTC portion of your business really kind of snap back to maybe even above peak levels that you've ever done. I know you're adding eight stores, and you're going to add some more stores in Q4. I just want to understand that those are just pretty big numbers. One, do you have the capacity to achieve that? Two, just understanding where you expect that mix of business to come from, given that, right now, you've stated, and the industry seems to be shifting a little bit more into the wholesale channel. Thanks. Yeah. Sure. No, it's a reasonable question. There's a number of things going on right now. Let me start with the last point. We absolutely are going to have the capacity to meet these goals in the back half of the year. We had this isolated incident that has been an extremely expensive gap in our sales, which we just, in the prepared remarks, gave some specific sizing around. That said, it has cast a shadow over our sales across all channels. We pulled back significantly on marketing and DTC, which has some cost savings, of course, but it means significant reduction in traffic and awareness because we haven't had the units for sale. We have significant delays on our website right now on time to deliver. Our wholesale partners have had equivalent delays, and many of these retailers have commissioned or similar workforce. When the commission is tied to either getting the mattress in a timely manner or tied to delivery, there's a disincentive on the floor to push our product at a time that we have constrained inventory. There's a shadow that's been cast across all of our sales over the last couple of months, which is very easy to understand as we come out of this backlog and are back into full production with significant expansion and availability. With the new machines coming online and the improvements we're making across the board, we've got a lot of opportunity to lean in into our existing doors, where, again, they've been under-investing in our product. We've likely given up a little bit of share as a result of that over the last two months. The consumer demand is still there, it's just we haven't had the product. There is, as we mentioned, 400 to 500 more wholesale doors. If you look at the nature of the doors we're talking about, these are very good retailers that likely would increase the average number of beds per door that we get. I mentioned Nebraska Furniture Mart, which I believe is about a million-square-foot store. That's not exactly the same kind of door as some of the smaller doors we play in, of course. You've got the product. New price increases that we're anticipating and new products that we have indicated that is likely coming later this year, which both gives more product and more attractive price points in terms of generating that revenue. You put it all together, and what we've learned in this omni-channel approach is it creates a very positive flywheel. The more showroom penetration we have, the more attractive our business is there, the more of those on the floor are pushing us, the more money our partners are making, which flows directly through. It also creates a great brand halo, which improves our DTC footprint as well. It all comes together. We just haven't been able to lean into that machine, and in fact, we pulled way back on that machine where we've been in such constrained inventory position. Thanks. That's helpful context. Just as a follow-up question on the marketing comment. Your marketing was up about $5.5 million sequentially in Q2 from Q1, and I think Craig said that roughly maybe $20 million impact to sales on the production issue. Can you, Craig, just kind of give me a sense for where marketing, which was roughly $60 million, might have been had you had that incremental $20 million of revenues? Would it be an incremental $5 million in marketing? Just trying to get a sense of where that also would've normalized. Yeah, that's probably in the ballpark. Oh, go ahead, Joe. That's right. No, go ahead. You got it. I was just saying, that's probably in the ballpark. We pulled back later in the month as we burned through the inventory that we had on hand and knew that there were going to be issues with being able to deliver. We pulled back late in the month. $5 million is in the range. Great. Thanks, guys. Best wishes. Thank you. Our next question today comes from Brian Nagel at Oppenheimer. Please go ahead. Hi, good afternoon. Thank you for taking my questions. The first question I have, I appreciate you laying out the estimates there of just what the production disruptions, the impact on the business here in Q2. The question I have is, as you look at those sales, in Q2, and I guess what's maybe spilling here into Q3, do you believe they're lost or are they delayed? Are there ways for you, if you know the demand is there, to kind of talk to the consumer and say the product will be there soon, you can ultimately fulfill that sale, or do you think these truly are lost sales? Well, there's two lenses to look through. I think a lot of them likely are lost sales. I think customers who are in need of product came into any of our retail partners and walked out with product which wasn't us. To that customer, that's a lost sale. It doesn't change the fact that every single year there's $18 billion or so of mattress sales. In our revenue potential, call it deferred growth, our ability to lean into our wholesale partner doors, to expand the number of doors that we have and lean in more to our brand and growth in DTC has all been shifted out, and our growth rate then stalled for a bit. Not actually stalled, continued to grow, of course, but not at the rates that we should have been growing. In our trajectory, it's absolutely deferred. We will continue to grow and take share as we move forward. We absolutely gave up some business to customers who went ahead and bought something else. The wholesale doors were not in and would have been in at this point, hundreds and hundreds of doors we should've been selling in months ago. They're all selling mattresses every day that aren't us. Those are unquestionably lost sales in the short term. Yeah, that's helpful. The second question I have, maybe a little bit bigger picture, but we talk a lot about, and it's come up here in the call again, just the margin differential between your DTC and your wholesale business. I know we've talked a lot strategically of the importance of wholesale to you as a company and a brand long term. The question I have is, as the business continues to evolve, are there additional levers you can pull on that wholesale side to help to, so to say, bolster those margins, recognizing they would never be where the DTC margins are, but at least to maybe somewhat narrow that differential? Yeah, certainly. I think some of that we laid out in the strategic deck for the investor day we did in June. Again, our product assortment was never really designed with wholesale in mind. Perhaps a little shortsighted as we launched, but at the time, it seemed like a really attractive DTC business that as we realized the market and realized the premium nature of our products, wholesale became an increasingly critical and strategically beneficial to us. As we retire and sunset existing product and launch new product and new capabilities, it's all being designed ground up with wholesale in mind. That means the more relevant price points, it means more relevant features. It means more appropriate margin profiles for our retail partners. That absolutely helps. Fulfillment continues to be a big expense as we go more premium. Continues to mean we're doing more in-home delivery, which is something that our wholesale partners are very good at, which is a way to offset some of those costs. We also anticipate continuing to go more premium and the more premium mattresses we're selling, especially through wholesale, there's just more margin to go around, which closes that gap as well. Yeah, I think there's a number of mechanisms we can take. Again, the three to five-year plan we put out incorporates some of that. The reality is, there is no future for us without brick and mortar. This is a considered purchase. We are winning on merits. We're winning on our product differentiation, and that has to be felt and experienced. It's predominantly brick and mortar category, and there's just no escaping that. That's how we win with the customer, and that's critically part of our strategy. Thank you. I appreciate all the color. Thank you. Sure. Thank you. Our next question today comes from Susan Anderson at B. Riley. Please go ahead. Hi. Good evening. Thanks for taking my question. I'm curious, it sounds like those new doors are performing very well. Maybe if you could talk about the white space you think you still have left after you expand this year, I guess both in North America and Canada, also if there's other international opportunity? Sure. New doors, you talking about our own showrooms or the wholesale? The wholesales. No, absolutely. The performance of new wholesale doors just speaks volumes to the pent-up demand that's out there, which again, has really only been constrained, frustratingly to us and our partners on our inventory constraints over the last few months. In the strategic plan, we did say that we're still aiming for sort of this 1/3, 2/3 split on a net revenue basis and getting into the range of around 3,500 doors all in. Which means it's really finding the right partners that are really presenting our product and working with us the right way. We do anticipate significantly more products to sell, a broader assortment, and we anticipate more attractive price points. As to international expansion, the plan we put forth was fairly modest in international over the next three to five years, really just fully realizing the opportunity in Canada. We do still believe that there is significant opportunity beyond North America, and that is absolutely part of our long-term strategy. Right now, we don't have the inventory to support ourselves domestically. Thing one is, let's take meaningful share in our backyard and in Canada. We do fully continue to anticipate expanding internationally, likely starting next year. Great. Just on the increases in labor and product costs that you talked about, but then I think also you talked about raising prices. Do you expect the price increases to fully offset the higher labor and product costs and other inputs? These are moving targets. Yeah, the intent would be that the price increases, and Craig, correct me if I'm misstating here, but would offset where we believe COGS is going to ultimately land. Yeah. Because they change so much, it's hard to say specifically and exactly, but our plan is that the price increases that we introduce will cover the increase in not only labor but also the materials COGS. Okay, great. Thank you so much. Our next question today comes from Bobby Griffin at Raymond James. Please go ahead. Good afternoon, everybody. Appreciate you taking my questions. Joe or Craig, I just want to follow up on some of the comments about the backlog building and the sequential difference between 3Q and 4Q as my first question. Is the right way to think about it the $50 million that you referenced, Joe, the $20 million here in 2Q, maybe I guess the $30 million that was cost in 3Q, all that $50 million gets delivered in 4Q? Is that what helps drive that big sequential difference in revenue growth? Sure. This sort of gets to Brian's question on is it lost sales or deferred sales? Yeah, we get back to the kind of growth rates we should have been having in Q4. Yes, that pent-up demand, so to speak, shifts into Q4. That said, I don't know that what we're suggesting is Q4 is bigger than it would have been had things have all gone normally. It's just because Q2 and Q3 have these significant challenges in there, it just makes Q4 look that much more distorted as we kind of get back to normal. Okay. Because I guess I'm trying to then understand kind of how you want us to think about the sequential difference in EBITDA. If these are already booked orders, you've already spent the marketing on these orders, and when they flow in in 4Q, they'll have a better associated flow-through margin. Are these not booked orders that you're referencing that are delayed, it's just business that will have to be picked back up in 4Q, or is it actual orders from customers that have been shifted out and not made and that will actually get produced and made in the fourth quarter? Our wholesale doors typically aren't ordering out more than four to five weeks. Even in DTC, which the expectation of the consumer is it's an immediate order, our backlog has gone up to four to six weeks on some models. That's as far out as sort of we can have line of sight to call it future recognized revenue. What we're talking about is really like for example, wholesale doors that we've had in contract that we've pushed out opening those doors. Okay. Which once they open, there's a somewhat predictable expectation at this point on what the productivity of any wholesale door is, at least on average. When you're talking hundreds of doors, that tends to get realized. This is really executing against our plans for continuing to drive growth, continue to release product, continue to raise prices, continue to expand our wholesale penetration, continue to lean back into brand and DTC demand and all of that, which is what we do every quarter. It's just we've been very constrained and Q4 is really the back of this quarter and then which is good momentum into Q4 is getting back to growth. Okay. That's helpful. I appreciate those details. Our next question today comes from Atul Maheswari with UBS. Please go ahead. Good evening. Thanks a lot for taking my question. Just two questions here. First, Craig, on the margin expectations for the back half, I think the guidance implies about 100 basis points of EBITDA margin contraction, give or take. Is this all going to be gross margin driven, or do you expect gross margin to be down more than 100 basis points and see some leverage in other areas of the P&L? Yeah. We're not giving guidance on the gross margin level. I will tell you as we continue to open more wholesale doors, we've talked about this before, that the expansion in the wholesale is going to put pressure at the gross margin level. Also, we pulled back on ad spend in the second quarter. We talked about that. As we get into the fourth quarter, it's traditionally a higher ad spend cost quarter. It'll be a mix of both gross margin and below the gross margin line. Got it. It's helpful. The second question's also on your guidance, obviously very fourth quarter heavy. You did mention that consumer demand's very hot right now. It's something your peers have mentioned as well, you've not fully participated in that demand, at least to the extent that you'd like due to your manufacturing challenges. For the fourth quarter, it could be possible the demand slows as consumers shift focus away from home and home related purchases. A, what's the view for overall industry demand in your guidance? Are you expecting continuation of current strong demand? B, if demand does slow, how much confidence do you have that you'll still be able to achieve your numbers? Obviously, a fair question. I'm taking calls daily from our wholesale partners reassuring that we really are going to have these units because of the demand they're turning away, and making sure that we are going to have this inventory for the traffic we're driving into the stores and the square footage we've earned. The sales associates who, again, are mostly commission, making sure they're actually going to be able to sell the product. The demand is real. The frustration around that demand and our inability to meet that demand is real. I'll reiterate something I've said in many prior quarters. Our entire strategy has not been built around category growth. We fully believe we are winning on merit in a category that is still growing, single-digit percentages, maybe 4%-5% this year. Even if the category was flat, we are still growing because we are taking share. That is the entirety of our strategy. We're doing that on the beneficial differences of our amazing mattresses and the amazing consumer satisfaction that we continue to demonstrate against them. Again, we've said this many times, when we ask consumers, "How do you learn about Purple?" 30% of the time, it's word of mouth. It's from existing customers who continue, even at our scale today, to rave about how remarkable our products are. We're not that concerned at the category level because it's not how we've won to date. We've been winning year-over-year on gaining share on merit. We're going to continue to do that. The demand continues to be there. The challenges we have are arguably self-inflicted. We've had these isolated production challenges, which have been painful, to say the least. Now that we're finally back to full production, working through backlog this month, and getting back to normal, that's why Q4 looks so distorted, and we have very high confidence in our ability to get back to doing what we've been doing for years now. Thank you. Our next question today comes from Keith Hughes at Truist. Please go ahead. Thank you. On the store adds that you discussed earlier, could you talk about how many you're going to get in the third quarter? Sorry, on wholesale doors or on showrooms? I'm sorry, I don't know what. Yeah. I'm sorry, wholesale doors. Wholesale doors. Yeah. We said 400-500, we anticipate at this point. It's not perfectly linear. We do anticipate, as we come out of backlog here in the last month of the quarter, that we're going to begin the heavy push, call it backlog of doors that are contractually signed that we've just continued to push out, that we will likely have a flurry of openings. I would assume it's at best 50/50, probably leaning a little more into Q4. Okay. Do you think for the Labor Day sales weekend, will you be able to service the stores at a level where you would like to be? Our guidance for the year accounts for the realities of our inventory. I'd say we are going to be in a much better position than we've been in coming into Labor Day. Labor Day orders are already coming in. Our commitments for Labor Day are already being made. For us to truly fully support all of our current 2,300 doors at the level they would all want right now, when we're just coming out of backlog by the end of August, no. That's part of the impact of the $50 million that we indicated and have already loaded into our guidance. It would be better, but not where we'd like it to be. Again, this is where, as that trajectory goes into Q4 and we have the full inventory and availability, is where we can start to really unlock our intrinsic demand and intrinsic growth rate. Thank you, sir. Today's final question comes from Matt Koranda at ROTH Capital. Please go ahead. Hey, guys, thanks for squeezing me in. A lot have been asked and answered here. Just wanted to see if you could put a finer point on capacity to deliver in Q4 with sort of the ramp-up coming. I know people have kind of alluded to maybe north of $250 million in revenue. If I do the straight math on Mattress Max machines for the rest of the year, it sounded like you said two more coming on, probably in 3Q. Wanted to see if you could kind of clarify when exactly those come online. What does that give you in terms of total theoretical capacity? I think in prior comments, Joe, you've talked about sort of $90 million-$100 million per machine, which probably means if we skew a little bit more toward wholesale, we're getting up toward that constrained number in terms of what we can produce and deliver around that $250 million level. Then just the second part of the question, if I could sneak it in, is in the medium term, I'm curious if you could share any metrics on the HMax machines that you talked about. Are they similar in CapEx per machine? Do they materially change the production capacity that you'll be able to produce with an individual machine? Then when will those represent sort of incremental machines installed? Is that sort of 2023 at the earliest? I'll start with just the existing Max machine. Again, we're at 8 right now. We basically said one a quarter. We would anticipate Max 9 or, excuse me, Max 10. No, sorry. Now I'm getting Max 10 is the next one. Max 1 we retired earlier this year. Max 2 through 7 we've got in Georgia. 8 and 9 are online, sorry. I apologize. A lot of questions. Max 2 through 7 are in Utah right now. Max 8 and 9 are in Georgia, 10 and 11 coming on this year. 10 likely would be early next quarter, 11 likely early the quarter after. We're at this very moment a little ahead of schedule on both, we've been pretty good at getting those online. We are continuing forward with those. Yes, sort of that overall $80 million-$100 million is where most of the analysts have come together on the revenue expectation per Max machine, and that's held pretty true over time. As to the HMaxs, we're not giving a lot of detail on them right now until we have them full-time, fully into production. Clearly we're not going through this effort of a new Max machine design without obvious benefits. What I would say we know right now is a little more capital expense upfront, but we anticipate much higher availability, much higher yield, so call it more units per hour, much lower labor cost, and much more maintainability, and a number of things that you would get in a generational improvement on any manufacturing machine. Our early work on it is clearly demonstrating that our goals will absolutely be met. To get into any more specifics on that prior to us being in full production would be a little premature. I will reiterate what I said in the prepared remarks. They are already operating in limited capacity, so not full shifts, but we run them for a while and test and learn, such that we are getting absolutely usable components out of them that are going into production mattresses as we speak. We already have some benefit from them. Our originally stated capacity model didn't incorporate the HMaxs at all. If we get the HMaxs going sooner than later, that would mean potentially one, two, or three HMaxs on top of the planned Max machines and that could mean a significant increase in capacity. Thank you, sir. This concludes today's question and answer session. I would like to turn the conference back over to Joseph Megibow for any closing remarks. Thank you so much. Reiterating my prior remarks, the last few months have been some of the most challenging in our history. We are emerging stronger and better equipped for success, with clear line of sight to getting out of backlog and getting back to planned expansion. We have a lot to look forward to over the rest of the year. Looking over the next few years, there's even more to get excited about. Our investments in new products and capabilities continue forward and will fuel the strategy we presented. I would like to apologize once more to our customers and great partners for any delays they may have experienced receiving our amazing mattresses as we work through our temporary constrained capacity. Most importantly, I want to personally thank our over 2,000 employees now for their incredibly hard work and unwavering passion for our products. To all of our customers, partners, and employees, stay healthy, be safe, and sleep well. Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.