The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Camilo Lyon - BTIG - Analyst
: Always looking forward to -- always great having you for a fireside chat and getting to know a little bit more about the business that you've created
and the success you've experienced over the last few years. So with that, maybe for those who may be less familiar with the story, could you give
us a brief overview of the business, your major product lines, and your main channels of distribution?
Question: Camilo Lyon - BTIG - Analyst
: So many things to unpack there and so many values to pursue, and we'll try and hit all of them in a short amount of time. Thanks for that great
overview. A lot -- a question that we get asked almost every time we have a conversation about Lovesac, which is more and more frequently these
days, is the fact that you thrived in -- during the pandemic in 2020 and continued to thrive last year. Why are you more than just a COVID winner?
Question: Camilo Lyon - BTIG - Analyst
: You said something really interesting in that response -- well, many interesting things. But the one I want to key in on is the adoption, the word of
mouth starting to accelerate. Can you talk about the consumer awareness levels of the Lovesac brand today and really how does that inform the
long run opportunity?
Question: Camilo Lyon - BTIG - Analyst
: All right. I'm taking the bait. You talked about StealthTech now, I think, six or seven times. You gave us a brief overview of the technology. It's a
product line you just introduced a couple of months ago. What's the market opportunity that you guys see with StealthTech, and what's been the
early receptivity to it by your consumer base?
Question: Camilo Lyon - BTIG - Analyst
: That's great. So shifting back to the consumer discussion. In your research, I'm guessing that you found a big driving force of that conversion, is
the fact that the consumer can get the product in seven to 10 days. And I'd imagine that within the pandemic, given the supply chain delays across
the globe, that's even a more compelling proposition.
Does that continue to be true? Is that the case that you're seeing today? And has Omicron created some disruptions to that delivery schedule that
has delayed some of those purchases? We've heard from some others today that I've talked about that. So I'm just curious if there's any light you
could share on that.
Question: Camilo Lyon - BTIG - Analyst
: Well, that's great execution on your part even in the face of challenges that you can't really control on a global scale. So kudos to you on that.
I want to get your thoughts here on the long-term margin opportunities. We're wrapping up here on time. I want to frame this for the audience
and help us contextualize, what does the long-term EBIT margin opportunity for Lovesac really look like?
Because you've got industry leading gross margins by thousands of basis points relative to lifelike competitors. But you're in an investment mode
naturally as you're a high-growth company today. So when we start to see a balance and a leverage of those expenses and investments, what does
this business look like on an EBIT basis?
Question: Camilo Lyon - BTIG - Analyst
: I'm getting the end-of-time signal, Shawn. We could continue this for easily another hour. But in the interest of time and other presentations, I'll
end it here. Thank you so much for your insights. And I look forward to seeing the success -- the launch of success that you are projected in the
trajectory that you're on will result in. Thanks so much, Shawn.
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