Thank you. Good day, everyone, and welcome to LFL Group's fourth quarter and full year 2025 conference call and webcast.

LFL's fourth quarter and full year 2025 financial results were released yesterday. The press release, financial statements, and Management's Discussion and Analysis are available on SEDAR+ and on our website at lflgroup.ca.

Joining me on the call today are Mike Walsh, President and Chief Executive Officer, and Victor Diab, Chief Financial Officer. Today's discussion includes forward-looking statements.

These statements are based on management's current assumptions and beliefs and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from these assumptions and beliefs. We encourage listeners to refer to the risk factors outlined in our Management's Discussion and Analysis and Annual Information Form, which provide additional detail on the risks and uncertainties that could affect future results.

This call also includes non-IFRS financial measures. Definitions, reconciliations, and related disclosures for these measures can be found in the Management's Discussion and Analysis and press release issued yesterday.

Forward-looking statements made during this call are current as of today, and LFL Group disclaims any intention or obligation to update or revise them, except as required by applicable law. All financial figures discussed today are in Canadian dollars, unless otherwise noted.

With that, I will turn the call over to Mike Walsh. Mike?

Good morning, everyone, and thank you for joining us. In 2025, LFL Group delivered strong operational and financial performance.

We grew system-wide sales by 2.8%, expanded gross margins, delivered 16.5% growth in normalized adjusted diluted EPS, and increased our quarterly dividend by 20%. As you would have seen, I'm also excited that yesterday the board approved a 50 cents special dividend.

These results reflect the efforts of our associates across the country to deliver solid performance day in and day out for our customers and our shareholders. Consumers were cautious and value-focused during 2025, leading to a challenging backdrop for retailers.

At the same time, trust, service, and confidence in the retailer became increasingly important in purchase decisions, a dynamic that plays directly to our strengths. It's worth emphasizing what execution like this requires.

Strong performance in 2025 wasn't just about being more promotional. It was about discipline and judgment.

Knowing where to flex in response to the consumer, how to flex, and when not to is something that's built over time. That hard-earned knowledge is what enables us to maintain customer loyalty while delivering solid financial results and maintaining long-term pricing power in our core categories.

I'm very pleased with how our teams delivered, driving consistent market share gains that translated into strong financial performance. Furniture was definitely the standout category in 2025 and an important contributor to our results, growing 6.3% for the year.

We continue to execute on a focused assortment strategy, narrowing where appropriate, going deeper in our best-performing SKUs, and selectively broadening into areas of opportunity. Strong performance we generated in the category during the year was a direct result of these decisions.

Our Appliance category, led by the Commercial channel, also contributed meaningfully to results in 2025, supported by the delivery of previously booked multi-unit residential projects. We continue to make solid progress across the replacement and property management segments, and we're expanding our geographic reach.

Appliances Canada has historically focused its builder and developer partnerships in Ontario, but anticipating a moderation in that market and recognizing that many of these partners operate nationally, we proactively made the decision to pilot a store-within-a-store concept inside our Leon's location in Richmond, BC. This format gives developers a dedicated destination for customer upgrades while making efficient use of infrastructure we already have in place.

In-store execution remained solid in 2025. As we discussed last quarter, our e-commerce platform continues to play an important role in driving more purposeful store visits.

We're seeing higher-intent customers walking through our doors, and our associates are well-positioned to serve them. They know the product, they understand the customer, and are focused on helping them find the right solution.

Turning briefly to the fourth quarter, while we anticipated the impact of Canada Post disruptions on flyers distribution during key promotional windows, the quarter brought some additional headwinds: increased promotional intensity in certain categories, selective consumer spending, particularly on larger discretionary items, and tougher winter weather comparisons. That said, in the context of the broader market, we're satisfied with how we performed.

We managed the business with discipline and delivered profitability for shareholders. Looking ahead to 2026, we're confident in our strategic position.

We do anticipate some carryover of the fourth quarter headwinds into early 2026, but our model was built for environments like this. Same focus that has driven our performance will continue to guide us: serving customers with the value they need, growing sales and market share, protecting gross margins, maintaining cost discipline, and translating it all into earnings growth.

From a category standpoint, we're building on what worked in 2025. Furniture remains our core strength, and we'll continue to go deeper where we have scale, sourcing advantages, and a clear value proposition.

At the same time, we're taking a disciplined, test-and-learn approach to selectively expanding our offering where we have relevance and where it makes sense for the customer across all of our focus segments. We also see meaningful growth potential for our warranty, insurance, and service businesses over the coming years.

These businesses complement the core retail platform, but we also see them becoming more meaningful contributors to results in their own right. We're also taking a selective approach to growing our store network in 2026.

We expect to add a small number of new locations: two corporate stores and up to five franchise stores, weighted towards the back half of the year. In parallel, we plan to move forward on some capital-light renovations and refreshes where targeted investment can enhance customer experience and drive returns.

As we've talked about before, our strategy has never been about maximizing store count. These are destination format locations with larger catchment areas, built around a full-service experience, and every decision we make, whether it's a new opening, a renovation, or a refresh, is evaluated through the lens of four-wall profitability and long-term value creation.

The historical results of that discipline give us the confidence to continue to grow at a measured pace rather than pursuing unit expansion for its own sake. Beyond the store footprint, we continue to make disciplined investments in the organization to better leverage our platform and support LFL's future growth.

We have added senior talent across digital and technology, diversified businesses, commercial operations, and real estate. These investments are about building capability, enabling us to move faster, integrate opportunities more effectively, and execute with greater consistency across the business.

We've been steadily strengthening our technology stack to improve how we operate, how we serve our customers, and how we make decisions. This includes piloting artificial intelligence tools, as well as deploying automation across the business in marketing, supply chain, forecasting, and document management, among other areas, to drive productivity and organizational efficiency.

We are in the early stages of this work, but we are encouraged by what we are seeing. Our focus remains on building a stronger, more capable organization for the long term.

We have a proven track record of navigating cycles like this. Our scale, sourcing capabilities, distribution network, and financial strength position us well to manage near-term variability and continue gaining market share over time.

With that, I'll turn it over to Victor to walk through the financial details and provide more context on the quarter and the year.

Thanks, Mike, and good morning, everyone. I'll start with the full year walkthrough, move to a discussion of the fourth quarter, and then touch on capital allocation and a few considerations as we enter 2026.

Overall, we're very pleased with our performance in 2025. For the year, revenue was $2.57 billion, up 3% year-over-year.

Growth was led by Furniture, along with a solid contribution from the Appliance categories led by the Commercial channel, as Mike highlighted. In Commercial, performance reflected the completion of previously secured multi-unit residential projects that moved through delivery during the year.

As we've outlined, we expect developer-related revenue to moderate, and we're beginning to see that trend emerge in the early part of 2026. Gross margin expanded 65 basis points to 45.04%.

This improvement reflects both the impact of higher-margin furniture sales and our continued focus on strengthening sourcing and vendor engagement. We've deepened relationships with our top vendors and increased purchasing penetration through our first ocean subsidiary, driving improved cost efficiencies and supply consistency.

At the same time, disciplined promotional activity and optimized pricing strategies have supported margin improvements across categories. SG&A rate improved to 36.48%, compared to 36.72% in 2024.

This improvement was primarily driven by lower retail financing fees due to declining interest rates. We also maintained strict cost discipline and realized leverage as we grew the top line, even in an environment where there was an upward cost pressure across many areas of the P&L.

Net income for the year was $157 million or $2.29 per diluted share. Normalizing for the one-time gain from the Keurig settlement, adjusted net income increased by $22.2 million or 16.6%, and adjusted diluted earnings per share increased 16.5%.

We're also pleased with where inventory levels sit today. Our written-to-delivered relationship is in good shape.

We've continued to go deeper on certain SKUs, which has enabled us to tighten the written-to-deliver timeline. We're heading into 2026 with a healthy in-stock position, good availability across key categories, and no material constraints on flow.

Turning to the fourth quarter, revenue was $671.4 million, up 0.7%, with same-store sales up 0.6%. The story is consistent with what we've seen through the year.

Growth was led by Furniture, where a stronger inventory position and an improved assortment enabled us to capture demand, and by Appliances, where we continue to see solid growth in the Commercial channel. Gross margin in the quarter was 46.08%.

The year-over-year improvement reflects a favorable mix shift into higher-margin furniture, as well as a better furniture and appliance margin rate from the assortment and sourcing work we've done over the past year. This was partially offset by a higher mix of sales in the lower-margin Commercial channel.

SG&A as a percentage of revenue was 35.51%, an increase of 13 basis points versus last year. The change was primarily driven by higher occupancy and amortization with the lease commencement of our Edmonton distribution center and other renewals, higher sales commission, and a slight deleveraging of fixed costs.

These were partially offset by lower POS retail financing fees as Bank of Canada interest rates moved lower. On a reported basis, adjusted diluted EPS for the quarter was 74 cents, down from 98 cents last year, reflecting the one-time $23.4 million legal settlement we recorded in Q4 of 2024.

If you normalize for that item, adjusted diluted EPS increased modestly year-over-year to 74 cents from 73 cents, an increase of 1.3%. It's important to view our fourth quarter results in the context of the market-related headwinds that Mike described earlier.

Even considering those factors, we continued to execute and delivered growth in normalized earnings. From a balance sheet perspective, we generated strong cash flow through 2025 and ended the year with $603 million in unrestricted liquidity, including cash, marketable securities, and our fully available revolver.

We also increased the quarterly dividend by 20%, underscoring our confidence in the strength of the business and our ability to continue generating solid cash flow. In addition, we stayed attuned to returning capital to shareholders where it makes sense to do so, and as Mike said, yesterday our board approved a 50 cents special dividend.

Maintaining this level of liquidity is a deliberate, strategic choice and one we're comfortable with. Our approach to capital allocation has been guided by a consistent focus on returns, and that means being strategic about liquidity, holding more in certain environments, less in others.

Our track record reflects that discipline, and with a liquidity position that very few others in this market have, we're well-positioned to act when and where it makes sense for the long-term growth of the business. Our approach to capital deployment remains disciplined and consistent with our long-term focus.

We prioritize reinvestment in the business where we see attractive returns, maintain a strong balance sheet, and return capital to shareholders over time, with a primary focus on our regular dividend. We also remain attuned to acquisition opportunities that fit strategically and create long-term value.

Looking at 2026, on reinvestment, we expect maintenance capital expenditures to be modestly higher than our typical range. Historically, we've talked about maintenance CapEx in the $35 million to $40 million range.

This year, we expect that to be approximately $45 million to $50 million, reflecting an increase in planned renovations and category-level refreshes across a portion of our network, in addition to our typical maintenance program. On the growth side, we expect to open two new corporate stores, along with up to five franchise locations towards the back half of the year.

Importantly, this level of maintenance and growth investments remains very manageable and enables us to continue generating strong free cash flow. In addition to store investments, we continue to look for opportunities to improve operating efficiency across the network.

Centralized distribution is a core part of our long-term strategy as we transition from the legacy attached warehouse model toward a more efficient hub-and-spoke network over time. The closure of our Mississauga warehouse in February of 2025 delivered expected operational results, including SG&A savings and working capital benefits, and we continue to track key service level metrics as part of that evaluation, including customer experience and written-to-deliver timelines.

Based on what we learned from Mississauga, we're evaluating a further centralized distribution initiative in another region. This would be a phased, measured test designed to build confidence on a larger scale.

These initiatives take time to implement, but the objectives are clear: reduce inefficiencies in inventory flows, improve working capital management, and drive meaningful SG&A efficiencies over the longer term, while maintaining service levels. The most significant opportunity is in Ontario, which is our largest market.

We are approaching this deliberately and will continue to provide updates as we make progress. We will continue to be opportunistic in our approach to buybacks, taking advantage of volatility where it aligns with our long-term strategy.

We did not repurchase any shares under our existing NCIB during the fourth quarter of the year. On M&A, we continue to evaluate opportunities that align with our core categories and retail focus, involve recognizable brands, offer a clear runway for growth, and are synergistic with our broader ecosystem.

In an environment like this, opportunities can emerge, and our balance sheet puts us in a position to act if the right fit presents itself. I also want to briefly address tariffs, as this is an important topic for the sector.

Steel derivative tariffs were implemented by the Government of Canada on December 26, 2025. Inventory already in transit was not impacted.

For new orders placed after December 26, we're evaluating the impact and will adjust pricing where appropriate. Any pricing increases would be surgical, carefully balancing customer value with financial returns, as we have done many times before across a range of market conditions.

This is an industry-wide factor, and we are well-positioned to manage it, given our scale, sourcing relationships, and supply chain capabilities. One item to flag on comparisons: as we move through 2026, we are lapping strong performance in 2025, which creates more demanding year-over-year comparisons, particularly in the first half.

This is most evident in Q1, where results last year benefited from a timing dynamic that pulled some sales forward from Q4 2024 into Q1 2025. Before handing it back, I'd like to briefly address the previously announced initiative to create a real estate investment trust.

This remains an important strategic priority for us, but timing will be driven by market conditions and regulatory approvals, and we'll share additional updates when appropriate. That's the only update we can provide on today's call.

As Mike mentioned, we've also strengthened our real estate capabilities by adding a dedicated senior resource to provide in-house expertise across our property portfolio. This role is focused on helping us drive greater value from our assets, supporting our development agenda, and ensuring we are making informed, strategic decisions across the portfolio that both strengthen our core business and create value for shareholders.

Entering 2026, we remain confident in our positioning. Our approach to managing the business will be consistent as we move forward, regardless of the environment.

We remain focused on outperforming the market and gaining share while protecting gross margins, staying disciplined on SG&A, and driving profitability. Overall, our scale, disciplined sourcing, promotional strategies, and solid balance sheet provide the foundation to continue driving profitable growth and shareholder value over the long term.

With that, I'll turn it back to Mike for closing remarks before we open the line for questions.

Thanks, Victor. To wrap up, 2025 was a strong year for LFL and one that demonstrates the consistency of our execution.

In a challenging environment for many retailers, we grew revenue, expanded margins, delivered solid earnings growth, and increased our dividends. More importantly, we did that by staying focused on the fundamentals: disciplined merchandising, targeted promotions, strong execution in our stores, and a clear focus on value for the customer.

These results weren't driven by short-term actions. They are a direct product of how we've built this business: the scale to negotiate directly with suppliers and secure advantaged pricing, banners that Canadians trust coast-to-coast backed by a large and growing omnichannel presence, an integrated logistics infrastructure, including one of the largest final-mile delivery networks in the country.

That sets us apart in how we serve customers from the store to their door. Together, these are durable advantages that matter most when consumers are being more deliberate with their spending, and they are the foundation we continue to build on.

As we move into 2026, our focus remains on execution and on continuing to gain market share in our core categories. We're investing thoughtfully where we see opportunity, and we're doing so from a position of strength, with a solid balance sheet and durable competitive advantages that will enable us to continue to win across cycles.

Before we open the line, I want to truly thank our associates across the country in our stores, distribution centers, and support teams for their continued commitment. Their work drives results every day.

To our shareholders, thank you for your continued support. With that, we'll be happy to take your questions.

Hey, good morning, Mike and Victor.

Morning.

Good morning.

Morning. Maybe just to start off on the same-store sales growth.

How can we kind of understand the deceleration in Q4 compared to your fairly brisk year-to-date pace up to then, and maybe specifically you can just touch on how you've seen consumer behavior evolve into Q4 and to start off 2026 so far? A

great question, Ty. I think how I'd characterize the Q4 was it was a little choppy.

We started out the first quarter of the fourth quarter with the Canada Post strike, and as that's one of our highest ROI channels with the consumer. Definitely that impacted.

So 50% of our network didn't have flyers going out to them, which really impacted Ontario and Quebec. The weather disruptions, our two biggest days of the year, Black Friday and Boxing Day, which both had weather events.

It's really tough because in 2024, in the fourth quarter, we had Canada Post strike, but it started later in November. In this year, or in 2025, it started in September.

As you look at Boxing Day, Boxing Day is kind of a month or two-month event now, given what happened in the pandemic. It's spread out over a period of time.

Leading up to Black Friday, we had literally 50% of our flyers not going out. For sure we lean more heavily into TV, digital, SEO, SEM, and email, but those channels don't fully replace the lost flyer impressions.

Just to add there, Ty, just just to build on on Mike's point. I think, obviously, slower start to the quarter, just given, the 50% of our network was either fully or partially impacted with no flyers.

Then, I would say we did see on top of weather, we did see us a consumer slowdown, a broader slowdown in December, just across our our, our brands, and which tells us it's a bit of a macro thing, to Mike's point. The the shopping period's getting the holiday shopping period's getting longer and longer.

By the time you get to, December, in between Black Friday and Boxing Day, we just noticed a bit more of a lull period there. That tells us, and we did see this throughout the year, shoppers are waiting for more value, they're waiting for the bigger days.

Our bigger promotional days outperformed our average days. We we continue to see, evidence of a a strained consumer and that, we're seeing trade-down happening.

All of that just tells us the consumer is being cautious, they're constrained, they've got to prioritize, where their where their share of wallet is going. That's just a bit more color there.

Great. Is it fair to say that you've seen that more cautious consumer behavior in December kind of carrying over into the first couple months of 2026 so far?

I think what we saw in December, which is a little tricky, right? It was a combination of weather and the consumer pulling back.

What we've seen in January is similar in that really cold January, lots of snowfall. We think that that impacted traffic, in addition to a more cautious consumer.

We did see that to start the year as well.

Great. Then maybe for my follow-up, just wondering if you could comment a little more on the promotional environment which you called out in your comments.

Is there any particular set of competitors where that increased promotional activity is coming from, and is there any sign of that abating so far in 2026? No,

I think Q4 carried into Q1 from the competitive set. I think consumers are value-driven right now, and they have been, as we've stated in previous quarters.

I think all retailers are trying to play in the value prop game on different channels, and so that's going to continue, and I don't see that abating throughout 2026.

Got it. Thanks for the questions.

I'll pass the line, guys.

Hi, thanks for taking my question. On the Commercial Appliance growth that's been helping some of the top line, you've mentioned that it's a lower margin mix.

As you see some weakness perhaps in other higher-margin categories, what levers do you have to kind of protect your margins if Commercial keeps outperforming?

We, as we stated in previous quarters, we continue to focus on the category of furniture because that's got one of the highest gross margins that we have. We continue to focus on that through a reduced assortment and going deeper on our inventory so we have the product available and we can thin up the lag time between written and delivered.

We also, as we said, Appliances Canada is primarily in Ontario, but they have lots of their customers that are in other parts of Canada. Leveraging a store-within-a-store in Richmond, BC, really helps us to enable Appliances Canada to play outside of Ontario, which has been severely impacted from a development perspective.

Just to answer the mix question there, to build on Mike's point there, Ahmed. Like we said, we know and we've signaled that the Commercial business is slowing down.

From a sales mix perspective, we're not necessarily expecting the same level of growth going forward. We're expecting moderation.

It is a lower margin category. The way we've been offsetting, despite tremendous growth in that channel over the last couple of years, our margin rate's been improving, and that's because we've been improving rate on the retail side through stronger furniture sales mix and some of the rate initiatives that we've had.

Net-net, we don't expect that to be a margin headwind going forward from a mix standpoint.

Okay. On the flip side of that comment, are you thinking about your promotional cadence into 2026 to drive a margin tailwind, as such that would push your adjusted EBITDA margin for 2026, assuming there's revenue growth higher?

I think the way you've got to look at rate, right? We operate pretty proud of sort of the improvement that the team's been able to make over the last couple years.

We're happy with kind of where we are at this level. We got to balance a few things, obviously, sales mix.

The way we've done it is primarily through sales mix and rate, core trade improvements, not through price. We've got to keep the consumer in mind there, right?

Our primary focus is provide value to the consumer, grow market share, and grow it profitably, and we tend to operate margin within a range, right? If you look at our history, we were pretty disciplined, we're consistent, and we gradually improve over time, but we pick and choose when we're going to do that, and we got to be very cautious in this environment, in a value-oriented environment, in terms of when we flex up or down on categories and overall.

Again, I would kind of point you to we've made good improvements. We're kind of satisfied at this level today.

There's upside in the medium to longer term, but it'll depend on overall sales mix is kind of the way we look at it.

Okay. Just if I can squeeze one more follow-up on Ty's comment around the Canada Post disruption.

Clearly, you see value in the medium and continuing the use of flyers going forward. Were you able to estimate or quantify the impact the Canada Post cost you this quarter?

Look, the way I would answer, we're not going to throw out numbers. Obviously, there's lots of variables in terms of sales, and we're not going to specifically break those things out, but I would point to again the key drivers in terms of, one, we thought the quarter, in the grand scheme of things, we thought that top line growing sales, growing profitability, that's a good result, right?

I think the momentum heading into the quarter and your comment about the step back, I think those are three factors that we talked about. The flyer impact, the start of the quarter, the broader December slowdown, and weather just in general, but on some of the bigger days like Boxing Day and leading up to Black Friday was adverse weather conditions, especially relative to last year.

I would just kind of look at it like that, but we're not going to throw specific numbers out there. There's just too many variables.

All right. It was worth a shot.

Thanks.

Good morning, guys. It's Jesse filling in for Martin.

Thanks for taking my call. I was wondering how promotions performed over the last year and how you expect them to perform going into the new year, and particularly maybe get some color on which campaigns worked and which didn't.

Listen, thanks for the question. Like I said maybe earlier, what we saw throughout the year is our bigger promotional days just outperform on our average days.

It does tell us that our promotions are working. For LFL just in general, our objective is to provide value to the consumer throughout the year, right?

We're always focused on value. We leverage our scale, and we leverage it well to provide value throughout the year.

We did see, in general, our bigger promotional days outperform our average days, and that just tells you where the consumer mindset is, but it does tell us that our promotions are working really well for us.

Great. Maybe, I know you touched on a little bit this call, but I was wondering about the replacement business.

Can you maybe provide a little bit more color on that? I know the builder pipeline was moderating a little bit, if you could touch on that, that would be helpful.

Thanks.

I think we signaled 12 to 18 months ago that the pipeline for the builder segment was going to be a challenge in 2026 and 2027. We pivoted to increase our replacement business, which we have been doing and continue to do.

It won't necessarily make up the shortfall from the development segment, but it definitely helps. It's a continued focus that we have on the replacement business.

Great. Thanks, that was awesome.

I'll leave it for the next queue.

Thanks, Jesse.

Thanks. Good morning, guys.

I appreciate the color so far on the January trends. Hoping you could just give an update here on what you're seeing across product lines and region to start the quarter.

It's a it's a good question. We continue to see strength out west.

We're seeing a bounce back in in BC, and more softness in, East, Ontario in general, just a bit slower to start the quarter. In general, I think January just has been colder, more snow, and I would characterize it as a bit tepid across the board.

It's our it's our smallest month of the quarter, we'll we'll continue to see how the quarter progresses. We're optimistic as we think about the back half of the year.

We're optimistic, in terms of hopefully some of the macro headwinds ease, and and we're optimistic about some of our initiatives going forward in terms of, again, being positioned for value and continuing to outperform the market and gain share share across our categories.

Great. Is it fair to say that the trends you saw in Q4 in terms of product lines, has that continued into the year as

well? Listen, as we think about Q1, I think a couple of things we need to flag, right?

Last year, we would have highlighted to you that we had a shift in written-to-deliver from Q4 into Q1. That's primarily a furniture category dynamic, right?

We're going to see a bit more, as we think about category performance in Q1, we're going to see a bit more pressure on the furniture category because of that shift. Otherwise, I would characterize the performance sort of across the categories as pretty consistent with our historical trend.

We're still pretty bullish on our ability to drive share growth in furniture. We believe we're really well-positioned in that category, but that comparable year-over-year, especially in Q1, is going to be hard to comp, especially as it relates to the furniture category.

Then again, we're off to a slower start in January as we characterized. Q1 will be a tougher comp, and then we feel pretty good about our positioning for the balance of the year.

Great. Thanks, Victor.

Then just on the commercial appliances, I know some details so far. Just hoping you could expand a little bit.

Is there a certain quarter in 2026 where you begin to lap these tougher comps? Can you frame the headwind on same-store sales growth?

I think, with respect to Commercial, look, it is moderating, it's going to be tough to comp. That category, that channel, we've seen tremendous growth frankly since 2019.

That category is grown at a CAGR of 6+% just to kind of put it out there. We're expecting a bit of a moderation, but we've gained a lot of share in that category.

Our goal is to obviously mitigate that through the replacement business, mitigate that through geographical expansion, as Mike highlighted in his comments. Nonetheless, it's probably going to moderate this year.

Our objective is to mitigate that as much as possible. We still feel like we're outside of Q1, we think we're going to drive good growth across our retail business.

We plan to open a few, like we said, we're going to grow our network. We have a couple of corporate stores planned to open this year in the back half of the year.

We've got up to five franchisee locations that we're going to open. All of that is going to help with top-line growth.

Thank you. Then maybe just one more from me.

You talked about renovating the stores. Are you able to provide a bit more detail on the cost per store, maybe the payback period, and how you're thinking about returns on those investments?

No, for sure. When we think about our renovations, we looked at it as major, minor, and sort of refreshes.

We've obviously got a couple new stores, like we said. It all has to fit within our return framework.

We have pretty high hurdle rates, well above our cost of capital. These are pretty high-returning projects.

We're basing it on some of the comps that we've seen in our network, some of the recent renovations that we've seen, where we've seen really good results and we're quite pleased. We're very selective.

As Mike said in his comments, we're pretty capital-light in our approach. The major renovations obviously cost more than the minor renovations and the refreshes, and then I'm going to add in their category-level refreshes.

In some cases, we'll go into a store and refresh the furniture category or the mattress category and not do an entire refresh. It really depends on the store itself, the market, what we're seeing as an opportunity, and it needs to fit within our return framework.

Again, our hurdle rates are pretty high. I'll leave it at that.

I think the only thing I would add is that retailers have to consistently look at their stores, the refresh, concept renewal, payback. I think one of the things coming out of the pandemic, we had two or three years where you weren't touching stores, and so it's really difficult to try and catch that up in one year.

Over time, we want to be able to continue to refresh our stores and look at a go-forward and a go-back strategy, what's working in any new developments or any concept renewal, and take that back to the broader groupings of stores. It's just something retailers have to consistently look at and do.

Great. I appreciate that.

Thanks, guys.