Tuesday Morning Corp New · OTC:TUEMQ
Tuesday Morning Corp New — Tuesday Morning — Investor Presentation (January 2018)
29 slides from Tuesday Morning Corp New's investor presentation, Jan 8, 2018
Slide 1: Safe Harbor Statement
Safe Harbor Statement Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements, which are based on management's current expectations, estimates and projections and are not guarantees of future performance. Forward looking statements include stat
Slide 2: Introduction
Introduction Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements, which are based on management's current expectations, estimates and projections and are not guarantees of future performance. Forward looking statements include statements re
Slide 3: Agenda
Agenda Cautionary Statement Regarding Forward-Looking Statements This presentation contains forward-looking statements, which are based on management's current expectations, estimates and projections and are not guarantees of future performance. Forward looking statements include statements regardin
Slide 4: Tuesday Morning: Who We Were
Tuesday Morning: Who We Were Founded:1974 in Dallas, TX “Pop-Up” shop format 2017 1974 Evolved Concept: Open year-round/7x per week 5 5 • Event driven • 4 warehouse sales/year • Public with 57 stores in 1984 • Private with 315 stores in 1997 • Public again with 354 stores in 1999
Slide 5: Tuesday Morning: Who We Were
Tuesday Morning: Who We Were Founded: 1974 / Dallas, TX “Pop-Up” Shop Format 2017 1974 • • Event Driven 4 Warehouse Sales/Year Evolved Concept: Open year-round/7x per week 6 6 • Rapid store growth into low-cost locations • Expanded into non-core categories • Period of underinvestment in IT/Supply Ch
Slide 6: Tuesday Morning: Who We Were - Merchandise Sales Contribution FY12
Tuesday Morning: Who We Were Merchandise Sales Contribution FY12 7
Slide 7: Tuesday Morning: Who We Are Today
Tuesday Morning: Who We Are Today Today: Actively positioning Tuesday Morning for Success • Rapid store growth into low-cost locations Expanded into non-core categories Period of underinvestment in IT/supply chain Founded: 1974 / Dallas, TX “Pop-Up” Shop Format • • 2017 1974 • • Event Driven 4 Wareh
Slide 8: Who We Are Today - Merchandise Sales Contribution FY17
Tuesday Morning: Who We Are Today Merchandise Sales Contribution FY17 9
Slide 9: Tuesday Morning: Who We Are Today
Tuesday Morning: Who We Are Today 10
Slide 10: Tuesday Morning: Who We Are Today
Tuesday Morning: Who We Are Today • Off-price retailer specializing in name-brand, high quality products for the home including luxury textiles, furnishings, housewares and seasonal décor – all at compelling price points Deal driven merchandise assortment, opportunistically sourced from • multiple c
Slide 11: Well Positioned Off-Price Retailer in Fragmented Home Furnishings Sector
Tuesday Morning: Who We Are Today Well positioned Off-Price Retailer in fragmented Home Furnishings Sector Off-Price/Closeout Retailers Tuesday Morning National Footprint 731 Locations Across 40 States Number of Stores 1600 1400 1200 1000 800 600 400 200 0 Home Furnishing Retailers 12 * As of latest
Slide 12: Tuesday Morning: Management Team
Tuesday Morning: Management Team •Organizational structure in place with highly experienced management team Name Title Retail Experience Tuesday Morning Experience Prior Experience Steven R. Becker Chief Executive Officer 7+ Years 5+ Years Stacie Shirley Executive Vice President, 25+ Years 2+ Years
Slide 13: Review of Strategic Initiatives
Review of Strategic Initiatives 14
Slide 14: Strategic Initiatives to Drive Profitable Growth
Strategic Initiatives to Drive Profitable Growth Improve Real Estate Positioning Drive Supply Chain Efficiencies Improve Working Capital Management Enhance Marketing Productivity 15
Slide 15: Comp Sales Trend
Comp Sales Trend -5.0% FY15 Annual COMP 7.2% Two-Year STACKED 13.3% FY16 Annual COMP 7.8% Two-Year STACKED 15.0% FY17 FY18 Annual COMP 2.2% Two-Year STACKED 10.0% * Prelimina ry comp s a les (fina l relea s e on 2/1/18) 16 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Q1 Q2 Q3 Q4 COMP% STACK 20.4% 19.9% 16.0% 1
Slide 16: Improving Sales Trend Across Cohorts
Improving Sales Trend Across Cohorts Average Sales per Store $1,840 $1,320 $1,270 $1,060 $700 $640 17 2,500 $2,050 $2,070 2,000 $1,920 1,500 $1,160 1,000 $790 $830 500 - FY14 FY15 FY16 FY17 Top 100 Bottom 100 Total
Slide 17: Real Estate Strategy
Real Estate Strategy Our Real Estate Initiatives Remain our #1 Strategic Priority Evolution of Store Locations % Prior FY15 of Fleet Impacted by Real Estate FY18 Strategy Long-Term ~75% of Stores will be Relocated/Refreshed1 Majority of Stores in Below Avg. Centers ~45% of Stores Relocated/Refreshed
Slide 18: Real Estate Strategy
Real Estate Strategy Goal: Increase traffic to stores and improve overall customer experience providing significant lift to sales and enhancing brand awareness Strong co-tenancy drives favorable customer demographics and traffic 19
Slide 19: Real Estate Strategy: New Store Frisco, TX
Real Estate Strategy: New Store Frisco, TX 20
Slide 20: Real Estate Strategy: Relocation Economics
Real Estate Strategy: Relocation Economics 1 Targeted store size is 10K – 12K, but actual results vary based upon real estate opportunities 2 Represents 1) average annual sales volume for the first year post-relocation for stores relocated in calendar 2015 and 2) estimated annual sales volume for th
Slide 21: Real Estate Strategy: Development Roadmap
Real Estate Strategy: Development Roadmap FY15 FY16 FY17 FY18 1 FY15 - FY18 1 Relocation & Expansions 30 relocations 7 Expansions 46 Relocations 7 Expansions 52 Relocations 13 Expansions 45 Relocations 8 Expansions 173 Relocations 35 Expansions New Store Growth 5 New Stores 16 New Stores 21 New Stor
Slide 22: Supply Chain: Build Efficiencies & Improve Productivity
Supply Chain: Build Efficiencies & Improve Productivity • Prior to 2016: Operated one distribution center in Dallas, consisting of 5 non-contiguous buildings. Very inefficient and expensive process due to multiple touches required • FY 2017: Began operating new 600K square foot DC in Phoenix to hand
Slide 23: Marketing: Prior Marketing
Marketing Prior Marketing: • • Program entirely focused on monthly promotional ad events with limited brand messaging Events were supported through traditional media (newspaper inserts/direct mail), targeting an older customer base Limited customer recognition through an ineffective loyalty program
Slide 24: Marketing Optimization
Marketing Optimization Marketing Focus Today • • • • • • Updated brand creative to focus on product and great deals Significant improvement in data collection, allowing more cost effective marketing Bold messaging to tell new customers who we are & what we do Diversified media to include more focus
Slide 25: Improve Working Capital Management
Improve Working Capital Management We continue to focus on our working capital and inventory management • Drive store level sales productivity Assortment Allocation Inventory levels o o o • Drive increased turn and freshness Tightly manage weeks of supply o • Improve overall working capital usage th
Slide 26: Income Statement
Income Statement 28 *FY 2017 results included the negative impact of supply chain disruptions which significantly impacted gross margins FY 2017* FY 2016 FY 2015 Sales ($ Millions) $966.7 $956.4 $906.4 Comp 2.2% 7.8% 7.2% Gross Margin 33.2% 35.7% 36.0% SG&A % of Sales 36.5% 35.5% 34.7% EPS ($0.74) $
Slide 27: Balance Sheet/Cash Flow
Balance Sheet/Cash Flow • $180M Asset Backed Facility – – 5 year facility maturing August 2020 No financial covenants (if specified availability levels are maintained) • Owned real estate provides additional flexibility – – Corporate offices (105K square feet) Dallas Distribution Center (1.2M square
Slide 28: FY 2018: First Half Milestones and Full Year Outlook
FY 2018: First Half Milestones and Full Year Outlook First Half Fiscal 2018 Sales Results & Milestones • Continued positive comp sales growth despite hurricane impact in Q1 Optimizing marketing; increased discipline around each event Supply chain functioning well Strong availability against bank lin
Slide 29: Tuesday Morning: Long Term Outlook
Tuesday Morning: Long Term Outlook Real Estate Repositioning Sales t Supply Chain Efficiencies and Productivity Gross Margin t Sales t Gross Margin t Sales t Merchandise and Inventory Optimization i oe Marketing Productivity , “Fesday Morning
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