Tuesday Morning Corp New · OTC:TUEMQ
Tuesday Morning Corp New — Tuesday Morning — Investor Presentation (March 2018)
36 slides from Tuesday Morning Corp New's investor presentation, Mar 9, 2018
Slide 1: Safe Harbor Statement
SAFE HARBOR STATEMENT The forward-looking statements made in this presentation relate only to events as of the date on which the statements were made. Except as may be required by law, the Company disclaims obligations to update its forward-looking statements to reflect events and circumstances afte
Slide 2: 44 Years of Being Passionate About the Deal
44YEARS Of Being Passionate About the Deal t R 3
Slide 3: • • • • • • •
• • • • • • • 4
Slide 4: 1974: Founded in Dallas, Texas
1974: Founded in Dallas, Texas Pop-Up shop format Four 6-week sales a year 1984: Went public with 57 stores * Open year-round, 7 days a week 1997: Went private with 315 stores 1999: Went public with 354 stores
Slide 5: Focused on Profitable Growth
Focused on Profitable Growth • Over 700 store locations across the US • Off-price retailer specializing in name-brand, high quality products for the home including luxury textiles, furnishings, housewares and seasonal decor - all at compelling price points • Deal-driven merchandise assortment, oppor
Slide 6: Sales History ($Millions)
Sales History ($Millions) $1,200 $956 $967 $979 $1,000 $865 $906 $838 $800 $600 $400 $200 $0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18* Store Locations: 852 861 852 828 810 769 751 731 724 *FY 2018 TTM as of 12/31/17 Financial Overview 7
Slide 7: 700+ Strategic Nationwide Locations
700+ Strategic Nationwide Locations MA (2) Ml (9) MT (0) Rl (0) CT WY (0) (0) (4) DE (3) MD (15) AZ (21) NM (7) " TX (108) *as of 2/15/18 Today - Positioned for Success 8 ND MO (18) (1) MN (9) SD (1) NE KS (8) OK (12)
Slide 8: Well-Positioned in a Fragmented Home Furnishings Sector
Well-Positioned in a Fragmented Home Furnishings Sector ,......;u....... ANT H RO PO LOC '-")("'-' west elm B A li N -··· BrfONEII OQ:eSS 1"01: LeSS LOBBY. JOANN C,urli.ngton TARGET at!_-1_ Today - Positioned for Success 9 Mass Quality IE Crate&Barrel RH PD TTE II Y n wayfa1r !9 .C. C_o,.s7co k. KI
Slide 9: Highly Experienced Management Team
Highly Experienced Management Team Trent Taylor Byrd Davis Position: CEO EVP, CFO& Treasurer EVP, Store Operations SVP, GMM CIO & EVP. Supply Chain and Inventory Management SVP, Marketing SVP. Real Estate SVP, HR. General Counsel & Corporate Secretary Retail Experience: 7+ Years 25+ Years 40+ Years
Slide 10: Highly Experienced Management Team
Highly Experienced Management Team Stev: Stacie Phillip Belinda Trent Taylor Catherine Dol Becker Shirley Hixon Byrd Davis Position: Evp, EVE. SVP, ClO & EVP, SVP. Sve: SVE, CFO & Store GMM Supply Chain Marketing Real Estate HR, General Treasurer Operations and Counsel & Inventory Corporate Manageme
Slide 11: Merchandise Assortment focused on core home categories
Merchandise Assortment focused on core home categories • Home Decor • Textiles Seasonal • Housewares Products Latest trends, Best Prices 12
Slide 12: Merchandise Assortment focused on core home categories
Merchandise Assortment focused on core home categories =sHome Décor *#Textiles Seasonal =Housewares Products - Latest trends, Best Prices 12
Slide 13: Compelling Values
Memory Foam Pet Bed: Occasional Tables: + Wayfair Price: $64.99 + At Home Price: $59.99 + TUESDAY MORNING PRICE: $39.99 + World Market Price: $89.99 * TUESDAY MORNING PRICE: $19.99-$29.99 American Crafts Punch Set: + Michael's Price: $49.99 + TUESDAY MORNING PRICE: $14.99 Typhoo English Tea: + World
Slide 14: Compelling Values
Wood Lantern Set: ey Air Fryer: + Sears Price: $126.64 + Best Buy Price: $119.99 + Wayfair Price: $101.99 + Walmart Price: $79.99 + TUESDAY MORNING PRICE: $46.99 + TUESDAY MORNING PRICE: $49.99 | Feather-Trimmed Pillow: + Amazon Price: $58.47 + Bed Bath & Beyond Price: $44.99 + Kirkland’s Price: $39
Slide 15: Our Customers Know A Great Deal When They See One
Our Customers Know A Great Deal When They See One Our Core customers are Shopping Aficionados1: Self-professed deal hunters who bask in the satisfaction of nabbing a perfect find at a great price. Think shopping is a great way to relax. Demographic profile2: Age 52%50-69 37%35-49 Household Income Av
Slide 16: Big Deals Here Today, Gone Tomorrow
= OFFERING = .., DEALS BIG DEAL ro us.\jb .:::::::: ........--_,-' ·_-:-::. . -;:_-;, -·',f.. ,-,. • I .... 1.. . ·' . <f) THAT ARE :·.;···HERE TODAY :····:;:;··· = gone= L _ _ _ _ _ __ _ ; crom.oJlJwttJ, '/ .. AND ARRIVING AGAIN NEXT WEEK! IJ.-L-----L.I.I
Slide 17: 2018 Strategic Initiatives
2018 STRATEGIC INITIATIVES 18
Slide 18: Real Estate Repositioning
Real Estate Repositioning • Actively repositioning portfolio to focus on improved co-tenancy • Flexible real estate portfolio • • 25% up for renewal in next 12 months On average, 20% a year • Flexible lease terms allow for: • • Ability to relocate stores Ability to renegotiate rent • Stores succeed
Slide 19: New Store Format
- Format • Relocate 75% of fleet from C/D locations to solid Band better shopping centers with favorable co-tenancy and customer demographics Increase traffic to stores and improve overall customer experience providing significant lift to sales and enhancing brand awareness • 20 --Original New Proto
Slide 20: Strong Co-Tenancy Drives Favorable Customer Demographics and Traffic
Strong Co-Tenancy Drives Favorable Customer Demographics and Traffic -----ru£sd«!J M_or ---5-0 -----
Slide 21: Strong Co-Tenancy Drives Favorable Customer Demographics and Traffic
Strong Co-Tenancy Drives Favorable Customer Demographics and Traffic REAL STRATEGIC INITIATIVES 2
Slide 22: Relocations, Expansions and Store Closings FY15-FY18
FY18 1 FY15 FY16 FY17 FY15-FY18 1 30 relocations 7 Expansions 46 Relocations 7 Expansions 52 Relocations 13 Expansions 45 Relocations 8 Expansions 173 Relocations 35 Expansions Relocation & Expansions/ New Store Growth / 5 16 15 57 21 Portfolio lmproveme/ 46 Closed 34 Closed 41 Closed 20 Closing 141
Slide 23: Improving Sales Trend Across Cohorts
Improving Sales Trend Across Cohorts Average Sales per Store 2,500 $2,070 $2,050 $1,920 2,000 $1,840 1,500 $1,320 $1,270 $1,160 $1,060 1,000 500 FY14 FY15 FY16 FY17 •Top 100 Bottom 100 •Total 'Includes only stores open for entire 12 month period
Slide 24: Supply Chain Transformation
Supply Chain Transformation Prior to 2016: • • Operated one distribution center in Dallas, consisting of 5 non-contiguous buildings Very inefficient and expensive processing facility FY 2017: • Began operating new 600K square foot DC in Phoenix to handle West Coast stores and support growing sales v
Slide 25: Broadening our Reach to Attract New Customers
Broadening our Reach to Attract New Customers Shared values among audiences1 Current Customer Reach 8.9M Shopping Aficionados Ages 55-69 Target New Customer Reach 30.3M Shopping Aficionados Ages 25-69
Slide 26: Marketing Initiatives
• Updated brand creative & personality to focus on product, great deals, and telling our story • Significant improvement in customer data collection, allowing for more efficient marketing • Improved digital marketing to cost effectively broaden our reach to pay top dollar for top quality. YOU CAN TR
Slide 27: Marketing Examples
IITue;.d y Mornirg added 6 new pho1os. N01errMr 8 :;017 · Pb:lnning fnr a lullhnuthTih;m< giving? Ynu'rfl' gnng tn nPcR"I;: full ratlle. TlJesdcy r..ornlng tlas you coiJered wttn exQUI!::Itedinnerware and loolsoflrlo:,-.,llr--NMI"""'*--'1 no,.,...to!OJ..-.cloo'il l lor '/<illliltll-. linens from nam
Slide 28: It's All about the Deal!
It's All about the Deal! • Expanding assortment in foundational categories, while growing new businesses • Focusing on partnerships to increase penetration of leading specialty store brands • Increasing focus on closeout deals in an opportunistic environment • Optimizing store-level assortment and i
Slide 29: It's All about the Deal!
It’s All about the Deal! * Expanding assortment in foundational categories, while growing new businesses * Focusing on partnerships to increase penetration of leading specialty store brands + Increasing focus on closeout deals in an opportunistic environment * Optimizing store-level assortment and i
Slide 30: Comp Sales Trend
Comp Sales Trend 25.0% 20.0% 15.0% 10.0% 5.0"/6 0.0% -2.7% 03 03 03 01 Q2 Q4 01 Q2 Q4 01 02 04 01 02 -5.0% oCOMP% •Two Year STACKED FY15 Annual COMP 7.2% Two-Year STACKED 13. 3% FY16 Annual COMP 7.8% Two-Year STACKED 15.0% FY17 Annual COMP 2.2% Two-Year STACKED 10.0% FY18 ·New stores are included in
Slide 31: Comp Sales Trend
Comp Sales Trend 25.0% 20.4% 19.9% 20.0% 16.0% 14.9% 15.0% 12.9% B.A: 12.1% ms 10.7% 1.0% 10.7% 9.6% 10.0% + 34 aK aX 76 s 7.8% 6.5% 6.0%) 51% 5.6% 5.0% 5 3.6% 3.65 3.6%] 18%] 1.8%) 0.0% +] Ley -2.7%. sox a2 a3 as a a2 a3 for) a 2 a3 for a a2 aCOMP% Two Year STACKED FY15 FY16 FY17 FY18 Annual COMP 7
Slide 32: Driving to Profitable Growth
Driving to Profitable Growth • Focused efforts to improve store inventory allocation • Increased inventory turn and freshness • Tightly managing weeks of supply • Improved overall working capital management throughout the supply chain • Additional gross margin opportunity through improved IMU, markd
Slide 33: FY 2018 Outlook
FY 2018 OUTLOOK FISCAL 2018 GUIDANCE: Comp: 2% -5% improvement 34 DEBT: Approximately flat to FY17 year-end balance EBITDA: Significant year-over-year
Slide 34: Long-Term Outlook
LONG-TERM OUTLOOK REAL ESTATE REPOSITIONING SALES SUPPLY CHAIN EFFICIENCIES AND PRODUCTIVITY GROSS MARGIN MERCHANDISE AND INVENTORY OPTIMIZATION SALES GROSS MARGIN MARKETING PRODUCTIVITY SALES 35
Slide 35: Long-Term Outlook
LONG-TERM OUTLOOK REAL ESTATE a SALES REPOSITIONING SUPPLY CHAIN EFFICIENCIES [a> GROSS MARGIN AND PRODUCTIVITY MERCHANDISE AND anny SALES INVENTORY OPTIMIZATION GROSS MARGIN MARKETING PRODUCTIVITY [mmm SALES
Slide 36: Thank You!
Thank YOU!