Comp sales were down 12% year-over-year and non-comp sales contributed $3 million in sales for the quarter. Both sales and comp sales performance improved through the quarter after a soft start in October. Weather in the quarter was a 3% tailwind versus the prior year, in line with our expectations for more normalized weather in fiscal 2024, which saw traffic recover sequentially and down high single digits in Q4 to down mid-single digits in Q1. Total transactions were down 6% year-over-year and average order value was down 5% year-over-year. Average order value continues to be affected by sales of equipment and high-ticket discretionary products, including hot tubs. Total chemical sales improved to down 3%, and we saw a sequential improvement in chemical unit volume each month during the quarter.

Equipment sales continued to be soft, down 18%. In total, non-discretionary product sales were down 8% versus a year ago. Discretionary product sales were down 19% and contributed about 40% of the quarter's total sales decline. Approximately three quarters of our discretionary product sales coming from our residential hot tub business., which was up against a 35% sales increase in Q1 of 2023. We are encouraged by the renewed interest we are seeing in hot tubs and faced easier comparisons over the next three quarters. Our analysis of credit card data indicates that our sales underperformed the industry by approximately 578 basis points in the quarter, of which 250 basis points is attributable to our June 2023 chemical price changes. As Q1 is historically our smallest quarter, we believe it is too early to draw conclusions from these numbers.

In addition, other data points we look at, including vendor discussions, store management discussions, and similar web traffic data are not indicating our performance lag that of the specialty industry. Regardless to further improve consumers' perception of our value price relationship, we are taking several actions which include: showcasing smaller sizes of chemicals and lower price point products at the front of stores, implementing an item of the month strategy, increasing messaging of our Pool Perks loyalty program benefits and price match guarantee, and increasing messaging around our omnichannel capabilities. With respect to profitability, gross margin decreased 450 basis points, driven primarily by rebate timing the expensing of previously capitalized DC costs and occupancy deleverage, each of which we discussed last quarter.

Gross margin was in line with our expectations. Adjusted EBITDA for the quarter was negative $24 million, and adjusted diluted earnings per share, was negative $0.20. We are encouraged that the industry retail pricing appears to have stabilized. Promotional activity appears to be consistent with seasonality and that industry supply chains are operating well. In addition, we believe that the secular tailwinds that drive industry demand remain intact, and we expect these tailwinds to continue to underpin our long-term growth opportunity. Leslie's remains the leading direct-to-consumer pool and spa retailer with unmatched scale, capabilities and brand awareness. After a year of abnormal industry conditions, our team is energized and focused on executing the strategic initiatives that underpin those competitive advantages.

As industry conditions continue to normalize, we are executing our strategic growth initiatives to return Leslie's to delivering sustainable top line growth and profitability. Turning to those initiatives. First, our customer file was down 8% in the quarter, driven primarily by traffic. Second, average revenue per customer was down 3% in the quarter, driven primarily by decreases in big ticket items, specifically hot tubs, heaters and above-ground pools. With regard to our PRO initiative, we ended the quarter with 4,000 PRO contracts in place and 98 PRO locations. This compares to 2,850 PRO contracts and 80 PRO locations versus the first quarter of last year. PRO sales were down 8% for the quarter. PRO Partner sales were up double-digits, offset by non-partner PRO sales, which declined double-digits, reinforcing the value PROs are seeing in our partner program.

Chemical pricing in the distributor channel remains very competitive, but appears to have stabilized. M&A and new store growth remain important initiatives for Leslie's and we remain confident in our long-term store expansion opportunities. For fiscal 2024, we remain on track to open 15 new stores. From an innovation standpoint, our AccuBlue Home smart tech device continues to increasingly resonate with our rising member base. Member spend continues to average $1,000 per year and member reviews continue to average 4.8 out of 5 stars. While still in the early days after the launch last May, we continue to expect the strong growth curve as customers realize its benefits and value proposition. Our vendor partner is ramping up device production for the season, and we are currently on track to achieve our 2024 full season device inventory plan.

While we remain focused on prudently executing our strategic initiatives to capture the long-term opportunities in front of us and extend our industry leadership, we continue to take actions to drive near-term performance. Number one, we are pricing at our relative historical price position and expect to hold this position for 2024. Number two, we are managing inventory and are on track to reduce our 2024 peak and year-end inventory by approximately $100 million and $50 million, respectively. Accordingly, Q1 inventory was down 22% or $95 million versus the prior year, while we still maintained high in-stock levels and strong service metrics. Number three, we are managing costs throughout the P&L. Scott will discuss this later in the call, but SG&A in the quarter was down 6% versus a year ago.

Number four, we continue to evaluate, develop, and elevate our people and processes to improve efficiency. The investments we have made in our supply chain talent, most notably the decision to put supply chain leadership under our Chief Merchandising Officer, Moyo LaBode, in conjunction with our new inventory and merchandising systems are driving benefits across the organization. And number five, we are utilizing consumer insight surveys to further improve our understanding of evolving consumer purchasing behavior, and we expect our preseason pool survey to be in the market this month. I'll now hand it over to Scott to discuss our results and outlook in more detail. Scott?

Scott Bowman: Good afternoon, everyone, and thank you, Mike. Before I discuss our results, I would like to introduce our new Vice President of Investor Relations, Matt Skelly. Matt is a seasoned Finance and Investor Relations professional with a career that has spanned over 20 years. We are excited to have them on board and look forward to his leadership of our Investor Relations efforts. Turning to first quarter results. Our results for the quarter were in line with or ahead of expectations, and we were pleased to see improving trends as the quarter progressed. We reported total sales of $174 million, a decrease of 11% compared to the first quarter of fiscal 2023. Comparable sales decreased 12%, but we saw sequential comp sales improvement each month throughout the quarter.

Comparable sales decreased 16% on a two-year stack basis and increased 4% on a three-year stack basis. Non-comparable sales contributed $3 million in the quarter, driven by acquisitions and new store growth. With respect to trends by consumer group, comparable sales for residential pool declined 10%, PRO pool declined 8%, and residential hot tub declined 20% compared to the prior year period. On a two-year stack basis, comparable sales declined 15% for residential pool, declined 15% for PRO pool, and declined 23% for residential hot tub. These declines were in line with our expectations given the current macroeconomic environment in a cost-conscious consumer. Gross profit was $50 million compared to $65 million in the first quarter of fiscal 2023 and gross margin rate declined 450 basis points to 29%, which was in line with our expectations.

Page 10 of our supplemental deck illustrates our Q1 gross margin rate bridge in more detail. During the quarter, gross margin was affected by four main factors, which we highlighted as anticipated puts and takes during our fiscal fourth quarter 2023 call. First, private gross margin rate declined 235 basis points, driven primarily by the timing of rebates. Second, DC costs were 125 basis point headwind comprised of 105 basis points from the expensing of previously capitalized DC costs and 20 basis points of deleverage on lower comparable sales. Third, occupancy costs, deleveraged by 200 basis points mainly due to the decline in comparable sales. Finally, inventory adjustments resulted in a positive impact of 110 basis points, as we improved inventory management.

SG&A was $87 million, a reduction of 6% or $5.4 million, compared to the first quarter of 2023. The reduction was due primarily to declines in merchant fees, lower headcount and executive transition costs and lower M&A costs. Adjusted EBITDA was negative $24 million, compared to negative $12 million in the first quarter of fiscal 2023 and adjusted net loss was $37 million, compared to a loss of $25 million in the first quarter of fiscal 2023. Interest expense increased to $17 million during the quarter from $13 million in the first quarter of fiscal 2023, due primarily to higher interest rates and our effective tax rate increased to 26.1%, compared to 25% in the first quarter of 2023. Adjusted diluted earnings per share, was negative $0.20 compared to negative $0.14 in the first quarter of fiscal 2023.

Diluted weighted average shares outstanding were $184 million. Moving to the balance sheet, we ended the quarter with cash and cash equivalents of $8 million compared to $3 million for the same period last year and had $38 million outstanding on the revolver, compared to $91 million at the same time last year. Availability on the revolver was $201 million at the end of the quarter. Inventory ended the quarter at $334 million, a decrease of $95 million or 22%, compared to the prior year quarter, while our in-stock position, service metrics and Net Promoter Scores remain very strong. Regarding our debt level, we had $788 million outstanding on our secured term loan facility at the end of the first quarter, compared to $796 million in the prior year quarter, and our leverage ratio was 5.3 times.

The applicable rate on our term loan was SOFR plus 275 basis points in the first quarter and our effective interest rate was 8.2%, compared to 6.1% in the prior year quarter. Turning to our fiscal 2024 outlook, we are maintaining our full year guidance. The first quarter was consistent with expectations. And we expect the second quarter to continue to be affected by pressure on discretionary categories in a more cost-conscious consumer, which is accounted for in our guidance. We have seen challenging weather for the first four weeks of the second quarter, although our weather providers are forecasting a favorable spring in some of our key markets. And as we discussed last quarter, we expect to remain on track to benefit from certain tailwinds in the back half of the fiscal year with easier comparable and as we anniversary the June 2023, chemical pricing action.

As a reminder, for fiscal 2024, we expect sales of $1.41 billion to $1.47 billion, adjusted EBITDA of $170 million to $190 million, adjusted net income of $46 million to $50 million and adjusted diluted earnings per share of $0.25 to $0.33. Consistent with our commentary in November and historical trends, we expect to deliver more than all of our profitability in the second half of the year, which is during peak pool season. We expect to see gross margin improvement of approximately 100 basis points compared to the prior year, driven by lower DC cost, better inventory management and improved supply chain efficiency. As a reminder, we expect most of this benefit will occur in the fourth quarter. Additionally, we expect to spend $50 million to $55 million in CapEx and to reduce fiscal year-end inventory levels by approximately $50 million.

Regarding capital allocation, our first priority continues to be the pay down of our existing debt with the goal of achieving a leverage ratio of 3.5 times to 3.7 times in fiscal 2024 and a longer-term goal of reaching a leverage ratio of 3 times or less. From a growth perspective, as Mike outlined, we are planning 15 new store openings in fiscal 2024, with the majority of these stores expected to open prior to Memorial Day ahead of the key pool season. We also plan to convert six residential stores to our pro forma. At this time, we are not including any M&A activity in our fiscal year guidance. And with that, I will hand it back over to Mike. Thank you.

Mike Egeck: Thank you, Scott. Before we wrap-up, I want to cover a few recent developments in our corporate ESG initiatives. In September, we published our third annual ESG report that highlighted our expanded environmental disclosures. The formation of four employee resource groups, with membership across the organization and the improvement of our MSCI ESG rating from A to AA. In addition, we were pleased to announce that Leslie's was recognized by St. Jude's Children's Hospital as their new corporate partner of the year. In December, we announced that Steven Ortega has decided not to stand for reelection as Chairman at our next Annual Meeting and that James Ray Jr. had resigned from the Board and his position as Lead Independent Director given his recent appointment as CEO for another publicly traded company.

I would like to thank Steve and James for their partnership and leadership as members of the Board. On behalf of current and former Leslie's associates, I would also like to thank Steve for his nearly two decades of service to Leslie's. We wish both Steve and James well in their future endeavors. We are also pleased to appoint John Strain a 30-year veteran of retail technology and e-commerce space and current board member as Lead Independent Director and Chairman Elect in advance of our 2024 Annual Meeting. To conclude, while we still felt the effects of lingering headwinds from 2023, we delivered results that were in line with or ahead of our expectations. As we prepare for the 2024 pool season, we remain confident in the durability of our advantaged business model and the ability of our team to leverage the competitive advantages from our scale, capabilities and strategic initiatives to drive growth, long-term market share gains, and shareholder value.

With that, I will hand it back to the operator for Q&A.

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