Good day, ladies and gentlemen, and welcome to the Grove Collaborative 2Q 2022 Earnings Call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host, Alexis Tessier. Ma'am, the floor is yours.

Hello, and thank you all for joining us today. With me on today's call are Grove’s, Co-Founder and CEO, Stuart Landesberg; and CFO, Sergio Cervantes. Before we get started, I'll quickly cover the forward-looking Safe Harbor. Some of the statements that we make today are about our future prospects, financial results, business strategies, industry trends and our ability to successfully respond to business risks may be considered forward-looking. Such statements involve a number of risks and uncertainties that could cause our actual results to differ materially. All of these statements are based on our view of the world and our business as we see it today. As described in our SEC filings, the underlying facts and assumptions for these statements can change as the world and our business changes. For more information, please refer to the risk factors discussed in our most recent filings with the SEC, which are available on our Investor Relations website at investors.grove.co. During today's call, we will also discuss certain non-GAAP financial measures. Reconciliations of these non-GAAP items to the most directly comparable GAAP financial measures are provided in our earnings release and supplemental earnings presentation, which are also available on our Investor Relations website. With that, I'll turn it over to Stuart.

Thank you, Alexis, and good afternoon, everyone. I'm excited to speak to you today after our June listing on our first earnings call as a public company. We will share details on our performance in the second quarter, how our results fit within our shareholder value creation plan, and why we believe Grove is positioned for success as we lead the household products industry to transformational change. For those of you newer to the Grove story, let me first provide background on our company and the mission that got us started. At Grove, our vision is that consumer products can be a positive force for human and environmental health. We operate in a massive industry with almost a $1 trillion global TAM for home and personal care products, a $180 billion TAM in the US alone. Essentially, all of that commerce is wrapped in single-use plastic today. Simply put, the current plastic and carbon footprint of our industry is not sustainable. In 20 years, products in our industry will look different. Change is inevitable, and Grove is leading that transformation. The home and personal care industries historically have a mixed track record for their impact on human health and a terrible track record for their impact on environmental health. One problem though, in particular, is the tip of the spear, both for our industry and for Grove, plastic. The overwhelming majority of consumers, 84% in the US are concerned about plastic waste. Grove is focused on being the market leader in solving that problem. The opportunity at Grove is to transition the products that we all use each day, hand soap, dish soap, laundry detergent, bath tissue, shampoo, face wash, both are good for us and for the planet. We are building this company to serve the families of tomorrow…

Thank you, Stuart. I can’t believe that it has only been four months that I enjoy the different company on its critical important mission. What stand up for me is that, I am surrounded by truly incredible people that share a common goal of creating solutions to the problems for our health and for our planet, cut the plastic consumption globally. Before I get into our results for the second quarter, I want to take a moment to layout some of the key drivers of the business. In the coming years, we expect to drive revenue by growing our omnichannel presence. Historically, we have grown revenue from $105 million in 2018 to over $300 million expected this year, predominantly by driving orders on our DTC platform from both new customers and existing customers, as well as through higher average order value. New customers' orders are primarily a function of how much we are spending on advertising, while customer retention is key for driving existing customer orders. Our order value has risen as we have expanded our product offering and we have seen a mix shift into higher value categories overtime from home care to personal care to beauty. As we continue our push into omnichannel distribution and brick and mortar retail becomes a larger part of our business, we expect the retail metrics such as door count, points of distribution and velocities to name a few to become a more prominent part of our business performance metrics. On the gross margin front, we have driven material expansion from 35% in 2018 to 49% last year by increasing our assortment of Grove branded products, which carry a higher gross margin of third-party products, as well as by the shift into higher market categories I just mentioned. Gross margin is also impacted…

Thank you. The floor is now open for questions. Our first question comes from Dana Tesley. Please state the question.

Hi. good afternoon, everyone. As you think about the cash profitability and the expense reductions that are underway, where are you in the cadence of that and when you think about the buckets, for example, the inefficient ad spend, where is there the most opportunity? And then on the revenue side, with the standard retail that you've entered into, capacity in being able to fulfill orders? And what do you see as the ultimate goal of retail contribution sales and margin. Thank you. A – Sergio Cervantes: Thank you, Dana. Thank you for the question. So basically, as we see the path to profitability going forward, our plan is and the plan that we have shared with the markets, we feel strongly that we have the capabilities, capacity and the right mindset and structure to achieve it. So what we are basically, cadence in this is for reductions in the second half of 2022 to start kicking further to what we have done, as previously mentioned during the call. So basically, this will kick off in 2022 and accelerate in the second half with the site of view of having these basically the bond rate that we want to achieve at some point during 2023. That's basically -- answering the question, where do we see the most benefit coming out of or the most efficiencies coming out of. It's a combination of all the P&L as we have been explaining. But basically, if you were to think in all the priorities, I think OpEx meet investment and gross margin performance in that order of sequence. I would put it, or ranking, if you will, and that's what we are striving for. I would let Stuart answer the second part of the question.

Yes. Thanks, Dana. It's -- I appreciate the question. I think Sergio said it well, that it really is a full P&L approach. And I think in terms of the area where we've got sort of the most to go or will drive the biggest impact on a relative basis. It's hard to pin down a little bit, because so many are driving double-digit million dollar changes year-over-year. Probably the one that I would point to most is continuing to drive stronger and stronger profitability from our core customer base. We see that in lowering the cost to serve in driving higher average basket and higher gross margins, which we're hopeful we can continue to drive for the balance of the year and through '23. And success there, of course, will drive really strong bottom line, especially as we seek to operate the business more efficiently.

Thank you.

Okay. There are no further questions. I'll turn it back to Stuart for closing remarks.

Thank you. Thanks, everyone, for joining. I just want to say, how grateful I am to have the opportunity to share the growth story now as a public company and how much conviction I have in our team's ability to continue to lead the way with innovation towards a future that where we drive, not just a material change for the environment, but also material returns for our shareholders over the many, many quarters and years ahead. Thank you much. Look forward to reporting back on future quarters, as we continue to make progress.

Thank you. This concludes today's conference call. We thank you for your participation. You may disconnect your lines at this time, and have a great day.