Max Rakhlenko

Max Rakhlenko asked about the expected shape of Planet Fitness's 2026 EBITDA and EPS guide, specifically for the first half versus the second half, and inquired about the timing and impact of a potential PF Black Card price increase on comp build and mix.

Answer

CFO Jay Stasz indicated lower comps in the first half and higher comps in the second half of 2026, primarily due to lapping the nationwide rollout of member management in Q2 and the backloaded nature of equipment revenue (57-60% of openings in Q4). He expects EBITDA margin to be consistent year-over-year, with leverage on SG&A. CEO Colleen Keating confirmed the Black Card price increase would occur after the peak join season (likely Q3), is modeled into the guidance, and will contribute to the comp from pricing, with an anticipated 75% rate / 25% volume split.

Max Rakhlenko asked about the expected shape of the year for the lower EBITDA and EPS guidance in 2026, specifically regarding the first half versus the second half. He also inquired about the margin progression throughout the year and the latest thinking on the timing and impact of a PF Black Card price increase.

Answer

CFO Jay Stasz indicated lower comps in the first half of 2026 due to lapping the nationwide rollout of member management in Q2, with higher comps expected in the second half. Equipment revenue is anticipated to be backloaded, similar to last year's Q4 concentration. He expects significant margin leverage on an ex-NAF basis, with overall EBITDA margin remaining consistent year-over-year. CEO Colleen Keating stated that the Black Card price increase would roll out after the peak join season, directionally similar to the Classic Card timing in Q3. She noted it is modeled into the guidance, contributing to the 75% rate / 25% volume comp split.

Max Rakhlenko questioned the conservative same-club sales guidance for the second half of the year, asking why churn from online cancellations wouldn't normalize faster. He also asked about the new Director of Franchise Sales role and the strategy for adding new franchisees to the system.

Answer

CFO Jay Stasz clarified that churn from the online cancellation rollout is slightly higher than first modeled, warranting conservatism despite the ongoing benefit from the Classic Card price increase. CEO Colleen Keating added that new franchisees are needed for long-term growth and to provide succession options for existing franchisees nearing the end of their fund horizons.

Max Rakhlenko asked about the current competitive environment and how Floor & Decor's price gaps are trending today compared to before tariffs were implemented, seeking any notable changes.

Answer

CEO Brad Paulsen described the competitive environment as rational, with pricing and promotional activity generally in line with expectations, except for some sensitivity in the vinyl segment of laminate and vinyl. He stated that price gaps remain consistent with historical trends, varying by category, and that the company continues to invest in pricing science.

Max Rakhlenko inquired about the current competitive environment and how Floor and Decor's price gaps are trending compared to before tariffs were implemented, seeking any notable changes.

Answer

Brad Paulsen (CEO, Floor and Decor) described the competitive environment as rational, with pricing and promotional activity in line with expectations, except for vinyl. He stated that price gaps remain consistent with historical trends, varying by category, and the company continues to invest in pricing science.

Max Rakhlenko asked about the future pricing strategy for exclusive brands relative to national brands, given recent adjustments, and whether exclusive brands might be priced lower or normalize over time. He also inquired about where Boot Barn is gaining the most market share, specifically commenting on the farm and ranch channel and the impact of vendors going direct-to-consumer (DTC).

Answer

CEO John Hazen believes exclusive brand pricing will normalize over time, with the team opportunistically holding psychological price points on certain items. He attributed market share gains to strong team execution, inventory depth, customer service, and assortment, taking share from independent retailers, Western competitors, and general retailers (e.g., department stores for denim), while noting DTC vendors are not a major concern.

Max Rakhlenko asked about Boot Barn's exclusive brand pricing strategy, specifically how price points between exclusive and national brands are evolving given recent adjustments and customer reactions, and if they will normalize over time. He also questioned where Boot Barn is gaining market share, particularly from the farm and ranch channel and direct-to-consumer vendors.

Answer

CEO John Hazen expects exclusive brand price points to normalize over time, with a careful approach to avoid breaking psychological price points on certain items. He attributed Boot Barn's market share gains to the team's execution, depth of inventory, sizing availability, and best-in-class customer service, taking share from independent retailers, Western competitors, and general retailers (especially in denim) rather than significant TAM expansion. He noted that D2C vendors, while effective in digital advertising, are not a major concern due to Boot Barn's store-centric model.

Max Rakhlenko asked about the long-term potential for exclusive brand product margins, particularly with the new VP of Sourcing. He also questioned if the positive turn in the work business is sustainable or related to easier comparisons, and how the company analyzes that business's historical performance.

Answer

CEO John Hazen stated that while the new sourcing team could deliver over 100-200 basis points of margin gain, these benefits are not expected until fiscal 2027 and 2028. Regarding the work business, he noted its steady improvement but said he was not ready to 'declare victory,' as there is still more work to be done to reinvigorate the category.

Max Rakhlenko inquired about the full-year guidance in the context of strong Q1 comps and easing comparisons, and asked for comments on the first month of Q2. He also sought an update on Breeze store conversion timing, the number of planned conversions, and the P&L impact for the rest of the year.

Answer

Kevin Willis, CFO, Valvoline, expressed confidence in the full-year guidance despite strong Q1. Lori Flees, President and CEO, Valvoline, noted Q2 started strong before Winter Storm Fern, which slowed momentum, but expects transactions to recoup. On Breeze, Lori Flees stated it's premature to detail store conversions, while Kevin Willis outlined a projected $160 million top line and $31 million EBITDA for the 10 months in FY26, with a $0.20 EPS impact.

Max Rakhlenko asked how to think about the full-year guidance given strong Q1 comps and easing comparisons, and for comments on the first month of Q2. He also inquired about the timing of Breeze store conversions and the P&L impact for the rest of the year.

Answer

Kevin Willis, CFO of Valvoline, reiterated confidence in the full-year guide, noting Q1's strong performance. Lori Flees, President and CEO, described a strong start to Q2 before Winter Storm Fern, expecting transaction recoupment. Flees stated it's premature to detail Breeze store conversions. Willis added that Breeze is expected to contribute $160 million in top-line and $31 million in EBITDA for 10 months in FY26, with a 100 basis point EBITDA margin impact.

Max Rakhlenko from TD Cowen asked about customer response and elasticity to recent price increases, the company's future pricing strategy in light of tariffs, and details regarding the new collection slated for next year.

Answer

Gary Friedman, Chairman and CEO, and Jack Preston, Chief Financial Officer, explained that price increases were a response to dynamic tariff movements, acknowledging challenges in perfect timing and mitigation efforts. Friedman expressed significant excitement for the new collection, targeting a major architectural and aesthetic block, with plans for a Salone launch in Milan, anticipating it could be a multi-billion dollar, 10-year growth driver.

Max Rakhlenko inquired about customer response and price elasticity following recent price increases in Q3, especially given tariff impacts, and asked for more details on the new collection planned for next year, including its timing and potential impact.

Answer

Chairman and CEO Gary Friedman and CFO Jack Preston discussed the dynamic nature of tariffs and price adjustments, noting that Q3 saw some unexpected tariff expenses on backorder goods. Friedman elaborated on the new collection, describing it as the 'biggest incremental move' targeting a significant architectural block (60% of homes $5M+), and revealed the acquisition of Michael Taylor Designs to support this initiative, with a target launch at Salone in Milan.

Max Rakhlenko questioned the medium-term revenue potential and four-wall economics of RH's European galleries, specifically referencing improvements in England and the strong start in Paris.

Answer

Chairman and CEO Gary Friedman discussed the rapid scaling of Paris, London, and Milan, noting higher brand awareness in London. He highlighted the potential for four-wall margins in Europe to align with U.S. galleries and the ongoing learning curve in operational execution.

Max Rakhlenko of TD Cowen inquired about the progress on reducing excess inventory in Q1 and asked for a bridge from Q1 free cash flow to the full-year guidance. He also asked if the company might need to raise capital.

Answer

CFO Jack Preston noted that inventory was down slightly sequentially, with more significant reductions planned for the second half of the year. Chairman & CEO Gary Friedman stated there is no plan to raise equity capital at the current stock price but might consider a convertible offering at a much higher price. He stressed that the company is not capital-constrained and is fully funding its growth initiatives.

Max Rakhlenko from TD Cowen asked about the elasticity observed in the business due to selective price increases and how this impacted Q3 comps, specifically the contribution from transactions versus ticket. He also inquired about the timing of tariff flow-through and its expected impact on margins in Q4 and subsequent quarters.

Answer

Laura Alber, CEO, explained that elasticity varies by product and competition, emphasizing the importance of innovation, exclusive products, and improved service for pricing power. Jeff Howie, CFO, detailed that tariffs took longer to flow through due to delayed effective dates and aggressive front-loading of inventory, confirming a larger impact is expected in Q4, as embedded in the guidance.

Max Rakhlenko asked about the elasticity observed in the business following selective price increases, inquiring about the impact on Q3 comps from transactions versus ticket. He also followed up on the flow-through of tariffs, asking for guidance on modeling their impact over the next several quarters, particularly for Q4.

Answer

CEO Laura Alber explained that pricing is constantly reviewed across brands and categories, noting that elasticity varies. She highlighted innovation and exclusive products as drivers of pricing power, along with improved service and experience. CFO Jeff Howie clarified that tariffs are taking longer to flow through due to delayed effective dates and aggressive front-loading of inventory, which benefited Q3. He stated that Q4 will see a larger tariff impact, as embedded in the guidance, and deferred 2026 guidance due to tariff volatility.

Max Rakhlenko of TD Cowen asked for management's view on whether Arhaus is gaining market share and how it is positioned against competitors. He also inquired about the specific drivers behind the product margin expansion in the quarter.

Answer

Founder, Chairman, and CEO John Reed expressed confidence that Arhaus is taking market share, citing its unique, proprietary product and growing sales. On margins, Reed mentioned proactive price adjustments in the spring helped. CFO Michael Lee added that product margin improvement was also driven by product mix and sourcing concessions, while transportation cost leverage came from higher sales volume. He noted new store openings in Q4 would help leverage occupancy costs going forward.

Max Rakhlenko from TD Cowen asked if competitors are taking different pricing actions, thereby changing price spreads, and requested specifics on SG&A investments aimed at capturing market share.

Answer

CFO Jeremy Fletcher and CEO Brad Beckham both confirmed they are not seeing any material changes in price spreads and that the industry continues to act rationally. On SG&A, Fletcher pointed to investments in teams and inventory availability, while Beckham added that investments also include maintaining high service levels during slower periods to build long-term customer loyalty.

Max Rakhlenko of TD Cowen asked if O'Reilly is observing any changes in its price spreads versus competitors, particularly WDs, amid tariff actions. He also requested specifics on SG&A investments aimed at capitalizing on market share opportunities.

Answer

EVP & CFO Jeremy Fletcher and CEO Brad Beckham stated that they are not seeing any material changes in price spreads and believe the industry is behaving rationally. Regarding investments, they highlighted spending on their teams, inventory availability, and technology to enhance customer service, noting they will 'out hustle' competitors, especially during slower periods, to secure future business.