Good afternoon, and thank you for standing by. Welcome to Grove Collaborative Holdings, Inc.'s First Quarter 2024 Earnings Conference Call. At this time, all lines have been placed on mute to prevent any background noise. Following the speakers' remarks, we will open your lines for your questions. As a reminder, this conference call is being recorded. Hosting today's call are Grove's CEO, Jeff Yurcisin, and CFO, Sergio Cervantes. Before they begin their prepared remarks, I will review the forward-looking statement safe harbor. Some of the statements made today about future prospects, financial results, business strategies, industry trends and Grove's ability to successfully respond to business risks may be considered forward-looking including statements relating to our intention to increase marketing spend, the addition of products to our subscribe and save program, future improvement in first order conversion rates and payback period, our net revenue and adjusted EBITDA margin guidance, sequential revenue growth in the second half of the year and adjusted EBITDA profitability for 2024. Such statements are based on current expectations and beliefs in our subject to a number of risks and uncertainties that could cause actual results to differ materially, including those factors discussed in our filings with the Securities and Exchange Commission. All of these statements are based on Grove's view today, and Grove assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. For more information, please refer to the risk factors discussed in Grove's most recent filings with the SEC, which are available on Grove's Investor Relations website at investors.grove.com. During today's call, Grove 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 the earnings release, which is also available on their Investor Relations website. I would now like to turn the call over to Jeff Yurcisin to begin.

Thank you, operator. Hello, everyone, and thank you for joining the call today. I'm going to share our financial performance for the first quarter of 2024 as well as certain operational updates. This is my third earnings announcement with Grove as CEO, and I remain deeply confident in our incredible team's ability to, first, deliver incremental ongoing results against our strategy. Our focus on our core pillars of customer, sustainability and profitability guides our decision-making activities and progress. Second, evolve our brand into the destination for conscientious consumers. We've expanded our own brand and third-party product assortment significantly in recent years to meet our customers' needs. We will continue to be a trusted destination for conscientious consumers who want the best for their family. Third, transform Grove Collaborative. The early results of our strategy represent the beginning of a multiyear transformation of the company, building a new foundation for our company and our brand to expand into a household name for sustainable products. We know that a significant percentage of shoppers in the United States prioritize sustainability in their purchases, especially as the plastic and climate crisis in our society expand rapidly. The opportunity for Grove to fill a void in the consumer products and retail industries is remarkable. To meet that opportunity, we must remain focused on operating a sustainable business to ensure we can continue our pursuit of our sustainable mission. This pursuit continues to be guided by our three pillars, customer, sustainability and profitability. First, I'll begin with our customer pillar, where we made significant changes to our customer experience and expanded our product offerings in an effort to make Grove more meaningful in the daily lives of our customers. Last quarter, we shared that we launched an updated experience for new customers, removing gated access and default subscriptions, reducing friction in the first order experience. We also launched a new subscribe and save program on individual products to incentivize cart building and repeat orders. This change represented a significant shift in our business model. More importantly, it is the beginning of how we're rebuilding the front end of our business. The launch initially reduced first order conversion, but it has since improved and continues to improve as we optimize the experience. As conversion and repeat order rates improve, we intend to spend more on advertising to acquire new customers with efficient paybacks. We also made progress on our third-party category expansion initiatives. In the first quarter, we expanded our third-party assortment by 34% year-over-year and enrolled 41% of third-party products in our subscribe and save program on top of nearly 100% of Grove branded products also enrolled in the program. As additional third-party vendors agree to our vendor funding terms, more products will be added to the program over time. Lastly, this past quarter was significant for our flagship owned brand, Grove Co., where we executed a number of launches, including a Grove Co. rebrand leveraging beautiful and sustainable aluminum packaging and new artwork across our portfolio of products. We also introduced a new ready-to-use assortment of Grove Co. hand soap, dish soap, and liquid laundry detergent that offers more accessible entry price points for customers by not requiring the purchase of durable dispensers. This assortment was brought to life through our ongoing retail partnership with Target to develop a product line that stands out on store shelves and conveys sustainability at a glance. We also launched Rooted Beauty by Grove Co. facial wipes, our first personal care launch in nearly two years under our new brand strategy, as well as new natural origin fragrances across our portfolio, including Sun Shower, Fresh Pomelo, Wild Mint, and Sea Spray. Finally, we launched our summer limited edition collection with the Nature Conservancy, celebrating our existing partnership and ongoing conservation efforts in Southeast Alaska. Turning to our sustainability pillar, which continues to serve as our foundation, mission and point of differentiation. We have driven several key initiatives that further drive our industry leadership. First, I'd like to start with our Earth month celebration, which took place throughout April. Earth month is a key milestone for us at Grove to celebrate progress on sustainability while further educating our customers about the work underway to do even more for the planet. During the month, we replaced plastic tape with paper tape to seal individual products within packages. This will be a permanent change going forward. We also launched a digital campaign titled 'Perfection Isn't Sustainable, Progress Is,' to celebrate the impact of our customers shopping with Grove. Second, we are publishing our 2023 annual sustainability report in May, providing a detailed summary of our key commitments, progress and partnerships across important issues relating to Grove's business, plastic, carbon, forest health, ingredient standards, and justice and equity. Finally, we disclosed our latest plastic intensity metrics in our earnings release this afternoon to continue providing accountability for the pace at which we decouple our revenue from the use of plastic. Lastly, we turn to our profitability pillar. I'm proud to report that we have continued to maintain positive adjusted EBITDA for the third quarter in a row. Our long-term goal is to generate positive cash flow, but the first step along that journey is positive adjusted EBITDA. Specifically, this past quarter saw us make progress on our facility expenses, including restructuring our San Francisco headquarters lease and announcing the closure of our St. Peters, Missouri fulfillment center to streamline fulfillment operations. We are taking action to ensure our corporate and fulfillment center footprints align with the size of our current business but still have room to scale. These savings will be reflected in our P&L throughout the coming quarters. These updates across our customer, sustainability, and profitability pillars demonstrate the progress that the Grove team has made and will continue to make in future quarters. I'll now turn the call over to Sergio to review our financial results in more detail.

Thank you, Jeff. Similar to previous calls, we will provide quarter-over-quarter comparisons in addition to the year-over-year changes as we continue to believe that sequential comparisons reflect trends in the business and provide a measure of effectiveness of the steps we have taken to position ourselves for long-term sustainable and profitable growth. Starting with the top line, net revenue in the first quarter was $53.5 million, down 10.5% from the fourth quarter of 2023 and 25.2% year-over-year. The ongoing impact of lower advertising continues to impact revenue. As we navigate the transformation of the first quarter experience and prioritize market efficiency, advertising as a percentage of revenue was a record low during the quarter. We expect to scale our advertising spend in coming quarters to support revenue growth as we continue to improve our first quarter conversion rate and payback period. Total orders were down 10.5% quarter-over-quarter and 29.5% year-over-year to 0.8 million, and active customers were down 12.3% quarter-over-quarter and 35% year-over-year to 0.8 million. Both total orders and active customers continue to be impacted by lower advertising spend. DTC net revenue per order was down 0.8% quarter-over-quarter, but up 7.5% year-over-year to $66.27. The year-over-year improvement was driven by a mix shift to existing customer orders as well as an increase in the number of units for existing customer orders, particularly within health and wellness as we continue to expand our product offering in that category, as well as paper goods. Gross margin was up 110 basis points quarter-over-quarter and 350 basis points year-over-year to 55.5%. The sequential improvement was mostly due to an increase in the estimated trend of funding allowance to better reflect the sell-through of third-party inventory. The year-over-year improvement was further benefited by reductions to our inventory reserve charges and a decrease in the number of lower margin first orders as a percentage of total orders, partially offset by a decrease in Grove Brands mix as a percentage of total revenue. Grove Brands products as a percentage of net revenue was down 150 basis points quarter-over-quarter and 580 basis points year-over-year to 43%. The sequential and year-over-year decline was largely due to the expansion of our third-party product offering, especially in the Health and Wellness category, fewer first orders, which have historically had more Grove branded items on average, and the recent transformation of the new customer experience. Advertising expense decreased 47.4% quarter-over-quarter and 36.3% year-over-year to $2.1 million. The sequential and year-over-year decline reflects our pullback in advertising spend and focus on efficiency as we transform the first order customer experience and improve the first order conversion rate. We have prioritized improving our first order conversion rate, which has improved and continues to improve as we optimize the customer experience for new channels. We anticipate increasing advertising spend as a percentage of net revenue over the course of the year while also improving our efficiency. The quarter-over-quarter sequential declines are also due to a reduction in retail-specific advertising as we continue to balance growth and profitability. Product development expense decreased 20.4% quarter-over-quarter and 14% year-over-year to $30.6 million. The sequential decline is partially due to a lapping of $0.7 million reclassification from SG&A and $0.1 million of restructuring charges in the fourth quarter. Excluding these items, product development expense was stable quarter-over-quarter and declined year-over-year. The year-over-year decline was primarily due to the prior year impact of restructuring and a decrease in stock-based compensation. SG&A expense decreased 23.3% quarter-over-quarter and 35.3% year-over-year to $24.6 million. The quarter-over-quarter and year-over-year decline is mainly due to lower fulfillment costs from fewer orders, a reduction in personnel headcount, and lower facility costs from a partial quarter impact of the modification of our headquarters lease. The year-over-year decline was further benefited by the reduction in professional service costs. Of note, the current quarter SG&A includes a $2.9 million gain from restructuring compared to Q4 2023, which included a $3.3 million expense from restructuring. Adjusted EBITDA for the fourth quarter was $1.9 million compared to $0.1 million in the fourth quarter of 2023 and a $6.9 million loss in the first quarter of 2023. Our adjusted EBITDA margin for the fourth quarter was positive 3.5% compared to positive 0.2% in Q4 2023 and negative 9.6% in Q1 2023. The improvement in adjusted EBITDA continues to demonstrate our hyper-focus on improving profitability. However, as Jeff mentioned previously, this improvement is only a milestone in our transformation that is focused on delivering positive cash flow. The net loss in the quarter was $3.4 million compared to a net loss of $9.5 million in the fourth quarter of 2023 and a $13.1 million loss in the first quarter of 2023. Turning now to the balance sheet, we ended the quarter with $81.6 million in cash, cash equivalents, and restricted cash, a decrease of $13.3 million from the previous quarter. The decrease is mainly due to the lease termination payment of our headquarters, annual bonus incentive payout, and interest expense. In this transformation period, we remain extremely focused on cash preservation and target efficient returns on cash outflows such as the lease termination payment. Based on the rent savings, we expect less than a two-year payback period to recover the initial cash outflow. As it relates to working capital trends, we finished the quarter with an inventory balance of $31.5 million, up $2.7 million from the end of Q4 2023, driven primarily by an increased investment in third-party inventory to support our category expansion initiatives. We have not made any draws on our asset-based loan facility since taking the minimum draw of $7.5 million in Q1 2023. Based on current inventories and accounts receivable balances, we have $9.1 million of borrowing capacity available under capacity. Now turning to our outlook. For the 12-month period ending December 31, 2024, we still expect net revenue of $215 million to $225 million, an adjusted EBITDA margin of 0% to 1%. Despite the uncertainty around the business model transformation and our ability to increase advertising spend over the course of the year, we are maintaining our guidance and continue to be optimistic that the changes to our first order experience and the launch of subscribe and save will be catalysts for sequential revenue growth in the second half of the year. We are already seeing improvements to our first order conversion rate as we expected, allowing us to acquire new customers more efficiently, but there is more work to be done. We also continue to match our expenses well in the midst of the transformation, including the completion of the headquarters lease modifications in the first quarter. I look forward to sharing more updates on top and bottom line progress in future quarters. I would now like to turn the call back over to Jeff for some closing remarks.

Thank you, Sergio. These results are just the beginning as we pursue a multiyear transformation for growth. You've heard me speak about how our sustainable mission is needed now more than ever before. Just look at the headlines about our environment and climate as this is our differentiation. We are committed to building a sustainable business to pursue that mission. Our efforts are focused on building a business that drives shareholder value creation through the generation of cash. Our first step is sequential revenue growth by the end of the year while being profitable on an adjusted EBITDA basis for the full year. We're laser-focused on our strategy and are excited to keep implementing our plan to drive results for our shareholders. With that, we're happy to answer any questions you have. Operator, please open the line for questions.

And the first question comes from Susan Anderson with Canaccord Genuity. Please go ahead with your question.

Hi, good evening. Thanks for taking my question. I was wondering just how we should think about the cadence of sales as we go throughout the year. Should we think about it as sequentially improving quarter-to-quarter in terms of the decline? Also, could you talk about the driver of the sales improvement as we progress throughout the year? Thanks.

I appreciate it, Susan. Thank you. First, I would say we're only guiding towards sequential growth this year. However, we believe that we are near a bottoming out of those unusual comps that occurred when we spent heavily on marketing back in 2022. What we're focusing on is initiatives around the customer experience, opening up the shopping experience to more new customers, following our existing customers into wellness where we're seeing great success, and improving the overall experience while browsing and shopping on Grove. That's where we're putting our energy. As for the revenue impacts we are forecasting, we see this sequential growth for the year, and more importantly, we expect this to be sustainable growth moving into 2025.

Great. And then I was wondering if you had any initial reads on the new products that you rolled out with new packaging at retail. Are they bringing in new customers into the brand?

I appreciate it. It's very early on some of these new products, but we are quite energized and excited about the launch of the Grove Co. rebrand, the new products, and the summer limited edition collection. We didn't mention this in our release, but we were awarded an award by the Guideline Awards, almost like the Oscars of the design world in the category of home shopping packaging. Anecdotally, we've heard that we've sold out of some targets already in the first week. We are very excited about the packaging to the positioning. For me, I am thrilled about the underlying product, the efficacy of it and the price. No new guidance that we're giving right now, just really excited about what we're doing and recognizing that it's very early.

Great. That sounds exciting. Could you talk about gross margin for the remainder of the year? Should we think about it for the next few quarters as being consistent with the first quarter in terms of the gross margin percentage, and what drivers or impacts should we consider?

Yes, I can. Thank you, Jeff. Thank you for the question, Susan. In terms of gross margin, bear in mind that Q1 has a couple of one-off items that you shouldn't expect to continue in the following quarters. Apart from that, while we do not guide on gross margins going forward, we continue to put all efforts towards becoming profitable, and gross margin continues to be one of those milestones. The emphasis will be on improving gross margin in the upcoming quarters.

Okay. Great. Lastly, could you talk about advertising? You mentioned picking it up in the back half of the year. Is that still the plan, and any thoughts around the level of advertising?

I appreciate that, Susan. We’re operating with strict discipline, expecting strong paybacks from our advertising spend. What’s happening is as we transform this customer experience by opening up the shopping experience, we are unlocking new channels, testing and learning. We have seen week-over-week improvement since the launch on February 29. As those efficiencies continue, we foresee a world where we can invest with high confidence on paybacks, which will lead to a higher advertising percentage of revenue spend. I'm not guiding to a specific number currently. What is most important is that we think about this incrementally, and we will only invest where it makes rational sense. When we see marketing spending increase as a percentage of revenue, I believe investors can be confident that we are treating their cash carefully and investing with high expectations of returns.

Okay. Great. Thanks so much. Good luck the rest of the year.

Thanks, Susan. Really appreciate it.

And the next question comes from the line of Dana Telsey with the Telsey Advisory Group. Please proceed with your question.

Hi, good afternoon, everyone. Jeff, can you talk a little bit about third-party brands? How are they performing? Are there differences between brands, or do you see certain attributes in brands that perform better than others? And on the Grove brand, which I think was 43% of the business this quarter, where does that settle out?

I appreciate the chance to talk about products. First, as the data suggests, third-party is growing faster. This is primarily driven because we're able to grow more SKUs and selections rapidly in that channel. However, I’ve mentioned this before. We are not working backwards from an ideal percentage mix. Our focus is presenting the highest performing products that are eco-friendly and wallet-friendly first to our customers. If I can emphasize one category, it's around wellness. Our survey found that nine out of ten of our customers trust us more than other retailers for wellness items. We've earned that trust through our high environmental and ingredient standards. In this quarter, orders with a VMS item increased from 8% last year to 13.8% this year, an increase of 290 basis points quarter-over-quarter as we continue to add relevant selections and introduce exceptional brands and products that meet their needs. It is a category that we are energized by and seeing strong success.

Got it. Following up on metrics such as orders, active customers, and AOV, how do you see those progressing as we move through the year? When do you think stabilization increases will happen? How should we envision those metrics evolving?

Good question. I mentioned earlier that we see some of the natural cohort curves bottoming out in the back half of the year, and we envision sequential growth. Revenue per order this quarter was $66.27, and it was up 7.5% year-over-year. Those expectations for revenue per order are reasonable to maintain; that enables the wallet economics to work, allowing customers a great deal and ensuring we can meet our obligations and deliver the right gross margin. As we get to the back half of the year, I believe you will see more stabilization in orders and a continued year-over-year improvement in revenue per order.

Thank you.

Thank you, Dana.

And there are no further questions at this time. I would like to turn the floor back over to Jeff Yurcisin for any closing comments.

Thank you very much. I appreciate your time. I want to thank everyone for joining the call, and I hope you have a great night. Thank you.

And ladies and gentlemen, that does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.