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So with this introduction, I want to focus my prepared remarks on the actions we are pursuing to turn around our recent performance and drive long-term growth. I am extremely confident in the direction we are headed, driven from the strong foundation of our credit segment, our compelling retail credit business model and our large market opportunity. Conn's leading credit organization is the result of the investments we made over multiple years to create sophisticated underwriting, collection and marketing capabilities. This solid foundation enables us to navigate normalizing credit trends and a difficult economic environment while simultaneously pursuing our growth strategies, including our emerging in-house LTO opportunity. The strength of our credit business, combined with our differentiated business model, also enables Conn's to offer unmatched payment options that are aligned with growing consumer needs and favorable demographics.

Within the 15 states in which we operate today, nearly half of consumers have credit scores that fit our Conn's credit and LTO payment options. In addition, the national average credit score in the United States in calendar 2022 was unchanged following multiple years of unprecedented credit score growth. With high inflation and growing economic uncertainty, we expect consumers' credit scores will decline in 2023 for the first time in over a decade. As a result, we believe our multiple payment offerings are needed now more than ever, and we are focused on helping provide flexible and affordable payment options to our customers. Our large addressable market also creates a compelling customer funnel that today represents approximately 28 million total visits to either one of our stores or to our website over the last 12 months.

We believe this provides significant growth opportunities across all aspects of our customer funnel that include growing the number of visitors who apply for credit, increasing approval rates and amounts and expanding our customers' use of their available credit. Since becoming a public company almost 20 years ago in late 2003, I believe Conn's has undergone two major strategic transformations. The first was in 2012 when the company went through a retail transformation that resulted in a move away from small, less profitable cash and carry merchandise towards large-ticket essential products for the home, including expanding our furniture assortment. These changes contributed to significantly higher retail sales and retail gross margin. The second transformation was under my leadership in 2016 when we began making significant investments in our credit operation and changed the lending model in multiple states that enabled us to increase interest rates to appropriately price the credit risk of our customers.

These changes contributed to a significant improvement in the profitability of our credit segment and created a solid foundation to support credit-driven growth initiatives. I believe that our in-house lease-to-own strategy will be the third strategic transformation we will undergo since becoming a public company and is critical to unlock the full potential of our customer funnel. I am pleased to report that we recently launched our in-house lease-to-own product as Improvement Financial, a brand name that is different from our core retail business. Like the other transformations the company has been through over the last 20 years, bringing the lease-to-own business in-house has the potential to contribute to significant growth in both revenue and earnings in the coming years.

Over the near term, it will allow us to provide another profitable option to better serve the approximately 600,000 applicants that did not qualify for Conn's in-house financing over the last 12 months. Since our differentiated retail credit business model enables us to capture both retail gross margin and lease income, we believe Conn's can approve more LTO applicants and provide greater purchasing power than other providers. We also believe we have a compelling opportunity to drive repeat customer relationships by gaining access to the payment history of LTO customers. We will use this information to convert in-house LTO customers to future Conn's credit customers. This will allow us to develop longer customer relationships by graduating customers to more attractive, lower-price financing options while also helping customers improve their credit.

After several quarters of development, Improvement Financial went live in February 2023 in three Houston area stores, and we have recently expanded to 10 locations. By the end of this fiscal year, we expect Improvement Financial will be offered across the majority of our stores and at conns.com. While it's too early to provide information on the performance of our new in-house LTO offering, we are excited by the potential to add incremental sales and earnings to Conn's. This past year, LTO sales were approximately $81 million and represented just over 7% of retail sales. As our in-house LTO program matures, we believe annual LTO sales can more than double and grow to over 15% of our retail sales. As we convert third-party LTO sales to in-house LTO transactions, we expect our operating income this fiscal year to be negatively impacted by approximately $15 million.

However, as the program matures, we believe our in-house LTO offering will add over $20 million to annual operating income. As you can see, Improvement Financial is a transformational opportunity that we believe will unlock significant value. I look forward to updating our shareholders on the progress of this program over the coming quarters. Next, I want to provide an update on the successful transition of our eCommerce business. Over the past 18 months, we completely re-platformed our website and created a modern online shopping experience that is supported by a broader assortment. Even as we undertook the difficult task of converting our eCommerce platform and enhancing our digital capabilities, we were able to grow eCommerce sales by 10.8% to an annual record of $79 million this past fiscal year.

Going forward, we continue to believe we have a large opportunity to grow online sales, and we are committed to driving traffic and increasing conversion. eCommerce sales are up 21.5% through the first seven weeks of the quarter, and we believe eCommerce sales this fiscal year can increase to over $100 million. Longer term, we continue to believe eCommerce sales can grow to over $300 million annually. Our eCommerce platform has also benefited from the recent implementation of an innovative digital application that changes two major aspects of the process. First, we no longer require a hard credit inquiry to provide a credit decision before shopping. Hard credit inquiries can affect the customers' credit score. Customers, particularly non-prime customers, are often wary of completing an application knowing that their credit may be affected.

In this new process, a credit decision is provided through a soft credit inquiry prior to shopping with little to no impact on the customer's credit score, which removes a significant friction point from the application and shopping process. Second, customers no longer go through a series of credit decisions individually applying for each credit program. Instead, once a customer completes a common application, they see a dashboard of qualifying offers, which allows them to see and select the payment option that best fits their individual needs. This new digital application removes another significant friction point from the application process and provides our customers with additional information to make informed purchase decisions. Since launching our innovative digital application process, we are seeing application traffic increase, which we believe ultimately supports sales opportunities across our customer funnel.

Our refocus on our core consumer through more targeted marketing, combined with the refreshed eCommerce platform, are beginning to drive application growth. The year-over-year change in applications has been narrowing over the past six months, and March will be the first month applications are up year-over-year in almost 18 months. Applications are a critical leading indicator of sales, and I am encouraged by these improving trends. Turning to new store growth. We ended fiscal year 2023 with 168 locations, which included 11 new stores and one closed location, and we continue to test our store within a store strategy with Belk. This fiscal year, we expect to open 11 stores and two distribution centers, all of which were previously committed.

After these stores and distribution centers open, we plan to pause new store openings over the next couple of years to focus on better serving our core credit-constrained consumers capitalizing on our in-house lease-to-own strategy and accelerating e-commerce growth. With major investments across our credit and retail segments behind us, we believe we have a multiyear opportunity to drive retail growth within our existing stores and online without the need to open new stores or distribution centers. We believe this strategy will maximize profitability by increasing revenue per store and leveraging our fixed operating costs. Finally, given the uncertain economic environment and in lieu of official guidance, I want to provide some details on recent sales trends and considerations for the year.

Since the third quarter, sales trends have improved or remained stable as we have refocused the business on our core credit-constrained consumer. These trends continued into the first quarter with total retail sales down 18.6% quarter-to-date. Looking forward through the remainder of the fiscal year, we expect retail sales to improve on a sequential basis as we benefit from the growth strategies we have discussed today. Looking at other areas of our income statement, we expect retail gross margin to stabilize and benefit from lower freight expenses this fiscal year. After reducing SG&A by approximately $18 million last fiscal year, primarily through cost savings initiatives, we expect annual SG&A expenses to increase year-over-year by $25 million to $35 million.

This expense growth is primarily associated with the 22 new stores that will have opened between last fiscal year and this fiscal year. It's also important to note that we currently expect our annual interest expense to increase year-over-year by approximately $40 million to $45 million as a result of wider credit spreads and higher benchmark rates. Before I turn the call over to George to share more details on our financials, I want to reiterate my confidence in our business. Conn's continues to have a strong value proposition, a solid foundation and compelling future. I believe we have the right strategies in place to drive top line sales and improve our financial results, especially as retail trends normalize. We can and should win in any environment, and the leadership team and I will hold the company accountable to this belief.

As we refocus on execution in the business, I am confident we can turn around our financial and operating results. I have a deep conviction that our business resonates with our customers and a strong belief in our leadership team's ability to deliver on our strategic priorities. With this overview, I'll turn the call over to George.

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George Bchara : Thanks, Norm. While this past fiscal year was challenging and we expect this current year to be impacted by continued economic uncertainty changes in consumer behavior and our in-house lease-to-own transition, we are excited by the strategies underway to drive profitable growth. On a consolidated basis, total revenues were $334.9 million for the fourth quarter, representing a 16.8% year-over-year decline. For the fourth quarter, the company reported a GAAP net loss of $1.79 per diluted share compared to net income of $0.26 per diluted share for the same period in fiscal year 2022. For fiscal year 2023, total revenues were $1.3 billion, representing a 15.6% year-over-year decline. The company reported a GAAP net loss of $2.46 per diluted share for fiscal year 2023, compared to net income of $3.61 per diluted share for fiscal year 2022.

On a non-GAAP basis, adjusting for certain charges and credits, we reported a net loss of $1.53 per diluted share for the fourth quarter compared to net income of $0.33 per diluted share for the same period in fiscal year 2022. For fiscal year 2023, we reported a net loss of $2 per diluted share compared to net income of $3.71 per diluted share for fiscal year 2022. Reconciliations of GAAP to non-GAAP financial measures are available in our fourth quarter earnings press release that was issued this morning. Looking at our fourth quarter retail segment performance in more detail. Total retail revenues were $270.8 million in the fourth quarter, representing an 18.7% year-over-year decline. Lower retail revenue was driven by a decrease in same-store sales, which was primarily driven by lower discretionary spending for home-related products and comparatively higher same-store sales in the prior year due to the impact of stimulus benefits.

These decreases were partially offset by new store growth. Retail gross margin for the fourth quarter declined 210 basis points to 33.7% and compared to 35.8% for the same period in fiscal year 2022. The decrease in gross margin was primarily driven by higher freight costs and deleveraging of fixed distribution costs from lower sales. We expect retail gross margin to improve over time as retail sales recover and we realize the benefit of lower international shipping costs. We estimate that the higher freight costs have impacted retail gross margin by approximately 150 to 200 basis points and will reverse over time as we continue to receive new inventory at lower freight costs. SG&A expenses in our Retail segment for the fourth quarter decreased 2.2% to $103.1 million compared to $105.4 million for the same period last fiscal year.

Lower SG&A expenses were due to cost savings initiatives and declines in variable costs that more than offset increases related to new store growth and eCommerce investments. Due to lower retail sales, SG&A expenses were 38.1% of retail sales for the fourth quarter compared to 31.6% for the same period in fiscal year 2022. For the fourth quarter, Retail segment operating loss was $19.5 million compared to Retail segment operating income of $10.9 million for the same period in fiscal year 2022. On a non-GAAP basis, adjusted Retail segment operating loss for the fourth quarter was $11.7 million, excluding charges and credits for asset disposal and store closure costs. This compared to non-GAAP adjusted Retail segment operating income of $13.6 million for the same period in fiscal year 2022, which excludes charges and credits for non-recurring excess import freight costs related to congestion in U.S. ports.

Turning to our fourth quarter Credit segment performance. Finance charges and other revenues were $64.1 million, a 7.8% year-over-year decline, primarily due to a decline in the average balance of the customer receivable portfolio. It is important to note that recent credit performance is up against large-scale stimulus programs, which supported better payment, delinquency and charge-off performance over the past two years. Underlying portfolio health remained stable. However, normalizing trends, current economic conditions and a more restrictive re-aged policy have impacted overall performance. As a percent of the portfolio, the 60-plus day past due balance was 12.7% at January 31, 2023 compared to 10.4% in fiscal year 2022, which benefited from stimulus programs.

The balance of re-aged accounts as a percent of the portfolio was 16.5% compared to 16.8% for the same period in fiscal year 2022. In addition, carrying value of re-aged accounts continues to improve and remains at one of the lowest levels in almost a decade. For fiscal year 2023, net charge-offs as a percent of the average portfolio balance were 14% compared to 11.1% for the year ended January 31, 2022. Our credit spread for fiscal year 2023 was 9.1% compared to 11.7% in fiscal year 2022. During the fourth quarter, the credit provision for bad debts was $44.1 million compared to $28.2 million for the same period in fiscal year 2022. The $15.9 million increase in credit provision for bad debts was primarily driven by higher net charge-offs.

The company reported a credit segment loss before taxes of $27 million in the fourth quarter compared to a credit segment loss of $1.1 million for the same period in fiscal year 2022. The greater credit segment loss before taxes was primarily due to a smaller portfolio and a higher provision for bad debts. Our fourth quarter and full year effective tax rate were 8% and 10.7%, respectively. These effective tax rates were lower than the statutory tax rate, primarily because of a non-cash valuation allowance that we recorded in the fourth quarter against our deferred tax asset. Turning now to our balance sheet. At January 31, 2023, we had $576.6 million in net debt compared to $483.4 million for fiscal year 2022. Net debt as a percent of the ending portfolio balance was approximately 56.2% at the end of the fourth quarter, which remains below pre-pandemic levels.

In addition, we have no near-term debt maturities. And last summer, we successfully completed our 11th ABS transaction since reentering the ABS market in 2015. We expect to complete another ABS transaction later this fiscal year. On February 21, 2023, we entered into a $100 million three-year term loan that was used to pay down the balance of our ABL facility and provided us with additional liquidity as we execute our turnaround strategies. As of March 24, we the company had $209.2 million of cash plus availability under our $650 million revolving credit facility. We continue to believe our liquidity and access to capital provides us with flexibility to support the current needs of our business while investing in our long-term growth initiatives.

Before we turn the call over to questions, I want to review the accounting treatment of our in-house LTO transition. As we have stated before in our consolidated financial statements, revenue from sales made through our in-house LTO offering will be reported as lease income recognized over the life of the lease rather than as a retail sale recognized at the time of the transaction. Therefore, as this year progresses, you will see lower LTO retail sales flow through our income statement and a growing base of lease revenue. This will temporarily impact profitability, as Norm stated in his prepared remarks. As lease revenue scales and our transition matures, we will benefit from highly profitable LTO economics. Finally, I want to share my thanks to our team members for their continued hard work, service and dedication.

So with this overview, Norm and I are happy to take your questions. Operator, please open the call up to questions.

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