Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Q3 2021 Earnings Presentation
23 slides from Duluth's earnings presentation, Dec 3, 2021
Slide 1: Investor Presentation Third Quarter 2021
Se 66 Investor Presentation Third Quarter 2021 December3, 2021
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation dated December 3, 2021 includes “forwardooking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts included in this presentation, including statements
Slide 3: Introduction to Duluth Trading Co.
Introduction to Duluth Trading Co.
Slide 4: Duluth Trading Co. at a Glance
Duluth Trading Co. at a Glance Workwear Heritage is the Foundation of our Authentic, Everyday Lifestyle Platform of Brands Long History of Product Innovation and Solution-Based Design Humorous and Distinctive Marketing Outstanding and Engaging Customer Experience Nationwide Omnichannel Presence with
Slide 5: Investment Highlights
Investment Highlights * Growing lifestyle platform of brands with well-established digitally-led Omnichannel business ¢ Multiple revenue growth opportunities led through 5 strategic pillars > Lead with a digital-first mindset > Intensify efforts to optimize our owned DTC channels > Evolve our multi-
Slide 6: Third Quarter Ended October 31, Financial Highlights
Third Quarter Ended October 31, Financial Highlights + Q3 Net sales of $145.3M increased 7.2% compared to Q3 2020, and increased 21.3% compared to Q3 2019 + Direct-to-consumer net sales of $85.2M decreased -1.4% compared to Q3 2020, and increased 38.4% compared to Q3 2019 + Retail net sales of $60.1
Slide 7: Net Sales and Adjusted EBITDA
Net Sales and Adjusted EBITDA ¢ Strong track record of 15% Net Sales and 14% Adjusted EBITDA growth * Strategic investments and operating efficiencies support long-term objectives of accelerated earnings growth (Sin milions) (Sin miltions) 2015 2016 2017 2018 2019 20202021* 2015 2016 2017 2018 2019
Slide 8: Growth Strategy
Growth Strategy
Slide 9: "Big Dam Blueprint" Growth Strategies
“Big Dam Blueprint” Growth Strategies 1 D 3 Evolve Our Multi- Brand Platform December 3,2021 4 Test & Leam to Unlock Long- Term Growth Pot i Investments to Future Proof the Bu
Slide 10: Lead With a Digital-First Mindset
Lead With a Digital-First Mindset * Transform Duluth into a digitally-led organization integrating data and digital technology into all areas of our business, fundamentally changing how we operate and deliver value to customers. * Our digital transformation will provide the structure for how we prio
Slide 11: Intensify Efforts to Optimize Our Owned DTC Channels
Intensify Efforts to Optimize Our Owned DTC Channels | pers? * Increase our focus and investments in our direct channel as our primary growth vehicle * Our customer places a high value on our stores and they will continue to serve as a critical piece of the omnichannel ecosystem: > Convenient touchp
Slide 12: Evolve our Multi-brand Platform as a New Pathway to Grow the Business
Evolve our Multi-brand Platform as a New Pathway to Grow the Business * Ladder to the Greater Purpose: “Celebrating the can-do spirit by enabling anyone who takes on life with their own two hands.” * Focus on features, benefits, durability, innovation and a strong value proposition @) * Prioritize s
Slide 13: Test and Learn to Unlock Long-Term Growth Potential
Gain operational learnings to implement whole including logistics, systems and people needed to scale efficiently Gain direct-from-manufacturer operational learnings to offer unique and customized products based on customer’s preferences Test the viability of potential drop-ship model Seek compellin
Slide 14: Increase and, in Some Areas, Accelerate Investments to Future Proof the Business
Increase and, in Some Areas, Accelerate Investments to Future Proof the Business * Analyze and identify investments that will allow us to scale more easily and effectively, as well as deliver on ever-evolving customer expectations: v Increased investments in automation across our logistics network t
Slide 15: Strengthening the Men's Business
Strengthening the Men’s Business + On a trailing twelve-month basis, men’s apparel net sales across our brands increased 5.8% over the prior year period + Selectively broaden our assortment in certain product categories to satisfy customer needs + Cement Duluth as the most innovative workwear brand
Slide 16: Growing the Women's Business
Growing the Women’s Business = x + Ona trailing twelve-month basis, women’s apparel net sales 9 | \ Il increased 5.1% over the prior year period + Continue customer acquisition through marketing investments and retail presence + Deepenrelationships with female customers by introducing a women’s line
Slide 17: Financial Review
\ Ww > C=\ ay \ I] @ : M are lhe See u Me } KS TS, L’ ZAK A f | ————— == = (Wd & | 2 : ( v Wz nancial Rev
Slide 18: Q3 Net Sales, Gross Profit, Adjusted EBITDA and Net Income
Gross Profit (Sin mlions) (Sin mlions) m= Retail Direct 63.6 $135.5 , $145.3 $71.0 18% s *, | — $86.4 $85.2 2020 2024 2020 2024 (11112020) (10/31/2021) (11/1/2020) (10/31/2021) Margin 52.4% 57.6% A sted EBITDA’ | Netincomer | (Sin mlions) (Sin milions) $28 $13.2 $114 6 ere $0.9 2020 2024 2020 2024 (
Slide 19: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity Debtto Capital": 2 Year to Date Free Cash Flow As of October 31, ($ in millions) 2021 $23.7 Cash $ 20.4 Debt: Line of Credit 0.0 Term Loan 0.0 Total Debt 0.0 $(40.2) Total Shareholders’ Equity 205.3 2020 2021 Total Capitalization $ 205.3 (11/1/2020) (10/31/2021) De
Slide 20: 2021 Guidance
($ in millions) Net Sales Adj. EBITDA EPS CAPEX () 2020 2021 Guidance $638.8 $55.5 $0.42 $16.4 $700 - $715 +9.6% - +11.9% $73-—$75 #31.8% — +36.1% $0.81 — $0.86 +92.9% — +104.8% ~$18 io 2021 Forecasted Adj. EBITDA Fiscal YearE nded January 30, 2022 {3 in milions) Tow. High Forcasted Net income z 265
Slide 21: Long-Term Financial Targets
Long-Term Financial Targets ($ in millions) Net Sales Operating Margin % Adj. EBITDA % Free Cash Flow 2017 2018 2019 2020 2025 Targets $471.4 $568.1 $615.6 $638.8 $1.0B 7.9% 6.5% 4.6% 3.8% 9-10% 9.8% 9.1% 8.4% 8.7% 14-15% ($16.6) ($21.9) ($22.4) $38.5 Positive December 3,2021
Slide 22: so S ® og
2 so S ® 2 2 og
Slide 23: Reconciliation to Q3 2021 Adjusted EBITDA and Free Cash Flow
lation to Q3 2021 Adjusted EBITDA and Free Cash Flow pers? Adjusted EBITDA ree Cash Flow ‘3. Months Ended 9 Months Ended ‘Oct 34, Nova, Oct, Nov, {3 inmitions 2024 2020 ‘Sin milions) 2024 2020 Net income (oss) s 28S 09 _Netcash provided by operating activities z 328 (26.6) (@) Depreciation and amort