Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q1 2023 Earnings Presentation
20 slides from Columbia Sportswear's earnings presentation, Apr 27, 2023
Slide 1: CFO Commentary and Financial Review First Quarter 2023
$s Columbia S Sportswear Company. | a8 CFO Commentary and Financial Review First Quarter 2023 April 27, 2023
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes. This presentation contains forward-looking statements within the meaning of the federal securities laws regarding Co
Slide 3: Abbreviations and definitions
DTC DTC.com DTC B&M y/y U.S. LAAP EMEA SG&A EPS bps direct-to-consumer DTC e-commerce DTC brick & mortar year-over-year United States Latin America and Asia Pacific Europe, Middle East and Africa selling, general & administrative earnings per share basis points “+” or “up” “-” or “down” LSD% MSD% HS
Slide 4: We connect active people with their passions
W E C O N N E C T A C T I V E P E O P L E W I T H T H E I R P A S S I O N S 4
Slide 5: Capital allocation approach
Dependent upon our financial position, market conditions and our strategic priorities, our capital allocation approach includes:
Slide 6: Q1'23 Financial Results Compared to Q1'22
Q1'23 FINANCIAL RESULTS COMPARED TO Q1'22 $821M +8% Net Sales Gross Margin Operating Margin Diluted EPS Q1'23 Highlights: + Global net sales grew 8% (10% c.c.), primarily reflecting earlier shipment of Spring ‘23 wholesale orders and DTC growth. + A return to normalized supply chain lead times enabl
Slide 7: Q1'23 vs Q1'22 financial summary table
• • • (dollars in millions, except per share amounts) Q1'23 Q1'22 Change Net Sales $820.6 $761.5 +8% Gross margin 48.7% 49.7% -100 bps SG&A percent of net sales 42.3% 39.3% +300 bps Operating income $56.4 $83.7 -33% Operating margin 6.9% 11.0% -410 bps Net income $46.2 $66.8 -31% Diluted EPS $0.74 $
Slide 8: Net Sales Overview
T SALES OVERVIEW » Q1'23 NET SALES AND GROWTH VS. Q1'22 CATEGORY PERFORMANCE BRAND PERFORMANCE CHANNEL PERFORMANCE APPAREL, ACCESSORIES & EQUIPMENT: t +12% (+14% c.c.) $633M FOOTWEAR: y -4% (-1% c.c.) $188M Or SOREL y -5% (-3% c.c.) S61M MOUNTAIN HARD. WEAR "3 t +16% (+18% c.c.) S25M Columbia +9% (+
Slide 9: Q1'23 Net Sales and Growth vs. Q1'22 by Region
Q1'23 NET SALES AND GROWTH VS. Q1'22 CANADA +35% (443% c.c.) $58M EMEA +14% (+20% c.c.) U.S. $108M +3% (+3% c.c.) $518M LAAP 412% (+22% c.c.) $137M GIONAL NET SALES PERFORMANCE All regions outside the U.S. were negatively impacted by foreign exchange rates. ‘Commentary below on primary drivers refle
Slide 10: Gross margin headwinds and tailwinds
Headwinds • Channel Profitability: lower DTC margins due to higher promotional activity and elevated outbound freight costs • Channel & Region Sales Mix: shift towards lower margin regions • FX: unfavorable effects from foreign currency hedge rates Tailwinds • Other: lower inbound freight costs • Ch
Slide 11: SG&A Bridge vs Last Year
&A BRIDGE VS LAST YEAR SG&A increased 16% to $347.4 million Pri SG&AE: Growth Dri PE 347.4M —— — * Supply Chain: higher warehousing and fulfillment expenses, resulting from elevated inventory levels as well as 3PL transition costs. * Omni-Channel: including higher DTC expenses to support growth and
Slide 12: Balance Sheet Overview
BALANCE SHEET OVERVIEW ince Sheet as of March 2023 Cash, Cash Equivalents and Short-term Investments Cash, cash equivalents and short-term investments totaled $460.6M, compared to $610.3M as of March 31, 2022. Inventory Inventories +34% y/y to $959M driven by elevated carryover inventory, earlier re
Slide 13: Capital Overview
CAPITAL OVERVIEW Q1'23 Net Cash provided by Operations Net cash flow provided by operating activities was $78.0M, compared to net cash flow used in operating activities of $33.8M for the same period in 2022. Inventory was the primary driver of the improvement in operating cash flows. Q1'23 Capital E
Slide 14: Financial Outlook
ANCIAL OUTLOOK | The Company's 2023 Financial Outlook and the underlying assumptions are forward-looking in nature, and the forward-looking statements reflect our expectations as of April 27, 2023 and are subject to significant risks and business uncertainties, including those factors described unde
Slide 15: Financial Outlook Assumptions
ANCIAL OUTLOOK ASSUMPTIONS Net sales growth is expected to be led by Columbia and SOREL up HSD%, partially offset by a decline in prAna while Mountain Hardwear is expected to be essentially flat. All four geographic segments are anticipated to grow in 2023, led by LAAP. From a product category persp
Slide 16: Assumptions and First Half Outlook
3 iN SUMPTIONS AND FIRST HALF OUTLOOK Foreign currency Foreign currency translation is expected to reduce net sales growth by approximately 20 bps (prior 30 bps) reflecting expected unfavorable foreign currency translation impacts through the first half of the year largely offset by expected favorab
Slide 17: Appendix
Slide 18: Constant-currency net sales non-GAAP note
(1) Constant-currency net sales is a non-GAAP financial measure. See “References to Non-GAAP Financial Information” above for further information.
Slide 19: Three Months Free Cash Flow Reconciliation
THREE MONTHS FREE CASH FLOW RECONCILIATION COLUMBIA SPORTSWEAR COMPANY Reconciliation of GAAP to Non-GAAP Financial Measures Net cash used in operating activities to free cash flow (Unaudited) Three Months Ended March 31, (te mitions) 2023 2022 ‘Net cash provided by (used in) operating activities $
Slide 20: Columbia Sportswear
ia | bi m Coluw Se 3