Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q1 2024 Earnings Presentation
22 slides from Columbia Sportswear's earnings presentation, Apr 25, 2024
Slide 1: CFO Commentary and Financial Review First Quarter 2024
Sportswear CFO Commentary and Financial R ev1ew First Quarter 2024 April 25, 2024 Exhibit 99.2
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
Slide 5: Capital Allocation Priorities
CAPITAL ALLOCATION PRIQRIDES Our goal i is to maintain our strong balance sheet and disciplined approach to ce capital allocation. Dependent upon our financial position, market conditions and our > strategic priorities, our capital allocation approach includes: @ INVEST INORGANIC GROWTH OPPORTUNITIE
Slide 6: Q1'24 Key Highlights
Q1’°24 KEY HIGHLIGHTS Q1'24 FINANCIAL RESULTS COMPARED TO Q1'23 $770M $0.71 -6% -4% ~ Net Sales Gross Margin Operating Margin Diluted EPS Q1'24 Highlights: * The decline in net sales primarily reflects lower wholesale net sales in the U.S. and Canada, driven by retailer cautiousness, a difficult com
Slide 7: Q1'24 financial results summary table
• • • (dollars in millions, except per share amounts) Q1'24 Q1'23 Change Net Sales $770.0 $820.6 -6% Gross margin 50.6% 48.7% +190 bps SG&A percent of net sales 45.4% 42.3% +310 bps Operating income $44.7 $56.4 -21% Operating margin 5.8% 6.9% -110 bps Net income $42.3 $46.2 -8% Diluted EPS $0.71 $0.
Slide 8: Q1'24 Net Sales and Growth vs. Q1'23 by region
Commentary below is based on constant currency performance. Q1'24 NET SALES AND GROWTH VS. Q1'23 Us. + Wholesale: down mid-teens%, primarily reflecting the impact of lower Spring ‘24 orders + DTC: down slightly (DTC B&M up HSD%, DTC.com down low-teens%) + The company had 161 stores (143 outlets, 18
Slide 9: Q1'24 Net Sales by category, brand and channel
Q1'24 NET SALES AND GROWTH VS. Q1'23 CATEGORY BRAND CHANNEL a PERFORMANCE PERFORMANCE PERFORMANCE APPAREL, ACCESSORIES I . WHOLESALE: MODI . & EQUIPMENT: Co uM b a L -2% (2%) DB -6% -s%cc) -24% 25% cc, § -14% (-13% cc.) $619M S664M S46M $391M MOUNTAIN 2. HARD: FOOTWEAR: prAna. WEAR 9 DTC: -20% (-19%
Slide 10: Q1'24 Gross Margin Bridge
Q1’24 GROSS MARGIN BRIDGE Q1’24 gross margin expanded 190 bps y/y to 50.6% Tailwinds * Other: includes the benefit from lower inbound freight costs 50.6% q || + Channel & Region Sales Mix: favorable | region and channel net sales mix shift * Channel Profitability: higher wholesale margins reflecting
Slide 11: SG&A expenses were relatively flat y/y
SG&A expenses were relatively flat y/y $347.4M Q1'23 Omni- Demand Supply Other Q1'24 Channel Creation Chain Q1'24 SG&A expenses were 45.4% of net sales compared to 42.3% in Q1'23 Primary SG&A Expense Increases * Omni-channel: including higher brick & mortar expenses related to temporary and new stor
Slide 12: Balance Sheet Overview
BALANGESHEET OVERVIEW__ Balance Sheet as of Marchi31,2024 Cash, Cash Equivalents, and Short-term Investments Cash, cash equivalents and short-term investments totaled $787.7M, compared to $460.6M as of March 31, 2023. Inventory Inventories -37% y/y to $607.4M. We continue to utilize our fleet of out
Slide 13: Capital Overview
CAPITAL OVERVIEW ” Q1'24 Net Cash Flow Provided by Operations S re) Net cash flow provided by operating activities was $106.8M, 1 7 M compared to $78.0M for the same period in 2023. Q1'24 Capital Expenditures cS 1 5M Capital expenditures totaled $14.8M, compared to $14.0M for the same period in 2023
Slide 14: 2024 Financial Outlook
2024 FINANCIAL OUTLOOK The Company's 2024 Financial Outlook and the underlying assumptions are forward-looking in nature, and the forward-looking statements reflect our expectations as of April 25, 2024 and are subject to significant risks and business uncertainties, including those factors describe
Slide 15: Anticipated net sales declines primarily reflect
Anticipated net sales declines primarily reflect: Netsales — - Netsales declines are expected to be led by the SOREL brand down mid-20%. Mountain Hardwear is expected to be up MSD%, prAna up LSD%, and the Columbia brand approximately flat. a + By region, a HSD% decline in Canada and a MSD% decline i
Slide 16: Tax rate, interest income, share count, FX and cash flow outlook
— . . The full year effective tax rate in our 2024 financial outlook is 24.0% to 25.0%. Effective tax rate, interest - interest income, net is anticipated to be ~S28M (prior~S19M). income and share count = + The $3.65 to $4.05 diluted EPS range is based on estimated weighted average diluted shares o
Slide 17: Cost savings targets
* Cost savings related to normalizing Operational Cost inventory levels : * Supply chain transformation . . Savings * Enterprise technology cost structure 2024 Savings Target: optimization * ae + InQ1'24, we completed a reduction-in- $75M to $90M Organizational force primarily impacting U.S. corpora
Slide 18: Growth Acceleration Strategies
GROWTH ACCELERATION STRATEGIES + Target new, younger active consumers to expand market share in nbia areas we are currently underserving * Elevate innovation and style, with a focus on more powerful collections * Streamline color and style counts * Target a more balanced, full funnel approach * Opti
Slide 19: Appendix
Slide 20: 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 21: 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 provided by (used in) operating activities to free cash flow (Unaudited) Three Months Ended March 31, In mons) 2024 2003 Net cash provided by (used in) operating acti
Slide 22: Coluw
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