Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q3 2022 Earnings Presentation
19 slides from Columbia Sportswear's earnings presentation, Oct 27, 2022
Slide 1: CFO Commentary and Financial Review Third Quarter 2022
Sportswear Company:M CFO Commentary and Financial Review Th.rd Quarter 2022 October 27, 2022 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 4
Slide 5: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Our goal is to maintain our strong balance sheet and disciplined approach to capital allocation. Dependent upon market conditions and our strategic priorities, our capital allocation approach includes: INVEST INORGANIC GROWTH OPPORTUNITIES TO DRIVE LONG-TERM PROFITABLE
Slide 6: Q3'22 Key Highlights
Q3’22 KEY HIGHLIGHTS Q3'22 FINANCIAL RESULTS COMPARED TO Q3’21 $955M +19% Net Sales Gross Margin Operating Margin Diluted EPS Q3'22 Highlights: * The increase in net sales primarily reflects earlier shipment of higher Fall ‘22 wholesale orders and DTC growth. + Net sales growth was led by the SOREL
Slide 7: Q3'22 financial results table
• • • • (dollars in millions, except per share amounts) Q3'22 Q3'21 Change Net Sales $955.0 $804.7 +19% Gross margin 48.0% 50.7% -270 bps SG&A percent of net sales 33.4% 34.8% -140 bps Operating income $145.3 $133.5 +9% Operating margin 15.2% 16.6% -140 bps Net income $111.8 $100.6 +11% Diluted EPS
Slide 8: Q3'22 Net Sales Overview
Q3’22 NETSALESOVERVIEW += Q3'22 NET SALES AND GROWTH VS. Q3'21 CATEGORY BRAND CHANNEL PERFORMANCE PERFORMANCE PERFORMANCE APPAREL, ACCESSORIES is ® WHOLESALE: & EQUIPMENT: Columbia ES t +17% (+20% c.c.) t +19% (+23% c.c.) t +28% (+31% c.c.) t +24% (+28% c.c.) $726M $773M $112M S$645M an HARDY FOOTWE
Slide 9: Q3'22 Regional Net Sales
Q3’22 REGIONAL NET SAL Q3'22 NET SALES AND GROWTH VS. Q3'21 Alll regions outside of the U.S. were negatively impacted by foreign exchange rates. Commentary below on primary drivers reflects constant currency performance. us. + Wholesale: up mid-20%, shipping of robust Fall ‘22 orders CANADA + DTC: u
Slide 10: Gross margin headwinds and tailwinds
Headwinds • Other: elevated inbound freight costs • Channel & Region Mix: higher mix of wholesale sales (including distributor sales), which typically carry a lower margin vs. DTC sales • Other: unfavorable y/y changes in inventory provisions • Channel Profitability: lower DTC product margins driven
Slide 11: Q3'22 SG&A Bridge
Q3'22SG&ABRIDGE #8 © z SG&A expense growth primarily reflects SG&A increased 14% to $319.0M expenses to support growth of the business and investments to drive our brand-led consumer-focused strategies: | | — SG&A Expense Increases | Sa! + Personnel: increased headcount to | support business growth,
Slide 12: Balance Sheet Overview
BALANCE SHEET OVERVIEW Balance Sheet as of September 30, 2022 Cash, Cash Equivalents and Short-term Investments S160M Cash, cash equivalents and short-term investments totaled $160.2M, compared to $600.6M as of September 30, 2021. The y/y reduction in cash primarily reflects increased working capita
Slide 13: Cash Flow Overview
CASH FLOW OVERVIEW Cash Flow for the Nine Months Ended September 30, 2022 Net Cash used in Operations > § Net cash flow used in operating activities was $328.1M, compared to $15.6M for the same period in 2021. The increase in net cash used in operations was largely attributable to increased inventor
Slide 14: 2022 Financial Outlook
2022 FINANCIALOUTLOOK }§©» The Company's 2022 Financial Outlook and the underlying assumptions are forward-looking in nature, and the forward-looking statements reflect our expectations as of October 27, 2022 and are subject to significant risks and business uncertainties, including those factors de
Slide 15: 2022 Financial Outlook
2022 FINANCIAL OUTLOOK Net sales + Inbound shipping times, port congestion and other logistics delays have elongated in-transit times resulting in delayed receipt and delivery of products. Our 2022 financial outlook incorporates our current view of the supply chain disruptions which could materially
Slide 16: 2022 Assumptions
2022 ASSUMPTIONS A Effective tax rate and share count The full year effective tax rate in our 2022 financial outlook is ~23.5% (prior 24.0%-24.5%). The 2022 effective tax rate is anticipated to be higher than the effective tax rate from 2019-2021 as the prior years included separate discrete tax ite
Slide 17: Appendix
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: First Nine Months Free Cash Flow Reconciliation
FIRST NINE 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) Nine Months Ended September 30, (in miltions) 2022 2021 Net cash used in operating activities $ (328.1