Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q2 2022 Earnings Presentation
21 slides from Columbia Sportswear's earnings presentation, Jul 27, 2022
Slide 1: CFO Commentary and Financial Review Second Quarter 2022
Sportswear Company:M CFO Commentary and Financial Review Second Quarter 2022 July 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
WE CONNECT ACTIVE PEOPLE WITH THEIR PASSIONS Columbia Fl HS 4 prAna
Slide 5: Strategic Priorities
STRATEGIC PRIORITIES We are committed to driving sustainable and profitable long-term growth and investing in our strategic priorities to: @ Pd DRIVE BRAND AWARENESS AND ENHANCE CONSUMER EXPAND AND IMPROVE SALES GROWTH THROUGH EXPERIENCE AND DIGITAL GLOBAL DTC OPERATIONS INCREASED, FOCUSED DEMAND CA
Slide 6: 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 7: Q2'22 Key Highlights
Q2’22 KEY HIGHLIGHTS Q2'22 FINANCIAL RESULTS COMPARED TO Q2'21 $0.11 -82% $578M +2% Net Sales Gross Margin Operating Margin Diluted EPS Q2°22 Highlights: + Y/Y net sales growth was tempered by the curtailment of shipments to our Russia-based distributor and strict restrictions in China related to it
Slide 8: Q2'22 vs Q2'21 financial summary table
• • • (dollars in millions, except per share amounts) Q2'22 Q2'21 Change Net Sales $578.1 $566.4 +2% Gross Margin % 49.2% 51.6% -240 bps SG&A % 48.7% 46.2% +250 bps Operating Income $8.8 $35.0 -75% Operating Margin % 1.5% 6.2% -470 bps Net Income $7.2 $40.7 -82% EPS $0.11 $0.61 -82%
Slide 9: Q2'22 Net Sales Overview
Q2’22 NETSALESOVERVIEW ~~» Q2'22 NET SALES AND GROWTH VS. Q2'21 CATEGORY BRAND CHANNEL PERFORMANCE PERFORMANCE PERFORMANCE APPAREL, ACCESSORIES . or” s WHOLESALE: & Equipment: Columbia SOREL t +3% (+5% c.c.) t 0% (+3% c.c.) t +24% (+26% c.c.) y -1% (+1% cc.) S468M S486M $29M $300M 4 HARD ey FOOTWEAR
Slide 10: Q2'22 Regional Net Sales
Q2’22 REGIONAL NETS. Q2'22 NET SALES AND GROWTH VS. Q2'21 CANADA 469% (+74% c.c.) $35M U.S. +9% (+9% c.c.) $412M EMEA -35% (-30% c.c.) $58M LAAP -7% (+2% c.c.) $73M Percentage change details and primary drivers Us. Wholesale: up low-teens%, shipping of higher Spring '22 orders, partially offset by s
Slide 11: Q2'22 Gross Margin Bridge
Q2’22 GROSS MARGINBRIDGE — Gross Margin contraction primarily reflects: Q2’22 gross margin contracted -240 bps y/y to 49.2% 49.2% 7: Vi Channel & FX Region Mix Channel Profitability Q2'21 Other Q2'22 Other: elevated inbound freight costs Channel Profitability: lower wholesale margins driven by input
Slide 12: Q2'22 SG&A Bridge
Q2’22SG&ABRIDGE = © SG&A increased 7% to $281.3M The y/y increase in SG&A expenses includes broad-based SG&A growth across ; multiple categories to support sales growth, as well as technology and supply chain capabilities, including: as 7 SG&A Expense Increases + Personnel: Increased headcount to su
Slide 13: Balance Sheet Overview
BALANCE SHEET OVERVIEW Balance Sheet as of June 30, 2022 Cash, Cash Equivalents and Short-term Investments S414M Cash, cash equivalents and short-term investments totaled $414.2M, compared to $820.9M as of June 30, 2021. Inventory Inventories +42% y/y to $962.9M. Inventory growth reflects increased
Slide 14: Cash Flow Overview
CASH FLOW OVERVIEW Cash Flow for the Six Months Ended June 30, 2022 Net Cash used in Operations __Net cash used in operating activities was $112.7M, compared to net cash provided by operating activities of $117.2M for the " same period in 2021. The decrease is largely attributable to increased inven
Slide 15: Forward Looking Statements
Forward Looking Statements 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 July 27, 2022 and are subject to significant risks and business uncertainties, including those factors descr
Slide 16: 2022 Financial Outlook
2022 FINANCIAL OU 2022 Financial Outlook Outlook compared to 2021 Net sales $3,448 to $3.50B +10% to +12% (prior $3638 to $3698) (prior 16% to +18%) Gross margin 49.5% to 49.8% 210 bps to 180 bps contraction rs) (prior ~50.3%) (prior ~130 bps contraction) 37.6% to 38.0% 20 bps leverage to 20 bps del
Slide 17: 2022 Financial Outlook
2022 FINANCIAL OUTLOOK Net sales Anticipated net sales growth primarily reflects: + 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 th
Slide 18: 2022 Assumptions
2022 ASSUMPTIONS A Effective tax rate and share count + The full year effective tax rate in our 2022 financial outlook is 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 items which lowe
Slide 19: Appendix
APPENDIX
Slide 20: Second Quarter 2022 Constant-Currency Reconciliation
SECOND QUARTER 2022 CONSTANT-CURRENCY RECONCILIATION COLUMBIA SPORTSWEAR COMPANY Reconciliation of GAAP to Non-GAAP Financial Measures. Net Sales Growth - Constant-currency Basis (Unaudited) Three Months Ended June 30, ‘dstior Constant Constant Reported Fig caerancy Reported ——Raportad——carancy NetS
Slide 21: First Half Free Cash Flow Reconciliation
FIRST HALF 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) ‘Six Months Ended June 30, in milions) 2022 2024 Net cash provided by (used in) operating activites $ (127) $