Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q3 2024 Earnings Presentation
22 slides from Columbia Sportswear's earnings presentation, Oct 30, 2024
Slide 1: CFO Commentary and Financial Review
Sportswear CFO Commentary and Fin anc1a I Review a 2 2 October 30, 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 PRIORITIES Our ene 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: a” INVEST INORGANIC GROWTH # OPPORTUNITIES ma
Slide 6: Q3'24 Highlights
Q3’24 HIGHLIGHTS Q3'24 FINANCIAL RESULTS COMPARED TO Q3'23 $932M -5% Net Sales Gross Margin Operating Margin Diluted EPS Q3’24 Highlights: * The decline in net sales primarily reflects softness in the U.S. and Canada, partially offset by strength in LAAP and EMEA. Operating margin pressure reflects
Slide 7: Q3'24 financial results summary table
• • • • (dollars in millions, except per share amounts) Q3'24 Q3'23 Change Net Sales $931.8 $985.7 -5% Gross margin 50.2% 48.7% +150 bps SG&A percent of net sales 38.8% 35.7% +310 bps Operating income $112.5 $134.6 -16% Operating margin 12.1% 13.7% -160 bps Net income $90.2 $103.5 -13% Diluted EPS $
Slide 8: Q3'24 Net Sales and Growth vs. Q3'23 by region
Commentary below is based on constant currency performance. Q3'24 NET SALES AND GROWTH VS. Q3'23 us. + Wholesale: down mid-teens%, primarily reflecting the impact of lower Fall '24 5 orders and a lower proportion of Fall ‘24 orders shipping in Q3, compared to CANADA prior year + DTC: down LSD% (DTC
Slide 9: Q3'24 Net Sales by category, brand and channel
= ¥ Te =~ * = Q3'24 NET SALES AND GROWTH VS. Q3'23 CATEGORY BRAND CHANNEL PERFORMANCE PERFORMANCE PERFORMANCE APPAREL, ACCESSORIES . WHOLESALE: & EQUIPMENT: Columbia | % 41% Gince) § -1% (0% cc.) 39% (-39% cc) § -9% (-9% cc) $735M $800M $74M S605M d, oe FOOTWEAR: prAna. WEAR ‘39. DTc: -23% (-22% c.c
Slide 10: Gross margin drivers
Tailwinds • Other: includes benefit from lower inbound freight costs • Channel & Region Sales Mix: favorable region and channel net sales mix shift Headwinds • FX: unfavorable effects from foreign currency hedge rates • Channel profitability: reflects higher clearance and promotional activity, parti
Slide 11: SG&A increased $9.6 million, or 3%
SG&A increased $9.6 million, or 3% Q3'23 Omni- Incentive Demand Supply Other Q3'24 Channel Comp Creation Chain Q3'24 SG&A expenses were 38.8% of net sales compared to 35.7% in Q3’23 Primary SG&A Expense Increases * Omni-channel: higher DTC brick & mortar expenses related to new stores and temporary
Slide 12: Balance Sheet Overview
BALANGESHEET OVERVIEW__ Balance Sheet as of September 30, 2024 Cash, Cash Equivalents, and Short-term Investments Cash, cash equivalents and short-term investments totaled $373.9M, compared to $214.8M as of September 30, 2023. Inventory Inventories -10% y/y to $798.2M. We continue to utilize our fle
Slide 13: Capital Overview
CAPITAL OVERVIEW ” Q3'24 YTD Net Cash Flow Used in Operations S77M Net cash flow used in operating activities was -S76.6M, be compared to net cash flow provided by operating acti $22.2M for the same period in 2023. Q3'24 YTD Capital Expenditures S42M Capital expenditures totaled $41.7M, compared to
Slide 14: 2024 Financial Outlook
2024 FINANCIAL OUTLOOK The Company's 2024 and fourth quarter Financial Outlooks and the underlying assumptions are forward-looking in nature, and the forward-looking statements reflect our expectations as of October 30, 2024 and are subject to significant risks and business uncertainties, including
Slide 15: Anticipated net sales declines
Anticipated net sales declines primarily reflect: Netsales Net sales declines are expected to be led by the SOREL brand down mid-20% and prAna down MSD%. Mountain Hardwear is expected to be up MSD% and the Columbia brand approximately flat to down modestly. a + Byregion, a LDD% decline in Canada and
Slide 16: Effective tax rate, interest income and share count
Effective tax rate, interest income and share count The full year effective tax rate in our 2024 financial outlook is expected to be 24.0% to 25.0%. Interest income, net is anticipated to be ~$30M. The $3.70 to $4.05 diluted EPS range is based on estimated weighted average diluted shares outstanding
Slide 17: ACCELERATE growth strategy
ACCELERATE is a consumer-centric growth strategy intended to elevate the Columbia brand to attract younger and more active consumers. It is a multi-year initiative centered around several consumer-centric shifts to our brand, product and marketplace strategies, as well as enhanced ways of working. e
Slide 18: Profit Improvement Plan cost savings
* Cost savings related to normalizing Operational Cost [IA abiasl Ababa : * Supply chain transformation . . Savings * Enterprise technology cost structure 2024 Savings Target: optimization * ae + We completed a reduction-in-force ~$90M Organizational primarily impacting U.S. corporate Cost Savings p
Slide 19: Appendix
Slide 20: Constant-currency net sales 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: Nine Months Free Cash Flow Reconciliation
NINE 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) Nine Months Ended September 30, (ie mitions) 2024 2023 Net cash provided by (used in) operatin
Slide 22: Columbia
ia | bi m Coluw Se 3