Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q1 2021 Earnings Presentation
20 slides from Columbia Sportswear's earnings presentation, Apr 29, 2021
Slide 1: CFO Commentary and Financial Review Q1'21
ae = a Exhibit 99.2 & Colmbia ™ Xx ‘Se Sportswear Company. CFO Commentary and Financial Review Ql’2l1 April 29, 2021
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
a —— : ag WE CONNECT ACTIVE PEOPLE WITH THEIR PASSIONS Columbia
Slide 5: Strategic Priorities
STRATEGIC PRIORITIES We are committed to driving sustainable and profitable long-term growth and investing in our strategic priorities to: @ - DRIVE GLOBAL BRAND AWARENESS AND SALES. GROWTH THROUGH INCREASED, FOCUSED DEMAND ENHANCE CONSUMER EXPAND AND IMPROVE EXPERIENCE AND DIGITAL GLOBAL DTC OPERAT
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: COVID-19 Updates
Health, Safety and Well Being DTC Brick & Mortar Store Impacts Supply Chain and Logistics =COVID=19 UPDATES. The Company's top priority throughout this pandemic remains to protect the health and safety of our employees, their families, our customers and our communities. We are continually adapting b
Slide 8: Q1'21 Financial Results and Comparisons to Q1'20
Q1’21 FINANCIAL RESULTS AND COMPARISONS TO Q1'20 e/, +10% Compared to (0.3)% Q1’20 Compared to break even diluted EPS Q1°20 Net Sales Gross Margin Operating Margin Diluted EPS Q1’21 Highlights: + Pace of fundamental recovery exceeded our expectations in Q1'21. Business momentum was led by 35% y/y DT
Slide 9: Q1'21 vs Q1'20 financial summary table
• • • • Q1'21 Q1'20 Change Net sales $625.6 $568.2 +10% Gross margin 51.4% 47.8% +360 bps SG&A percent of net sales 40.7% 48.7% -800 bps Operating income $70.5 -$2.0 +$72.5 Operating margin 11.3% -0.3% +1,160 bps Net income $55.9 $0.2 +$55.7 Diluted EPS $0.84 $0.00 +$0.84
Slide 10: Q1'21 Net Sales Overview
Q1'21-NET-SALES. OVERVIEW 9) Q1'21 PERCENTAGE CHANGE VS. Q1'20 AND Q1’21 NET SALES CATEGORY BRAND PERFORMANCE PERFORMANCE Columbia P +12% 9% 0) $527M APPAREL, ACCESSORIES & EQUIPMENT: t +4% (+2% c.c.) S469M er SOREL t +20% (+18% c.c.) S46M MOUNTAIN hea tebe FOOTWEAR: t +35% (432% c.c.) $157M a | -14
Slide 11: Q1'21 Regional Net Sales Performance
“Q1'21-REGIONAL NET SALES PERFORMANCE~- ~ Q1'21 PERCENTAGE CHANGE VS. Q1'20 AND Q1'21 NET SALES U.S. Wholesale: down LSD%, later timing of inventory receipts more than offset Spring 2021 order book growth CANADA DTC: up low-20%, driven by DTC.com +low-30% and DTC B&M +LDD% The Company had 132 stores
Slide 12: Q1'21 Gross Margin Bridge
=Q1'21-GROSS-MARGIN BRIDGE Gross Margin expansion primarily reflects: Q1’21 gross margin expanded 360bps y/y to 51.4% Tailwinds + Channel Profitability: favorable DTC product margins driven by lower promotional levels Channel Profitability: lower wholesale customer accommodations Channel & Regional
Slide 13: Q1'21 SG&A Bridge
-Q1'21 SG&A BRIDGE Q1’21 SG&A expenses decreased 8% y/y to $254.4M The y/y decrease in SG&A expenses was primarily driven by: SG&A Expense Reductions + Bad Debt: lower bad debt expense, reflecting the non-recurrence of COVID-related reserve provisions incurred in Q1'20 and, to a lesser extent, a res
Slide 14: Balance Sheet Overview
BALANCE SHEET OVERVIEW Balance Sheet as of March 31, 2021 Cash, Cash Equivalents and Short-term Investments Cash, cash equivalents and short-term investments Ss8 7 5M totaled $874.6M, compared to $706.9M at March 31, 2020. The Company had no borrowings, compared to short-term borrowings of $174.4M a
Slide 15: Net Cash Flow from Operations
Net Cash Flow from Operations Net cash flow from operating activities was $110.9M, $1 1 1M compared to net cash flow from operating activities of $12.8M for the same period in 2020. Capital Expenditures S 4 M Capital expenditures totaled $3.9M, compared to $9.5M for the same period in 2020. Share Re
Slide 16: 2021 Financial Outlook
2021 FINANCIAL OUTLOOK. Sy) The Company's 2021 Financial Outlook and the underlying assumptions, are forward-looking in nature, and the forward-looking statements reflect our expectations as of April 29, 2021 and are subject to significant risks and business uncertainties, including those factors de
Slide 17: Outlook Assumptions
TLOOK-ASSUMPTIONS =~ ipated net sales growth primarily reflects: + Allbrands are anticipated to grow in 2021 led by the Columbia brand, Our DTC B&M stores primarily sell Columbia brand products as such Columbia brand sales growth will disproportionately benefit from the anniversary of prior year tem
Slide 18: Outlook assumptions: tax rate, cash flow, capex
The effective income tax rate may be affected by unanticipated impacts from changes in international, federal or state tax policies, changes in the Company's geographic mix of pre-tax income, other discrete events, as well as differences from our estimate of the tax benefits associated with employee
Slide 19: Appendix
Slide 20: First Quarter 2021 Constant-Currency Reconciliation
FIRST QUARTER 2021 CONSTANT-CURRENCY RECONCILIATION Three Months Ended March 31, Adjust for Constant. ‘Constant Reported Foreign currency Reported Reported ‘currency Net Sale —Currancy Nat Sales =e Sales (Nat Sales (Nat Sales (i miions except percentage changes) 2021___Yranslaton___2021"" 2020 ___‘i