Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q4 2022 Earnings Presentation
20 slides from Columbia Sportswear's earnings presentation, Feb 2, 2023
Slide 1: CFO Commentary and Financial Review Fourth Quarter 2022
a &» Columbia S Sportswear Company. CFO Commentary and Financial Review (gQ Fourth Quarter 2022 February 2, 2023
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: Q4'22 Key Highlights
Q4’22 KEY HIGHLIGHTS a Q4'22 FINANCIAL RESULTS COMPARED TO Q4'21 $2.02 $1.17B 5% +4% Net Sales Gross Margin Operating Margin Diluted EPS Q4’22 Highlights: * Global net sales grew 4% (8% c.c.), including 2% growth in the U.S. and 6% in the international markets (20% c.c.). * The increase in net sales
Slide 7: Q4'22 financial results summary table
• • • • • Q4'22 Q4'21 Change Net Sales $1,169.6 $1,129.7 +4% Gross margin 50.4% 52.2% -180 bps SG&A percent of net sales 34.6% 34.0% +60 bps Operating income $155.4 $211.6 -27% Operating margin 13.3% 18.7% -540 bps Net income $125.7 $157.0 -20% Diluted EPS $2.02 $2.39 -15%
Slide 8: Q4'22 Net Sales Overview
Q4'22 NETSALESOVERVIEW ~~» Q4'22 NET SALES AND GROWTH VS. Q4'21 CATEGORY BRAND CHANNEL PERFORMANCE PERFORMANCE PERFORMANCE APPAREL, ACCESSORIES is WHOLESALE: & EQUIPMENT: Columbia ES P 46% 411% cc, HF +8% 13% cc) YP -13% -9% cc) 42% 47% c0.) $901M $961M $143M $515M an HARDY FOOTWEAR: prAna. WEAR "30
Slide 9: Q4'22 Regional Net Sales
Q4’22 REGIONAL NET SAL Q4'22 NET SALES AND GROWTH VS. Q4'21 All regions outside the U.S. were negatively impacted by foreign exchange rates. Commentary below on primary drivers reflects constant currency performance. » down MSD%, driven by a lower portion of Fall ‘22 orders hipping in Q4, relative t
Slide 10: Gross margin headwinds and tailwinds
Headwinds • Channel Profitability: lower DTC margins driven by higher promotional activity, compared to exceptionally low promotions in Q4’21, and increased outbound freight costs; and to a lesser extent • Channel Profitability: lower wholesale margins driven by a higher proportion of off price vers
Slide 11: Q4'22 SG&A Bridge
Q4’22SG&ABRIDGE = © . SG&A expense growth primarily reflects expenses to SG&A increased 5% to $405.1M support the growth of the business, inflationary pressures, and investments to drive our brand-led consumer-focused strategies: a || SG&A Expense Increases (i + Personnel: increased headcount to sup
Slide 12: 2022 Key Highlights
2022 KEY HIGHLIGHTS 2022 FINANCIAL RESULTS COMPARED TO 2021 $3.46B 411% $4.95 7% Net Sales Gross Margin Operating Margin Diluted EPS 2022 Highlights: Net sales growth reflects strong H1'22 growth and challenging marketplace conditions in H2’22, with late deliveries and customer cancellations mitigat
Slide 13: Balance Sheet Overview
BALANCE SHEET OVERVIEW Balance Sheet as of December 31, 2022 Cash, Cash Equivalents and Short-term Investments S431M Cash, cash equivalents and short-term investments totaled $431.0 million compared to $894.5 million as of December 31, 2021. The y/y reduction in cash primarily reflects increased wor
Slide 14: Cash Flow Overview
CASH FLOW OVERVIEW Cash Flow for the Twelve Months Ended December 31, 2022 Net Cash used in Operations Net cash used in operating activities was $25.2M, compared to net cash provided by operating activities of $354.4M in 2021. The decrease was largely attributable to increased inventory purchases, C
Slide 15: 2023 Financial Outlook
2023 FINANCIALOUTLOOK }§©» The Company's 2023 Financial Outlook and the underlying assumptions are forward-looking in nature, and the forward-looking statements reflect our expectations as of February 2, 2023 and are subject to significant risks and business uncertainties, including those factors de
Slide 16: 2023 Financial Outlook
2023 FINANCIAL OUTLOOK Anticipated net sal h primarily reflects: Netsales * Netsales growth is expected to be led by SOREL up LDD% and Columbia up HSD%, partially offset by modest declines in prAna and Mountain Hardwear. + All four geographic segments are anticipated to grow in 2023, led by LAP. + F
Slide 17: Foreign currency, cash flow and first half commentary
Foreign currency Foreign currency translation is expected to reduce net sales growth by approximately 30 bps. Foreign currency is expected to have an approximately $0.05 negative impact on diluted earnings per share due primarily to unfavorable foreign currency transactional effects from hedging of
Slide 18: Appendix
APPENDIX
Slide 19: 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 20: Twelve Months Free Cash Flow Reconciliation
TWELVE 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) Years Ended December 31, (ie mitions) 2022 2021 Net cash used in operating activities $ (252) § 3544 Capit