Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q2 2023 Earnings Presentation
20 slides from Columbia Sportswear's earnings presentation, Aug 1, 2023
Slide 1: CFO Commentary and Financial Review Second Quarter 2023
Sportswear Company:M CFO Commentary and Financial Review Second Quarter 2023 August 1, 2023 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 approach
Dependent upon our financial position, market conditions and our strategic priorities, our capital allocation approach includes:
Slide 6: Q2'23 Financial Results Compared to Q2'22
Q2'23 FINANCIAL RESULTS COMPARED TO Q2’22 $621M +7% Net Sales Gross Margin Operating Margin Diluted EPS Q2’23 Highlights: * Global net sales grew 7% (9% c.c.) y/y, driven by increased sales internationally including earlier shipments of Fall ‘23 distributor orders and a recovery from pandemic restri
Slide 7: Q2'23 financial results summary table
• • • (dollars in millions, except per share amounts) Q2'23 Q2'22 Change Net Sales $620.9 $578.1 +7% Gross margin 50.6% 49.2% +140 bps SG&A percent of net sales 50.3% 48.7% +160 bps Operating income $6.2 $8.8 -29% Operating margin 1.0% 1.5% -50 bps Net income $8.4 $7.2 +17% Diluted EPS $0.14 $0.11 +
Slide 8: Q2'23 Net Sales and Growth vs. Q2'22 by region
CANADA -21% (-16% c.c.) $28M U.S. -3% (-3% c.c.) $399M Q2'23 NET SALES AND GROWTH VS. Q2'22 EMEA +75% (+75% c.c.) $101M LAAP +28% (+35% c.c.) $93M Commentary below on primary drivers reflects constant currency performance. us. : down HSD%, reflecting a lower portion of Spring ‘23 orders shipped in Q
Slide 9: Net Sales Overview
T SALES OVERVIEW Q2'23 NET SALES AND GROWTH VS. Q2'22 CATEGORY PERFORMANCE BRAND PERFORMANCE CHANNEL PERFORMANCE APPAREL, ACCESSORIES & EQUIPMENT: t +4% (+6% c.c.) $489M FOOTWEAR: t +20% (+22% c.c.) $132M er SOREL Columbia t +11% (+12% c.c.) t +32% (+32% c.c.) $537M $38M MOUNTAIN HARD. WEAR "3 SL pr
Slide 10: Gross margin tailwinds and headwinds
Primary Gross Margin Tailwinds • Other: lower inbound freight costs and, to a lesser degree, changes in inventory provisions Primary Gross Margin Headwinds • Channel Profitability: lower DTC margins due to increased clearance and promotional activity • Channel Profitability: lower wholesale margins
Slide 11: SG&A increased 11% to $312.5 million
SG&A increased 11% to $312.5 million Omni- Supply Chain Enterprise Demand Channel Technology Creation Q2’23 SG&A expenses were 50.3% of net sales compared to 48.7% in Q2’22 Primary SG&A Expense Increases Omni-Channel: including higher DTC B&M expenses related to new and temporary outlet stores Suppl
Slide 12: Balance Sheet Overview
BALANCE SHEET OVERVIEW Balance Sheet as of June 30, 2023 Cash, Cash Equivalents and Short-term Investments Cash, cash equivalents and short-term investments totaled $302.8M, compared to $414.2M as of June 30, 2022. Inventory Inventories +21% y/y to $1,163M driven by earlier receipt of current season
Slide 13: Capital Overview
CAPITAL OVERVIEW H1'23 Net Cash Flow Provided by Operations Net cash flow provided by operating activities was $9.7M, compared to net cash flow used in operating activities of $112.7M for the same period in 2022. Lower purchases of inventory was the largest driver of the improvement in operating cas
Slide 14: 2023 Financial Outlook
ANCIAL OUTLOOK ) 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 August 1, 2023 and are subject to significant risks and business uncertainties, including those factors described unde
Slide 15: Financial Outlook Assumptions
ANCIAL OUTLOOK ASSUMPTIONS The change in the sales outlook is primarily related to lower expectations in the U.S. region due to softer than planned consumer demand impacting the U.S. wholesale and DTC e-commerce businesses. Weaker sales in Korea also contributed to the reduction in the sales outlook
Slide 16: Foreign currency, operating cash flow and capex
Foreign currency Foreign currency translation is expected to reduce net sales growth by approximately 30 bps (prior 20 bps) reflecting unfavorable foreign currency translation impacts through the first half of the year, largely offset by expected favorable impacts in the latter part of the year. For
Slide 17: 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 Six Months Free Cash Flow Reconciliation
FIRST SIX 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) Six Months Ended June 30, 2023 202 ‘Net cash provided by (used i) operating activities 3 a7 $ (127) Cap
Slide 20: Columbia
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