Columbia Sportswear Company · NASDAQ:COLM
Columbia Sportswear — Q4 2023 Earnings Presentation
22 slides from Columbia Sportswear's earnings presentation, Feb 1, 2024
Slide 1: CFO Commentary and Financial Review Fourth Quarter 2023
$s Columbia S Sportswear Company. | a CFO Commentary and Financial Review Fourth Quarter 2023 February 1, 2024
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 approach
Dependent upon our financial position, market conditions and our strategic priorities, our capital allocation approach includes: OPP IT TO DRIVE LONG-TERM PROFITABLE GROWTH t Uo REF THROUGH DIVIDENDS AND SHARE REPURCHASES
Slide 6: Q4'23 Financial Results Compared to Q4'22
Q4’23 FINANCIAL RESULTS COMPARED TO Q4'22 Net Sales Gross Margin Operating Margin Diluted EPS 4°23 Highlights: The decline in net sales primarily reflects earlier shipment of Fall ‘23 wholesale orders in Q3'23 compared to late shipment of Fall ‘22 wholesale orders in Q4’22, as well as lower U.S. DTC
Slide 7: Q4'23 vs Q4'22 summary financial table
• • • • (dollars in millions, except per share amounts) Q4'23 Q4'22 Change Net Sales $1,060.0 $1,169.6 -9% Gross margin 50.6% 50.4% +20 bps SG&A percent of net sales 38.2% 34.6% +360 bps Operating income $113.1 $155.4 -27% Operating margin 10.7% 13.3% -260 bps Net income $93.3 $125.7 -26% Diluted EP
Slide 8: Net Sales Overview
T SALES OVERVIEW ) Q4'23 NET SALES AND GROWTH VS. Q4'22 CATEGORY PERFORMANCE BRAND PERFORMANCE CHANNEL PERFORMANCE APPAREL, ACCESSORIES & EQUIPMENT: y -9% (-9% c.c.) $823M FOOTWEAR: Ye -12% (-13% ec) $237M er SOREL Columbia A | -7% (-8% c.c.) $891M y -18% (-19% c.c.) S116M MOUNTAIN HARD. WEAR "3 SL
Slide 9: Regional Net Sales Performance
Q4'23 NET SALES AND GROWTH VS. Q3'22 CANADA -29% (-29% c. S65M U.S. -12% (-12% c.c.) $689M EMEA -2% (-7% c.c.) $131M LAAP +7% (+7% c.c.) $175M GIONAL NET SALES PERFORMANCE Commentary below is based on constant currency performance. Us. : down high-teens%, primarily reflecting a lower portion of Fall
Slide 10: Gross Margin Bridge
ROSS MARGIN BRIDGE Q4’23 gross margin expanded 20 bps y/y to 50.6% Primary Gross Margin Tailwinds + Other: includes the benefit from lower inbound freight costs Channel & Region Sales Mix: a higher proportion of DTC sales, which generally carry higher gross margins Channel Profitability: lower DTC m
Slide 11: SG&A expense bridge
SG&A expenses primarily reflect lower variable expenses driven by changes in sales volume, offset by inflationary pressures and investments to support growth strategies. * Omni-channel: including higher brick & mortar expenses related to new stores and temporary clearance locations Primary SG&A Expe
Slide 12: 2023 Financial Results Compared to 2022
2023 FINANCIAL RESULTS COMPARED TO 2022 a $3.49B +1% $4.09 -17% Net Sales Gross Margin Operating Margin Diluted EPS 2023 Highlights: + Net sales growth was driven by international markets, led by LAAP (+10%), EMEA (+7%) and Canada (+3%), partially offset by the U.S. (-3%). By brand, the Columbia bra
Slide 13: Balance Sheet Overview
BALANCE SHEET OVERVIEW Balance Sheet as of December 31, 2023 Cash, Cash Equivalents, and Short-term Investments Inventory Cash, cash equivalents and short-term investments totaled $764.5M, compared to $431.0M as of December 31, 2022. Inventories -27% y/y to $746.3M, driven by lower inventory buys an
Slide 14: Capital Overview
CAPITAL OVERVIEW 2023 Net Cash Flow Provided by Operations Net cash flow provided by operating activities was $636.3M, compared to net cash flow used in operating activities of $25.2M for the same period in 2022. The largest driver of improvement in operating cash flows was a reduction in inventory.
Slide 15: 2024 Financial Outlook
ANCIAL OUTLOOK The Company's 2024 Financial Outlook and the underlying assumptions are forward-looking in nature, and the forward-looking statements reflect our expectations as of February 1, 2024 and are subject to significant risks and business uncertainties, including those factors described unde
Slide 16: Financial Outlook Assumptions
ANCIAL OUTLOOK ASSUMPTIONS Anticipated net sales declines primarily reflect: + Net sales declines are expected to be led by the SOREL brand down low-20%. Mountain Hardwear is expected to be up MSD%, prAna up LSD%, and the Columbia brand approximately flat. By region, a HSD% decline in Canada and a M
Slide 17: Tax, interest, share count and H1'24 commentary
Effective tax rate, interest income and share count PTIONS AND H1’24 COMMENTARY The full year effective tax rate in our 2024 financial outlook is 24.0% to 25.0%. Interest income, net is anticipated to be ~$19M The $3.45 to $3.85 diluted EPS range is based on estimated weighted average diluted shares
Slide 18: Profit Improvement and Growth Acceleration
* Cost savings related to normalizing Operational Cost Mime gS . Columbia Savina * Supply chain transformation g + Enterprise technology cost structure optimization — * Atleast a 3% to 5% reduction in US. Product Organizational corporate personnel costs Cost Savings + Majority of actions to be compl
Slide 19: Appendix
Slide 20: 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 21: 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 provided by (used in) operating activities to free cash flow (Unaudited) Year Ended December 34, ln mits) Er Ev Net cash provided by (used in operating activites $ 6
Slide 22: Coluw
ia | bi m Coluw Se 3