Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Q2 2022 Earnings Presentation
24 slides from Duluth's earnings presentation, Sep 2, 2022
Slide 1: Investor Presentation Second Quarter 2022
Dur T RADING G Investor Presentation Second Quarter 2022 September 2, 2022
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation dated September 2, 2022 includes “forwdodking statements’ within the meaning of the Private Securitiégatibn Reform Act of 1995. All statements, other than statements of historical facts included in this pi , including concerning Duluth Holditsg
Slide 3: Introduction to Duluth Trading Co.
INTRODUCTION TO DULUTH TRADING CO.
Slide 4: There's Always Gotta Be a Better Way
THERE’S ALWAYS GOTTA BE A BETTER WAY Duluth Trading Co. was founded on the belief that there’s always a better way to be found. A better way to solve. A better way to make. A better way to be. We’re on a mission to build better, harder -working apparel and gear that helps enable everyone from the yo
Slide 5: Better Brands, Innovation, Marketing, Experiences, Distribution
Better Brands A brood of sub-brands all bonded by the belief that you can accomplish anything that you put your own mind and own two hands to Better Innovation Long, colorful history of product innovation and solution -based design Better Marketing Distinctive marketing made to break through the clu
Slide 6: Brand Positioning
Brand Positioning e@ Common Brand Values e Common Target Customers for Both Men and Women e Unique Sub-Brands for Unique End Uses Duwtt Duluth builds hardworking apparel and gear for hardworking men and women who live a life of doing. Ingenious, solution - filled gearthat’s designed and tested to on
Slide 7: Financial Review
FINANCIAL REVIEW
Slide 8: Financial Highlights
Three Financial Highlights @ Net sales of $141.5M compared to $149.1M in the prior year second quarter @ Gross profit margin of 53.4% compared to 54.6% in the prior year second quarter e Excluding a non-recurring $1.3M inventory write down, current quarter gross profit margin would | have been 54.4%
Slide 9: Three Months Ended July 31, 2022
Three Months Ended July 31, 2022 $149.1 (5% gyqis Si. $85 2021 (8/1/2021) ™ Retail 2022 (7/31/2022) ™ Direct Net Sales ($ in millions) (7.1)% $31 iin $76 2021 2022 (8/1/2021) (7/31/2022) 54.6% Margin 53.4% Gross Profit ($ in millions) 1 adjusted to reflecttheadd-b : : $21 e $13 2021 2022 (8/1/2021)
Slide 10: Six Months Ended July 31, 2022
Six Months Ended July 31, 2022 $282.5 (6.4)% $264.4 ™ 2022 (7/31/2022) ™ Direct 2021 (8/1/2021) ™ Retail Net Sales ($ in millions) (3.6)% Smee $143 (32.6)% $31 x $21 2021 2022 2021 2022 (8/1/2021) (7/31/2022) (g/1/2021) (7/31/2022) 52.4% Margin 54.0% 11.1% Margin 8.0% Adjusted EBITDA + ($ in million
Slide 11: Net Sales and Adjusted EBITDA
Net Sales and Adjusted EBITDA e Strong track record of 15% Net Sales and 15% Adjusted EBITDA growth e Strategic investments and operating efficiencies support long -term objectives of accelerated earnings growth 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021 Net Sales Adjusted
Slide 12: Strong Balance Sheet, Liquidity and FCF
Strong Balance Sheet, Liquidity and FCF Debt to Capital 1) Free Cash Flow ($ in millions) As of July 31, 2022 Cash $15.4 Debt: Line of Credit 0.0 Term Loan 0.0 Total Debt 0.0 Total Shareholders’ Equity $227.6 Total Capitalization $242.9 Debt to Capital ratio 0.0% jot include TRI Holdings, LLC, a var
Slide 13: Long-Term Financial Targets
Long-Term Financial Targets 2022 2025 (5 in millions) Outlook Targets Net Sales $568.1 $615.6 $638.8 $698.6 $680 - $705 $1.0B Operating Margin% 6.5% 4.6% 3.8% 63% 45-49% 9- 10% Adj. EBITDA % 9.1% 8.4% 8.6% 11.1% 10.1-10.4% 14-15% Free Cash Flow ($21.9) ($22.4) $38.5 gsi6 HSB sitive Deer September 2,
Slide 14: Fiscal 2022 Financial Guidance
Fiscal 2022 Financial Guidance inmitong | 2022 | 2022 Guidance Reconciliation to 2022 Forecasted Adj. EBITDA Fiscal Year Ended January 29, 2023 NetSales $698.6 $680 to $705 2.7% to +0.9% Forcasted (Sin millions) Low High Net Income $20.0 $23.2 . (+) Depreciation and amortization 32.2 32.3 Adj. S774
Slide 15: Investment Highlights
Investment Highlights e Growing lifestyle platform of sub -brands with well-established digitally-led omnichannel business e Multiple revenue growth opportunities led through five strategic pillars e Strategic investments support long -term EBITDA margin expansion e Generating positive cash flow wit
Slide 16: Blueprint
Bb DAIVE BLUEPRINT
Slide 17: Five Strategic Pillars
1 Lead Witha Digital-First Mindset 2 Intensify Efforts to Optimize Our Owned DTC Channels 3 Evolve Our Multi- Brand Platform as a New Pathway to Grow the Business 4 Test & Learn to Unlock Long-Term Growth Potential 5 Increase/ Accelerate Investments to Future Proof the Business
Slide 18: Lead With a Digital-First Mindset
Lead With a Digital-First Mindset 1) e Transform Duluth into a digitally-led organization integrating data and digital technology into all areas of our business, fundamentally changing how we operate and deliver value to customers e Our digital transformation will provide the structure for how we pr
Slide 19: Intensify Efforts to Optimize Our Owned DTC Channels
Intensify Efforts to Optimize Our 2 ] Owned DTC Channels Increase our focus and investments in our direct channel as our primary growth vehicle oO Our customer places a high value on our stores and they will continue to serve as a critical piece of the omnichannel ecosystem: © Convenient touchpoint
Slide 20: Evolve our Multi-brand Platform as a New Pathway to Grow
Evolve our Multi-brand Platform as a 3) New Pathway to Grow the Business e Ladder to the Greater Purpose: “Celebrating thecan -do spirit by enabling anyone who takes on life with their own two hands.” e Focus on features, benefits, durability, innovation and a strong value proposition e Prioritize s
Slide 21: Test & Learn to Unlock Long-term Growth Potential
Test & Learn to Unlock Long -term 4 ] Growth Potential e@ Gain operational learnings to implement wholesale opportunities including logistics, systems and people needed to scale efficiently e Gain direct-from-manufacturer operational learnings to offer unique and customized products based on custome
Slide 22: Increase and, in Some Areas, Accelerate Investments to Future Proof the Business
Increase and, in Some Areas, Accelerate Investments to Future Proof the Business e Analyze and identify investments that will allow us to scale more easily and effectively, as well as deliver on ever -evolving customer expectations: © Increased investments in automation across our logistics network
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Slide 24: Appendix: Reconciliation to Adjusted EBITDA and Free Cash Flow
Appendix Reconciliation to 2022 Adjusted EBITDA and Free Cash Flow Adjusted EBITDA Free Cash Flow 3 Months Ended 6 Months Ended 6 Months Ended § in milli July 31, August1, July31, August 1, § in milli July31, August 1, {in millions) 2022 2021 2022 2021 {in millions) 2022 2021 Net Income $23 $8.9 $1.