COLM - Earnings call transcript Q1 2024 | Columbia Sportswear Company

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Operator

Greetings. Welcome to the Columbia Sportswear First Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Andrew Burns, you may begin.

Andrew Burns

Good afternoon, and thanks for joining us to discuss Columbia Sportswear Company's first quarter results.

In addition to the earnings release, we furnished an 8-K containing a detailed CFO commentary and financial review presentation explaining our results. Vice available the Investor and about expectations, Executive future. call Officer, will Boyle; statements also me website, Chief forward-looking Vice is Financial contain Peter Tim on Chief or Bragdon. This Administrative anticipations the today are Executive General President document and on Swanson; Columbia's Officer Relations our beliefs investor.columbia.com. With Executive Officer, Chief This Jim and and and Counsel, President regarding Chairman, call President conference good and are in have expressed reasonable basis. to are a statements These faith believed

expectations. I'd inherently However, risks uncertainties each We update information. constant date is the changes forward-looking results materially and statements sales. to forward-looking Columbia's forward-looking undertake less non-GAAP actual any projected. Many results not conform statement including may is financial do are We out reference call, of described what are and may certain we duty reliable net subject many this our filings. than like from and forward-looking of to actual uncertainties, the that SEC and to call historical to risks any in that of during statements also measures, these after or caution the differ currency statements to point the conference in

section non-GAAP financial about these For CFO commentary financial measures, measures of tables GAAP please of and and our results, to financial to and non-GAAP the further referencing earnings including release, refer information supplemental review. non-GAAP rationale included management's an and measures a and information financial for appendix reconciliation in explanation our the of

questions by end limit we Q&A a get of the period to each everyone Following which the their prepared host can will caller X to we remarks, will hour. so we during

to Tim. the turn call I'll Now over

Timothy Boyle

with pleased to Thanks, Andrew, has line started that report out expectations. good in broadly afternoon. our XXXX and I'm

management to We take to across earnings net teams are environment, disciplined continue approach and share working modestly our channels. diluted to we full sales maximize a this per our reiterating In our year expense commercial while raising outlook range. sales challenging are all

enables the a us business. sheet see and Our unlocking across to fortress profit approach to thoughtful growth take balance improvement opportunities the we long-term

During on our progress made the quarter, top we meaningful priorities.

plan inventory to benefits. exiting Inventory challenges the I'm over supply proud year-over-year team's quarter. the down yielded our was XX% reduction of Our healthy navigate years, generating several the substantial margins. gross has efforts chain while last

of our focus goals, shifting now success. for including enhancing longer-term and our vital is are chain turns We efficiency improving supply our towards the speed inventory operations. Growth and

across We implementing the are strategies the to portfolio business. accelerate

the focused active through performance we're a into on line further that reinvigorated younger bringing brand consumers and product For innovation, Colombia, style. emphasizes

marketing consideration On from funnel a targeting full drive more to the approach balanced, customers. new front, we're

enhancing are focused and also on retail in-store elevating assortment our our channels. all across We presentations product

and product meaningfully brand bigger thinking our team that has phase they growth. Hardwear the the leaders of strategies up refresh as its prAna brand from is as recent the across that direct distributor driven in products, successful. growth in strategy have meaningful markets consumers businesses. globe China several this that we years marketplace. In map Mountain we the is emerging momentum know proof new We our SOREL have right and innovative our we fuel points with target our Europe and recent when We at the brands, several and business. to win and in formulating next strong the We've across scale

this year. deliver on $XXX in between to million and profit cost million savings million to program. $XXX including by XXXX, improvement track Turning $XX in to million our We're savings $XX

savings. associated with inventory eliminating and indirect are our throughout efficiencies driving expenses also carrying begun realizing excess cost supply We've We chain. spend

valued our their company lose contributed This need tenure. to a to completed during team, who we never our quarter, the force. During in have members of reduction

confident remain in over time. I thoughtfulness, respect values. share first growth portfolio We handled balance market differentiated and capture with strategies financial will sheet, teams this review reaccelerate us fortress Our and position with sales core to that increased now anniversaried high process shipments. our consistent our led of brand quarter our $XXX as by decreased brick-and-mortar of range, Direct-to-consumer activity. primarily timing spring year's driven X% wholesale This million. end net earlier E-commerce declined X%, guidance Net exceeded year-over-year the growth. sales promotional to sales by last we results.

per mix declined as orders. 'XX lower XXX lower XX% higher points Our inbound spring as favorable wholesale offset business freight activity. basis essentially growth and flat decreased by demand creation SG&A promotional DTC now year-over-year challenging margin Diluted rates. were most this Overall, constant remains expenses offset our region. year-over-year, growth currency channel expanded by I'll $X.XX. And review variable reflecting to more Gross spending. first market. than reference share costs quarter were primarily expenses North review, With and chain X% supply sales America earnings lower net I'll

net followed in and on outdoor footwear January, Across help in placing market, category particularly first DTC We mid-teens percent. cautious hard to e-commerce businesses. In mid-teens sales columbia.com our have X%, direct winter weak, goods proactively orders. down our last We Japan the March. was younger enriched over trends innovations and sorel.com to and, we that with taking of consumers and driven are the clearance late -- brand. year profitably decrease stores sales and in is this site inflationary in see value brick-and-mortar XX%, XXXX, partners. consumers and overall are high led [indiscernible] visit particularly are fleet lower sales out is the DTC facing to remains channels, know manage challenging. Since Pacific inventory. in temporary percent new of fueled want and consumers. from used wholesale we North which extent, latest the by our to promotional stores been liquidate inventory when establish e-commerce as X%. year, including the as future America, temporary Europe environment continue hit a the leverage driven for to in across favorable increased have outlet locations ensure LAAP, sales net China This lesser trends important trends softer products including year, already sales excess site the active including quarter, experienced continue to e-commerce net productivity. In U.S. expression were managing by best destination they last 'XX the several We exceptional high several U.S., strength soft were PFAS impacting sales in orders. Outside region headwinds retailers platform China, exceptionally marketplace. Latin activity all single-digit and net by a led from net our of in approach percent slightly. seek grapple markets, weather sales will by pressures, performance that season U.S. decreased columbia.com, by America, we contribution resulting the in Traditional these increased to we they an demand. to brand stores improved drive down our increased store stronger levels Asia clearance with locations, sales or [indiscernible]. U.S. February opened by DTC we our spring

spring fastest-growing quarter is year's recognition proud sell-through to on team consumers. platform. collection, as China-specific and 'XX last clearly the The transit brands of TikTok this with from outdoor our special line, younger was outpacing fact, resonating one the the premium receive Chinese In

quarter. sales in which of low of softer our tourist foreign from percent XXXX. Japan driven being net to net orders, greater sales markets continue the in fastest-growing lending. China expect portion 'XX of year helping decreased to LAAP domestic parts sales quarter percent. Korea reflecting increased percent, declined double-digit of digit the compared last business offset spring increasing consumer the a is benefit mid-single first distributor high one to We activity, XXs fourth

or sales sales Africa X%. essentially Europe perform orders. decreased growth offset of Excluding East lower timing, net and and direct were impact by 'XX flat. Europe, well shipment DTC wholesale spring brand Middle the as EMEA, Columbia in sell-through distributor marketplace healthy flat of the DTC wholesale [indiscernible] economic The measured geopolitical net LAAP pressures. to the healthy impact The despite and continues region,

last its in This Society into year. our quarter, following extended Hike we France, launch the popular successful U.K. program

Columbia explore we the technologies. To outdoors place across Asia take learn markets. to about continuing year, our This reminder, programs strengthen we're includes hikers further Hike over Megamarsch. brand's partnership European events Columbia society the each category Switzerland a Austria several series hiking participants. This across high it in with and that exclusive XX the Germany, with X,XXX allows important have young a Columbia's typically and presence meet series to fielding them of As people of events direct and like-minded of

EMEA distributor the orders compared 'XX shipping greater XX% first business year the of Our and portion a quarter to of reflecting last in spring fourth declined quarter. low

net were consumers only seeking value sales XX% slightly by growth. Similar marketplace, Excluding store. is E&A orders offset distributor performance 'XX driving modest the impacted being sales impact the markets Canada are our timing, shipment by lower the several wholesale as geopolitical Canadian which in U.S., despite to outlook healthy were conflicts. at down of declined DTC out partially spring

to orders, Looking well at DTC brick-and-mortar product newest X%, consumers and access shipments brand offset our spring net underway spring our innovations. by partially of performance for sales The lower we're brand. reflecting by gain decreased growth. Columbia to delivery excited is

technology that strategies displays, reenergizing Columbia to industry-leading consumers point omni sell-throughs spectrum protection like Moon. fast-growing early scientific is coming on build and new with PFG these Cisco price breathable This by differentiate lunar encouraging new PFG also right a competition. our available helping with deflector, products younger, February, in innovations airflow, base. the drive cushioning, to the In and sun expand of full broad lander innovative I in of higher Omni-MAX fishing Omni-Heat to window we focused response exceptionally Omni-MAX cooling stores, of new on are footwear, Machines, several from pack and launched comfort. We're the new offering traction. attract the partner fit, with Columbia's as supported we skin look the combines This the Omni-Shade We Intuitive trailing on the for steels. Infinity unchartered more system offerings proud drive on Our the consumer and encouraged on years a These Columbia protection Machines. Omni-Shade and seasons sun are tech Intuitive new fabric the next variety as to Omni-Freeze spring, to which launch a the active like [indiscernible]. I'm path. indications performance protect help and consumer versatile styles we brand for like sun collection. long-term spirit the display In Sportswear and launched assortment [indiscernible] footwear hiking, is Columbia of and the that successes mission enhanced referenced. we our increased Omni-MAX our was in-store stability In DTC features growth agents.

of billions outer hundreds product Columbia's temperatures reflective This media moon thermal mission was protect We're circle. extreme partnership blankets. full Nova-C the that sending space. NASA's brings space of of on lander outlets by in inspired creating featured a Our worldwide. technology helped impressions the the from The technology was

We PFG week driving on long and with we've wrap are with way the NASCAR Speedway. brand. Intuitive later PFG place Academy was with to with event Bubba Sports race Machines opportunity that The and history mission this at meet and created of Dallas proud have Bubble to to Bubba's his a year. In Both signed and on April, a finish. for energetic NASCAR, we greet Academy special and connect off Border seventh Wallace, car ahead partnered fan further a this a base unique Columbia capped in Outdoor Academy to scheduled to our host share next in Texas

a with mentioned our have strategic brand top designed a partners. key to remains launched collection our our priority This our care The ambassadors New we to style to Columbia the emerging accessories excited York-based footwear functionality the camping. younger and as leverage boutique channel appealing we create with As while to [indiscernible] and we're for brands. collaboration heat outdoor brand wholesale latest before, audience. Shifting spring, apparel, for featuring

and focused our emerging net sales with trends As our The and on and team refining which growth awareness, outlined XX% are is offset challenging headwinds a brand remains call market. the the prAna growth. and predominantly The to the on to our product outlook. shipments and in in the our earlier accelerating forward-looking across growth. outlook the building is now building growth. emerging With to sales on please increased brand's statements. momentum brand. Mountain statements reminder, from is [indiscernible] compelling reflecting in commentary long-term track, We're second remain recent encouraged year. I'll DTC X% presentation brand orders future product include I brands by America, CFO the with the return we decreased SOREL confident the these and growth. timing sales place, a spring The focused In potential evident performance. partially modest the a sustainable product of fall decline 'XX see additional most This refresh. decreased potential. growth net XXXX DTC related half team wholesale. brand line of brand positioning net and Hardwear review SOREL SOREL its wholesale, team challenged is for on in the North are mix revitalizing brand earlier portfolio prAna's in financial unlocking disclosures the on focused review DTC and in quarter, financial by a assortment commentary XX%, building brand details our the of sales and driving

working from vast time, appear and shipment to we manageable. product our any of in see. majority will to to full. continuously time fall minimize be delivered expected disruptions At teams 'XX, this are resulting line is The Looking on delay our delays

reiterating outlook are sales We to of net decline. X% our X% a

and seek to to While our XX.X% expected be now of will work and down SG&A is to overall to maximize opportunistically clearance expected to sales levels sales. The XX.X%. liquidation XX leading of X.X%. value, XX% expand net there modest operating and Gross to XXX activity has as XX.X% we sales, to an or inventory portfolio, consumers points our margin X.X% is not continue expecting changed. are We basis meaningfully expectations higher were margin to net modestly across approximately changes

income, [indiscernible]. per outlook $X.XX share has $X.XX earnings income higher to a modestly diluted lower interest to driven Our share licensing by and increased

team, We in expect opportunities our across least see significant our and strong business. $XXX the at confident achieve strategies the operating to cash flows of long-term the our million in ability we year. Overall, I'm growth

driven to functional investing engagement that? create excellence in We are differentiated, enhance products accelerate marketplace that values. That us amplified of global remarks. experiences by increased by and growth, welcome iconic our investments, consumers, and drive to consumer capabilities that Operator, strategic retain innovative, priorities your and delight help digitally our and focused creation the and profit are for with brand with investing that's demand the you talent questions could omni-channel remainder led hour. is core my prepared empowered We concludes in

Operator

The first Guggenheim. comes with from Instructions] [Operator question Bob Durbul

Robert Drbul

X my I guess, Tim, questions. on

fall guess you've heading XX%, and of and one you the and is sort leanest Europe just more for the down, the of the level expect the business, book, order region seeing is season? positioned talk the the inventories I a health just it bit that you what of can business Can first year. The your second the and piece little comfort you're European talk about this inventories sort you're trends, was in with rest the specifically? the that And in is, run into a composition of how around

Timothy Boyle

Yes.

[indiscernible] to proud area. down very we're achieve the to reduction, inventories were still that up store in We according about utilizations. actualize our more there's the and improve for room our automation turns with plant. to updated see we have place we friendly frankly, help that, utilizing We us the we was XX% to margin, the to X%, think gross us demand able of outlet the and get the our right fleet in opportunities think, to to in especially I now relation our great around demand estimating inventory inventory

The [indiscernible] I of our more of brand better Europe. occasionally in [indiscernible]. and to to continue opportunity management. exposure these our grow partners it we'll hear June in from in to the we some that in for as to at Europe, including So the company's that I'm there's But room but We think think, And been is think close us I to [indiscernible] still again, more Europe doing rapidly. anniversary marketing has from getting more best for members and good. the This efforts, just there's rightly, inventory there's us in of the end opportunity this Europe. great there, celebrate done not team is to come. And we've with global be hikes we're well European known we business XXth the business I thrilled way improve. relates to

Operator

BNP. from with Laurent comes Vasilescu question next The

Laurent Vasilescu

I The January, last on the -- had line February ask wanted favorable good January commented call, I to about and XQ. think March. got you -- think beat outdoor top for you but I weather right, the the weather, in very challenging then category the

the pull Was like maybe into what international Anything just side Was there surprise there curious a was was that there share versus I'm guide that we consider? So you that be can XQ your -- the front, forward something to when know helpful. guided should on XQ? that would very on you upside from February?

Timothy Boyle

The I the the the would off that America. the glad it. We me, [indiscernible] nicely warm a quarter Yes. but quarter, improvement to a in winter the third the And January in in of in fourth fact North first January, believe weather just fourth was surprise, very come appropriate quarter year. last surprise don't was in were winter see want was weather -- in to excuse say very we and

is weather-dependent much business dependent. this economically more Our than

and appropriate, it's So impacting. the is weather is [indiscernible] is business when our exceptional, vastly

a in So surprise Jan. really of bit that's the where numbers a were

Jim Swanson

the Laurent, upside reflected was January, had through I add that our the seeing from outlook. call weather we when February, in that our indicated of might we earnings we in that month standpoint a QX were

million Most was it outlook. to in would upside. either an the don't the the attribute with where end business. in of shipments can think, to I slightly at the be line be I most that thought earlier shift. right about in U.S. the we our We [indiscernible] quarter, look high relative on top quarter, of of you -- you better, when $XX And the think, So we're line

just not is this at So meaningful stage. least any nature anything day at of

Laurent Vasilescu

mentioned, -- Any weather, about down but looks calling business it's cancellations? there don't wholesale U.S. came think U.S. mean to book super U.S. Jim, better business what of because it they're terms there late, know helpful. can how Okay. the you the maybe super it would shaping about back of the because that's on as the did in context half. your I helpful. it guided the do comment I for then How of And weather-dependent it Tim, order we like up you have digits? was flattish reorders, that is comment mid-single side, on in kind be you derive. if any be

Timothy Boyle

Yes. Well, remember, we take extent certain to in our order December November, primarily in book January. a

So it additional some winter. reflects the much based average this an the we've on than that year. move that early It event partners in a inventory for period. have purposes, our normal [indiscernible] in of will is weather winter we're the retail older weather But

Jim Swanson

[indiscernible], couple extra a maybe to just points. in add of

to that the by combination year, that's and more continue partially a our these business, by that being have with led than say, different by down contemplate so and wholesale coupled we second wholesale Our you business not be down U.S. opened look I that should be half annualize at of in mid-single business, temporary XX through thought the for will percent new ago. large than brick-and-mortar business where operating. stores clearance the digit days stores the when And business, we'd full offset, the still have direct-to-consumer That's we year. been the would really year-over-year we or

Laurent Vasilescu

last the down XQ the of is a question, how of of a about of can range you margins recognize million tweaked we -- then of that my kind kind $XX Excellent. know could on in question kind clear. over kind of it quarters? I a to kind course give of And savings, you where out? year, quarters then the sorry. $XX the but anything gross shake And on savings? you X-part margin Jim, but think That's for the us gross the the can first But you very next that about X comment know maybe of equal be the don't I should do tranches million if across quarter, --

Jim Swanson

some in we Laurent, the published, CFO provide detail commentary outlook. on that QX we our Yes, did

contemplate basis were to in different we're our being year-over-year of and size a sales compare by favorable inventory-related do gross and and that's, provisions QX we XXX onetime down that a that So to last in margin XXX points nature anniversarying year large, against. reflection

I'd gross our our to essentially going from last to the quarter where level. down standpoint, you our that overarching it and even pertains that. the business -- are incurred terms If program, second year. And and chain were we the benefit is that costs margins normalized work set into ago. foremost, inventories great then to those supply progress elevated carrying operations certainly in making getting aside, team with be more on going we had as our collectively we're in first back And a across say, improvement an great really a profit of year we've to the That's

a In Tim fact, late QX regard took the force. late to that quarter, our U.S. March. actions That distribution, were third-party logistics the some We costs to million. executed quarter, in prepared with in remarks $XX in was had down reduction next referred

wouldn't million very benefits anticipate outlook. million on built to in see that that terms achieve But $XX being our track that's of into much we're to we of able beginning QX. to So until the $XX

Operator

with The next Duffy from Stifel. question Jim comes

Jim Duffy

to start I on the wanted U.S. market.

regions, remain earnest we of lessening? there seeing the outdoor as be relates Your see signs consumer U.S. Are spring U.S. what are I'm any curious a of category that the hangover this is And indications on then any as all you in activity Can the getting the whole U.S. to speak life season kind hopeful? and how COVID to silver. quite comments to certain in you're you U.S. begin from early the in spring the

Timothy Boyle

Yes.

in I those. and many marketplace we're brands today, of number a with think competing the there's of

business. frankly, to sheet is, expansion and going strong balance exuberant we're with as [indiscernible] obviously the think as our And I dust here the sells. of be it when

impactful as business functional. do weather used business all is well. is -- are and a more backed our I [indiscernible] how of Father's -- today of of work expectational doors. Mother's said, there's will Day, to and consumers on Day amount activities the the so And We that those that gift again, think get our I kinds continue the out significant robust as

Jim Duffy

And younger getting the Hike something you're and then, on efforts your Europe. States? Society progress evidence in in brand, the brand really bringing consumers you're traction Tim, the I'm new with good with. Can consumer to like pleased the you interested of to Initiative younger bring with Seems comment United the in of

Timothy Boyle

interesting, it's quite [indiscernible] Well, our the part youngest has to of been some their styles, which in are our generous frankly business, much our of these Certainly. which PFG uptake surprising. fits, sizing. new has we active PFG traditionally quite more add been as And there the line, components

the a certainly on begin more good really other getting And so then PFG in styles person are And like to and styles, have designed trailing looks robust a lift a we're more footwear, stuff. which that way. a very our in it the better for are that active we way as approaching people and

the that So expectations and I styles think -- those that design opportunity the continue is to area. in and we'll are in there define

Jim Duffy

come Hike And the U.S.? Society we expect should to to

Timothy Boyle

sort mean, PAM a global it's Definitely, a likely. I a been really uptick. -- of

-- have marketing inclusion the in European a certainly and it's for efforts. uptake Asia and was super Society We [indiscernible] across was Hike our

Operator

with Baird. from The Jonathan Komp comes next question

Jonathan Komp

inventory. down take on just more progress the made the competitive on environment. related I the slightly up you've the about you gross margin. comment just may year, to Can the margin ask just Could given guide you And there? stores. I reasons that, follow for can I to perspective And have missed to the temporary little share on a want the gross

year up much think U.S. give to XX% the up last that's to how perspective just to year, volume driving more there? this size in way I Any you're or

Jim Swanson

Yes. let I then in color. Tim jump start and add can some and

get revenue, gross outlook the composition, As our puts full the there's made it constant business of in down you brick-and-mortar outlet and the underlying down in SOREL we've the been the But parts year our operate some relates the the some to to that and our was business. up it of to takes those prior revenue slightly. margin, our held terms our of We the when there's revision with was with in down outlook. and outlook and e-commerce area we took into through We our took shifts took business our stores, of slightly. The year. continue balance we clearance and of case our

the under so liquidate very overall little will they're it then overall the obviously a amount, year, than and of contributing a value dependence vehicle these an change be driving as our of a in coming the in the going are a portion X% for as and or we're But great disruptive be profitable us of down. And on channel. through And increased will much operating We're the XX it like and outlet of stores an to business the from profitability quarter, to inventory that's then stores. for that temps stores, margins. I at the about wholesale clearance operating operating more a closeout vehicle standpoint, mix you to that result relates it saw effectively the just and X% with slightly And what's above margin in of quarter. to sales locations, sales, think, the less

Timothy Boyle

Our typical would method with selling sell merchandise frankly Marshalls channels be of T.J.Maxx flooded on price and those to to inventory. were or

and to it best the the in sell -- stores. us take temporary it approach So ourselves for take was these

has So the by other liquidation what as at decent to down come margins, [indiscernible]. comparison inventory certainly that

operating stores our those back standard go to up to will We temporary close and stores. begin

a opportunity that discount inventory, have would something really us didn't it big in an have broad flush think and on our done. I the the So gives it marketplace to the e-com business impact kind of

Jonathan Komp

move brand good a like Looks sense. Makes there.

of back the brand flat Just something one follow-up Could comment, year, you globally. in the positive, mid-single half. like maybe just digits Columbia it about looks on you're assuming for the revenue your

visibility I'm some So you maybe benefits about baking growth of newer hoping as if that you're have the share could a from initiatives see key those the the drivers longer and or in think maybe whether you tail. and we Colombia

Jim Swanson

Yes.

itself flat. category, second outlook right. that, half, a towards do the say the the remain I the Jon, contemplate looking in full to footwear, think brand. we it on As year outdoor would footwear at about relates apparel particular, that's And more the trends growth We're challenged. leans on, touched that Tim I in as basis,

in in in expect I'd we've a term. of growth to we're there, footwear at least lot from of we're the the got near half challenges for But standpoint. And then some term, taking back that confidence the that planning direction to continue longer a So the see year.

for wholesale apparel, the and we're the Some order out book on modest for season. wholesale business. book of that fall based the order Columbia of growth anticipating our wholesale is 'XX

So that's of but the there look our stores, standpoint. continues part And fleet I at side is from see of we brick-and-mortar that the to of brand business. store brand with international that certainly, be well business we perform the the the And -- will encouraging. will and benefit most from the an think when benefit additional

Operator

The Mitch next from question Seaport comes Kummetz with Research.

Mitchel Kummetz

first guess on I book. just order my the question,

down you we're mentioned orders any a that were mid-single low bit change you in follow-up. digits. order I'm fall little guys that the further are think on SOREL? I assumptions also a if wondering to XQ, there's when wondering you if have that reported And And book guide around change, into Or changing that that's other I'm process. just I SOREL then related? now

Jim Swanson

in saw anticipated. been more the of business change had we what which case than sharply the SOREL, business quarter The in of more first e-commerce we the the bit a down biggest in Yes. a in reflection has

got hand that and line make product got that it's going environment. we've in reflecting We the of leadership And it's indicative with in and some declines. also be the in the reinvigorating they order looking take be And to forward to that mid-XXs. time those to in fall down near the mind, outlook a revised the place brand, the down looking term. so to tough challenging new updates Obviously, for 'XX -- growth, really obviously forward to would we've and been book but

Mitchel Kummetz

range. the order that down at order book in And still then the is all? digit to low that mid-single consolidated -- Has book changed

Jim Swanson

is contemplated to the our a percent. for order be I think fall a low season down global single-digit so -- basis, book 'XX on

to So call it the X% range. X%

Mitchel Kummetz

just on the a margin. then question gross second And

but gross substantially XQ. nice a takes So and kind swing? the for puts first be to of expect in From that standpoint, reason showed the pretty down big you what's guys quarter margin you main in

Jim Swanson

The I question inventory I who benefited was some a biggest asked that had to QX can't last one little to. we and gross margin. earlier, remember sales bit of what but referring provisions related is the exceptional year,

year there year. favorable. have this same were were last onetime So don't those We adjustments things

a drive outlet continue expect we half that those to part assortment available far even you year, will applying basically latter margin on healthier about QX. And in to then, outlook. If And within margin margin you we those assortment to the in of back to take merchandise drive year going the inventory of aside, we we're will operate stores the our though that a sell the Mitch, and have. clearance up we is in neutral -- the the margin position of that that is the as a to thing additional planned gross better locations, that's by that gross the have we better think way that's

Operator

The next TD question comes from with Kernan Cowen. John

Alexander Douglas

Alex Douglas is John. This on for

and margin know one of specifically got have So couple commented last of first lower freight costs. you've on something puts calls. you takes, some fiscal the inbound was the earnings the gross 'XX my guys I on

end would year, impacts the wondering of was fair lower the just a the to you for headwind? when timing what's flexo be those will that or I maybe flat lapping guys either it by assume freight costs? for start So And that

Jim Swanson

our over that we've basis as look last And in of ago. what XXX terms inbound brake QX quarter. last points Yes. we're ocean The each quarters, impact in off margin basis has back several coming relates as quarters a X to the of charges inbound from the the it seeing experienced on in year highs you freights plus average, meaningful XXX gross was tune on of, points. benefited our per more

and of in expect quarter, of the what second we move be a from that freight freight order overall built, of said last to in would not down the to certainly of bit we as continued that, we those that negotiations a year. us currently more, would overall, rates there's we're course the we've where on the magnitude So beginning that supply just but far the over seen opportunity lower given forward here, see being demand come benefit. Having less indicate

Alexander Douglas

of turns. And my one helpful. inventory was on very That's on then question next your comments

a Just question. clarifying more of

it goal the mentioned be You of Just for goal clarify goal? or would Xx. more Is if help can that long-term of fiscal a very helpful. that modeling end of you purposes, 'XX

Timothy Boyle

over is goal. the would X, but goal turns long-term prior this a is be will a more for achieve Yes. improve and But get attainable, our good periods. to of believe it That we, which other companies to company inventory

Jim Swanson

Yes, certainly not 'XX.

a give Our would inventory of specific at and the to end to though, the -- that There's forecast of expectation, that. lot don't complexities want while year. be we

expectation able we'll of manage to be to exited where year-over-year relative Our 'XX. would down be out that we inventory

turns. inventory we'll So improvement in and efficiency that see the that

Operator

question next Lejuez The Paul from with Citigroup. comes

Paul Lejuez

much talk U.S. to if that know Curious clearance bricks-and-mortar ticket? locations. clarification back that's do of about I of say within of don't quarter, you by could DTC sales Can you traffic have on and being half? those. plan the the excluding how temporary were And driven maybe business. in how Did those is comps additional then many what just you share versus what the point second X% the total in represented you business

Timothy Boyle

a Yes. We wholesale to consider [indiscernible] ourselves be company.

have business. where operating I information really traffic on a markets our around rates we generally, stores been KPIs have in been retail don't exceptional. But release of conversion we're good the tell the those the numbers So can you, outlet and lot

the long-term to operate inventories. at inventory high high overall with operate to for with is margins efficient begin to then are company the we gross on our in for our to stores and these really, line continue So believe of level stores what we brand -- us the should inventories demand. turn an suite is in And focus down temporary for as get be plans, and the liquidation

Jim Swanson

point there. just on Yes. follow-up a And then

And about comps. a also as from was gains. but of specific asked included we said Having the in combination new the direct-to-consumer did our You business. provide productivity the temporary prepared retail growth Tim of touched brick-and-mortar perspective that remarks, a on, indicate stores, KPIs don't Tim's that we

with greater can some and clearance positive my contribute the again, and we that towards for exit to to on take conversion, you out be these our away sales the basis, yes, comp X%. But consolidated that. of then, back share stores, began of we And slightly as So these. to that, full represented lion's a profitable. down my regard than prior temporary that point, for just to to a And XXXX, slightly plan regard from X% net less quarter. comments we help ramp modestly the as first Tim's out those than comment traffic it's and year of And was are think with to

Paul Lejuez

And through process? then give Can are just you you just product, in that clearing one Got it. on us an follow-up. the PFAS update where

Timothy Boyle

mirror. Yes. We end a virtually be this year, to hope [indiscernible] our believe PFAS by of rearview that be topic products, will the and we out in

Jim Swanson

a you able the challenge through which through inventory and there's outlet business. work when that an that good to sold inventory. being don't We about to there. most great excess being salable, intend we of we've at to be remains do Certainly, standpoint, look is direct-to-consumer from able through move customer to We the capability already high-quality profitably. degree that Yes, we perfectly to a progress. have our that And sell of this is we clearance own envision allocated have, and feel balance made what the

Operator

Perry Next Bank of Alex question from America. comes with

Alexander Perry

just lot how us I peers, margins compared outperformance strong product to doing is there? what's other on And to about ask China driving your regions? remind about Are you actually. the the it business wanted the reception? the expansion China Can any distribution there versus new a you of of talk maybe then

Timothy Boyle

Sure. we've X, we the first were in underperformed years. years, XX China Well, this about we in for though ourselves business been operating we reminder, directly Even And as many the years. for just a doing underperforming. there were X marketplace, for

business. I the So our rest to of the would has that local we're just when outsized results around and the you business much of that more the operations turned market. our a smaller comparison function the we've by relevant you making bulk maybe cleaning for the at is others, business up improvement fact when them of say and with look the compare some

that focused instrumental retail local for way, It's and directly more is we number merchandise, really the which monthly really different been making is our well our been in local haven't -- exceptional. as utilizing on improved been we've market as We performance decisions key lastly, the the the requirements. And a team but store focusing productivity, distribution. have including operations management designing great better. market has expanded improving of It's a on ways, much

Jim Swanson

a I'll double Yes. points there. operating distribution less. just on down no We're Tim's standpoint. From talking

door a a In ago. fact, we may less operating be than were year we to

we but the with. And far margin. business our So follow-up overall Alex, this other perspective, is of it, provide I and above your can existing the store margins that point all will from coming specifics on we the through to certainly overall productivity share an then corporate China, online dealers that our to one with parts operating profitable is in question, most gains among contribution work regard within fleet

Alexander Perry

out guide more. I DTC And really to That's bit parse the then just helpful. Perfect. wanted a

I guess, for think some Is for implied count? in just then to be of think through implies year. it year-over-year quite DTC talk it there? guide the brick-and-mortar what's would that? about I up I what ddc.com driver that as a the move And Can sort you you driving is acceleration be the maybe bit. door

Jim Swanson

question. Good Yes.

clearance it this up plans with side throughout new stores of business, stores those our relates year, brick-and-mortar last the the clearance combined combination of those for as temporary temporary to year. the ramped last stores. we We opened the So year,

last operated a Case annualization productivity So to this point, we and you're that in table going the size them had this versus QX assortment open revenue improvement in this in year the around of year with see in year, can throughout the Keep we assortment time, to benefit see stores inventory associated X the last from standpoint. that. To a year in this believe there's we year, opportunity continue we last the where better in the weak the stores throughout are for We that year. got of through of some as most we'll consumer -- lesser for different to and that color being mind outlets a we're that given is excess the on available pretty the of we've flushing we left we points degree, contemplating those so XX that last year. had year. annualized recapture

things, and side half touched drive some to then brick-and-mortar with contemplate particularly business, China as by the late to business, and and that began e-commerce growth large, the that of we year. And the the degree U.S. promotions. that's, changes, well. with improvement in our we And to of respect on Asia will we of international not in brick-and-motor So making of on, the regard particularly back do last business as year, had the columbia.com mention year, last Tim degree mid the in

we and year, were in of the so discounted. And earlier promotional part the highly

the that brand get year, the latter of representation online. the to of backed you part As into essentially off of better a we

Alex, we'll that's more a comping be in you reflected that and also of will, latter is part of year get we in against some our as So the outlook. if comp, year, this

past think have strategic other as I been thing the course then the of few making would digital-based investments. I mention well, we years the over

we've their on and and the better consumer. efforts program consumer so to sites to our are to working [indiscernible] made teams personalize to membership our the And enhancements digital market

those we So the same of I begin year, half of as we're in leveraging the think on get type of some return to back this increasingly, able investments.

Operator

with is Serna next question The from UBS. Mauricio

Mauricio Serna Vega

talk maybe sales reconcile. to you the businesses. will U.S. you've on interesting be and That super I question, in seen to that the sell-through then guidance, first could hear. guess just the the European wanted And about

keeping then for you're I beat stable. you midpoint of think but much the by pretty like the it guidance about QX

in like decline understand a where I just inside previous the just wanted guide, keeping to that. just million outperformance? the you're -- And do think is I upcoming $XX the that savings previous on then SG&A So guide to about in it's sure if to you And like you're I the SG&A the like drove like lastly, -- SG&A, math of like be offset the what as [indiscernible] understand like like the to plan. the -- already quarters? wanted is changes that versus like or what being something

Timothy Boyle

where that Yes. year. on Mauricio, you about tell an an average market in average is I the the -- North is it America our can through sell

average. So which how Jim? like a In our stores us. looks retail our we're pleased typically for with positive on be slightly like partner going it's that. stores and that's be It Europe, where looks liquidation performing, are the they [indiscernible] about through ahead they're of would to

Jim Swanson

Yes, I on can questions. jump in couple other of the

revenue weeks as it first, couple So beat, to be QX within and relates that the Mauricio a days by earlier or large, different. of can shipments, wholesale

full second hence, our changes year to timing a any not difference and you're outlook. quarter just that's And seeing first between So quarter.

came that then forecast in fine-tuning slight the where brought down SG&A that we we're to out slightly. regard So that of QX. And making SG&A, adjustments with there's

to and cost I the manage from going discipline. of of capturing be standpoint just what reduction able be the think a business with reflection efficiency to it's a you we're

of that. note specific of outside So nothing

Mauricio Serna Vega

as approach of or very wind are going be lot consumers how follow-up standpoint, in like like next company to out if of the would you're how outlet of Is stores. down I essentially, this like stores, down? a I I pricing like on wanted the that it. just a Got affect all the don't because, understand know, just And quick QX? a guess, merchandise. lot But just the it don't it you know -- a like using be clear there I them temporary perceive to like consumer gradual year year is the from to going to like,

Timothy Boyle

timed as are are locations really how we a temporary The be effective Yes. going inventory. liquidating to the of function

inventory stores But help may we ago. all these expect to where some to the that are small XX be that be that virtually gradually had would stores be or to next So X established permanent point the that X they're converted closing number months us are basically, I that these gone around or month-to-month in cloud and liquidate there fact years like they'll X we'll the performance. we over so

Operator

Okay.

in We management have like no questions any queue. to I'd closing floor remarks. the further to turn for back

Timothy Boyle

the you We're for looks Well, and all business potential bright. thank excited for in. very the future the about listening

talk next to quarter. will We you

Operator

time. today's for concludes conference, and This lines you you your at participation. may disconnect Thank this your

Columbia Sportswear (COLM) 25 Apr 242024 Q1 Earnings call transcript