Financial Data and Key Metrics Changes - Third quarter net sales grew 19% on a reported basis and 22% on a constant currency basis [9] - Diluted earnings per share increased 18% to $1.80 [9] - Gross margin contracted 270 basis points primarily due to higher inbound expenses [9] - Operating margin contracted 140 basis points [9] Business Line Data and Key Metrics Changes - SOREL brand net sales increased 28% year-over-year, driven by function-first fashion footwear [6][19] - Columbia brand net sales grew 19%, with balanced growth across apparel and footwear [14] - DTC (Direct-to-Consumer) business was up 8%, with 9% growth in e-commerce and 8% in brick-and-mortar [9] Market Data and Key Metrics Changes - US net sales increased 19%, with mid-20% wholesale growth [10] - Latin America and Asia Pacific region net sales increased 24% [12] - EMEA (Europe, Middle East, Africa) net sales increased 54% [13] Company Strategy and Development Direction - The company aims to align inventory with anticipated demand and manage excess inventory effectively [7][8] - Focus on innovations like Omni-Heat Infinity and Omni-Heat Helix to differentiate products [14][15] - Continued investment in footwear as a growth accelerator for the Columbia brand [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the threat of recession impacting the market but expressed confidence in their strategies [7][8] - Anticipated headwinds in the fourth quarter due to higher order cancellation risk and a more promotional environment [7] - Reiterated full-year net sales and diluted earnings per share outlook, expecting 10% to 12% net sales growth [21] Other Important Information - Inventory levels increased by 47% exiting the third quarter [7] - The company plans to liquidate excess inventory through regular retail sales and outlet stores [26][64] - The partnership with Dude Perfect aims to enhance brand engagement and consumer experiences [17] Q&A Session Summary Question: Can you elaborate on cancellations and inventory adjustments? - Cancellations were nearly 100% due to late deliveries, primarily affecting fall '22 products [26] - Retailers ended up with low inventories from the previous season, indicating a potentially good season ahead [27] Question: What is the strength of SOREL's sales by gender? - SOREL's sales are predominantly women's, with 80% of sales being non-winter styles [30] Question: What is driving the change in footwear growth guidance? - Slight shifts in revenue from Q3 to Q4 due to timing of wholesale shipments and cancellations [32] Question: How is the company performing in Europe and China? - The European market is performing well despite economic pressures, and the Chinese market shows resilience with strong e-commerce performance [35][36] Question: What is the outlook for gross margins and promotional activity? - Increased promotional activity is expected in Q4 due to inventory levels across the industry [39] Question: Will some inventory be held for future sales? - The intention is to manage inventory liquidation over the next several quarters rather than holding for future seasons [62][64]

[PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section details the company's financial performance, condition, and related disclosures for the reporting period [Item 1. Financial Statements and Supplementary Data](index=5&type=section&id=Item%201.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the unaudited condensed consolidated financial statements, highlighting a 2% Q2 net sales increase, a significant drop in net income, and a sharp rise in inventories leading to negative operating cash flow [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets at $2.73 billion, a decrease driven by reduced cash, while inventories significantly increased to $962.9 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | Dec 31, 2021 | June 30, 2021 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $413,110 | $763,404 | $819,806 | | Inventories, net | $962,875 | $645,379 | $676,009 | | Total current assets | $1,795,133 | $2,114,037 | $1,878,719 | | Total assets | $2,726,788 | $3,067,128 | $2,863,299 | | Total current liabilities | $618,444 | $680,390 | $567,600 | | Total liabilities | $995,071 | $1,077,876 | $1,001,642 | | Total shareholders' equity | $1,731,717 | $1,989,252 | $1,861,657 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2022 net sales increased 2% to $578.1 million, but gross profit declined, leading to a sharp 75% drop in operating income and an 82% decrease in net income Q2 Statement of Operations (in thousands, except per share amounts) | Metric | Q2 2022 | Q2 2021 | Change | | :--- | :--- | :--- | :--- | | Net sales | $578,063 | $566,370 | +2.1% | | Gross profit | $284,160 | $292,517 | -2.9% | | Operating income | $8,773 | $34,995 | -74.9% | | Net income | $7,163 | $40,684 | -82.4% | | Diluted EPS | $0.11 | $0.61 | -82.0% | Six Months Statement of Operations (in thousands, except per share amounts) | Metric | H1 2022 | H1 2021 | Change | | :--- | :--- | :--- | :--- | | Net sales | $1,339,573 | $1,191,976 | +12.4% | | Gross profit | $662,607 | $613,919 | +8.0% | | Operating income | $92,439 | $105,475 | -12.4% | | Net income | $74,000 | $96,584 | -23.4% | | Diluted EPS | $1.16 | $1.44 | -19.4% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned negative at $112.7 million for H1 2022, primarily due to a significant inventory build-up, while financing activities used $325.3 million for repurchases and dividends Six Months Cash Flow Summary (in thousands) | Activity | H1 2022 | H1 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(112,668) | $117,162 | | Net cash provided by (used in) investing activities | $101,865 | $(11,203) | | Net cash used in financing activities | $(325,317) | $(73,988) | | Net decrease in cash and cash equivalents | $(350,294) | $29,081 | - The significant use of cash in operations was primarily due to a **$332.2 million increase in inventories**, compared to a $123.7 million increase in the prior year period[16](index=16&type=chunk) - The company used **$287.4 million for common stock repurchases** in H1 2022, a substantial increase from $54.5 million in H1 2021[16](index=16&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes disclose disaggregated revenue by product, channel, and geography, highlight the expanded share repurchase program, and explain regional performance variations Q2 2022 Net Sales by Product Category & Channel (in thousands) | Category/Channel | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | **Product Category** | | | | | Apparel, Accessories & Equipment | $468,318 | $453,050 | +3.4% | | Footwear | $109,745 | $113,320 | -3.2% | | **Channel** | | | | | Wholesale | $299,896 | $302,303 | -0.8% | | Direct-to-consumer | $278,167 | $264,067 | +5.3% | Q2 2022 Net Sales by Geographic Segment (in thousands) | Segment | Q2 2022 | Q2 2021 | % Change | | :--- | :--- | :--- | :--- | | U.S. | $412,485 | $379,065 | +8.8% | | LAAP | $72,825 | $77,975 | -6.6% | | EMEA | $57,542 | $88,574 | -35.0% | | Canada | $35,211 | $20,756 | +69.6% | - In April 2022, the Board of Directors authorized an additional **$500 million** for the stock repurchase plan[53](index=53&type=chunk)[54](index=54&type=chunk) - As of June 30, 2022, **$529.4 million** remained available under the program[53](index=53&type=chunk)[54](index=54&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the challenging business environment, detailing Q2 sales growth, gross margin contraction, plummeting operating income, and the impact of increased inventory on cash flow [Business Environment and Trends](index=28&type=section&id=Business%20Environment%20and%20Trends) The company identifies inflationary pressures, a strengthening U.S. dollar, persistent supply chain disruptions, and excess marketplace inventory as key business challenges - Inflationary pressures, a strong U.S. dollar, and recession fears are weighing on consumer discretionary spending[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) - Supply chain disruptions have led to later-than-expected inventory receipts for Fall 2021, Spring 2022, and Fall 2022 seasons[107](index=107&type=chunk) - Excess inventory in the marketplace, caused by the arrival of delayed orders and slowing demand, has led to increased order cancellations and an expected increase in promotional activity[109](index=109&type=chunk) [Results of Operations — Consolidated](index=32&type=section&id=Results%20of%20Operations%20%E2%80%94%20Consolidated) Consolidated Q2 net sales increased 2%, but gross margin contracted by 240 basis points due to freight costs, and SG&A expenses rose, leading to a 75% drop in operating income Q2 2022 Net Sales Change by Brand (Constant-Currency) | Brand | % Change (Constant-Currency) | | :--- | :--- | | Columbia | +3% | | SOREL | +26% | | prAna | +3% | | Mountain Hardwear | +19% | | **Total** | **+4%** | - Gross margin contracted by **240 bps** in Q2, primarily due to an approximate **310 bps decrease** related to elevated inbound freight costs[124](index=124&type=chunk) - SG&A expenses increased by **7%** in Q2, driven by higher personnel expenses and increased demand creation spending[127](index=127&type=chunk) [Results of Operations — Segment](index=39&type=section&id=Results%20of%20Operations%20%E2%80%94%20Segment) Segment performance varied, with U.S. and Canada sales growing, while EMEA sales declined sharply due to Russia, and LAAP sales were impacted by COVID-19 in China Q2 2022 Segment Performance (in millions) | Segment | Net Sales | Net Sales % Change | Operating Income (Loss) | Change in Op. Income | | :--- | :--- | :--- | :--- | :--- | | U.S. | $412.5 | +9% | $67.3 | $(14.8) | | LAAP | $72.8 | -7% | $(3.1) | $(2.1) | | EMEA | $57.6 | -35% | $(1.0) | $(12.5) | | Canada | $35.2 | +69% | $3.5 | $2.9 | - The EMEA net sales decrease was driven by the curtailment of shipments to the Russia-based distributor[146](index=146&type=chunk) - The LAAP net sales decrease was primarily in the China business, due to government efforts to control the spread of COVID-19[145](index=145&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity despite a decrease in cash, primarily due to negative operating cash flow driven by inventory build-up and significant stock repurchases - Total liquidity as of June 30, 2022, was over **$915 million**, including cash, short-term investments, and available credit lines[157](index=157&type=chunk) - Inventory balance increased to **$962.9 million** as of June 30, 2022, compared to $676.0 million a year prior, reflecting anticipated sales growth and lower-than-expected sales[170](index=170&type=chunk) - Planned capital expenditures for 2022 are approximately **$80 to $100 million**, focusing on digital, supply chain, and DTC operations[171](index=171&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in market risk disclosures from the 2021 Annual Report on Form 10-K - There has not been any material change in the market risk disclosure from the company's 2021 Annual Report on Form 10-K[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting - The company's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of the end of the quarter[179](index=179&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2022[180](index=180&type=chunk) [PART II — OTHER INFORMATION](index=52&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section provides information on legal proceedings, key risk factors, equity security sales, and a list of filed exhibits [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation but does not expect it to have a material adverse effect on its financial position or results - The company is involved in routine litigation but does not expect it to have a material adverse effect on its financial position or results[181](index=181&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks including volatile economic conditions, intense competition, supply chain disruptions, inventory imbalances, cybersecurity threats, regulatory non-compliance, and public health impacts - Demand risks include volatile economic conditions, intense competition, changing consumer preferences, and unseasonable weather[183](index=183&type=chunk) - Supply chain risks stem from reliance on contract manufacturers in Asia, raw material price volatility, and dependence on third-party logistics providers, which are currently facing constraints[193](index=193&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk) - The inability to accurately forecast demand can lead to excess inventory, write-downs, and discounted sales, or inventory shortages and lost sales[188](index=188&type=chunk)[189](index=189&type=chunk) - The COVID-19 pandemic continues to pose risks by disrupting the supply chain, restricting retail operations, causing labor shortages, and impacting consumer demand[249](index=249&type=chunk)[250](index=250&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2022, the company repurchased 906,704 shares for $69.6 million, with $529.4 million remaining available under the repurchase program Q2 2022 Share Repurchases | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2022 | 94,423 | $88.85 | | May 2022 | 651,557 | $76.75 | | June 2022 | 160,724 | $69.98 | | **Total Q2** | **906,704** | **$76.81** | - As of June 30, 2022, approximately **$529.4 million** remained available for repurchase under the company's publicly announced plan[263](index=263&type=chunk)[264](index=264&type=chunk) [Item 6. Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including certifications from the CEO and CFO and XBRL data files - Lists exhibits filed with the report, including certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1, 32.2) and XBRL data files[266](index=266&type=chunk)

Columbia Sportswear Company (NASDAQ:COLM) Q2 2022 Earnings Conference Call July 27, 2022 5:00 PM ET Company Participants Andrew Burns - Director of Investor Relations Tim Boyle - Chairman, President and Chief Executive Officer Jim Swanson - Executive Vice President and Chief Financial Officer Conference Call Participants Bob Drbul - Guggenheim Jim Duffy - Stifel Financial Corp. Laurent Vasilescu - Exane BNP Paribas Mackenzie Boydston - BTIG John Kernan - Cowen Mitch Kummetz - Seaport Research Paul Lejuez - ...

Columbia Sportswear Company (NASDAQ:COLM) Q1 2022 Results Earnings Conference Call April 28, 2022 5:00 PM ET Company Participants Andrew Burns - Director of IR & Competitive Intelligence Timothy Boyle - Chairman, CEO & President Jim Swanson - EVP & CFO Peter Bragdon - EVP and Chief Administrative Officer Conference Call Participants Bob Drbul - Guggenheim Jim Duffy - Stifel Laurent Vasilescu - Exane Jonathan Komp - R. W. Baird Krista Zuber - Cowen Mitch Kummetz - Seaport Global Mackenzie Boydston - BTIG Mau ...

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Columbia Sportswear Company (NASDAQ:COLM) Q3 2021 Earnings Conference Call October 28, 2021 5:00 PM ET Company Participants Andrew Burns - Director, IR Tim Boyle - Chairman, President and CEO Jim Swanson - EVP and CFO Peter Bragdon - EVP and Chief Administrative Officer and General Counsel Conference Call Participants Robert Drbul - Guggenheim Securities Laurent Vasilescu - Exane BNP Paribas Camilo Lyon - BTIG Tracy Kogan - Citi Alex Perry - Bank of America Merrill Lynch Operator Greetings and welcome to Co ...