On AG(ONON)2024-11-12 20:27Financial Data and Key Metrics Changes - The company achieved record net sales of CHF 636 million in Q3, growing by 33% on a constant currency basis [7][30] - Gross profit margin reached 60.6%, and adjusted EBITDA margin was 18.9%, both the highest since going public [32][49] - D2C net sales grew by 49.8%, reaching CHF 246.7 million, accounting for 38.8% of total net sales [32][38] Business Line Data and Key Metrics Changes - Net sales from shoes grew by 32.1% to CHF 603.7 million, driven by strong performance in running franchises like Cloudmonster and Cloudrunner [44] - Apparel sales increased by 33.4% to CHF 26.8 million, with expectations for reacceleration in Q4 [45] - Wholesale channel grew by 23.2%, reaching CHF 389.1 million, reflecting strength in existing and new product franchises [38] Market Data and Key Metrics Changes - APAC region saw net sales of CHF 74.6 million, growing by 79.3% on a constant currency basis, contributing 11.7% to total business [43] - The Americas region grew by 34.1% to CHF 395.5 million, driven by brand strength and operational improvements [41] - EMEA region reached CHF 165.8 million in net sales, growing by 15.1%, with France being the fastest-growing market [43] Company Strategy and Development Direction - The company aims to position itself as a premium global sportswear brand with a focus on sustainable and durable growth [7][20] - Strategic focus areas include apparel, retail expansion, and increasing brand awareness, particularly in APAC [12][20] - Plans to open 20 to 25 new retail stores annually, with significant growth expected in China and Japan [14][75] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued brand momentum and operational improvements heading into Q4, expecting higher constant currency growth rates [54] - The company anticipates achieving at least CHF 2.29 billion in net sales for the full year 2024, despite expected FX headwinds [55] - Management highlighted the importance of innovation and operational excellence as key drivers for long-term success [24][25] Other Important Information - The company reported a positive cash flow of over CHF 125 million in Q3, with a cash balance of nearly CHF 750 million at the end of the quarter [51] - Significant investments in D2C channels and operational efficiencies have contributed to strong performance [33][47] Q&A Session Summary Question: Increases in brand awareness details - Management noted significant increases in brand awareness, particularly among younger demographics, driven by partnerships with cultural icons and Olympic exposure [60][61] Question: Drivers of 50% B2C growth - Key drivers included successful product launches, increased brand awareness from marketing efforts, and investments in D2C environments [64][66] Question: Inventory and supply chain constraints - Management acknowledged past constraints but indicated improvements in product flow and inventory management, with plans for enhanced warehouse automation [71][73] Question: Wholesale performance moderation - The moderation was attributed to door closures in Europe and inventory constraints, but overall brand demand remains strong [91][92] Question: Multiyear margin outlook - Management confirmed confidence in achieving long-term margin goals, with expectations for continued strong performance in Q4 [96][97]