Clarus Corporation (NASDAQ:CLAR) Q4 2022 Earnings Call Transcript

Jim Duffy: Okay. Great. Thank you.

Operator: Thank you. Our next question is a follow-up from Alex Perry with Bank of America. Please proceed.

Alexander Perry: Hi. Sorry about the third question here, but I just wanted to ask. So the guidance implies a sort of reacceleration revenue from, call it, down 16% in 1Q to down 6% for the year. I know you have sort of the open-to-buy impacting BD in the first quarter. Are retailers 2H orders up year-over-year for Black Diamond based on sort of your read on the fall/winter 2023 order book, which is sort of causing the implied acceleration in revenue as you move through the year?

John Walbrecht: Yes. Great question, Alex. So yes, we’re able to look forward and see a strong order book for both spring 2023 as well as fall 2023. Obviously, fall is a higher percentage of our business. It’s more like a 55 to 45 as a mix. And then as we know the acceleration of D2C and even our flagship retail, retail does 75% of this business in the back half of the year and 50% in Q4. And we see that often in our direct-to-consumer businesses as well.

Alexander Perry: Got you. So the fall/winter 2023 order book should be up against this year? Is that sort of right?

John Walbrecht: Correct. Yes, correct. And obviously, in line with this anticipation that the open-to-buy or inventory overhang that we have seen at our key accounts will not be the case in Q3 and Q4 of this year.

Alexander Perry: So the 1Q is just 2022 product them not chasing sort of winter 2022 product. It’s not necessarily indicative of core momentum or demand for your product. It’s more of a factor of that which you see that easy as you move through the year?

John Walbrecht: Correct. And we believe that we’ve had a long winter, as you all know, I mean, we get more snow again this week. But as the season changes over from what was the season in Q3 and Q4 and into spring, summer, you’re probably now really April as opposed to February or March. We will see that shift of activity accelerate key categories.

Alexander Perry: So the spring 2023 is up as well. That’s just the…

John Walbrecht: Yes.

Alexander Perry: Okay. All right. Perfect. Thank you.

Operator: Thank you. At this time, this concludes our question-and- session. I would now like to turn the call back over to Mr. Walbrecht for closing remarks.

John Walbrecht: Thank you. We thank everyone for listening into today’s call, and appreciate all your questions, and we look forward to speaking with you when we report our first quarter 2023 results. Thanks again, everyone. Be safe.

Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may now disconnect your lines at this time. Thank you for your participation. The conference will begin shortly