Columbia Sportswear Company (NASDAQ:COLM) Q2 2023 Earnings Call Transcript

Jim Swanson: Yes. As it relates to Q3 gross margin, we’ve not gotten down into specifics from our guidance standpoint, aside from providing revenue and operating income outlook. Having said that, we would expect gross margin to be up in the third quarter, we’ll continue to benefit from the lower inbound freight costs. That should be a 300 basis point benefit in the third quarter. There’s going to be some favorability as it relates to the region and channel mix as well with lower sales from our distributor business, which carries a lower gross margin. And so, there is an offset, however, and that’s, to your point, in terms of what we’re expecting from a promotional and clearance standpoint. So that’s, by and large, offsetting a lot of that in the third quarter.

And that’s effectively as we move through this inventory through our outlets, we’re more or less holding the promotions that you would see marketed. But as it relates to in-store and the aged or the excess inventory move through there from a clearance standpoint, those are marked down a bit more. And so that’s essentially the offset that you see in the margin. And then the fourth quarter, we anticipate being up as well. It’s really those same drivers that are going to be in play.

Alex Perry: Perfect. That’s really helpful. Best of luck going forward.

Operator: Thank you. There were no other questions at this time. I would now like to hand the call back to Tim Boyle for closing remarks.

Tim Boyle: Thank you very much. Thanks for listening in. Look forward to talking to you at the end of Q3.

Operator: Thank you. This does conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.