Columbia Sportswear Company (NASDAQ:COLM) Q4 2023 Earnings Call Transcript

Tim Boyle : Let me talk about the temporary outlet stores first and maybe last Jim to talk a little bit gross margin topic. When we knew at the beginning of last year or maybe even the last part of the prior year that we had too much inventory, there were two strategies that we took to liquidate the inventory. One was to approach the typical vendors that would buy this kind of stuff T. J. Maxx and et cetera, that we have long history with. And there was so much inventory around, frankly, that it became much clearer that we could clear these inventories through our own temporary stores that we could open them profitably, which we have been able to do. So, we’re going to maintain the stores as long as it’s necessary to complete the final liquidation of the access inventory. And then we’ll take, we’ll analyze how many of them ultimately end up being kept, but by far the majority of them will be likely closed.

Jim Swanson: The — as it pertains to the gross margin and why we would expect greater gross margin expansion in Q1 as compared to the first half. Bear in mind, through the first quarter, we still anticipate lower inbound freight costs. Those will carry through basically the first quarter. And we’ve seen about a 300 basis points benefit in Q2 through Q4 of ‘23. And it’s the continuation of that into Q1 and then there’s an offset to the degree we are continuing to work through certain of our inventory liquidation efforts. And then I should mention in the second quarter of last year. In the second quarter of last year, we did have some inventory obsolescence provisions that were favorable. That’ll be a make a difficult comp. And then Tim was just pointing out to me as well, our distributor business from a growth standpoint carry the lower gross margin. So, that’ll have an impact here in the first quarter or rather Q2.

Operator: [Operator Instructions]. We appear to have no further questions in queue. I’d like to turn the call back to management for any closing remarks.

Tim Boyle : Thank you, operator. This is Tim. So, I just want to point out that I’m personally very disappointed [indiscernible] we provided today. Our global team is focused on returning and surpassing the levels of growth and profitability that we’ve historically produced. So, we look forward to talking to you next quarter about how well we’re doing on that plan? Thank you.

Operator: Thank you. This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.