Jim Duffy • Stifel

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CEO Mike Dennison addressed the demand questions, stating that bike OEMs have not reduced demand due to tariffs and that upfitting growth is driven by better product mix, execution, and dealer development. CFO Dennis Schemm commented on inventory, explaining that the build was a purposeful, strategic move to improve stocking positions in the aftermarket business and that working capital remains a top priority.

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CEO Mike Dennison explained that Taiwan's capacity is now in line with its pre-COVID footprint but with higher efficiency, and future expansion would likely occur in Southeast Asia. CFO Dennis Schemm noted strong progress in the upfitting business, highlighting a recent dealer meeting and efforts to reposition inventory and co-develop products to meet customer needs, which is driving dealer growth.

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CEO Mike Dennison noted that upfit channel inventory health varies by brand, with GM and Ford improving while Stellantis/Jeep requires more work. CFO Dennis Schemm detailed a new product strategy focused on multiple price points and performance-oriented packages. Regarding pricing, Mike Dennison stated that while there are some specific requests, there is no widespread pressure, as the company continues to drive price through innovation.

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Executive Matthew Reintjes identified Southeast Asia as the key region for diversification, noting that production is already underway with experienced partners. CFO Michael McMullen added that inventory levels are expected to decline this year, with constraints managed by delaying some launches and introducing others first outside the U.S. He praised the team's remarkable ability to react to the dynamic situation.

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CEO Matt Reintjes explained that international growth in established markets like Canada and Australia is broad-based, while in Europe it's a more methodical wholesale build-out alongside strong e-commerce. CFO Mike McMullen noted that Q4 category dynamics will mirror the full year, with CEO Matt Reintjes adding that the numerous new, giftable Drinkware products position the category for a strong holiday season.

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CFO Joe Alkire clarified that the Helly Hansen accretion estimate of $0.15 is conservative because it depends on a Q2 closing (a seasonally weak quarter for Helly) and excludes any potential synergies or working capital benefits. Regarding Project Jeanius, he stated that benefits stem from optimizing sourced versus internal manufacturing, with upside beyond $100 million coming from newly identified efficiencies in both SG&A and gross margin as the project moves into execution.

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CEO Scott Baxter outlined three pillars for Project Jeanius: global supply chain transformation, back-end efficiencies leveraging a shared platform and data analytics, and commercial optimization to improve speed-to-market. CFO Joseph Alkire quantified the savings at $100 million at full run-rate, split roughly two-thirds to gross profit and one-third to SG&A. He noted SG&A savings will materialize in H1 2025, with gross margin benefits scaling in H2 2025 and into 2026.

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CFO Jesse Timmermans acknowledged a definite negative sales impact in January from the wildfires and a pause on social media, but noted that February trends picked up solidly. Co-CEO Michael Mente highlighted strong performance in cold-weather categories like outerwear and sweaters, as well as growing traction in tailoring, sophisticated styles, and workwear as key expansion areas.

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Co-CEOs Michael Karanikolas and Michael Mente attributed the efficiency to a mix of brand marketing allocation shifts and digital marketing improvements, such as optimizing for customer return behavior and using AI for better product targeting. CFO Jesse Timmermans asserted that customer growth was not flattered by markdowns, as full-price sales and new full-price customers grew significantly faster than their markdown counterparts.

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VP, Global Finance Alexander Hoff responded that consumers are increasingly seeking premium products, which is reflected in the B2B order book. He noted that the leather share is increasing and that premium categories like clogs and boots are performing extremely well. This indicates that retail partners are expanding their assortments with Birkenstock beyond traditional sandals into higher-priced items.

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CFO Erik Massmann outlined the capital allocation priorities: first, investing in the business (approx. €80M in CapEx), and second, continuing to pay down debt to reach the ~1.5x leverage target, with a focus on the U.S. term loan. He stated that any further use of cash, such as share repurchases, would be a decision for the Board, emphasizing the need to maintain flexibility for strategic investments.

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CEO Chris Hufnagel characterized the run specialty channel as healthy and confirmed that Saucony is gaining share, driven by product innovation. CFO Taryn Miller described current inventory levels as healthy and near-term targets, but noted that a modest, disciplined investment in inventory is planned for 2025 to support growth, especially for the Saucony brand.

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CEO Christopher Hufnagel reported that Saucony's e-commerce grew mid-single digits in Q3 across both performance and lifestyle, though it was somewhat constrained by tight inventory. He confirmed the 'stabilization' phase of the turnaround is largely complete and expressed confidence in the planned Q4 growth inflection, citing positive early visibility into the 2025 order book.

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CEO Andrew Rees described HEYDUDE's wholesale partners as highly engaged, but acknowledged that work remains to clean up channel inventory, which is factored into guidance and includes planned Q1 returns. CFO Susan Healy did not provide specific free cash flow guidance but noted the company's strong cash generation and clean inventory position, with turns exceeding the 4x goal.

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CEO Andrew Rees explained that the account base was rationalized about a year ago to focus on large strategic partners. He affirmed strong confidence in HEYDUDE's long-term potential, stating the company is prepared to make elevated SG&A investments in marketing and infrastructure, funded by the profitable Crocs, Inc. portfolio, and has not tempered these plans. He noted the long-term gross margin target for HEYDUDE is around 50%.

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CFO David Bergman confirmed that inventory is 'fairly clean,' with off-price sales running at the low end of their target range, contributing to the margin beat. CEO Kevin Plank described the future marketing approach as 'opportunistic' and agile, focused on telling compelling product stories. Bergman added that new marketing leadership is still finalizing plans, with more detail on timing to be provided on the next call.

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CEO Kevin Plank explained that Eric Liedtke will focus on marketing and strategy, serving as a key partner to the product and region leaders to strengthen the operating model, allowing Plank to focus on other areas. CFO Dave Bergman stated that the benefits from reduced promotions will continue through the fiscal year, more so in the first half, and that comparisons should normalize by the start of fiscal 2026.

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CEO Tim Boyle explained the DTC dynamics involve closing temporary clearance stores, positioning columbia.com as a less promotional brand showcase, and opening new, premium stores in high-traffic malls. Regarding marketing, Boyle stated the company is on the cusp of the new strategy, with digital presentations beginning in spring and testing for the fall campaign showing promising results.

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President and CEO Michelle Gass emphasized the strategy to become an iconic apparel company, not just a jeans brand. She noted that categories outside of denim bottoms now constitute about 40% of the business and are growing. The tops business grew 8% in Q4, and the ratio of bottoms to tops has improved from 7:1 historically to a current 2:1, with a goal of reaching 1:1 or better. Non-denim bottoms platforms like XX Chino and Tech pants are also performing well.

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President and CEO Bracken Darrell stated that while inventory is fresh and levels are down, the supply chain is working effectively. He noted the spring 2025 order book was light, reflecting past sentiment, but expressed confidence in the product pipeline for future seasons. EVP and CFO Paul Vogel added that integrated supply chain initiatives are helping improve inventory placement.

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CEO Bracken Darrell confirmed that momentum for Timberland's Yellow Boot is a global trend but cautioned the brand's revenue is still down. For Dickies, he described the brand as being in the 'middle' of its stabilization, with a new brand president now in place to lead the turnaround focused on its workwear heritage.

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CFO John Vandemore confirmed the strong wholesale outlook was a global comment. Regarding China, he stated that the company has 'derisked' the market in its forward guidance and noted that while early Singles Day results were encouraging, it was too soon for a definitive conclusion. He highlighted that the company's geographic diversification is a key strength that helps offset regional challenges like those currently seen in China.

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