Q4 2023 Amer Sports Oyj Earnings Call

Operator: Amer Sports Fourth Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you'd like to ask a question during that time, simply press star, followed by the number 1 on your telephone keypad. And if you'd like to withdraw that question, again press star 1. Thank you. I would now like to turn the conference over to Omar Saad, Vice President of Finance and Investor Relations. Omar, you may begin your conference.

All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.

If you would like to ask a question during that time, simply press star, followed by the number 1 on your telephone keypad. And if you would like to withdraw that question, again, press star 1. Thank you. I would now like to turn the conference over to Omar Saad, Vice President of Finance and Investor Relations. Omar, you may begin your conference.

Omar Saad: Hi, everyone. Thanks for joining Amer Sports fourth quarter and fiscal year 2023 earnings call, which is our first earnings call as a public company on the New York Stock Exchange. Earlier this morning, we announced our fourth quarter and full year 2023 results. The release can be found on our IR website, investors.amersports.com. A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only, and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the safe harbor statement in our earnings release and SEC filings.

Earlier this morning, we announced our fourth quarter and full year 2023 results. The release can be found on our IR website, investors.ambersports.com. A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the Safe Harbor Statement in our earnings release and SEC filings.

A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the Safe Harbor Statement in our earnings release and SEC filings.

Please see the Safe Harbor Statement in our earnings release and SEC filings.

Omar Saad: We will also discuss certain non-IFRS financial measures. Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to the most comparable IFRS measures. We will begin with prepared remarks from our CEO, James Zheng and CFO, Andrew Page, followed by a Q&A session until 9 A.M. Eastern. Our three segment leaders will also join for the Q&A portion of the call: CEO of Arc’teryx, Stuart Haselden; CEO of Solomon, Franco Fogliato; and CEO of Wilson, Joe Dudy. With that, I'll turn the call over to James.

Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliation to the most comparable IFRS measures. We will begin with prepared remarks from our CEO, James Eng, and CFO, Andrew Page, followed by a Q&A session until 9 a.m. Eastern. Our three segment leaders will also join for the Q&A portion of the call, CEO of Arc'teryx, Stuart Hazelden, CEO of Salomon, Franco Fogliato, and CEO of Wilson, Joe Doody. With that, I'll turn the call over to James.

We will begin with prepared remarks from our CEO, James Eng, and CFO, Andrew Page, followed by a Q&A session until 9 a.m. Eastern. Our three segment leaders will also join for the Q&A portion of the call, CEO of Arc'teryx, Stuart Hazelden, CEO of Salomon, Franco Fogliato, and CEO of Wilson, Joe Doody. With that, I'll turn the call over to James.

Our three segment leaders will also join for the Q&A portion of the call, CEO of Arc'teryx, Stuart Hazelden, CEO of Salomon, Franco Fogliato, and CEO of Wilson, Joe Doody. With that, I'll turn the call over to James.

With that, I'll turn the call over to James.

James Zheng: Thanks, Omar. I'm very proud to lead Amer Sports first earnings call as a New York Stock Exchange List Company. Amer Sports may be new to the U.S. Equity markets, but we come from a long and rich heritage in sports and outdoor activities. Our brands are loved and trusted by a million worldwide. Whether used by elite competitors, [inaudible] aspirational enthusiasts, our equipment, footwear and apparel delivers the best technical quality and performance. We are excited about opportunity to drive growth across our three segments, Technical Apparel, Outdoor Performance and the Ball & the Racquet Sports. Although, 2023 was another strong year of sales growth and the margin expansion for Amer Sports, we are still in the early stage of our profitable growth in fact following our transformation to a decentralized brand direct operating model in 2020. This transformation has been critical to unlock the value of our portfolio led by our high growth flagship brand, Arc'teryx. Several factors give us confidence for the future.

AMS Sports may be new to the U.S. equity market, but we come from a long and rich heritage in sports and outdoor activities. Our brains are loved and trusted by millions worldwide. Whether used by elite competitors, weekend rewards, or aspirational enthusiasts, our equipment, footwear, and apparel delivers the best technical quality and performance. We are excited about opportunity to drive growth across our three segments. technical apparel, outdoor performance, and the ball and the racket sports. Although 2023 was another strong year of sales growth and the margin expansion for Amherst sports. We are still in the early stage of a profitable growth, infection following our transformation to a decentralized brand direct operating model in 2020. This transformation has been critical to unlock the value of our portfolio, led by our high-gloss flagship brand Acteryx. Several factors give us confidence for the future.

Our brains are loved and trusted by millions worldwide. Whether used by elite competitors, weekend rewards, or aspirational enthusiasts, our equipment, footwear, and apparel delivers the best technical quality and performance. We are excited about opportunity to drive growth across our three segments. technical apparel, outdoor performance, and the ball and the racket sports. Although 2023 was another strong year of sales growth and the margin expansion for Amherst sports. We are still in the early stage of a profitable growth, infection following our transformation to a decentralized brand direct operating model in 2020. This transformation has been critical to unlock the value of our portfolio, led by our high-gloss flagship brand Acteryx. Several factors give us confidence for the future.

Whether used by elite competitors, weekend rewards, or aspirational enthusiasts, our equipment, footwear, and apparel delivers the best technical quality and performance. We are excited about opportunity to drive growth across our three segments. technical apparel, outdoor performance, and the ball and the racket sports. Although 2023 was another strong year of sales growth and the margin expansion for Amherst sports. We are still in the early stage of a profitable growth, infection following our transformation to a decentralized brand direct operating model in 2020. This transformation has been critical to unlock the value of our portfolio, led by our high-gloss flagship brand Acteryx. Several factors give us confidence for the future.

We are excited about opportunity to drive growth across our three segments. technical apparel, outdoor performance, and the ball and the racket sports. Although 2023 was another strong year of sales growth and the margin expansion for Amherst sports. We are still in the early stage of a profitable growth, infection following our transformation to a decentralized brand direct operating model in 2020. This transformation has been critical to unlock the value of our portfolio, led by our high-gloss flagship brand Acteryx. Several factors give us confidence for the future.

technical apparel, outdoor performance, and the ball and the racket sports. Although 2023 was another strong year of sales growth and the margin expansion for Amherst sports. We are still in the early stage of a profitable growth, infection following our transformation to a decentralized brand direct operating model in 2020. This transformation has been critical to unlock the value of our portfolio, led by our high-gloss flagship brand Acteryx. Several factors give us confidence for the future.

Although 2023 was another strong year of sales growth and the margin expansion for Amherst sports. We are still in the early stage of a profitable growth, infection following our transformation to a decentralized brand direct operating model in 2020. This transformation has been critical to unlock the value of our portfolio, led by our high-gloss flagship brand Acteryx. Several factors give us confidence for the future.

We are still in the early stage of a profitable growth, infection following our transformation to a decentralized brand direct operating model in 2020. This transformation has been critical to unlock the value of our portfolio, led by our high-gloss flagship brand Acteryx. Several factors give us confidence for the future.

This transformation has been critical to unlock the value of our portfolio, led by our high-gloss flagship brand Acteryx. Several factors give us confidence for the future.

Several factors give us confidence for the future.

James Zheng: First, we operate a unique portfolio of premium outdoor and sports brands, each position at the pinnacle of their respective market. Second, our brands have high engagement and the satisfaction with consumers around the world, but are still relatively small players in those large global outdoor and the sports markets. Third, the Premium segment of the Outdoor Sports markets remains healthy and growing, especially in Great China and Americas, where we continue to outperform peers. Fourth, our highest margin brands, regions, channels and the categories are growing the fastest and we have assembled a strong and experienced management team that's energized and motivated to drive value creation for our stakeholders.

Second, our brands have high engagement and satisfaction with consumers around the world, but are still relatively small players in the large global outdoor and sports markets. Third, the premium segment of the outdoor sports market remains healthy and growing, especially in Great China and America, where we continue to outperform peers. Fourth, our highest margin brand, bridging, channels, and categories are glowing the fattest and we have assembled a strong and experienced manual team that's energized and motivated to drive value creation for our stakeholders.

Third, the premium segment of the outdoor sports market remains healthy and growing, especially in Great China and America, where we continue to outperform peers. Fourth, our highest margin brand, bridging, channels, and categories are glowing the fattest and we have assembled a strong and experienced manual team that's energized and motivated to drive value creation for our stakeholders.

Fourth, our highest margin brand, bridging, channels, and categories are glowing the fattest and we have assembled a strong and experienced manual team that's energized and motivated to drive value creation for our stakeholders.

James Zheng: Before I review the performance of our brand segments, I want to zoom in on what I see as our path forward. First, we believe Arc'teryx is a breakout growth story with unprecedented growth and profitability for the Outdoor industry. It's truly charting new territory with its disruptive DTC models and a very strong competitive position. The growth and the profitability of this franchise will fuel our Amer Sports for years to come. Second, Solomon and Wilson and all our other brands are very strong, have longstanding authentic heritage, premium position with their respective segments and amazing products. Although, they are early in their growth infection, we are building very strong foundation for future growth for these brands across categories and the key geographies.

First, we believe a terrace is a breakout growth story with unprecedented growth and the profitability for the outdoor industry. It's truly charting new territory. with its disruptive DTC models and a very strong competitive position. The growth and profitability of this franchise will fuel our e-sports for years to come. Second. Solomon Wilson and all our other brains are very strong, have long-standing authentic heritage. premium position with their respective segments and amazing products. Although they are early in their growth infection. We are building very strong foundation for future growth for these brands across categories and the key geographies.

It's truly charting new territory. with its disruptive DTC models and a very strong competitive position. The growth and profitability of this franchise will fuel our e-sports for years to come. Second. Solomon Wilson and all our other brains are very strong, have long-standing authentic heritage. premium position with their respective segments and amazing products. Although they are early in their growth infection. We are building very strong foundation for future growth for these brands across categories and the key geographies.

with its disruptive DTC models and a very strong competitive position. The growth and profitability of this franchise will fuel our e-sports for years to come. Second. Solomon Wilson and all our other brains are very strong, have long-standing authentic heritage. premium position with their respective segments and amazing products. Although they are early in their growth infection. We are building very strong foundation for future growth for these brands across categories and the key geographies.

The growth and profitability of this franchise will fuel our e-sports for years to come. Second. Solomon Wilson and all our other brains are very strong, have long-standing authentic heritage. premium position with their respective segments and amazing products. Although they are early in their growth infection. We are building very strong foundation for future growth for these brands across categories and the key geographies.

Second. Solomon Wilson and all our other brains are very strong, have long-standing authentic heritage. premium position with their respective segments and amazing products. Although they are early in their growth infection. We are building very strong foundation for future growth for these brands across categories and the key geographies.

Solomon Wilson and all our other brains are very strong, have long-standing authentic heritage. premium position with their respective segments and amazing products. Although they are early in their growth infection. We are building very strong foundation for future growth for these brands across categories and the key geographies.

premium position with their respective segments and amazing products. Although they are early in their growth infection. We are building very strong foundation for future growth for these brands across categories and the key geographies.

Although they are early in their growth infection. We are building very strong foundation for future growth for these brands across categories and the key geographies.

We are building very strong foundation for future growth for these brands across categories and the key geographies.

James Zheng: Third, we believe our unique expertise in Great China and our success embedding top talent in our brand teams in this important growth region, give us a clear competitive advantage across all brands in our portfolio. Before I turn it over to Andrew to discuss our company results, margins, the balance sheet and the guidance, I will provide a review of our three brand segments. First, Technical Apparel led by Arc'teryx, revenues grew 26% to $550 million in Q4, driven by 42% direct to consumer growth, including a 33% omni-comp. This was partially offset by a 5% decline in wholesale, which was expected and the primarily related to the supply chain related sales shift from Q3 into Q4 in 2022, which create a more difficult comparison.

Before I turn it over to Andrew to discuss our company results, margin, the balance sheet, and the guidance, I will provide a review of our three brand segments. First, technical apparel. Led by Actarix, revenues grow 26% to $550 million in Q4, driven by 42% direct-to-consumer growth, including a 33% on-econ. This was partially offset by a five percent a decline in wholesale, which was expected and primarily related to the supply chain-related share shift from Q3 into Q4 in 2022. which create a more difficult comparison.

First, technical apparel. Led by Actarix, revenues grow 26% to $550 million in Q4, driven by 42% direct-to-consumer growth, including a 33% on-econ. This was partially offset by a five percent a decline in wholesale, which was expected and primarily related to the supply chain-related share shift from Q3 into Q4 in 2022. which create a more difficult comparison.

Led by Actarix, revenues grow 26% to $550 million in Q4, driven by 42% direct-to-consumer growth, including a 33% on-econ. This was partially offset by a five percent a decline in wholesale, which was expected and primarily related to the supply chain-related share shift from Q3 into Q4 in 2022. which create a more difficult comparison.

This was partially offset by a five percent a decline in wholesale, which was expected and primarily related to the supply chain-related share shift from Q3 into Q4 in 2022. which create a more difficult comparison.

a decline in wholesale, which was expected and primarily related to the supply chain-related share shift from Q3 into Q4 in 2022. which create a more difficult comparison.

which create a more difficult comparison.

James Zheng: For the full year 2023, Technical Apparel grew 45%, driven by 57% DTC growth, including a 55% omni-comp. Arc'teryx continues to experience very strong brand momentum across all regions, channels, consumer segments and the product categories. And in both stores and online, the DTC channel experienced strong traffic and the commercial trends. The brand achieved key milestones in its DTC evolution in 2023, including premium flagship openings in Osaka, Beijing, Toronto, and the most recently, our 20,000 square foot store in Shanghai, that's taken the brand's retail presentation to new highs. Arc'teryx is also doubling down on innovation, including a significant new footwear launch with the first fully in-house designed and developed footwear for the mountain athlete. Arc'teryx continues to drive deep relationships in mountain communities through global academies and host more than 25 Australian participants at Whistler, San Anton, Chamonix, Squamish and the Yangtze Academies across 2023.

Actarix continues to experience very strong brand momentum across all regions, channels, consumer segments, and the product categories. And in both stores and online, the DTC channel experienced strong traffic and conversion trends. The brand achieved key milestones in its TTC evolution in 2023. including premium flagship openings in Osaka, Beijing, Toronto, and most recently, a 20,000 square foot store in Shanghai that's taking the brand's retail presentation to new heights. Aptel is also doubling down on innovation, including a significant new footwear launch with the first fully in-house designed and developed footwear for the mountain athletes. Arcaryx continues to drive deep relationships in mountain communities through global academies and hosts more than 25,000 participants at Whistler, St. Anton, Chamonix, Squamish, and the Yangtze Academies across 2023.

And in both stores and online, the DTC channel experienced strong traffic and conversion trends. The brand achieved key milestones in its TTC evolution in 2023. including premium flagship openings in Osaka, Beijing, Toronto, and most recently, a 20,000 square foot store in Shanghai that's taking the brand's retail presentation to new heights. Aptel is also doubling down on innovation, including a significant new footwear launch with the first fully in-house designed and developed footwear for the mountain athletes. Arcaryx continues to drive deep relationships in mountain communities through global academies and hosts more than 25,000 participants at Whistler, St. Anton, Chamonix, Squamish, and the Yangtze Academies across 2023.

The brand achieved key milestones in its TTC evolution in 2023. including premium flagship openings in Osaka, Beijing, Toronto, and most recently, a 20,000 square foot store in Shanghai that's taking the brand's retail presentation to new heights. Aptel is also doubling down on innovation, including a significant new footwear launch with the first fully in-house designed and developed footwear for the mountain athletes. Arcaryx continues to drive deep relationships in mountain communities through global academies and hosts more than 25,000 participants at Whistler, St. Anton, Chamonix, Squamish, and the Yangtze Academies across 2023.

including premium flagship openings in Osaka, Beijing, Toronto, and most recently, a 20,000 square foot store in Shanghai that's taking the brand's retail presentation to new heights. Aptel is also doubling down on innovation, including a significant new footwear launch with the first fully in-house designed and developed footwear for the mountain athletes. Arcaryx continues to drive deep relationships in mountain communities through global academies and hosts more than 25,000 participants at Whistler, St. Anton, Chamonix, Squamish, and the Yangtze Academies across 2023.

Aptel is also doubling down on innovation, including a significant new footwear launch with the first fully in-house designed and developed footwear for the mountain athletes. Arcaryx continues to drive deep relationships in mountain communities through global academies and hosts more than 25,000 participants at Whistler, St. Anton, Chamonix, Squamish, and the Yangtze Academies across 2023.

Arcaryx continues to drive deep relationships in mountain communities through global academies and hosts more than 25,000 participants at Whistler, St. Anton, Chamonix, Squamish, and the Yangtze Academies across 2023.

James Zheng: Regionally, Technical Apparel grows 30% in both Great China and America. Technical Apparel grew more than 40% in APAC, where we are evolving that operating model to accelerate DTC expansion. Importantly, in Q4, Arc'teryx also posted outsized growth in key opportunity areas, including [inaudible], footwear and hard goods and accessories. Turning to Outdoor Performance. Revenue grew 2% in Q4 to $523 million driven by strong top and the bottom line performance in our Winter Sports Equipment franchise, partially offset by an expected deceleration in Salomon footwear in the wholesale channel. DTC experienced strong growth, while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above.

Technical Apparel grows 30% in both Great China and America. [inaudible] Technical apparel grew more than 40 percent in APEC, where we are evolving the operating model to accelerate DTC expansion. Importantly, in Q4, Arcteryx also posted outsized gloves in key opportunity areas, including women's footwear, and haggards, and accessories. Turning to outdoor performance, revenue grow 2% in Q4 to $523 million, driven by strong top and bottom line performance in our winter sports equipment franchise, partially offset by an expected deceleration in Solomon footwear in the wholesale channel. DTC experienced strong growth while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above.

Technical apparel grew more than 40 percent in APEC, where we are evolving the operating model to accelerate DTC expansion. Importantly, in Q4, Arcteryx also posted outsized gloves in key opportunity areas, including women's footwear, and haggards, and accessories. Turning to outdoor performance, revenue grow 2% in Q4 to $523 million, driven by strong top and bottom line performance in our winter sports equipment franchise, partially offset by an expected deceleration in Solomon footwear in the wholesale channel. DTC experienced strong growth while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above.

Importantly, in Q4, Arcteryx also posted outsized gloves in key opportunity areas, including women's footwear, and haggards, and accessories. Turning to outdoor performance, revenue grow 2% in Q4 to $523 million, driven by strong top and bottom line performance in our winter sports equipment franchise, partially offset by an expected deceleration in Solomon footwear in the wholesale channel. DTC experienced strong growth while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above.

Turning to outdoor performance, revenue grow 2% in Q4 to $523 million, driven by strong top and bottom line performance in our winter sports equipment franchise, partially offset by an expected deceleration in Solomon footwear in the wholesale channel. DTC experienced strong growth while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above.

expected deceleration in Solomon footwear in the wholesale channel. DTC experienced strong growth while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above.

DTC experienced strong growth while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above.

James Zheng: Regionally, Great China and APAC experienced healthy increases, partially offset by declines in the America and the EMEA. Although, wholesalers in the Americas and the EMEA remain cautious with preorders as they focus on maintaining lean inventories and rely more on refreshment orders. Solomon continues to enjoy strong demand at retail. The brand performed well in both own retail and the partner stores, including DTC up a very strong double-digit with all regions and the format showing solid gains. There continued to be signs that Solomon footwear is generating strong brand heat in [inaudible] communities. Our new sports style line was ranked as the number one clothes brand on StockX last year. Although, worth noting is a strong Winter Sports Equipment performance in Q4, particularly in APAC, Great China and the EMEA aided by favorable weather conditions, strong result bookings and timely inventory deliveries. For the full year 2023, Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China, and the 44% growth in APAC. By channel, DTC led growth at plus 42%.

experienced healthy increases, partially offset by declines in the America and the EMEA. Although wholesalers in the Americas and the EMEA remain cautious with pre-orders as they focus on maintaining lean inventories and rely more on refreshment orders, Sonoma continues to enjoy strong demand at retail. The brand performed well in both own retail and partner stores, including DTC, a very strong double-digit with all regions and formats showing solid gain. There continues to be signs that salmon full-wear is generating strong brand heat in key snake communities. Our new sports style line was ranked as the number one clothes brand on StockX last year. Although worth noting is the strong winter sports equipment performance in Q4, particularly in APEC, Great China, and the EMEA, aid by favorable weather conditions. strong result bookings, and timely inventory deliveries. for the full year 2023. Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC lead goes at the plus 42 percent.

Although wholesalers in the Americas and the EMEA remain cautious with pre-orders as they focus on maintaining lean inventories and rely more on refreshment orders, Sonoma continues to enjoy strong demand at retail. The brand performed well in both own retail and partner stores, including DTC, a very strong double-digit with all regions and formats showing solid gain. There continues to be signs that salmon full-wear is generating strong brand heat in key snake communities. Our new sports style line was ranked as the number one clothes brand on StockX last year. Although worth noting is the strong winter sports equipment performance in Q4, particularly in APEC, Great China, and the EMEA, aid by favorable weather conditions. strong result bookings, and timely inventory deliveries. for the full year 2023. Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC lead goes at the plus 42 percent.

The brand performed well in both own retail and partner stores, including DTC, a very strong double-digit with all regions and formats showing solid gain. There continues to be signs that salmon full-wear is generating strong brand heat in key snake communities. Our new sports style line was ranked as the number one clothes brand on StockX last year. Although worth noting is the strong winter sports equipment performance in Q4, particularly in APEC, Great China, and the EMEA, aid by favorable weather conditions. strong result bookings, and timely inventory deliveries. for the full year 2023. Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC lead goes at the plus 42 percent.

There continues to be signs that salmon full-wear is generating strong brand heat in key snake communities. Our new sports style line was ranked as the number one clothes brand on StockX last year. Although worth noting is the strong winter sports equipment performance in Q4, particularly in APEC, Great China, and the EMEA, aid by favorable weather conditions. strong result bookings, and timely inventory deliveries. for the full year 2023. Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC lead goes at the plus 42 percent.

Our new sports style line was ranked as the number one clothes brand on StockX last year. Although worth noting is the strong winter sports equipment performance in Q4, particularly in APEC, Great China, and the EMEA, aid by favorable weather conditions. strong result bookings, and timely inventory deliveries. for the full year 2023. Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC lead goes at the plus 42 percent.

Although worth noting is the strong winter sports equipment performance in Q4, particularly in APEC, Great China, and the EMEA, aid by favorable weather conditions. strong result bookings, and timely inventory deliveries. for the full year 2023. Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC lead goes at the plus 42 percent.

strong result bookings, and timely inventory deliveries. for the full year 2023. Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC lead goes at the plus 42 percent.

for the full year 2023. Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC lead goes at the plus 42 percent.

Outdoor performance grow 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC lead goes at the plus 42 percent.

By channel, DTC lead goes at the plus 42 percent.

James Zheng: Key brand highlights from 2023, include number one, Solomon becoming an official partner for 2026 Milano Cortina Olympic Games, including supplying 25,000 volunteers and [inaudible] with Salomon Apparel, Footwear and Accessories. Second, the launch of Salomon's first low running super shoe, the PHANTASM 2, which sold out in 30 days. And the third, the successful of Solomon athlete, Courtney Dauwalter, the best trail runner on the planet and the first human even to win the Western States 100, the Hardrock 100 and the UTMB in a single season. And the 2024 start with a splash when Solomon launches Welcome Back to Earth brand campaign during the Super Bowl. In Winter Sports Equipment, Atomic reinforced its global leadership in Alpine Skis and achieved number two position in the global Ski Boot market. Our star athlete, Mikaela Shiffrin had an exceptional year, breaking the 24 year old record for most World Cup victories of all time, and now has 93 wins.

Number one, Salomon becoming an official partner for the 2026 Milan-Cortina Olympic Games, including supplying 25,000 volunteers and torchbearers with Salomon apparel, footwear, and accessories. Second, the launch of Solomon's first low-running super shoe, the Phantasm II, which sold out in 30 days. And the third, the successful athlete, Courtney Doherty, the best trail runner on the planet, and the first human even to win the Western States 100, the Hard Rock 100, and the UTMB in a single season. And the 2024 start with a splash when Solomon launches Welcome Back to Earth brand campaign during the Super Bowl. in winter sports equipment. Atomic reinforced its global leadership in Alpine skis and achieved number two position in the global ski boot market. Our star athlete, Mikhail Shafrin, had an exceptional year, breaking the 24-year-old record for most workout victories of all time. and now has 93 weeks.

Second, the launch of Solomon's first low-running super shoe, the Phantasm II, which sold out in 30 days. And the third, the successful athlete, Courtney Doherty, the best trail runner on the planet, and the first human even to win the Western States 100, the Hard Rock 100, and the UTMB in a single season. And the 2024 start with a splash when Solomon launches Welcome Back to Earth brand campaign during the Super Bowl. in winter sports equipment. Atomic reinforced its global leadership in Alpine skis and achieved number two position in the global ski boot market. Our star athlete, Mikhail Shafrin, had an exceptional year, breaking the 24-year-old record for most workout victories of all time. and now has 93 weeks.

And the third, the successful athlete, Courtney Doherty, the best trail runner on the planet, and the first human even to win the Western States 100, the Hard Rock 100, and the UTMB in a single season. And the 2024 start with a splash when Solomon launches Welcome Back to Earth brand campaign during the Super Bowl. in winter sports equipment. Atomic reinforced its global leadership in Alpine skis and achieved number two position in the global ski boot market. Our star athlete, Mikhail Shafrin, had an exceptional year, breaking the 24-year-old record for most workout victories of all time. and now has 93 weeks.

And the 2024 start with a splash when Solomon launches Welcome Back to Earth brand campaign during the Super Bowl. in winter sports equipment. Atomic reinforced its global leadership in Alpine skis and achieved number two position in the global ski boot market. Our star athlete, Mikhail Shafrin, had an exceptional year, breaking the 24-year-old record for most workout victories of all time. and now has 93 weeks.

in winter sports equipment. Atomic reinforced its global leadership in Alpine skis and achieved number two position in the global ski boot market. Our star athlete, Mikhail Shafrin, had an exceptional year, breaking the 24-year-old record for most workout victories of all time. and now has 93 weeks.

Atomic reinforced its global leadership in Alpine skis and achieved number two position in the global ski boot market. Our star athlete, Mikhail Shafrin, had an exceptional year, breaking the 24-year-old record for most workout victories of all time. and now has 93 weeks.

Our star athlete, Mikhail Shafrin, had an exceptional year, breaking the 24-year-old record for most workout victories of all time. and now has 93 weeks.

and now has 93 weeks.

James Zheng: Moving to Ball & the Racket, where revenues declined 3% to $242 million in Q4. Ball & the Racked had promising growth in EMEA and the Great China. This growth wasn't enough to offset declines in its largest channel, U.S. wholesale. From a category perspective, the growth in sportswear, golf and the balls wasn't enough to offset weakness in baseball and the racket. The U.S. sports equipment market was significantly hampered in 2023 due to elevate inventories across the industry that are split over from 2022. In Q4, we made the strategic decision to take the promotional actions necessary for Ball & the Racket to begin 2024 with wholesale inventory levels. Wilson continues to be a market share leaders in its core business of Tennis, Baseball and the golf, and we remain confident in the brand's long term outlook.

where revenues declined 3% to $242 million in Q4. Ball and the racket had promising growth in Yimei and Great China. This growth wasn't enough to offset declines in its largest channel, U.S. wholesale. From a category perspective, the gloves in sportswear, golf, and balls wasn't enough to offset weakness in baseball and the racket. The U.S. sports equipment market was significantly hampered in 2023 due to elevated inventories across the industry that has sped over from 2022. In Q4, we made the strategic decision to take the promotional actions necessary for Ball and Rackets to begin 2024 with healthier inventory levels. Wilson continues to be a market share leader in its core business of tennis, baseball, and sports. and we remain confident in the brand's long-term outlook.

Ball and the racket had promising growth in Yimei and Great China. This growth wasn't enough to offset declines in its largest channel, U.S. wholesale. From a category perspective, the gloves in sportswear, golf, and balls wasn't enough to offset weakness in baseball and the racket. The U.S. sports equipment market was significantly hampered in 2023 due to elevated inventories across the industry that has sped over from 2022. In Q4, we made the strategic decision to take the promotional actions necessary for Ball and Rackets to begin 2024 with healthier inventory levels. Wilson continues to be a market share leader in its core business of tennis, baseball, and sports. and we remain confident in the brand's long-term outlook.

This growth wasn't enough to offset declines in its largest channel, U.S. wholesale. From a category perspective, the gloves in sportswear, golf, and balls wasn't enough to offset weakness in baseball and the racket. The U.S. sports equipment market was significantly hampered in 2023 due to elevated inventories across the industry that has sped over from 2022. In Q4, we made the strategic decision to take the promotional actions necessary for Ball and Rackets to begin 2024 with healthier inventory levels. Wilson continues to be a market share leader in its core business of tennis, baseball, and sports. and we remain confident in the brand's long-term outlook.

From a category perspective, the gloves in sportswear, golf, and balls wasn't enough to offset weakness in baseball and the racket. The U.S. sports equipment market was significantly hampered in 2023 due to elevated inventories across the industry that has sped over from 2022. In Q4, we made the strategic decision to take the promotional actions necessary for Ball and Rackets to begin 2024 with healthier inventory levels. Wilson continues to be a market share leader in its core business of tennis, baseball, and sports. and we remain confident in the brand's long-term outlook.

The U.S. sports equipment market was significantly hampered in 2023 due to elevated inventories across the industry that has sped over from 2022. In Q4, we made the strategic decision to take the promotional actions necessary for Ball and Rackets to begin 2024 with healthier inventory levels. Wilson continues to be a market share leader in its core business of tennis, baseball, and sports. and we remain confident in the brand's long-term outlook.

In Q4, we made the strategic decision to take the promotional actions necessary for Ball and Rackets to begin 2024 with healthier inventory levels. Wilson continues to be a market share leader in its core business of tennis, baseball, and sports. and we remain confident in the brand's long-term outlook.

Wilson continues to be a market share leader in its core business of tennis, baseball, and sports. and we remain confident in the brand's long-term outlook.

and we remain confident in the brand's long-term outlook.

James Zheng: Some of our recent key highlights over the past year include launching the first ever 3D printed basketball, which debuted at the 2023 NBA All-Star Game dunk contest and expanding the brand's retail footprint with new version stores in Santa Monica, Minneapolis, Mall of America, Garden State Plaza, the Galleries in Houston, as well as additional stores in China and Korea. Wilsons' strength in tennis continues as 32% of the competitors at the recent Australian Open compete using our Western Racquet, making us the number one racquet at the tournament. For the full year 2023, Ball & Racquet grow 7%, led by double-digit gains in DTC, Great China and APAC. With that, I will turn it over to Andrew to discuss our company results and the outlook.

contest and expanding the brand's retail footprint with new Wilson stores in Santa Monica, Minneapolis, Mall of America, Garden State Plaza, the Galleries in Houston, as well as additional stores in China and Korea. Wilson's strength in tennis continues as 32% of the competitors at the recent Australian Open compete using a Wilson racket, making us the number one racket at the tournament. For the full year 2023, ball and racket grow 7%, led by double-digit gains in DTC, Great China, and APAC. With that. I will turn it over to Andrew to discuss our company results and outlook.

Wilson's strength in tennis continues as 32% of the competitors at the recent Australian Open compete using a Wilson racket, making us the number one racket at the tournament. For the full year 2023, ball and racket grow 7%, led by double-digit gains in DTC, Great China, and APAC. With that. I will turn it over to Andrew to discuss our company results and outlook.

For the full year 2023, ball and racket grow 7%, led by double-digit gains in DTC, Great China, and APAC. With that. I will turn it over to Andrew to discuss our company results and outlook.

With that. I will turn it over to Andrew to discuss our company results and outlook.

I will turn it over to Andrew to discuss our company results and outlook.

Andrew Page: Thanks, James. Amer Sports continues to enjoy the financial benefits of our transformation to a brand direct operating model. Our strong and authentic brands resonate with consumers and position us well to navigate the challenging macro crossed currents in 2023. With revenue growth above 20% for the full year and continued gross and operating margin expansion, we continue to win with our consumers. Our full year and Q4 results all came in at or above the high end of the ranges we preannounce in our flash results in January. Q4 results decelerated from Q3, which we expected due to supply chain bottlenecks in the second half of 2022, which caused a meaningful shift of sales from Q3 into Q4 creating much harder comparisons.

AmerSports continues to enjoy the financial benefits of our transformation to a brand direct operating model. Our strong and authentic brands resonate with consumers and position us well to navigate the challenging macro cross-currents in 2023. With revenue growth above 20% for the full year and continued gross and operating margin expansion, we continue to win with our consumers. Our full year and Q4 results all came in at or above the high end of the ranges we pre-announced in our flash results in January. Q4 results decelerated from Q3, which we expected due to supply chain bottlenecks in the second half of 2022, which caused a meaningful shift of sales from Q3 into Q4, creating much harder comparisons.

Our strong and authentic brands resonate with consumers and position us well to navigate the challenging macro cross-currents in 2023. With revenue growth above 20% for the full year and continued gross and operating margin expansion, we continue to win with our consumers. Our full year and Q4 results all came in at or above the high end of the ranges we pre-announced in our flash results in January. Q4 results decelerated from Q3, which we expected due to supply chain bottlenecks in the second half of 2022, which caused a meaningful shift of sales from Q3 into Q4, creating much harder comparisons.

With revenue growth above 20% for the full year and continued gross and operating margin expansion, we continue to win with our consumers. Our full year and Q4 results all came in at or above the high end of the ranges we pre-announced in our flash results in January. Q4 results decelerated from Q3, which we expected due to supply chain bottlenecks in the second half of 2022, which caused a meaningful shift of sales from Q3 into Q4, creating much harder comparisons.

Our full year and Q4 results all came in at or above the high end of the ranges we pre-announced in our flash results in January. Q4 results decelerated from Q3, which we expected due to supply chain bottlenecks in the second half of 2022, which caused a meaningful shift of sales from Q3 into Q4, creating much harder comparisons.

Q4 results decelerated from Q3, which we expected due to supply chain bottlenecks in the second half of 2022, which caused a meaningful shift of sales from Q3 into Q4, creating much harder comparisons.

Andrew Page: Looking at the second half in total, our underlying sales and margin trends remained healthy. We also experienced a capital structure transformation following our IPO last month. We retired approximately $4 billion worth of shareholder loans and we refinanced the remaining $1.8 billion of third-party loans to more favorable terms and extended maturity to 2031. Digging in deeper, starting with our top line. For the fourth quarter, revenue rose 10% to $1.3 billion. For the full year 2023, group revenue grew 23%. DTC continued to grow at a very strong double-digit rate led by Arc'teryx while wholesale revenues for the group fell 4% with all three segments experiencing declines due to the comparison issues mentioned above.

We also experienced a capital structure transformation following our IPO last month. We retired approximately $4 billion worth of shareholder loans, and we refinanced the remaining $1.8 billion of third-party loans to more favorable terms and extended maturity to 2031. Digging in deeper, starting with our top line. For the fourth quarter, revenue rose 10% to $1.3 billion. For the full year, 2023, group revenue grew 23%. D2C continued to grow at a very strong double-digit rate led by Arcteryx while wholesale revenues for the group fell 4% with all three segments experiencing declines due to the comparison issues mentioned above.

We retired approximately $4 billion worth of shareholder loans, and we refinanced the remaining $1.8 billion of third-party loans to more favorable terms and extended maturity to 2031. Digging in deeper, starting with our top line. For the fourth quarter, revenue rose 10% to $1.3 billion. For the full year, 2023, group revenue grew 23%. D2C continued to grow at a very strong double-digit rate led by Arcteryx while wholesale revenues for the group fell 4% with all three segments experiencing declines due to the comparison issues mentioned above.

Digging in deeper, starting with our top line. For the fourth quarter, revenue rose 10% to $1.3 billion. For the full year, 2023, group revenue grew 23%. D2C continued to grow at a very strong double-digit rate led by Arcteryx while wholesale revenues for the group fell 4% with all three segments experiencing declines due to the comparison issues mentioned above.

For the fourth quarter, revenue rose 10% to $1.3 billion. For the full year, 2023, group revenue grew 23%. D2C continued to grow at a very strong double-digit rate led by Arcteryx while wholesale revenues for the group fell 4% with all three segments experiencing declines due to the comparison issues mentioned above.

For the full year, 2023, group revenue grew 23%. D2C continued to grow at a very strong double-digit rate led by Arcteryx while wholesale revenues for the group fell 4% with all three segments experiencing declines due to the comparison issues mentioned above.

D2C continued to grow at a very strong double-digit rate led by Arcteryx while wholesale revenues for the group fell 4% with all three segments experiencing declines due to the comparison issues mentioned above.

Andrew Page: DTC expanded 37% in Q4 led by Technical Apparel in the Americas and Greater China. In wholesale, high inventory levels at retail in the Americas and EMEA were a drag on shipments in the Ball and Racket Outdoor Performance segments. In Q4, regional growth was led by a 45% increase in Greater China, where all three brand segments experienced solid growth, followed by 22% growth in APAC, albeit off a small base. The Americas grew mid-single digits led by DTC strength, partially offset by declines in our wholesale channel.

And wholesale, high inventory levels at retail in the Americas and EMEA were a drag on shipments in the ball and racket and outdoor performance segments. In Q4, regional growth was led by a 45% increase in Greater China, where all three brand segments experienced solid growth, followed by 22% growth in APAC, albeit off a small base. The Americas grew, mid-single digits, led by D2C's strength, partially offset by declines in our wholesale channel.

In Q4, regional growth was led by a 45% increase in Greater China, where all three brand segments experienced solid growth, followed by 22% growth in APAC, albeit off a small base. The Americas grew, mid-single digits, led by D2C's strength, partially offset by declines in our wholesale channel.

The Americas grew, mid-single digits, led by D2C's strength, partially offset by declines in our wholesale channel.

partially offset by declines in our wholesale channel.

Andrew Page: Turning to profitability. Adjusted gross profit margin rose 170 basis points to 52.2% in Q4 versus Q4 2022, primarily driven by our highest gross margin business, Arc'teryx, growing at a faster rate than our other franchises. This was partially offset by heavily promotional environment in Ball & Racket, lower logistics costs, improved sourcing performance, and channel and regional mix also drove gross margin expansion. In Q4, strong gross profit gains were offset by SG&A deleverage. Adjusted SG&A as a percentage of revenue increased 410 basis points on slower sales growth and represented 42.6% of revenues in the quarter. This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10.4%.

Primarily driven by our highest growth margin business, Arterix, growing at a faster rate than our other franchises. This was partially offset by heavily promotional environment and ball and racket. lower logistics costs, improved sourcing performance, and channel and regional mix also drove gross margin expansion. In Q4, strong gross profit gains were offset by SG&AD leverage. Adjusted SG&A as a percentage of revenue increased 410 basis points on slower sales growth and represented 42.6 percent of revenues in the quarter. This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10.4 percent.

This was partially offset by heavily promotional environment and ball and racket. lower logistics costs, improved sourcing performance, and channel and regional mix also drove gross margin expansion. In Q4, strong gross profit gains were offset by SG&AD leverage. Adjusted SG&A as a percentage of revenue increased 410 basis points on slower sales growth and represented 42.6 percent of revenues in the quarter. This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10.4 percent.

lower logistics costs, improved sourcing performance, and channel and regional mix also drove gross margin expansion. In Q4, strong gross profit gains were offset by SG&AD leverage. Adjusted SG&A as a percentage of revenue increased 410 basis points on slower sales growth and represented 42.6 percent of revenues in the quarter. This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10.4 percent.

In Q4, strong gross profit gains were offset by SG&AD leverage. Adjusted SG&A as a percentage of revenue increased 410 basis points on slower sales growth and represented 42.6 percent of revenues in the quarter. This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10.4 percent.

Adjusted SG&A as a percentage of revenue increased 410 basis points on slower sales growth and represented 42.6 percent of revenues in the quarter. This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10.4 percent.

This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10.4 percent.

Andrew Page: The key areas of expense growth included variable selling expenses, additional headcount, variable marketing expenses, higher rent costs driven by store openings and strategic investments in IT. Our Q4 adjusted net income declined to a loss of $41 million compared with $46 million of income in Q4 2022, driven primarily by increased interest expense on higher variable interest compared to 2022. Adjusted diluted EPS fell to an $0.11 loss in the fourth quarter as compared to $0.12 of income in the Q4 of 2022. For the full year 2023, we generated a $0.35 adjusted diluted loss per share as compared to an $0.08 loss per share in the prior year. Excluding PPA, our fourth quarter adjusted net income would have been a loss of $31 million or an $0.08 per share loss. For the full year of 2023, adjusted net income excluding PPA would have been a loss of $92 million.

Our Q4 adjusted net income declined to a loss of $41 million compared with $46 million of income in Q4 2022. driven primarily by increased interest expense on higher variable interest compared to 2022. Adjusted diluted ETS fell to an 11 cent loss in the fourth quarter as compared to 12 cents of income in the fourth quarter of 2022. For the full year 2023, we generated a $0.35 adjusted diluted loss per share as compared to an $0.08 loss per share in the prior year. excluding PPA, our fourth quarter adjusted net income would have been a loss of 31 million dollars or an 8 cent per share loss. Well, the full year of 2023, adjusted net income, excluding PPA, would have been a loss of $92 million.

driven primarily by increased interest expense on higher variable interest compared to 2022. Adjusted diluted ETS fell to an 11 cent loss in the fourth quarter as compared to 12 cents of income in the fourth quarter of 2022. For the full year 2023, we generated a $0.35 adjusted diluted loss per share as compared to an $0.08 loss per share in the prior year. excluding PPA, our fourth quarter adjusted net income would have been a loss of 31 million dollars or an 8 cent per share loss. Well, the full year of 2023, adjusted net income, excluding PPA, would have been a loss of $92 million.

Adjusted diluted ETS fell to an 11 cent loss in the fourth quarter as compared to 12 cents of income in the fourth quarter of 2022. For the full year 2023, we generated a $0.35 adjusted diluted loss per share as compared to an $0.08 loss per share in the prior year. excluding PPA, our fourth quarter adjusted net income would have been a loss of 31 million dollars or an 8 cent per share loss. Well, the full year of 2023, adjusted net income, excluding PPA, would have been a loss of $92 million.

For the full year 2023, we generated a $0.35 adjusted diluted loss per share as compared to an $0.08 loss per share in the prior year. excluding PPA, our fourth quarter adjusted net income would have been a loss of 31 million dollars or an 8 cent per share loss. Well, the full year of 2023, adjusted net income, excluding PPA, would have been a loss of $92 million.

excluding PPA, our fourth quarter adjusted net income would have been a loss of 31 million dollars or an 8 cent per share loss. Well, the full year of 2023, adjusted net income, excluding PPA, would have been a loss of $92 million.

Well, the full year of 2023, adjusted net income, excluding PPA, would have been a loss of $92 million.

Andrew Page: Turning to the balance sheet and cash flow. As I mentioned, we improved our capital structure using the IPO proceeds to retire our EUR1.3 billion shareholder loan. We also refinanced $2 billion of debt in the form of EUR700 million term loan, a $500 million term loan and an $800 million senior secured notes. Following our IPO and debt restructuring, our net debt to adjusted EBITDA is down several turns to approximately 3 times. We aim to bring that down below 2 times over the next few years through both EBITDA expansion and debt pay down. Based on current interest rates, our net finance costs will run-in the range of $45 million to $50 million per quarter, a meaningful improvement from 2023.

As I mentioned, we improved our capital structure. using the IPO proceeds to retire our 1.3 billion euro shareholder loan. We also refinance $2 billion of debt in the form of 700 million euro term loan. a $500 million U.S. dollar term loan. and an $800 million senior secured notes. Following our IPO and debt restructuring, our net debt to adjusted EBITDA is down several turns to approximately three times. We aim to bring that down below two times over the next few years through both EBITDA expansion and debt pay down. Based on current interest rates, our net finance costs will run in the range of 45 to 50 million dollars per quarter, a meaningful improvement from 2023.

using the IPO proceeds to retire our 1.3 billion euro shareholder loan. We also refinance $2 billion of debt in the form of 700 million euro term loan. a $500 million U.S. dollar term loan. and an $800 million senior secured notes. Following our IPO and debt restructuring, our net debt to adjusted EBITDA is down several turns to approximately three times. We aim to bring that down below two times over the next few years through both EBITDA expansion and debt pay down. Based on current interest rates, our net finance costs will run in the range of 45 to 50 million dollars per quarter, a meaningful improvement from 2023.

We also refinance $2 billion of debt in the form of 700 million euro term loan. a $500 million U.S. dollar term loan. and an $800 million senior secured notes. Following our IPO and debt restructuring, our net debt to adjusted EBITDA is down several turns to approximately three times. We aim to bring that down below two times over the next few years through both EBITDA expansion and debt pay down. Based on current interest rates, our net finance costs will run in the range of 45 to 50 million dollars per quarter, a meaningful improvement from 2023.

a $500 million U.S. dollar term loan. and an $800 million senior secured notes. Following our IPO and debt restructuring, our net debt to adjusted EBITDA is down several turns to approximately three times. We aim to bring that down below two times over the next few years through both EBITDA expansion and debt pay down. Based on current interest rates, our net finance costs will run in the range of 45 to 50 million dollars per quarter, a meaningful improvement from 2023.

and an $800 million senior secured notes. Following our IPO and debt restructuring, our net debt to adjusted EBITDA is down several turns to approximately three times. We aim to bring that down below two times over the next few years through both EBITDA expansion and debt pay down. Based on current interest rates, our net finance costs will run in the range of 45 to 50 million dollars per quarter, a meaningful improvement from 2023.

Following our IPO and debt restructuring, our net debt to adjusted EBITDA is down several turns to approximately three times. We aim to bring that down below two times over the next few years through both EBITDA expansion and debt pay down. Based on current interest rates, our net finance costs will run in the range of 45 to 50 million dollars per quarter, a meaningful improvement from 2023.

We aim to bring that down below two times over the next few years through both EBITDA expansion and debt pay down. Based on current interest rates, our net finance costs will run in the range of 45 to 50 million dollars per quarter, a meaningful improvement from 2023.

Based on current interest rates, our net finance costs will run in the range of 45 to 50 million dollars per quarter, a meaningful improvement from 2023.

Andrew Page: Inventories finished 2023 in a healthy position, up 21% from the end of 2022, below our revenue growth of 23% for the full year. Our goal is to grow inventories at a rate that is in line or below revenue growth. Turning to the future. We are happy to share our five-year financial algorithm, which consists of low double-digit to mid-teens annual sales growth, 300 basis points of gross margin expansion and 30 basis points to 70 basis points of annual adjusted operating margin expansion. The group level top line algorithm reflects mid to high-teens sustainable growth for technical apparel, high-single to low double-digit annual expansion for Outdoor Performance, and a mid-single digit long term growth rate for Ball & Racket.

Our goal is to grow inventories at a rate that is in line or below revenue growth. Turning to the future, we are happy to share our five-year financial algorithm, which consists of low-double-digit to mid-teens annual sales growth, 300 basis points of gross margin expansion, and 30 to 70 basis points of annual adjusted operating margin expansion. The group-level top-line algorithm reflects mid- to high-team sustainable growth for technical apparel. high single to low double-digit annual expansion for outdoor performance, and a mid-single-digit long-term growth rate for ball and racket.

Turning to the future, we are happy to share our five-year financial algorithm, which consists of low-double-digit to mid-teens annual sales growth, 300 basis points of gross margin expansion, and 30 to 70 basis points of annual adjusted operating margin expansion. The group-level top-line algorithm reflects mid- to high-team sustainable growth for technical apparel. high single to low double-digit annual expansion for outdoor performance, and a mid-single-digit long-term growth rate for ball and racket.

300 basis points of gross margin expansion, and 30 to 70 basis points of annual adjusted operating margin expansion. The group-level top-line algorithm reflects mid- to high-team sustainable growth for technical apparel. high single to low double-digit annual expansion for outdoor performance, and a mid-single-digit long-term growth rate for ball and racket.

The group-level top-line algorithm reflects mid- to high-team sustainable growth for technical apparel. high single to low double-digit annual expansion for outdoor performance, and a mid-single-digit long-term growth rate for ball and racket.

high single to low double-digit annual expansion for outdoor performance, and a mid-single-digit long-term growth rate for ball and racket.

Andrew Page: Turning to the near term guidance. We are off to a solid start in 2024 and continue to enjoy healthy mix shift benefits led by our fastest growing high margin Arc'teryx business. Given the difficult comparison from the strong growth at the beginning of 2023, we expect revenue growth for the group in the range of 6% to 8% in Q1, which will be our slowest growth quarter of the year. This incorporates greater than 30% growth in Technical Apparel, flattish revenues in Outdoor Performance and a low double-digit decline in Ball & Racket. We expect Q1 adjusted gross profit margin to be approximately 53.5%, driven primarily by mix shift benefits and an adjusted operating profit margin of 9% to 10%. Our net finance costs for the quarter will be $100 million to $110mn and our effective tax rate will be in the range of 25% to 35%. This equates to adjusted diluted EPS in the range of $0.01 loss to $0.02 earnings per share.

We are off to a solid start in 2024 and continue to enjoy healthy mixed-shift benefits led by our fastest-growing, high-margin Arcteryx business. Given the difficult comparison from the strong growth at the beginning of 2023, we expect revenue growth for the group in the range of 6 to 8 percent in Q1, which will be our slowest growth quarter of the year. This incorporates greater than 30 percent growth in technical apparel, flattish revenues and outdoor performance, and a low double-digit decline in ball and racket. We expect Q1 adjusted gross profit margin to be approximately 53.5% driven primarily by mixed-shift benefits. and an adjusted operating profit margin of 9 to 10 percent. Our net finance cost for the quarter will be $100 to $110 million, and our effective tax rate will be in the range of 25 to 35 percent. This equates to adjusted diluted EPS in the range of a one cent loss to two cents earnings per share.

Given the difficult comparison from the strong growth at the beginning of 2023, we expect revenue growth for the group in the range of 6 to 8 percent in Q1, which will be our slowest growth quarter of the year. This incorporates greater than 30 percent growth in technical apparel, flattish revenues and outdoor performance, and a low double-digit decline in ball and racket. We expect Q1 adjusted gross profit margin to be approximately 53.5% driven primarily by mixed-shift benefits. and an adjusted operating profit margin of 9 to 10 percent. Our net finance cost for the quarter will be $100 to $110 million, and our effective tax rate will be in the range of 25 to 35 percent. This equates to adjusted diluted EPS in the range of a one cent loss to two cents earnings per share.

This incorporates greater than 30 percent growth in technical apparel, flattish revenues and outdoor performance, and a low double-digit decline in ball and racket. We expect Q1 adjusted gross profit margin to be approximately 53.5% driven primarily by mixed-shift benefits. and an adjusted operating profit margin of 9 to 10 percent. Our net finance cost for the quarter will be $100 to $110 million, and our effective tax rate will be in the range of 25 to 35 percent. This equates to adjusted diluted EPS in the range of a one cent loss to two cents earnings per share.

We expect Q1 adjusted gross profit margin to be approximately 53.5% driven primarily by mixed-shift benefits. and an adjusted operating profit margin of 9 to 10 percent. Our net finance cost for the quarter will be $100 to $110 million, and our effective tax rate will be in the range of 25 to 35 percent. This equates to adjusted diluted EPS in the range of a one cent loss to two cents earnings per share.

and an adjusted operating profit margin of 9 to 10 percent. Our net finance cost for the quarter will be $100 to $110 million, and our effective tax rate will be in the range of 25 to 35 percent. This equates to adjusted diluted EPS in the range of a one cent loss to two cents earnings per share.

Our net finance cost for the quarter will be $100 to $110 million, and our effective tax rate will be in the range of 25 to 35 percent. This equates to adjusted diluted EPS in the range of a one cent loss to two cents earnings per share.

This equates to adjusted diluted EPS in the range of a one cent loss to two cents earnings per share.

Andrew Page: Keep in mind that net finance costs for the quarter includes approximately $60 million of non-recurring items associated with the early extinguishment of debt, related hedge contract exit costs and the higher interest rate on the prior debt for the first 45 days of the quarter. This non-recurring net finance cost would negatively impact Q1 EPS by $0.08 to $0.09 per share. Going forward, we expect recurring net finance costs to be in the range of $45 million to $50 million on a quarterly basis. For the segments, we expect an adjusted operating profit of slightly above 20% for Technical Apparel, mid-single digits for Outdoor Performance and low to mid-single digits for Ball & Racket.

This non-recurring net finance cost would negatively impact Q1 EPS by 8 to 9 cents per share. Going forward, we expect recurring net finance costs to be in the range of $45 to $50 million on a quarterly basis. For the segments, we expect an adjusted operating profit of slightly above 20% for technical apparel, mid-single digits for outdoor performance, and low to mid-single digits for ball and racket.

Going forward, we expect recurring net finance costs to be in the range of $45 to $50 million on a quarterly basis. For the segments, we expect an adjusted operating profit of slightly above 20% for technical apparel, mid-single digits for outdoor performance, and low to mid-single digits for ball and racket.

For the segments, we expect an adjusted operating profit of slightly above 20% for technical apparel, mid-single digits for outdoor performance, and low to mid-single digits for ball and racket.

Andrew Page: Turning to the full year. We expect mid-teens revenue growth for the group, which incorporates greater than 20% growth in Technical Apparel, 8% to 10% growth in Outdoor Performance and low to mid-single digits growth in Ball & Racket. We expect more than 100 basis points of adjusted gross margin expansion to 53.5 to 54.0 in 2024, driven primarily by mix shift. This will be partially offset by SG&A deleverage. We expect adjusted operating margin of 10.5% to 11%. For the segments, we expect adjusted operating margin of slightly above 20% for Technical Apparel, high-single digits for Outdoor Performance, and mid-single digits for Ball & Racket. You should assume full year net financing expenses of $240 million to $250 million or approximately $180 million to $190 million, excluding the non-recurring items that I mentioned above of $60 million in the first quarter and an effective tax rate of 25% to 35%. This equates to a range of $0.30 to $0.40 of adjusted diluted EPS based on $510.1 million fully diluted share count.

We expect more than 100 basis points of adjusted gross margin expansion to 53.5 to 54.0 in 2024, driven primarily by mixed shift. This will be partially offset by SG&AD leverage. We expect adjusted operating margin of ten and a half to eleven percent. For the segments, we expect adjusted operating margin of slightly above 20% for technical apparel. high single digits for outdoor performance, and mid single digits for ball and racket. You should assume full-year net financing expenses of $240 to $250 million. Or approximately $180 to $190 million excluding the non-recurring items that I mentioned above of $60 million in the first quarter. and an effective tax rate of 25 to 35 percent. This equates to a range of 30 cents to 40 cents of adjusted diluted EPS based on 510.1 million fully diluted share count.

This will be partially offset by SG&AD leverage. We expect adjusted operating margin of ten and a half to eleven percent. For the segments, we expect adjusted operating margin of slightly above 20% for technical apparel. high single digits for outdoor performance, and mid single digits for ball and racket. You should assume full-year net financing expenses of $240 to $250 million. Or approximately $180 to $190 million excluding the non-recurring items that I mentioned above of $60 million in the first quarter. and an effective tax rate of 25 to 35 percent. This equates to a range of 30 cents to 40 cents of adjusted diluted EPS based on 510.1 million fully diluted share count.

We expect adjusted operating margin of ten and a half to eleven percent. For the segments, we expect adjusted operating margin of slightly above 20% for technical apparel. high single digits for outdoor performance, and mid single digits for ball and racket. You should assume full-year net financing expenses of $240 to $250 million. Or approximately $180 to $190 million excluding the non-recurring items that I mentioned above of $60 million in the first quarter. and an effective tax rate of 25 to 35 percent. This equates to a range of 30 cents to 40 cents of adjusted diluted EPS based on 510.1 million fully diluted share count.

For the segments, we expect adjusted operating margin of slightly above 20% for technical apparel. high single digits for outdoor performance, and mid single digits for ball and racket. You should assume full-year net financing expenses of $240 to $250 million. Or approximately $180 to $190 million excluding the non-recurring items that I mentioned above of $60 million in the first quarter. and an effective tax rate of 25 to 35 percent. This equates to a range of 30 cents to 40 cents of adjusted diluted EPS based on 510.1 million fully diluted share count.

high single digits for outdoor performance, and mid single digits for ball and racket. You should assume full-year net financing expenses of $240 to $250 million. Or approximately $180 to $190 million excluding the non-recurring items that I mentioned above of $60 million in the first quarter. and an effective tax rate of 25 to 35 percent. This equates to a range of 30 cents to 40 cents of adjusted diluted EPS based on 510.1 million fully diluted share count.

You should assume full-year net financing expenses of $240 to $250 million. Or approximately $180 to $190 million excluding the non-recurring items that I mentioned above of $60 million in the first quarter. and an effective tax rate of 25 to 35 percent. This equates to a range of 30 cents to 40 cents of adjusted diluted EPS based on 510.1 million fully diluted share count.

Or approximately $180 to $190 million excluding the non-recurring items that I mentioned above of $60 million in the first quarter. and an effective tax rate of 25 to 35 percent. This equates to a range of 30 cents to 40 cents of adjusted diluted EPS based on 510.1 million fully diluted share count.

and an effective tax rate of 25 to 35 percent. This equates to a range of 30 cents to 40 cents of adjusted diluted EPS based on 510.1 million fully diluted share count.

This equates to a range of 30 cents to 40 cents of adjusted diluted EPS based on 510.1 million fully diluted share count.

Andrew Page: We are assuming $250 million to $260 million of depreciation and amortization, which includes $100 million to $110 million of ROU depreciation. Capex is expected to be approximately $300 million, an increase of $120 million over 2023 to support new store expansion, our SAP implementation, and distribution and logistics investments. With that, I'll turn it back to the operator for Q&A.

CAPEX is expected to be approximately $300 million, an increase of $120 million over 2023 to support new store expansion, our SAP implementation, and a $1.5 million increase in our revenue. Thank you. Thank you. distribution and logistics investments. With that, I'll turn it back to the operator for Q&A.

distribution and logistics investments. With that, I'll turn it back to the operator for Q&A.

With that, I'll turn it back to the operator for Q&A.

Operator: As a reminder, if you would like to ask a question, please press star followed by the number 1 on your telephone keypad. We also ask that you ask one multi-part question or two single-part questions. Your first question comes from the line of Matthew Boss from JP Morgan. Please go ahead.

Your first question comes from the line of Matthew Boss from J.P. Morgan. Please go ahead.

Matthew Boss: Great. Thanks, and congrats on your Q1 out of the gate.

Thanks, Matt. So, two-part question. Maybe first, could you just elaborate on the momentum that you're seeing at the Arc'teryx brand across regions or channels, just supporting the first quarter guidance of more than 30% technical apparel revenue growth?

James Zheng: Thanks, Matt.

Matthew Boss: So, two part question. Maybe first, could you just elaborate on the momentum that you're seeing at the Arc'teryx brand across regions or channels just supporting the first quarter guidance of more than 30% Technical, Apparel revenue growth? And then for Andrew, could you just help bridge the embedded top line progression from 6% to 8% revenue growth in the Q1 to mid-teens growth for the full year?

And then for Andrew, could you just help bridge the embedded top line progression from 6 to 8% revenue growth in the first quarter to mid-teens growth for the full year?

Stuart Heselden: Hey, Matt. It's Stuart. So I'll speak to your first question there. So fourth quarter ended very strong for Arc’teryx. We saw results that exceeded our expectations to end the year and we've seen that momentum carry forward into the first quarter. We're actually seeing sequential strengthening in our underlying KPIs and across our direct to consumer business. So traffic and conversion in both our stores and our digital websites performing very well. We're in a very strong in-stock position from an inventory standpoint. So the combination of those things are leading us to the guidance that we shared with you.

Fourth quarter. We saw results that exceeded our expectations to end the year, and we've seen that momentum carry forward into the first quarter. We're actually seeing sequential strengthening in our underlying KPIs and our across our direct to consumer business. So traffic and conversion in both our stores and our digital websites performing very well. We're in a very strong in stock position from an inventory standpoint. So the combination of those things are leading us to the guidance that we shared with you.

We saw results that exceeded our expectations to end the year, and we've seen that momentum carry forward into the first quarter. We're actually seeing sequential strengthening in our underlying KPIs and our across our direct to consumer business. So traffic and conversion in both our stores and our digital websites performing very well. We're in a very strong in stock position from an inventory standpoint. So the combination of those things are leading us to the guidance that we shared with you.

sequential strengthening in our underlying KPIs and our across our direct to consumer business. So traffic and conversion in both our stores and our digital websites performing very well. We're in a very strong in stock position from an inventory standpoint. So the combination of those things are leading us to the guidance that we shared with you.

Andrew Page: Thanks, Matt. This is Andrew. As you think about the progression of our quarters, like, I said in my prepared remarks, Q1 is going to be our lowest growth quarter, given the comparison issues that we talked about exiting 2022 that carried over into the first quarter of 2023. While we haven't given cadence for the full year, what I will tell you is that you could expect each of the - rest of the year is mid-teens up for the rest of the year to equate to the full year guidance of mid-teens and in Q4, being our strongest quarter of this year. From a growth perspective, again, coming off of easy compare in 2023, for all the reasons that we talked about.

Q1 is going to be our lowest growth quarter given the comparison issues that we talked about exiting 2022 that carried over into the first quarter of 2023. While we haven't given cadence for the full year, what I will tell you is that you could expect each of the rest of the year is mid-teens up for the rest of the year to equate to the full year guidance of mid-teens, and Q4 being our strongest quarter of this year from a growth perspective, again, coming off an easy compare in 2023 for all the reasons that we talked about.

Omar Saad: Hey, Matt. It's Omar. I'll just add one thing. So the comparisons get 20 points easier going from the first quarter to the fourth quarter, but also the Arc’teryx store openings. We're opening more new larger Arc’teryx stores this year than we have in any year in the past, including some of the key openings, store opening late in 2023 and in the first half of 2024. So well before the key winter season, which is going to just drive a much bigger kind of conversion and revenue volume in the back half for that brand, which is already growing at a fast rate. Thanks.

Matthew Boss: Thanks. Great color. Best of luck.

Operator: Your next question comes from the line of Lorraine Hutchinson from Bank of America. Please go ahead.

Lorraine Hutchinson: Thank you. Good morning. Can you talk about the drivers of the decline in outdoor margin that you're guiding to in the first quarter? And then what changes to lead to the nice expansion embedded in the guidance for the year?

Andrew Page: Yeah. So when you think about the Outdoor Performance, there is meaningful investment built into the first half of this year. As you know, that business is primarily DTC driven in Greater China, but outside of Greater China, the meaningful wholesale business. We will continue to invest in the business, the footwear business related to outdoor performance, and especially into North America. The other phenomenon in there is, Winter Sports Equipment is part of Outdoor Performance. And as you know, when we talked about winter sports equipment having a strong fourth quarter, which is primarily, weather driven in the sense that weather got bad early, people bought early and that's created a softer first quarter. That's, so footwear within outdoor performance is performing really well. Winter Sports Equipment, which is part of Outdoor Performance is having a softer first quarter coming up a really strong fourth quarter.

And especially into North America, the other, the other phenomenon in there is when it's sports equipment is part of outdoor performance. And, as you know, we talked about winter sports equipment having a strong fourth quarter, which is primarily weather-driven in the sense that weather got bad early, people bought early, and that's created a softer first quarter. So, footwear within outdoor performance is performing really well. Winter sports equipment, which is part of outdoor performance, is having a softer first quarter coming off a really strong fourth quarter.

And, as you know, we talked about winter sports equipment having a strong fourth quarter, which is primarily weather-driven in the sense that weather got bad early, people bought early, and that's created a softer first quarter. So, footwear within outdoor performance is performing really well. Winter sports equipment, which is part of outdoor performance, is having a softer first quarter coming off a really strong fourth quarter.

Omar Saad: Lorraine, do you have another one.

Lorraine Hutchinson: No, thank you.

Operator: Your next question comes from the line of Brooke Roach from Goldman Sachs. Please go ahead.

Good morning, and thank you for taking our question. I was hoping you could elaborate on the outlook for North America growth for both the outdoor performance and ball and racket segments as you move throughout the year. How are you thinking about the idiosyncratic growth opportunity given the momentum of your brands and growth footwear, and what trends are you seeing with your partners as they manage through inventory and current demand levels?

Brooke Roach: Good morning, and thank you for taking our question. I was hoping you could elaborate on the outlook for North America growth for both the outdoor performance and ball and racket segments as you move throughout the year. How are you thinking about the idiosyncratic growth opportunity given the momentum of your brands and growth footwear, and what trends are you seeing with your partners as they manage through inventory and current demand levels? Thank you.

you could elaborate on the outlook for North America growth for both the outdoor performance and ball and racket segments as you move throughout the year. How are you thinking about the idiosyncratic growth opportunity given the momentum of your brands and growth footwear, and what trends are you seeing with your partners as they manage through inventory and current demand levels? Thank you.

Thank you.

Franco Fogliato: Hi. This is Franco. Thanks for the question. Look at the - we're at the beginning of accelerating North America. We see definitely some consciousness from the retailers into preorders, but we're seeing also strong in season reorders. We've seen that in Q4 as well as we enter the year. We announced later last year that we have recruited a new leader for our Americas business, a gentleman that used to run the OcA brand of North America. We believe there are plenty of opportunities, in particular creating this unique competitive advantage through the outdoor sneakers, as well as there is a strong demand for an outsider brand into the specialty channel. Yeah, so we're excited about the opportunity.

We've seen that in Q4 as well as we enter the year. We announced later last year that we've recruited a new leader for our America's business, a gentleman that used to run the Oka brand for North America. We believe there are plenty of opportunities, in particular, creating this unique competitive advantage through the outdoor sneakers, as well as there is a strong demand for an outsider brand into the specialty channel. Yeah, so we're excited about the opportunity.

Andrew Page: And from a Wilson perspective, involving racquet sports, again, we continue to be a market leader in almost every category that we participate in. We continue to win with our trade accounts. We obviously have talked about the excess inventory in the trade accounts. And our insights would suggest that you're going to see some of that trend and some of the retailers moving through inventory in the first half of the year and that returned to a more normalized cadence in the back half of the year. But the thing that's important to us is that we continue to be category leaders in each of the categories that we participate in. We continue to get strong insights from our retail partners. And as that channel normalizes, we think we're going to continue to be a winner there.

You know, we continue to be a market leader in almost every category that we participate in. We continue to win with our trade accounts. You know, we obviously have talked about the excess inventory in the trade accounts, and that, you know, our insights would suggest that you're going to see some of that trend and some of the retail that's moving through inventory in the first half of the year, and that return to a more normalized cadence in the back half of the year. But the thing that's important to us is that we continue to be category leaders in each of the categories that we participate in. We continue to get strong insights from our retail partners. And as that channel normalizes, we think we're going to continue to be a winner there.

Omar Saad: Yeah. I would add, this is Omar. One of the things that gives us confidence early on in the year is seeing that gross margin actualization rate for the Wilsons brand really pop back up again now that our inventories are clean. Yes. The retailers aren't - the industry is not right where we want it to be and we feel we are really good shape in terms of how our brand is performing and the market share there. Thanks.

Yeah, I would add, Omar, you know, one of the things that gives us confidence early on in the year is seeing that gross margin actualization rate for the Wilson brand really pop back up again now that our inventories are clean. Yes, the retailers aren't, the industry is not right where we want it to be, but we feel in really good shape in terms of how our brand is performing in the market share there. Thanks.

Thanks.

Operator: Your next question comes from the line of Paul Lejuez from Citigroup. Please go ahead.

Your next question comes from the line of Paul Leger from Citigroup. Please go ahead.

Paul Lejuez: Hi. Just a follow-up on the - I'm sorry, this is Kelly on for Paul. Thanks for taking our question. Just want to follow-up on the Ball & Racquet acceleration that's applied in your full year guidance. Is that something you see based on your order books or is this something related to some of the new innovation that you plan on putting out, particularly in the baseball category? Anything you could elaborate there? And then just, if we could just give us update on what's going on in China. I know you have very strong performance there, but the macro has been volatile. So if you could just provide any additional color that would be helpful. Thank you.

I just want to follow up on the ball and racket acceleration that's applied in your full year guidance. Is that something you see based on your order books, or is this something related to some of the new innovation that you plan on putting out, particularly in the baseball category? Anything you could elaborate there? And then just, if we could just get an update on what's going on in China. I know you have very strong performance there, but the macro has been volatile. So, if you could just provide any additional comment, that'd be helpful. Thank you.

Is that something you see based on your order books, or is this something related to some of the new innovation that you plan on putting out, particularly in the baseball category? Anything you could elaborate there? And then just, if we could just get an update on what's going on in China. I know you have very strong performance there, but the macro has been volatile. So, if you could just provide any additional comment, that'd be helpful. Thank you.

Joe Duty: Yeah. Hi. This is Joe Dudy, the CEO of Wilsons. So, I'll comment on the Wilson, question first. And what we're really seeing is that the participation is still strong in our categories. The sell through from feedback from our retailers is positive too, so it's working through the inventories, but as you stated, we have great product launches, especially in Tennis and Baseball, our two largest categories, especially in North America. And, we recently just launched, the blade tennis racket, which is our number one selling tennis racket, and the expectations have been exceeding our outlook so far, so we're confident in that. And then the baseball market, the new season really starts in June, July and we have new product launches there. And one of the things we're doing is, we went through over the COVID period. We ended up moving our bat product launches to two year product launches, and we're moving those back starting this year to one year, product launches to create that newness in in the marketplace. So we have a lot of confidence.

great product launches, especially in tennis and baseball, our two largest categories, especially in North America, and we recently just launched the Blade tennis racket, which is our number one selling tennis racket, and the expectations have been exceeding our outlook so far, so we're confident in that. And then the baseball market, the new season really starts in June, July, and we have new product launches there. And one of the things we're doing is we're launching the Blade tennis racket, which is our number one selling tennis racket, and we're also launching the Blade tennis racket, which is our number one selling tennis racket. We went through over the COVID period, we ended up moving our BAT product launches to two-year product launches, and we're moving those back starting this year to one-year product launches to create that newness in the marketplace. So we have a lot of confidence.

We went through over the COVID period, we ended up moving our BAT product launches to two-year product launches, and we're moving those back starting this year to one-year product launches to create that newness in the marketplace. So we have a lot of confidence. And I'd just add.

We went through over the COVID period, we ended up moving our BAT product launches to two-year product launches, and we're moving those back starting this year to one-year product launches to create that newness in the marketplace. So we have a lot of confidence.

Joe Duty: And I'd just add. that we got out of the gates really strong last year. We grew 14% across the board in Q1 of 2023. That's not a sustainable number. It was replenishing and probably getting the inventories too high. So the comps as we get through the rest of the year will be easier from the ball sports perspective.

that we got out of the gates really strong last year. We grew 14% across the board in Q1 of 2023. That's not a sustainable number. It was replenishing and probably getting the inventories too high. So the comps as we get through the rest of the year will be easier from the ball sports perspective.

Omar Saad: James?

James Zhen: So we see, very positive growth for our business in China markets, and we believe our brand have a very good competitive advantage in China, given the foundation and the infrastructure we build that. And in China, I mean, even the overall economy still face level of challenge, The category we are sitting and still, I mean, very, I would say, there's still on trend. Okay. So, all the brands, especially our character of Solomon, really performed extremely well in 2023 and also the beginning of the year, we also see a great improvement from our business. So we still see a very good progressing of our business in China market.

Bye. Bye-bye. So, we see. very positive growth for our business in China markets. And we believe our brand have a very good competitive advantage in China, given the foundation infrastructure we build that. and In China, we, I mean, even the overall economy still face level of challenge. The category we are sitting and still, I mean, a very. I would say they're still on trend, okay? So all the brands, especially character of Salomon, really performed extremely well in 2033 and also the beginning of the... Yeah, we also see a great improvement from our business. So we... We still see a very good progressing of our ability in China market.

Bye-bye. So, we see. very positive growth for our business in China markets. And we believe our brand have a very good competitive advantage in China, given the foundation infrastructure we build that. and In China, we, I mean, even the overall economy still face level of challenge. The category we are sitting and still, I mean, a very. I would say they're still on trend, okay? So all the brands, especially character of Salomon, really performed extremely well in 2033 and also the beginning of the... Yeah, we also see a great improvement from our business. So we... We still see a very good progressing of our ability in China market.

So, we see. very positive growth for our business in China markets. And we believe our brand have a very good competitive advantage in China, given the foundation infrastructure we build that. and In China, we, I mean, even the overall economy still face level of challenge. The category we are sitting and still, I mean, a very. I would say they're still on trend, okay? So all the brands, especially character of Salomon, really performed extremely well in 2033 and also the beginning of the... Yeah, we also see a great improvement from our business. So we... We still see a very good progressing of our ability in China market.

very positive growth for our business in China markets. And we believe our brand have a very good competitive advantage in China, given the foundation infrastructure we build that. and In China, we, I mean, even the overall economy still face level of challenge. The category we are sitting and still, I mean, a very. I would say they're still on trend, okay? So all the brands, especially character of Salomon, really performed extremely well in 2033 and also the beginning of the... Yeah, we also see a great improvement from our business. So we... We still see a very good progressing of our ability in China market.

and In China, we, I mean, even the overall economy still face level of challenge. The category we are sitting and still, I mean, a very. I would say they're still on trend, okay? So all the brands, especially character of Salomon, really performed extremely well in 2033 and also the beginning of the... Yeah, we also see a great improvement from our business. So we... We still see a very good progressing of our ability in China market.

In China, we, I mean, even the overall economy still face level of challenge. The category we are sitting and still, I mean, a very. I would say they're still on trend, okay? So all the brands, especially character of Salomon, really performed extremely well in 2033 and also the beginning of the... Yeah, we also see a great improvement from our business. So we... We still see a very good progressing of our ability in China market.

The category we are sitting and still, I mean, a very. I would say they're still on trend, okay? So all the brands, especially character of Salomon, really performed extremely well in 2033 and also the beginning of the... Yeah, we also see a great improvement from our business. So we... We still see a very good progressing of our ability in China market.

I would say they're still on trend, okay? So all the brands, especially character of Salomon, really performed extremely well in 2033 and also the beginning of the... Yeah, we also see a great improvement from our business. So we... We still see a very good progressing of our ability in China market.

Yeah, we also see a great improvement from our business. So we... We still see a very good progressing of our ability in China market.

We still see a very good progressing of our ability in China market.

Paul Lejuez: Thank you.

Operator: Your next question comes from the line of Alex Straton from Morgan Stanley. Please go ahead.

Your next question comes from the line of Alex Stratton from Morgan Stanley. Please go ahead.

Alex Straton: Perfect. Thanks for taking the question. I wanted to focus on Technical Apparel, the full year guidance for over 20% growth. Can you just walk us through what you're assuming for DTC, China and North America specifically or any color? And then also what's driving that it looks like a deceleration throughout the year given 1Q is at 30%. Thanks a lot.

Stuart Heselden: Hey, Alex. It's Stuart. So, we're really pleased with the balanced growth that we're seeing regionally across North America and China. Both regions grew at a similar pace, both in the fourth quarter and through the initial portion of the first quarter. So, we're seeing just broad based regional strength for the brand and we're also really happy with what we're seeing in Europe and Asia outside of China. So, in the underlying, strength of the business, as I mentioned, in the earlier question, there is really from the fundamentals of our DTC business. So, traffic, conversion increases, we're actually seeing also reductions in markdown rate and return rate. And it's both within our retail stores as well as our e commerce business. So, broad based strength and we see that also connect to a really strong and healthy inventory position, stronger than we've been in prior periods, just given the supply chain challenges that we had related to COVID going back 18 months. But overall, really healthy position. And as we look forward for the full year guide versus the Q1 guide, we're going to plan the business in a responsible manner.

Hey, Alex and Stuart, so we're really pleased with the balance growth that we're seeing regionally across. North America and China. Both regions grew at a similar pace, both in the fourth quarter and through the initial portion of the first quarter. So we're seeing just broad-based regional strength for the brand. And we're also really happy with what we're seeing in Europe and Asia outside of China. So the And the underlying strength of the business, as I mentioned in the earlier question, is really from the fundamentals of our D2C business. So Traffic conversion increases, we're, we're actually seeing also reductions in markdown rate and return rate. So it's. And it's both within our retail stores, as well as our e-commerce business. So broad-based strength, and we see that also connected to a really strong and healthy inventory position, stronger than we've been in prior periods, just given the supply chain challenges that we had related to COVID going back 18 months. But overall really healthy position and as we look forward for the full year guide versus the Q1 guide, you know, we're going to plan the business in a responsible manner.

North America and China. Both regions grew at a similar pace, both in the fourth quarter and through the initial portion of the first quarter. So we're seeing just broad-based regional strength for the brand. And we're also really happy with what we're seeing in Europe and Asia outside of China. So the And the underlying strength of the business, as I mentioned in the earlier question, is really from the fundamentals of our D2C business. So Traffic conversion increases, we're, we're actually seeing also reductions in markdown rate and return rate. So it's. And it's both within our retail stores, as well as our e-commerce business. So broad-based strength, and we see that also connected to a really strong and healthy inventory position, stronger than we've been in prior periods, just given the supply chain challenges that we had related to COVID going back 18 months. But overall really healthy position and as we look forward for the full year guide versus the Q1 guide, you know, we're going to plan the business in a responsible manner.

Both regions grew at a similar pace, both in the fourth quarter and through the initial portion of the first quarter. So we're seeing just broad-based regional strength for the brand. And we're also really happy with what we're seeing in Europe and Asia outside of China. So the And the underlying strength of the business, as I mentioned in the earlier question, is really from the fundamentals of our D2C business. So Traffic conversion increases, we're, we're actually seeing also reductions in markdown rate and return rate. So it's. And it's both within our retail stores, as well as our e-commerce business. So broad-based strength, and we see that also connected to a really strong and healthy inventory position, stronger than we've been in prior periods, just given the supply chain challenges that we had related to COVID going back 18 months. But overall really healthy position and as we look forward for the full year guide versus the Q1 guide, you know, we're going to plan the business in a responsible manner.

So the And the underlying strength of the business, as I mentioned in the earlier question, is really from the fundamentals of our D2C business. So Traffic conversion increases, we're, we're actually seeing also reductions in markdown rate and return rate. So it's. And it's both within our retail stores, as well as our e-commerce business. So broad-based strength, and we see that also connected to a really strong and healthy inventory position, stronger than we've been in prior periods, just given the supply chain challenges that we had related to COVID going back 18 months. But overall really healthy position and as we look forward for the full year guide versus the Q1 guide, you know, we're going to plan the business in a responsible manner.

And the underlying strength of the business, as I mentioned in the earlier question, is really from the fundamentals of our D2C business. So Traffic conversion increases, we're, we're actually seeing also reductions in markdown rate and return rate. So it's. And it's both within our retail stores, as well as our e-commerce business. So broad-based strength, and we see that also connected to a really strong and healthy inventory position, stronger than we've been in prior periods, just given the supply chain challenges that we had related to COVID going back 18 months. But overall really healthy position and as we look forward for the full year guide versus the Q1 guide, you know, we're going to plan the business in a responsible manner.

Traffic conversion increases, we're, we're actually seeing also reductions in markdown rate and return rate. So it's. And it's both within our retail stores, as well as our e-commerce business. So broad-based strength, and we see that also connected to a really strong and healthy inventory position, stronger than we've been in prior periods, just given the supply chain challenges that we had related to COVID going back 18 months. But overall really healthy position and as we look forward for the full year guide versus the Q1 guide, you know, we're going to plan the business in a responsible manner.

And it's both within our retail stores, as well as our e-commerce business. So broad-based strength, and we see that also connected to a really strong and healthy inventory position, stronger than we've been in prior periods, just given the supply chain challenges that we had related to COVID going back 18 months. But overall really healthy position and as we look forward for the full year guide versus the Q1 guide, you know, we're going to plan the business in a responsible manner.

overall really healthy position and as we look forward for the full year guide versus the Q1 guide, you know, we're going to plan the business in a responsible manner. We're going to plan the sales and the inventory in a place that we feel is appropriate for the business. If demand materializes above these levels, we're in a position where we can capture higher sales levels. The inventory position we have will afford that, but we're planning our expenses and our capital investments in a place that we see is responsible and that's connected to that 20% full year guide.

overall really healthy position and as we look forward for the full year guide versus the Q1 guide, you know, we're going to plan the business in a responsible manner.

Stuart Heselden: We're going to plan the sales and the inventory in a place that we feel is appropriate for the business. If demand materializes above these levels, we're in a position where we can capture higher sales levels. The inventory position we have will afford that. But we're planning our expenses and our capital investments in a place that we see as responsible and that's connected to that 20% full year guide.

Operator: Your next question comes from the line of Ike Boruchow from Wells Fargo. Please go ahead.

Your next question comes from the line of Ike Borrowchow from Wells Fargo. Please go ahead.

Ike Boruchow: Hey, guys. Good morning. Two for me, one specific to the guide and one bigger picture. Just on the guide, maybe to Stuart. Can you give us, specifically what's embedded in your guidance on door expansion this year? And then, if you're able to, can you talk about what comp you're expect omni-comp you're baking in for both the first quarter and the full year? And then, to the team, just more detail how the brands are positioned in China today. How do you think about them? How would it be different over [inaudible] here? Thanks.

Stuart Heselden: Yeah. Hi, Ike. It's Stuart. So I'll start with your first question there. So, we're planning to open a net of around 30 doors in Arc'teryx this year and we'll see more than half of those stores in North America. So, we're excited for a number of the new locations that we're opening and planning across all our regions, but we'll see important flagships in Europe as well as North America. We just opened a 7,000 square foot flagship in Covent Garden, this past week. We'll open flagships in Toronto and also in New York City, a part of the projection that I just mentioned. And then from an omni-comp standpoint, I think we've shared mid-teens overall for the full year, and so pretty confident with that level of growth.

And we'll see more than half of those stores in North America. So, we're excited for a number of the, the new locations that we're, we're opening and planning and across the, you know, across all our regions, but we'll see important flagships in Europe as well as North America. We just opened 7000 square foot flagship and coven garden this this past week. Uh, we'll open flagships in Toronto and also in New York City. Um, a part of the, the, the projections that I just mentioned, and then from an omni comp standpoint, I think we've shared mid teams. Uh, and, uh, overall for the, for the full year. Uh, and so pretty confident with, uh, with that level of growth.

So, we're excited for a number of the, the new locations that we're, we're opening and planning and across the, you know, across all our regions, but we'll see important flagships in Europe as well as North America. We just opened 7000 square foot flagship and coven garden this this past week. Uh, we'll open flagships in Toronto and also in New York City. Um, a part of the, the, the projections that I just mentioned, and then from an omni comp standpoint, I think we've shared mid teams. Uh, and, uh, overall for the, for the full year. Uh, and so pretty confident with, uh, with that level of growth.

Omar Saad: And James on the different brand positioning in China?

James Zheng: Yeah. I just add on certain points here for Arc’teryx. Arc’teryx is really being positioned as the pinnacle in Auto segments and after four years cultivation, I mean, we really made Arc’teryx become the best Golden Goose brand in China. In terms of the quality of the retail environment we created in the market as well as the productivity by stores and we really outperform in the industries. And I'll just give you an example, recently in January - mid of January, we just opened a 20,000 square foot flagship store in Shanghai, [inaudible] independent buildings, within 30 days, the sales revenue already reached $3.2 million. So it's, it's a I mean, I think, I mean, when you have chance to visit China and then really you look at the store, I mean, at close stores, it's a big position as a kind of the level of the premiums. I mean, not only premium, but also at the luxury segment and that we are, we are on popular par with a friend like Moncler, okay, so in China markets.

actually become the best sporting goods brand in China in terms of the The quality of the retail environment we created in the market, as well as the productivity by stores, and we really outperformed in the industries. And I'll just give you an example. Recently, in January, mid of January, we just opened a 20,000 square foot. flagship store in Shanghai, four-story independent buildings. Within 30 days, the sales revenue already reached 3.2 million U.S. dollars. So it's, I mean, I think, I mean, when you have chance to visit China and really look at the store, I mean, I carry stores, it's a big position as a kind of the level of the premiums. I mean, not only the premium, but also the luxury segment. And we are practically on par with a brand like a Moncler, okay, so in China markets.

The quality of the retail environment we created in the market, as well as the productivity by stores, and we really outperformed in the industries. And I'll just give you an example. Recently, in January, mid of January, we just opened a 20,000 square foot. flagship store in Shanghai, four-story independent buildings. Within 30 days, the sales revenue already reached 3.2 million U.S. dollars. So it's, I mean, I think, I mean, when you have chance to visit China and really look at the store, I mean, I carry stores, it's a big position as a kind of the level of the premiums. I mean, not only the premium, but also the luxury segment. And we are practically on par with a brand like a Moncler, okay, so in China markets.

And I'll just give you an example. Recently, in January, mid of January, we just opened a 20,000 square foot. flagship store in Shanghai, four-story independent buildings. Within 30 days, the sales revenue already reached 3.2 million U.S. dollars. So it's, I mean, I think, I mean, when you have chance to visit China and really look at the store, I mean, I carry stores, it's a big position as a kind of the level of the premiums. I mean, not only the premium, but also the luxury segment. And we are practically on par with a brand like a Moncler, okay, so in China markets.

flagship store in Shanghai, four-story independent buildings. Within 30 days, the sales revenue already reached 3.2 million U.S. dollars. So it's, I mean, I think, I mean, when you have chance to visit China and really look at the store, I mean, I carry stores, it's a big position as a kind of the level of the premiums. I mean, not only the premium, but also the luxury segment. And we are practically on par with a brand like a Moncler, okay, so in China markets.

So it's, I mean, I think, I mean, when you have chance to visit China and really look at the store, I mean, I carry stores, it's a big position as a kind of the level of the premiums. I mean, not only the premium, but also the luxury segment. And we are practically on par with a brand like a Moncler, okay, so in China markets.

Ike Boruchow: Got it. Thank you very much.

Got it. Thank you very much.

Operator: Your next question comes from the line of Michael Binetti from Evercore ISI. Please go ahead.

Michael Binetti: Hey, guys. Thanks for taking our questions. Congrats on the first quarter out of the gate here. I guess a few on - coming into the year, any are there Wilson inventory issues past us at this point? And then on the cold weather, I know it's been a little bit unfavorable weather. Any sense from the channel of competitors that might have inventory stuck in the channel that might be cleared or any consideration you added to your gross margin expectations for the year if we do see some competitor clearing?

I'm coming into the year any are the Wilson inventory issues passes at this point and then on the cold weather I know it's been a little bit unfavorable weather any sense of from from the channel of competitors that might have inventory stuck in the channel that might be be cleared or any consideration you added to your gross margin expectations for the year if we if we do see some competitor clearing.

Andrew Page: Yeah. Thanks, Michael. This is Andrew. We feel, we talked about this a lot. We feel really good about how we exited 2023 with our inventory in Wilson. As a matter of context, we cleared about $90 million of inventory in Wilson that was deemed desirable to move through a slower moving in the second half of 2023. And so as we stepped into 2024, we feel good about it. And as Omar alluded to earlier, you can meaningfully see the step up in realized, gross profit per product sold as soon as we got into 2024, which is an indicator in our minds, number one, the heat of our brand, how our retail partners appreciate us and the fact that, moving through and the promotional environment was, as it related to our product was meaningfully tied to getting through December.

You know, we cleared about $90 million of inventory in Wilson that was deemed, you know, desirable to move through a slower moving in the second half of 2023. And so as we stepped into 2024, we feel good about it. And as Omar alluded to earlier, you can meaningfully see the step up in realized gross profit per product sold as soon as we got into 2024, which is an indicator in our minds, number one, of the heat of our brand, how our retail partners appreciate us, and the fact that, you know, moving through in the promotional environment was, you know, as it related to our product was meaningfully tied to.

getting through December. So we're moving our product at strong gross margins now. We definitely do continue to feel the excess inventory in the market with our retail partners. But again, we believe that we are positioned primarily as that moves through. And to your point about what we've embedded in our plan, you know, we've embedded in our plan that the first half of 2024 will continue to drive toward normalization and you start to see more normalized rates in the back half of 2024.

getting through December.

Andrew Page: So, we're moving our product at strong gross margins now. We definitely do continue to feel the excess inventory in the market with our retail partners. But we again, we believe that we are positioned primarily as that moves through. And to your point about what we've embedded in our plan, we've embedded in our plan that the first half of 2024 will continue to drive toward normalization and you start to see more normalized rates in the back half of 2024.

Omar Saad: And maybe Joe and Franco, you guys could give a quick summary of what you're seeing - what your retail partners and what you're hearing in the market and what your retail partners are telling you starting with Franco and then Joe?

Franco Fogliato: Yeah. Thanks for the questions. We're seeing inventory normalizing. We're very happy where we stand out there from a Solomon perspective, in particular with footwear. We know retail has been very cautious on their booking for 2024 and this is really translating into very strong replenishment business we are seeing. At the beginning of the year, which was a continuation of Q4. So, we are very pleased with where we stand at the moment. We would like to think the world's will be a little happier, would be in a longer term in a much better position, in the short term of some pain, but we are continuing to eat market shares. Joe?

Franco Fogliato: Yeah. Thanks for the questions. We're seeing inventory normalizing. We're very happy where we stand out there from a Solomon perspective, in particular with footwear. We know retail has been very cautious on their booking for 2024 and this is really translating into very strong replenishment business we are seeing. At the beginning of the year, which was a continuation of Q4. So, we are very pleased with where we stand at the moment. We would like to think the world's will be a little happier, would be in a longer term in a much better position, in the short term of some pain, but we are continuing to eat market shares.

Omar Saad: Joe?

Joe Duty: Yes. And for Wilson, what we're hearing back is that, the consumer - we know that the wholesalers from a trade perspective are being more cautious on their replenishments and waiting till they have stronger visibility, but what we're hearing from them also is that they're seeing that consumers are waiting closer until they need the product. There's not a fear of it maybe being out of stock, so they're waiting closer to, say, the baseball season starts till the weather breaks for golf. So, we're positive and we see again that the participation rates are really staying robust and strong, so we expect that consumer demand to come. And then, some of the feedback we're getting from our retailers in our leading categories as we continue to outperform the competition in the sell through. So, we're excited and it shows that strength in our position in the market place for Wilsom.

and waiting until they have stronger visibility. But what we're hearing from them also is that they're seeing the consumers are waiting closer until they need the product. There's not a fear of it maybe being out of stock. So they're waiting closer to say the baseball season starts till the weather breaks for golf. So we're positive and we see again that the participation rates are really staying robust and strong. So we expect that consumer demand to come. And then some of the feedback we're getting from our retailers. in our leading categories as we continue to outperform the competition in the South here. So we're excited and it shows that strength in our position in the marketplace for Wilson.

in our leading categories as we continue to outperform the competition in the South here. So we're excited and it shows that strength in our position in the marketplace for Wilson.

Omar Saad: Michael, did you have a follow-up?

Michael Binetti: I'm curious, you said that bigger picture, the gross margin expansion for the year is from mix effects. So I'm curious, Stuart, how should we think about gross margin in the Arc'teryx brand as you put the offense in, any opportunities to expand the gross margins within the brand?

Stuart Haselden: Yeah. We're pleased with how our margins are performing, gross margins and operating margins. So, we do see the opportunity for some modest expansion over the course of the year that we expect to flow through and we expect to grow operating profit faster than we'll grow top line.

You know, we're pleased with how our margins are performing, gross margins and operating margins. So, we do see the opportunity for some modest expansion over the course of the year that we expect to flow through, and we expect to grow operating profits faster than we'll grow top line.

Michael Binetti: Thank you.

Operator: Your next question comes from the line of Jay Sole from UBS. Please go ahead.

Jay Sole: Great. Thank you. Andrew, just want to ask you about working capital and can you just give us a little reminder about how you expect working capital to develop this year and next year and sort of compare it to 2022 and 2023 kind of explain the differences? Thank you.

Andrew Page: I think, as you as you think about working capital this year, you'll start to see our working capital efficiency improve this year, especially as it relates to 2022. We obviously were building inventory in 2023, exiting 2022 because of the fact that supply chain was pretty erratic. So, we built inventory up in 2023, we held it a little bit longer than we needed to. And so, you'll start to see it - start to drive efficiency in 2024. And as you get out of 2024, I think that we start to get to a more normalized rate in 2025. But we're going to grow inventories, our biggest - obviously, our biggest working capital element is inventory. We're going to keep inventory right in line with revenue growth as we move through the key performance indicator for us. And obviously, with the refinance we're going to be able to keep more of our cash to continue to invest in the business as our finance charges go down.

Improved this year, especially as relates to 2022. We, you know, obviously we, we were building inventory in 2023 exiting 2022 because of the fact that supply chain was was pretty erratic. So we built inventory up in 2023. we held it a little bit longer than we needed to. And so you'll start to see it start to drive efficiency in 2024. And as you get out of 2024, I think that we start to get to a more normalized rate in 2025, but we're going to, you know, we're going to grow inventories. Our biggest, obviously, our biggest working capital element is inventory. We're going to keep inventory right in line with with revenue growth as we, as we move through, yes, a key performance indicator for us and. And obviously, with the refinance, we're going to be able to keep more of our cash to continue to invest in the business. as our finance charges go down.

And obviously, with the refinance, we're going to be able to keep more of our cash to continue to invest in the business. as our finance charges go down.

as our finance charges go down.

Jay Sole: Got it. Okay. And then, is - you gave some Capex guidance. Are you giving any sort of free cash flow guidance or operating cash flow guidance for the year?

Andrew Page: Yeah. So, we haven't given free cash flow guidance and we were just very, very early on in trying to understand where the financing was going to be and so we haven't given free cash flow guidance. I'd like to get through the Q1 and really start to see where we're going to come out with regard to stabilize my interest rates, FX hedging programs, all of those things, trying to get them up, squeeze it all in one quarter is a lot.

Omar Saad: And you guys saw in the guidance that even the tax rate is a range. So, we're still trying to like narrow down the cash tax rate given the jurisdiction of the various debt and interest deductibility etc.

etc.

Jay Sole: Got it. Thanks, Omar. Thank you.

Operator: Your next question comes from the line of John Kernan from TD Cowen. Please go ahead.

John Kernan: Excellent. Thank you. Congrats on a nice quarter [inaudible]. Stuart, could you talk to Arc’teryx in China? Obviously it's the biggest region for Technical Apparel in Arc’teryx. Just curious how we should think about the growth rate in China both in 2024 and within the long term algo?

Stuart, did you talk to Architects in China? Obviously, it's the biggest region for technical apparel and architects. Just curious how we should think about the growth rate in China both in 2024 and within the long-term algo.

Just curious how we should think about the growth rate in China both in 2024 and within the long-term algo.

Stuart Haselden: Yeah, John. Hey, it's Stuart. So, yeah, our China business has been really strong. In 2023, it was just over 40% of the total. It is our largest region by sales and by profits. We enjoy slightly higher gross margins as a result of the price advantage that we have in China. The growth rates, what I would tell you have been pretty consistent between North America and China, certainly in the latter part of 2023 and certainly into the beginning of 2024, we want to have balanced growth regionally. And so, we're very focused on setting the business up to achieve that. And so, I think we gave a little color in the prepared remarks around the pace of growth that we're seeing in China. And we can see  - we have seen a sequential acceleration into Q1 from Q4 and that acceleration has been consistent with North America and China. So, the stores that we operate there are the most productive of any region in the world. We've been focused on a strategy there of opening fewer stores that are larger and more productive. The stores that will open in North America, we're very happy with and very productive, but the China stores are tending to be larger and more revenue per unit. And we shared some of that in the certainly in the IPO process and with the disclosure to date. So, I'll leave it there.

Yeah, our China business has been really strong it's you know in 2020 Three, it was just over 40% of the total. It is our largest region by sales and by profits. We enjoy slightly higher gross margins. as a result of the price advantage that we have in China. The growth rates, what I would tell you, have been pretty consistent between North America and China, certainly in the latter part of 2023 and certainly into the beginning of 2024. We want to have balanced growth regionally, and so we're very focused on setting the business up to achieve that. And so I think we gave a little color in the prepared remarks around the pace of growth that we're seeing in China, and we have seen a sequential acceleration into Q1 from Q4, and that acceleration has been consistent in both North America and China. The stores that we operate there are the most productive of any region in the world. You know, we've been focused on a strategy there of opening fewer stores that are larger and more productive. The stores that will open in North America, we're very happy with and very productive. But the China stores are tending to be larger and more revenue per unit. And we shared some of that in the, you know, certainly in the IPO process and with the disclosure to date. So I'll leave it there.

Three, it was just over 40% of the total. It is our largest region by sales and by profits. We enjoy slightly higher gross margins. as a result of the price advantage that we have in China. The growth rates, what I would tell you, have been pretty consistent between North America and China, certainly in the latter part of 2023 and certainly into the beginning of 2024. We want to have balanced growth regionally, and so we're very focused on setting the business up to achieve that. And so I think we gave a little color in the prepared remarks around the pace of growth that we're seeing in China, and we have seen a sequential acceleration into Q1 from Q4, and that acceleration has been consistent in both North America and China. The stores that we operate there are the most productive of any region in the world. You know, we've been focused on a strategy there of opening fewer stores that are larger and more productive. The stores that will open in North America, we're very happy with and very productive. But the China stores are tending to be larger and more revenue per unit. And we shared some of that in the, you know, certainly in the IPO process and with the disclosure to date. So I'll leave it there.

as a result of the price advantage that we have in China. The growth rates, what I would tell you, have been pretty consistent between North America and China, certainly in the latter part of 2023 and certainly into the beginning of 2024. We want to have balanced growth regionally, and so we're very focused on setting the business up to achieve that. And so I think we gave a little color in the prepared remarks around the pace of growth that we're seeing in China, and we have seen a sequential acceleration into Q1 from Q4, and that acceleration has been consistent in both North America and China. The stores that we operate there are the most productive of any region in the world. You know, we've been focused on a strategy there of opening fewer stores that are larger and more productive. The stores that will open in North America, we're very happy with and very productive. But the China stores are tending to be larger and more revenue per unit. And we shared some of that in the, you know, certainly in the IPO process and with the disclosure to date. So I'll leave it there.

The growth rates, what I would tell you, have been pretty consistent between North America and China, certainly in the latter part of 2023 and certainly into the beginning of 2024. We want to have balanced growth regionally, and so we're very focused on setting the business up to achieve that. And so I think we gave a little color in the prepared remarks around the pace of growth that we're seeing in China, and we have seen a sequential acceleration into Q1 from Q4, and that acceleration has been consistent in both North America and China. The stores that we operate there are the most productive of any region in the world. You know, we've been focused on a strategy there of opening fewer stores that are larger and more productive. The stores that will open in North America, we're very happy with and very productive. But the China stores are tending to be larger and more revenue per unit. And we shared some of that in the, you know, certainly in the IPO process and with the disclosure to date. So I'll leave it there.

The stores that we operate there are the most productive of any region in the world. You know, we've been focused on a strategy there of opening fewer stores that are larger and more productive. The stores that will open in North America, we're very happy with and very productive. But the China stores are tending to be larger and more revenue per unit. And we shared some of that in the, you know, certainly in the IPO process and with the disclosure to date. So I'll leave it there.

John Kernan: Excellent. Thank you.

Operator: Your next question comes from the line of Laurent Vasilescu from BNP Paribas. Please go ahead.

Laurent Vasilescu: Good morning. Thank you very much for taking my question. I wanted to ask first on my one question Andrew, in 4Q, DTC was up 37%, while wholesale was down 4%. Could you probably share with us, how we think - we should think about those two channels for the first quarter, as well as the full year? And then a bigger picture question on footwear. Could you maybe share with the audience how big Solomon footwear, was for 2023? Where can it go over the next few years? And are there any key learnings that you can share, from Salomon's success in footwear that could extend into Arc’teryx? Thank you very much.

Could you probably share with us how we should think about those two channels for the first quarter as well as the full year? And then a bigger picture question on footwear, could you maybe share with the audience how big Solomon Footwear was for 2023? Where can it go over the next few years? And are there any key learnings that you can share from Solomon's success in footwear that could extend into Arc'teryx? Thank you very much. Thank you. Thank you. Thank you.

First to Franco on the solar and footwear. Yeah, look, we see in Q1 in particular the pressure remaining. We said earlier the pressure on the order book is there from a wholesale perspective, but DTC performance is very strong at the moment, and we see that momentum in DTC to continue in Q1, as well as the strong momentum in Asia. So we're very confident we're off to a good start of the year.

Omar Saad: First to Franco on the Solomon footwear.

Franco Fogliato: Yeah. Look, we see in Q1 in particular the pressure remaining. We said earlier, the pressure on the order book is there from a wholesale perspective, but DTC performance is very strong at the moment and we see that momentum in DTC to continue in Q1, as well as the strong momentum in Asia. So, we're very confident we're off a good start to the year.

Stuart Haselden: Yeah. Thanks. And then as you think about, DTC versus wholesale, obviously, wholesale was down for all the reasons we talked Q4, very promotional environment, excess inventory. We do not anticipate wholesale to be down like that as you move forward. In fact, we believe that wholesale will be - for us wholesale will be for the full year up high-single digits and DTC will continue to be up around, in the 30s, like below 30%. And that's how [inaudible] blended.

So, thanks, and then as you think about D2C versus wholesale, you know, obviously, wholesale was down for all the reasons we talked about in the fourth quarter. They're in promotional environment, excess inventory. We do not anticipate wholesale to be down like that as you move forward. In fact, we believe that wholesale will be, you know, for us, wholesale will be for the full year up high single digits. And D2C will continue to be up around. and in the 30s, like we're at low 30%. And that's how you get to the blended.

And D2C will continue to be up around. and in the 30s, like we're at low 30%. And that's how you get to the blended.

and in the 30s, like we're at low 30%. And that's how you get to the blended.

And that's how you get to the blended.

Laurent Vasilescu: That's very helpful. If I could squeeze one more in, how do we think about China for this year, Andrew, if you can give some color on that, in terms of growth rate?

That's very helpful. If I could squeeze one more in. How do we think about China for this year, Andrew, if you can give some color on that in terms of growth rate?

Andrew Page: With regard to the China, the region, we still expect China to see a very strong growth rate. Again, when we talk about disciplined planning, you're going to see us plan a number in the high 20s, low 30s, but we will have the inventory to be able to service it if the demand is there.

if the demand is there.

Laurent Vasilescu: Thank you very much.

Operator: Your next question comes from the line of Jonathan Komp from Baird. Please go ahead.

Jonathan Komp: Yeah. Hi. Hello. I want to follow-up on the five year targets for Technical Apparel. The targets imply reaching well above $3 billion of revenue over the next five years. So, Stuart, I'm just wondering as you think about Arc'teryx, the long term opportunity, how do you size up the potential and what are some of the key drivers you're looking forward to in the near term here?

Stuart Haselden: Hey, Jonathan. So, yeah, we're very excited for the prospects for the brand globally. We see a long runway in every region. In North America, we ended the year just under 50 stores. We see the potential for over 200, and we see exciting, additional store runway in Europe and Asia, both in China and outside of China. So, the very sort of concrete, objective way we're seeing the success in our store strategy is probably the easiest way to think about how we see the revenue development towards the five year targets occurring, we're equally bullish on our digital business. In North America, our digital business is about the same size as our retail business. And, it's an exciting, omnichannel strategy that we have, where channels really closely intertwined. So, we capture demand and fulfill that demand in a very cross-channel manner in North America, as well as Europe and Asia. Our business in China is more weighted towards retail. And so, the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So, while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical, to how we see our success developing as well.

Stuart Haselden: Hey, Jonathan. So, yeah, we're very excited for the prospects for the brand globally. We see a long runway in every region. In North America, we ended the year just under 50 stores. We see the potential for over 200, and we see exciting, additional store runway in Europe and Asia, both in China and outside of China. So, the very sort of concrete, objective way we're seeing the success in our store strategy is probably the easiest way to think about how we see the revenue development towards the five year targets occurring, we're equally bullish on our digital business. In North America, our digital business is about the same size as our retail business.

Hey, Jonathan. So, so, yeah, we're, you know, very excited for the prospects for the brand globally. You know, we're, we're, we see a long runway in in every region in North America, you know, You know, we ended the year just under 50 stores. We see the potential for over 200, you know, and we see exciting additional store runway in Europe and Asia, both in China and outside of China. So the. The very sort of concrete objective way we're seeing the success in our store strategy. It's probably the easiest way to think about how we see. the revenue development towards the five-year targets occurring, we're equally bullish on our digital business. In North America, our digital business is about the same size as our retail business. It's an exciting. omni-channel strategy that we have where the channels really. closely intertwined so We capture demand and fulfill that demand in a very cross-channel manner in North America as well as Europe and Asia. Our business in China is more weighted toward retail, and so the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

You know, we ended the year just under 50 stores. We see the potential for over 200, you know, and we see exciting additional store runway in Europe and Asia, both in China and outside of China. So the. The very sort of concrete objective way we're seeing the success in our store strategy. It's probably the easiest way to think about how we see. the revenue development towards the five-year targets occurring, we're equally bullish on our digital business. In North America, our digital business is about the same size as our retail business. It's an exciting. omni-channel strategy that we have where the channels really. closely intertwined so We capture demand and fulfill that demand in a very cross-channel manner in North America as well as Europe and Asia. Our business in China is more weighted toward retail, and so the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

The very sort of concrete objective way we're seeing the success in our store strategy. It's probably the easiest way to think about how we see. the revenue development towards the five-year targets occurring, we're equally bullish on our digital business. In North America, our digital business is about the same size as our retail business. It's an exciting. omni-channel strategy that we have where the channels really. closely intertwined so We capture demand and fulfill that demand in a very cross-channel manner in North America as well as Europe and Asia. Our business in China is more weighted toward retail, and so the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

It's probably the easiest way to think about how we see. the revenue development towards the five-year targets occurring, we're equally bullish on our digital business. In North America, our digital business is about the same size as our retail business. It's an exciting. omni-channel strategy that we have where the channels really. closely intertwined so We capture demand and fulfill that demand in a very cross-channel manner in North America as well as Europe and Asia. Our business in China is more weighted toward retail, and so the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

the revenue development towards the five-year targets occurring, we're equally bullish on our digital business. In North America, our digital business is about the same size as our retail business. It's an exciting. omni-channel strategy that we have where the channels really. closely intertwined so We capture demand and fulfill that demand in a very cross-channel manner in North America as well as Europe and Asia. Our business in China is more weighted toward retail, and so the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

Stuart Haselden: And, it's an exciting, omnichannel strategy that we have, where channels really closely intertwined. So, we capture demand and fulfill that demand in a very cross-channel manner in North America, as well as Europe and Asia. Our business in China is more weighted towards retail. And so, the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So, while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical, to how we see our success developing as well.

It's an exciting. omni-channel strategy that we have where the channels really. closely intertwined so We capture demand and fulfill that demand in a very cross-channel manner in North America as well as Europe and Asia. Our business in China is more weighted toward retail, and so the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

omni-channel strategy that we have where the channels really. closely intertwined so We capture demand and fulfill that demand in a very cross-channel manner in North America as well as Europe and Asia. Our business in China is more weighted toward retail, and so the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

closely intertwined so We capture demand and fulfill that demand in a very cross-channel manner in North America as well as Europe and Asia. Our business in China is more weighted toward retail, and so the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

We capture demand and fulfill that demand in a very cross-channel manner in North America as well as Europe and Asia. Our business in China is more weighted toward retail, and so the store business there is a bigger part of the overall mix. But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well. So the footwear launch that we have happening this week, tomorrow we'll actually launch three new footwear models, the first of which that have been designed in our Portland Footwear Design Center is emblematic of our commitment to innovation and the success that we're creating through that strategy.

But we also see the continued focus on product innovation. So while we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market and product innovation is critical to how we see our success developing as well.

Stuart Haselden: So, the footwear launch that we have happening this week, tomorrow we'll actually launch three new footwear models. The first of which that have been designed in our Portland footwear design center, is emblematic of our commitment to innovation and success that we're creating through that strategy. So, I would see certainly the channel expansion, product innovation. And then the third one I would highlight is really investment in our brand and our community strategy. So, the brand is very undeveloped or the awareness levels are quite low, in most of the geographies where we operate. And so, how we're able to drive brand awareness will also drive engagement with the brand, traffic conversion to our channels. So, we see the investments that we're making across our brand and community activities as a third element of how we will achieve the targets that you mentioned.

So, I would see the, you know, certainly the channel expansion, product innovation, and then the third one I would highlight is really investment in our brand and our community strategy. So, the brand is very undeveloped, or the awareness levels are quite low in most of the geographies where we operate, and so how we're able to drive brand awareness will also drive engagement with the brand, traffic conversion to our channels. So, we see the investments that we're making across our brand and community activities as a third element of how we will achieve the targets that you mentioned.

Operator, I think we have time for one. Oh, sorry, Andrew. Yeah. Hey, I just I want to go back and correct a comment. So on the last question, I think this is an important comment for for all of you guys to for my correction on.

Omar Saad: Operator, I think we have time for one - oh, sorry, Andrew you had something.

Andrew Page: Yeah. Hey, I just, I want to go back and correct a comment. So, on the last question, I think this is an important comment for all of you guys, for my correction on. Wholesale for the full year will be up mid-single digits, I think it's a high single digits, so mid-single digits for the whole year, retail up right around 30%. And in the Q1, as you think about it, wholesale will be down slightly to flat to last year. I remember last year was a very strong wholesale Q1, and DTC will be up around 20%. So, I think it's just to make sure that you guys update your models to reflect that.

Wholesale for the full year will be up mid-single digits. I think I said high single digits, so mid-single digits for the whole year. Retail up right around 30 percent. Then the first quarter, as you think about it, wholesale will be down slightly to flat to last year. I remember last year was a very strong wholesale first quarter, and DTC will be up around 20 percent. I think it's, you know, just make sure that you guys update your models to reflect that.

I think it's, you know, just make sure that you guys update your models to reflect that.

Omar Saad: Operator, time for one more.

Operator: Yes. Our final question today comes from Yiren Lu from CICC. Please go ahead.

Yiren Lu: Yes. Thank you for taking my question. I just have a long term question for Arc’teryx. As you have mentioned, the Arc’teryx expansion, the DTC expansion in the United - in the North America is a very important strategy for us. I just want to know, while we are very glad to hear our new flagship store opening in North America recently, what has been the changing part of our DTC expansion? And what are our unique strengths that make us doing better than our competitors? Thank you.

As you have mentioned, our parity expansion, the D2C expansion in the United States, in the North America is... a very important strategy for us. I just wonder, you know, while we are very glad to hear our new flagship store opening in North America recently, what has been the challenging part of our D2C expansion and, you know, what are our unique strengths that make us doing better than our competitors? Thank you.

a very important strategy for us. I just wonder, you know, while we are very glad to hear our new flagship store opening in North America recently, what has been the challenging part of our D2C expansion and, you know, what are our unique strengths that make us doing better than our competitors? Thank you.

Stuart Haselden: Yeah. Hey, Yiren. It's Stuart. So, yeah, North America, we see an exciting story emerging, DTC story, as you reposition the brand from primarily wholesale to now primarily direct to consumer over the last three years. And we're seeing exciting trends in Canada and in the United States. We're probably a little farther ahead in Canada, as it's our home market. But we're really bullish on the United States as well. And so, we'll open a couple of flagships that I mentioned. In Toronto, we'll open a 8,000 square foot flagship, on Bloor Street. In New York City, we're going to open a 14,000 square foot, flagship, in the heart of SoHo on Broadway, that we're super excited about Manhattan in July in the summer. But the overall momentum that we're seeing across every part, every region where we're operating in North America is pretty exciting and it's quite balanced as I mentioned between our retail strategies and our e commerce strategies.

Thank you. Yeah, hey, you're in Stuart. So yeah, North America We see an exciting story emerging, D2C story, as you've repositioned the brand from primarily wholesale to now primarily direct-to-consumer over the last three years. And we're seeing, you know, exciting trends in Canada and in the United States, probably a little farther ahead in Canada, as it's our home market, but we're really bullish on the United States as well. And so we'll open a couple of flagships that I mentioned. In Toronto, we'll open an 8,000 square foot flagship on Bloor Street. In New York City, we're going to open a 14,000 square foot flagship in the heart of Soho on Broadway that we're super excited about. That'll happen in July, in the summer, but the But the overall momentum that we're seeing across every region where we're operating in North America is pretty exciting. quite balanced, as I mentioned, between our retail strategies and our e-commerce strategies.

Yeah, hey, you're in Stuart. So yeah, North America We see an exciting story emerging, D2C story, as you've repositioned the brand from primarily wholesale to now primarily direct-to-consumer over the last three years. And we're seeing, you know, exciting trends in Canada and in the United States, probably a little farther ahead in Canada, as it's our home market, but we're really bullish on the United States as well. And so we'll open a couple of flagships that I mentioned. In Toronto, we'll open an 8,000 square foot flagship on Bloor Street. In New York City, we're going to open a 14,000 square foot flagship in the heart of Soho on Broadway that we're super excited about. That'll happen in July, in the summer, but the But the overall momentum that we're seeing across every region where we're operating in North America is pretty exciting. quite balanced, as I mentioned, between our retail strategies and our e-commerce strategies.

We see an exciting story emerging, D2C story, as you've repositioned the brand from primarily wholesale to now primarily direct-to-consumer over the last three years. And we're seeing, you know, exciting trends in Canada and in the United States, probably a little farther ahead in Canada, as it's our home market, but we're really bullish on the United States as well. And so we'll open a couple of flagships that I mentioned. In Toronto, we'll open an 8,000 square foot flagship on Bloor Street. In New York City, we're going to open a 14,000 square foot flagship in the heart of Soho on Broadway that we're super excited about. That'll happen in July, in the summer, but the But the overall momentum that we're seeing across every region where we're operating in North America is pretty exciting. quite balanced, as I mentioned, between our retail strategies and our e-commerce strategies.

And we're seeing, you know, exciting trends in Canada and in the United States, probably a little farther ahead in Canada, as it's our home market, but we're really bullish on the United States as well. And so we'll open a couple of flagships that I mentioned. In Toronto, we'll open an 8,000 square foot flagship on Bloor Street. In New York City, we're going to open a 14,000 square foot flagship in the heart of Soho on Broadway that we're super excited about. That'll happen in July, in the summer, but the But the overall momentum that we're seeing across every region where we're operating in North America is pretty exciting. quite balanced, as I mentioned, between our retail strategies and our e-commerce strategies.

But the overall momentum that we're seeing across every region where we're operating in North America is pretty exciting. quite balanced, as I mentioned, between our retail strategies and our e-commerce strategies.

quite balanced, as I mentioned, between our retail strategies and our e-commerce strategies. And, you know, as you ask the question, like, how are we winning market share and how are we distinguishing ourselves in the market? You know, we view Arc'teryx as the pinnacle competitor in the outdoor space.

quite balanced, as I mentioned, between our retail strategies and our e-commerce strategies.

Stuart Hadelsen: And as you ask the question like how are we winning market share and how are we distinguishing ourselves in the market, we view Arc’teryx as the pinnacle competitor in the outdoor space. We believe we have the very best products, the highest level of innovation, the highest level of quality that separates our products based on the merits of its performance. And we complement that with what we believe is, really the only vertical brand in the outdoor space. And so, we are building community where we open stores. We are engaging, with our customers in a way we do not see other brands doing. And when you listen to how other brands talk about how they develop their business, they talk about their stores as a transactional platform. We operate our stores as a part of the communities where we operate and we want to engage in those communities. A good example of this is our rebirth strategy, where we not only want to sell you a jacket, we want to help you maintain it. We want to help you clean it properly. We want to help ensure that it's repaired when it needs it.

We believe we have the very best products, the highest level of innovation, the highest level of quality that separates our products based on the merits of its performance. And we complement that with what we believe is really the only vertical brand in the outdoor space. And so we are building community where we open stores. We are engaging with our customers in a way we do not see other brands doing. And when you listen to how other brands talk about how they develop their business, They talk about their stores as a transactional platform. We operate our stores as a part of the communities where we operate, and we want to engage in those communities. A good example of this is our ReBird strategy, where We not only want to sell you a jacket, we want to help you maintain it. We want to help you clean it properly. We want to help ensure that it's repaired when it needs it.

And we complement that with what we believe is really the only vertical brand in the outdoor space. And so we are building community where we open stores. We are engaging with our customers in a way we do not see other brands doing. And when you listen to how other brands talk about how they develop their business, They talk about their stores as a transactional platform. We operate our stores as a part of the communities where we operate, and we want to engage in those communities. A good example of this is our ReBird strategy, where We not only want to sell you a jacket, we want to help you maintain it. We want to help you clean it properly. We want to help ensure that it's repaired when it needs it.

They talk about their stores as a transactional platform. We operate our stores as a part of the communities where we operate, and we want to engage in those communities. A good example of this is our ReBird strategy, where We not only want to sell you a jacket, we want to help you maintain it. We want to help you clean it properly. We want to help ensure that it's repaired when it needs it.

We not only want to sell you a jacket, we want to help you maintain it. We want to help you clean it properly. We want to help ensure that it's repaired when it needs it. Then when you're ready for a new jacket, you're going to trade it in and we're going to keep that jacket in service with another guest through our ReBird program. We believe this creates a very distinct business model that is separated in the marketplace today and is part of the success that we're achieving. Thank you.

We not only want to sell you a jacket, we want to help you maintain it. We want to help you clean it properly. We want to help ensure that it's repaired when it needs it.

Stuart Hadelsen: And then, when you're ready for a new jacket, you're going to trade it in and we're going to keep that jacket, in service with another guest through our rebirth program. So, we believe this creates a very distinct business model, that is separated in the marketplace today, and is part of the success that we're achieving.

Unknown: Great.

Operator: And that's all the time we have for questions today. I’ll now turn the call back over to Omar for closing remarks.

Omar Saad: Thanks, everyone, for joining. We'll see you after next quarter. This concludes today's conference call. Thank you for your participation and you may now disconnect.

Omar Saad: Thanks everyone for joining. We'll see you after next quarter.

This concludes today's conference call. Thank you for your participation and you may now disconnect.

Operator: This concludes today's conference call. Thank you for your participation and you may now disconnect.

Operator: Welcome everyone to the Amer Sports Q4 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star followed by the number 1 on your telephone keypad, and if you would like to withdraw that question, again, press star 1. Thank you. I would now like to turn the conference over to Omar Saad, Vice President of Finance and Investor Relations. Omar, you may begin your conference.

Operator: Welcome everyone to the Amer Sports Q4 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star followed by the number 1 on your telephone keypad, and if you would like to withdraw that question, again, press star 1. Thank you. I would now like to turn the conference over to Omar Saad, Vice President of Finance and Investor Relations. Omar, you may begin your conference.

Later today at this time I would like to welcome everyone to the AMR Sports fourth quarter 2023 earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question and answer session. If you would like to ask a question during that time simply press star followed by the number.

One on your telephone keypad, and if you'd like to withdraw that question again press star one.

I would like I would now like to turn the conference over to Omer Omar Saad Vice President of Finance and Investor Relations Omar you May begin your conference.

Omar Saad: Hi everyone. Thanks for joining Amer Sports Q4 and fiscal year 2023 Earnings Call, which is our first earnings call as a public company on the New York Stock Exchange. Earlier this morning, we announced our Q4 and full year 2023 results. The release can be found on our IR website, investors.amersports.com. A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the Safe Harbor Statement in our earnings release and SEC filings. We will also discuss certain non-IFRS financial measures. Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to the most comparable IFRS measures.

Omar Saad: Hi everyone. Thanks for joining Amer Sports Q4 and fiscal year 2023 Earnings Call, which is our first earnings call as a public company on the New York Stock Exchange. Earlier this morning, we announced our Q4 and full year 2023 results. The release can be found on our IR website, investors.amersports.com. A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the Safe Harbor Statement in our earnings release and SEC filings. We will also discuss certain non-IFRS financial measures. Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to the most comparable IFRS measures.

Everyone. Thanks for joining <unk> fourth quarter and fiscal year 2023 earnings call, which is our first earnings call as a public company on the New York Stock Exchange.

Earlier this morning, we announced our fourth quarter and full year 2023 results. The release can be found on our IR website investors that AMR sports Dot com.

A quick reminder to everyone that today's call will contain forward looking statements within the meaning of the federal Securities laws. These forward looking statements reflect our current expectations and beliefs, only and are subject to certain risks and uncertainties that could cause actual results to differ materially.

Please see the safe Harbor statement in our earnings release and SEC filings.

We will also discuss certain non <unk> financial measures. Please refer to our earnings release for important information regarding such non <unk> financial measures, including reconciliations to the most comparable <unk> measures.

Omar Saad: We will begin with prepared remarks from our CEO, James Zheng, and CFO, Andrew Page, followed by a Q&A session until 9:00AM Eastern. Our three segment leaders will also join for the Q&A portion of the call, CEO of Arc'teryx, Stuart Haselden, CEO of Salomon, Franco Fogliato, and CEO of Wilson, Joe Dudy. With that, I'll turn the call over to James.

Omar Saad: We will begin with prepared remarks from our CEO, James Zheng, and CFO, Andrew Page, followed by a Q&A session until 9:00AM Eastern. Our three segment leaders will also join for the Q&A portion of the call, CEO of Arc'teryx, Stuart Haselden, CEO of Salomon, Franco Fogliato, and CEO of Wilson, Joe Dudy. With that, I'll turn the call over to James.

We will begin with prepared remarks from our CEO, James Zhang and CFO, Andrew page, followed by a Q&A session until nine a M. Eastern.

Our three segment leaders, who also joined for the Q&A portion of the call CEO of our Terex Stewart Hazelton.

Solomon <unk> and CEO of Wilson, Joe Doody.

James Zheng: Thanks, Omar. I'm very proud to lead Amer Sports' first earnings call as a New York Stock Exchange-listed company. Amer Sports may be new to the U.S. equity markets, but we come from a long and rich heritage in sports and outdoor activities. Our brands are loved and trusted by millions worldwide. Whether used by elite competitors, weekend warriors, or aspirational enthusiasts, our equipment, footwear, and apparel delivers the best technical quality and performance. We are excited about the opportunity to drive growth across our three segments: technical apparel, outdoor performance, and ball and racket sports. Although 2023 was another strong year of sales growth and margin expansion for Amer Sports, we are still in the early stage of profitable growth, in fact following our transformation to a decentralized, brand-direct operating model in 2020.

James Zheng: Thanks, Omar. I'm very proud to lead Amer Sports' first earnings call as a New York Stock Exchange-listed company. Amer Sports may be new to the U.S. equity markets, but we come from a long and rich heritage in sports and outdoor activities. Our brands are loved and trusted by millions worldwide. Whether used by elite competitors, weekend warriors, or aspirational enthusiasts, our equipment, footwear, and apparel delivers the best technical quality and performance. We are excited about the opportunity to drive growth across our three segments: technical apparel, outdoor performance, and ball and racket sports. Although 2023 was another strong year of sales growth and margin expansion for Amer Sports, we are still in the early stage of profitable growth, in fact following our transformation to a decentralized, brand-direct operating model in 2020.

With that I'll turn the call over to James.

Thanks, Omar I'm very proud to lead Amer sports first earning call as the New York Stock Exchange listed company.

<unk> may be new to the U S equity markets, but have we come from a long and rich heritage in sports and outdoor activities.

Our brands are loved and trusted by million worldwide.

Whether used by elite competitors weekend, Lori or aspirational. He says, yes, our equipment footwear and apparel delivers the best technical quality and the performance.

We're excited about our opportunity to drive growth across our three segments.

Technical apparel outdoor performance and the Bull ended records.

Although 2023 was another strong year of sales growth and the margin expansion for Amer sports. We are still in the early stage of our profitable growth infection. Following our transformation to a decentralized branded direct operating model in 2020.

James Zheng: This transformation has been critical to unlock the value of our portfolio, led by our high-growth flagship brand, Arc'teryx. Several factors give us confidence for the future. First, we operate a unique portfolio of premium outdoor and sports brands, each positioned at the pinnacle of their respective markets. Second, our brands have high engagement and satisfaction with consumers around the world, but are still relatively small players in the large global outdoor and sports markets. Third, the premium segment of the outdoor sports markets remains healthy and growing, especially in Great China and the Americas, where we continue to outperform peers. Fourth, our highest-margin brands, geographies, channels, and categories are growing the fastest, and we have assembled a strong and experienced management team that's energized and motivated to drive value creation for our stakeholders.

James Zheng: This transformation has been critical to unlock the value of our portfolio, led by our high-growth flagship brand, Arc'teryx. Several factors give us confidence for the future. First, we operate a unique portfolio of premium outdoor and sports brands, each positioned at the pinnacle of their respective markets. Second, our brands have high engagement and satisfaction with consumers around the world, but are still relatively small players in the large global outdoor and sports markets. Third, the premium segment of the outdoor sports markets remains healthy and growing, especially in Great China and the Americas, where we continue to outperform peers. Fourth, our highest-margin brands, geographies, channels, and categories are growing the fastest, and we have assembled a strong and experienced management team that's energized and motivated to drive value creation for our stakeholders.

This transformation has been critical to unlock the value of our portfolio led by our high gross flagship brand of Terex.

Several factors give us confidence for the future.

First we operate a unique portfolio of premium outdoor sports brands each position at the pinnacle of their respective market.

Second our brands have high engagement and satisfaction with consumers around the world, but are still relatively small players in those large globals outdoor and sports market.

The premium segment of the outdoor sports market remains healthy and are growing, especially in greater China and the Americas.

We continued to outperform peers.

Fourth our highest margin brain bridging channels and our categories are growing the fastest and we have assembled a strong and experienced management team, that's energized and motivated to drive value equation for our stakeholders.

James Zheng: Before I review the performance of our brand segments, I want to zero in on what I see as our path forward. First, we believe Arc'teryx is a breakout growth story with unprecedented growth and profitability for the outdoor industry. It's truly charting new territory with its disruptive DTC models and very strong competitive position. The growth and profitability of this franchise will fuel Amer Sports for years to come. Second, Salomon Wilson and all our other brands are very strong, have longstanding authentic heritage, premium positioning with their respective segments, and amazing products. Although they are early in their growth inflection, we are building a very strong foundation for future growth for these brands across categories and key geographies.

James Zheng: Before I review the performance of our brand segments, I want to zero in on what I see as our path forward. First, we believe Arc'teryx is a breakout growth story with unprecedented growth and profitability for the outdoor industry. It's truly charting new territory with its disruptive DTC models and very strong competitive position. The growth and profitability of this franchise will fuel Amer Sports for years to come. Second, Salomon Wilson and all our other brands are very strong, have longstanding authentic heritage, premium positioning with their respective segments, and amazing products. Although they are early in their growth inflection, we are building a very strong foundation for future growth for these brands across categories and key geographies.

Before I review the performance of our brand segments.

Two zero.

What I see as our path forward.

First we believe <unk> is a break out growth story with unprecedented growth and profitability for the outdoor industry.

It's two rig charting new territory.

It's disruptive DTC models, and the very strong competitive position.

The growth and profitability of this franchise will feel.

More sports for years to come.

Second.

Hello, Ma'am worsen and all our other brands are very strong have longstanding authentic heritage premium positioning with their respective segments and amazing products.

Although they are early in their growth infection. We are building very strong foundation for future growth for these brands across categories and key geographies.

James Zheng: Third, we believe our unique expertise in Greater China and our success embedding top talent in our brand teams in this important growth region give us a clear competitive advantage across all brands in our portfolio. Before I turn it over to Andrew to discuss our company results, margins, the balance sheet, and the guidance, I will provide a review of our three brand segments. First, Technical Apparel, led by Arc'teryx, revenues grew 26% to $550 million in Q4, driven by 42% direct-to-consumer growth, including a 33% omni-comp. This was partially offset by a 5% decline in wholesale, which was expected and primarily related to the supply chain-related sales shift from Q3 into Q4 in 2022, which created a more difficult comparison. For the full year 2023, Technical Apparel grew 45%, driven by 57% DTC growth, including a 55% omni-comp.

James Zheng: Third, we believe our unique expertise in Greater China and our success embedding top talent in our brand teams in this important growth region give us a clear competitive advantage across all brands in our portfolio. Before I turn it over to Andrew to discuss our company results, margins, the balance sheet, and the guidance, I will provide a review of our three brand segments. First, Technical Apparel, led by Arc'teryx, revenues grew 26% to $550 million in Q4, driven by 42% direct-to-consumer growth, including a 33% omni-comp. This was partially offset by a 5% decline in wholesale, which was expected and primarily related to the supply chain-related sales shift from Q3 into Q4 in 2022, which created a more difficult comparison. For the full year 2023, Technical Apparel grew 45%, driven by 57% DTC growth, including a 55% omni-comp.

Third we believe our unique expertise in greater China, and our success embedding top talent in our brand teams in this important growth region give us a clear competitive advantage across all brands in our portfolio.

Before I turn it over to Andrew to discuss our company results margins the balance sheet and our guidance I will provide a review of our three brand segments.

First technical apparel.

Led by our tariffs revenues grew 26% to $550 million in Q4, driven by 42% direct to consumer growth, including a 33% omnicom.

This was partially offset by a 5% decline in wholesale which was expected and primarily relate to the supply chain related sales shift from Q3 into Q4 in 2022.

Create a more difficult comparison.

For the full year 2023, technical apparel grew 45% driven by 57% DTC growth, including a 55% comp.

James Zheng: Arc'teryx continues to experience very strong brand momentum across all regions, channels, consumer segments, and product categories. In both stores and online, the DTC channel experienced strong traffic and conversion trends. The brand achieved key milestones in its DTC evolution in 2023, including premium flagship openings in Osaka, Beijing, Toronto, and most recently, a 20,000-square-foot store in Shanghai that's taking the brand's retail presentation to new heights. Arc'teryx is also doubling down on innovation, including a significant new footwear launch with the first fully in-house designed and developed footwear for the mountain athlete. Arc'teryx continues to drive deep relationships in mountain communities through global academies and hosts more than 25,000 participants at Whistler, St. Anton, Chamonix, Squamish, and Yangshuo Academies across 2023. Regionally, technical apparel grew 30% in both Great China and America.

James Zheng: Arc'teryx continues to experience very strong brand momentum across all regions, channels, consumer segments, and product categories. In both stores and online, the DTC channel experienced strong traffic and conversion trends. The brand achieved key milestones in its DTC evolution in 2023, including premium flagship openings in Osaka, Beijing, Toronto, and most recently, a 20,000-square-foot store in Shanghai that's taking the brand's retail presentation to new heights. Arc'teryx is also doubling down on innovation, including a significant new footwear launch with the first fully in-house designed and developed footwear for the mountain athlete. Arc'teryx continues to drive deep relationships in mountain communities through global academies and hosts more than 25,000 participants at Whistler, St. Anton, Chamonix, Squamish, and Yangshuo Academies across 2023. Regionally, technical apparel grew 30% in both Great China and America.

<unk> continues to experience very strong brand momentum across all regions channels consumer segments and product categories.

In both stores and online the DTC channel experienced strong traffic and conversion trends.

<unk> achieved a key milestone in its TTC of erosion in 2023.

Including premium fresh ships opening in Osaka, Beijing, Toronto, and most recently, our 20000 square foot store in Shanghai.

The brand's retail presentation to new Heights.

October is also doubling down on innovation, including a significant new footwear launch with the first fully in house designed and developed footwear for the mountain ethylene.

<unk> continues to drive deep relationships in mountain communities through global academies and host more than 25000 participants at Whistler, showing anthem Chamonix, Squamish and the young saw economies across 2023.

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James Zheng: Technical apparel grew more than 40% in APAC, where we are evolving the operating model to accelerate DTC expansion. Importantly, in Q4, Arc'teryx also posted outsized growth in key opportunity areas, including women's footwear, hard goods, and accessories. Turning to Outdoor Performance, revenue grew 2% in Q4 to $523 million, driven by strong top and bottom-line performance in our winter sports equipment franchise, partially offset by an expected deceleration in Salomon footwear in the wholesale channel. DTC experienced strong growth, while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above. Regionally, Greater China and APAC experienced healthy increases, partially offset by declines in the Americas and the EMEA. Although wholesalers in the Americas and the EMEA remain cautious with pre-orders as they focus on maintaining lean inventories and rely more on replenishment orders, Salomon continues to enjoy strong demand at retail.

James Zheng: Technical apparel grew more than 40% in APAC, where we are evolving the operating model to accelerate DTC expansion. Importantly, in Q4, Arc'teryx also posted outsized growth in key opportunity areas, including women's footwear, hard goods, and accessories. Turning to Outdoor Performance, revenue grew 2% in Q4 to $523 million, driven by strong top and bottom-line performance in our winter sports equipment franchise, partially offset by an expected deceleration in Salomon footwear in the wholesale channel. DTC experienced strong growth, while wholesale declined due to the challenging comparison versus Q4 2022 mentioned above. Regionally, Greater China and APAC experienced healthy increases, partially offset by declines in the Americas and the EMEA. Although wholesalers in the Americas and the EMEA remain cautious with pre-orders as they focus on maintaining lean inventories and rely more on replenishment orders, Salomon continues to enjoy strong demand at retail.

Technical apparel growth, 30% in both China and America <unk>.

Apparel grew more than 40% in APAC, where we are evolving the opt.

Breaking model to accelerate DTC expansion.

Importantly in Q4 October also posted outsized growth in key opportunity areas.

Including women's footwear, and hardgoods and accessories.

Turning to outdoor performance revenue grew 2% in Q4 to 523 moved it empowers driven by strong top and bottom line performance in our winter sports equipment franchise, partially offset by an expected deceleration in Salomon footwear in the host.

Our channel.

DTC experienced strong growths were wholesale declined due to the challenging comparison versus Q4 2022 mentioned above.

Originary, great, China and APAC.

<unk> healthy increases partially offset by declines in the America and the EMEA.

Although wholesalers in the Americas, and the EMEA remained cautious with preorders as they focus on maintaining lean inventories and rely more on refreshment orders Panama continues to enjoy strong demand at retail.

James Zheng: The brand performed well in both own retail and partner stores, including DTC, up a very strong double-digit with all regions and formats showing solid gains. There continue to be signs that Salomon Footwear is generating strong brand heat in key sneaker communities. Our new sports style line was ranked as the number one growth brand on StockX last year. Although worth noting is the strong winter sports equipment performance in Q4, particularly in APAC, Great China, and the EMEA, aided by favorable weather conditions, strong results bookings, and timely inventory deliveries. For the full year 2023, outdoor performance grew 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC led growth at +42%.

James Zheng: The brand performed well in both own retail and partner stores, including DTC, up a very strong double-digit with all regions and formats showing solid gains. There continue to be signs that Salomon Footwear is generating strong brand heat in key sneaker communities. Our new sports style line was ranked as the number one growth brand on StockX last year. Although worth noting is the strong winter sports equipment performance in Q4, particularly in APAC, Great China, and the EMEA, aided by favorable weather conditions, strong results bookings, and timely inventory deliveries. For the full year 2023, outdoor performance grew 18%, growing in all regions driven by the 146% growth in Great China and the 44% growth in APAC. By channel, DTC led growth at +42%.

The brand performed well in both on retail and upon their stores, including DTC up very strong double digits with all regions and formats showing sorry, Dave.

They are continued to be signs that Saddam of footwear is generating strong brand heat in key sneak communities.

Our new sports stylized was ranked as the number one growth brand on stock X last year.

Although worth noting is a strong winter sports equivalent performance in Q4, particularly in APAC, where China and the EMEA aided by favorable weather conditions strong result.

Bookings and the timely inventory deliveries.

For the full year 2023, although performance grow 18% growing in all regions driven by the 146% growth in greater China, and a 44% growth in APAC.

James Zheng: Key brand highlights from 2023 include: First, Salomon becoming an official partner for the Milano Cortina 2026 Olympic Winter Games, including supplying 25,000 volunteers and torch bearers with Salomon apparel, footwear, and accessories. Second, the launch of Salomon's first road-running super shoe, the S/Lab Phantasm 2, which sold out in 30 days. Third, the success for Salomon athlete Courtney Dauwalter, the best trail runner on the planet, and the first human ever to win the Western States 100, the Hardrock 100, and the UTMB in a single season. 2024 starts with a splash when Salomon launches Welcome Back to Earth brand campaign during the Super Bowl. In winter sports equipment, Atomic reinforced its global leadership in alpine skis and achieved second position in the global ski boot market.

James Zheng: Key brand highlights from 2023 include: First, Salomon becoming an official partner for the Milano Cortina 2026 Olympic Winter Games, including supplying 25,000 volunteers and torch bearers with Salomon apparel, footwear, and accessories. Second, the launch of Salomon's first road-running super shoe, the S/Lab Phantasm 2, which sold out in 30 days. Third, the success for Salomon athlete Courtney Dauwalter, the best trail runner on the planet, and the first human ever to win the Western States 100, the Hardrock 100, and the UTMB in a single season. 2024 starts with a splash when Salomon launches Welcome Back to Earth brand campaign during the Super Bowl. In winter sports equipment, Atomic reinforced its global leadership in alpine skis and achieved second position in the global ski boot market.

Channel DTC less close at the plus 42%.

Key Brian highlights from 2023 include.

Number one.

Settlement, becoming official partner for 2026, Milan Court in Olympic games, including surprising 25000 volunteers and touch bearish with salmo apparel footwear and accessories.

The launch of settlements first low running shoe pursue the phantasm too which sold out in 30 days.

And a third the successful settlement estimate Courtney the water the.

Best true runner on the planet and the first human even to win the Western States 100, the Harlequin Henry and <unk> in a single season.

And the 2024 start with a fresh when someone launches will come back to Earth brand campaign during the Super Bowl.

In winter spot equipment.

Tommy reinforce its global leadership in <unk> and achieved number two position in the global <unk> market.

James Zheng: Our star athlete Mikaela Shiffrin had an exceptional year, breaking the 24-year-old record for most World Cup victories of all time, and now has 93 wins. Moving to ball and racket, where revenues declined 3% to $242 million in Q4, ball and racket had promising growth in Americas and Greater China. This growth wasn't enough to offset declines in its largest channel, U.S. Wholesale. From a category perspective, the growth in sportswear, golf, and balls wasn't enough to offset weakness in baseball and the racket. The U.S. sports equipment market was significantly hampered in 2023 due to elevated inventories across the industry that spilled over from 2022. In Q4, we made the strategic decision to take the promotional actions necessary for ball and racket to begin 2024 with healthier inventory levels.

James Zheng: Our star athlete Mikaela Shiffrin had an exceptional year, breaking the 24-year-old record for most World Cup victories of all time, and now has 93 wins. Moving to ball and racket, where revenues declined 3% to $242 million in Q4, ball and racket had promising growth in Americas and Greater China. This growth wasn't enough to offset declines in its largest channel, U.S. Wholesale. From a category perspective, the growth in sportswear, golf, and balls wasn't enough to offset weakness in baseball and the racket. The U.S. sports equipment market was significantly hampered in 2023 due to elevated inventories across the industry that spilled over from 2022. In Q4, we made the strategic decision to take the promotional actions necessary for ball and racket to begin 2024 with healthier inventory levels.

Our star athlete Mackerras, Jeffery had an exceptional year breaking the 24 year old record foremost World Cup victories of all time.

And now has 93 weeks.

Moving to bow indirectly, where revenues declined 3% to $242 million in Q4.

<unk> had promising growth in EMEA and equate China.

This growth wasn't enough to offset declines in is the largest channel U S wholesale.

A category perspective, the growth in sportswear and the boss wasn't enough to offset weakness in baseball and the record.

The U S sports equipment market was significantly hampered in 2033 due to elevated inventories.

Most of the industry that the spill over from 2032.

In Q4, we made the strategic decision to take the promotional actions necessary for an elected to begin 2024 with healthier inventory levels.

James Zheng: Wilson continues to be a market share leader in its core business of tennis, baseball, and balls, and we remain confident in the brand's long-term outlook. Some of Wilson's key highlights over the past year include launching the first-ever 3D-printed basketball, which debuted at the 2023 NBA All-Star Game dunk contest, and expanding the brand's retail footprint with new Wilson stores in Santa Monica, Minneapolis, Mall of America, Garden State Plaza, The Galleria in Houston, as well as additional stores in China and Korea. Wilson's strength in tennis continues, as 32% of the competitors at the recent Australian Open competed using a Wilson racket, making us the number one racket at the tournament. For the full year 2023, ball and racket grew 7%, led by double-digit gains in DTC, Greater China, and APAC. With that, I will turn it over to Andrew to discuss our company results and the outlook.

James Zheng: Wilson continues to be a market share leader in its core business of tennis, baseball, and balls, and we remain confident in the brand's long-term outlook. Some of Wilson's key highlights over the past year include launching the first-ever 3D-printed basketball, which debuted at the 2023 NBA All-Star Game dunk contest, and expanding the brand's retail footprint with new Wilson stores in Santa Monica, Minneapolis, Mall of America, Garden State Plaza, The Galleria in Houston, as well as additional stores in China and Korea. Wilson's strength in tennis continues, as 32% of the competitors at the recent Australian Open competed using a Wilson racket, making us the number one racket at the tournament. For the full year 2023, ball and racket grew 7%, led by double-digit gains in DTC, Greater China, and APAC. With that, I will turn it over to Andrew to discuss our company results and the outlook.

We also continues to be a market share leaders in its core business of tennis baseball and the board.

And we remain confident in the brand's long term outlook.

Some of our work in key highlights over the past year include launching the first ever three D printed festival, which debuted at the 2023 NBA All star game.

Contest and expanding the brand's retail footprint with new western stores in Santa Monica Media efforts more America.

<unk> stayed product the gallery in Houston, as well as additional stores in China and Korea.

We are seeing stress in tennis continuous at 32% of the competitors at the recent Australian open compete using our western rapid making us the number one record at a tournament.

For the full year 2023, Paul and our rapid growth, 7% led by double digit gains in DTC, great, China and APAC.

With that.

James Zheng: Thanks, James. Amer Sports continues to enjoy the financial benefits of our transformation to a brand-direct operating model. Our strong and authentic brands resonate with consumers and position us well to navigate the challenging macro cross-currents in 2023. With revenue growth above 20% for the full year and continued growth in operating margin expansion, we continue to win with our consumers. Our full year and Q4 results all came in at or above the high end of the ranges we pre-announced in our flash results in January. Q4 results decelerated from Q3, which we expected due to supply chain bottlenecks in H2 2022, which caused a meaningful shift of sales from Q3 into Q4, creating much harder comparisons. Looking at H2 in total, our underlying sales and margin trends remained healthy. We also experienced a capital structure transformation following our IPO last month.

Andrew Page: Thanks, James. Amer Sports continues to enjoy the financial benefits of our transformation to a brand-direct operating model. Our strong and authentic brands resonate with consumers and position us well to navigate the challenging macro cross-currents in 2023. With revenue growth above 20% for the full year and continued growth in operating margin expansion, we continue to win with our consumers. Our full year and Q4 results all came in at or above the high end of the ranges we pre-announced in our flash results in January. Q4 results decelerated from Q3, which we expected due to supply chain bottlenecks in H2 2022, which caused a meaningful shift of sales from Q3 into Q4, creating much harder comparisons. Looking at H2 in total, our underlying sales and margin trends remained healthy. We also experienced a capital structure transformation following our IPO last month.

Our tended to over Andrew to discuss our company results and the outlook.

Thanks James.

Sports continues to enjoy the financial benefits of our transformation to a brand direct operating model.

Our strong and authentic brands resonate with consumers and position us well to navigate the challenging macro cross currents in 2023.

With revenue growth above 20% for the full year and continued gross and operating margin expansion, we continue to win with our consumers.

Our full year and Q4 results all came in at or above the high end of the range as we pre announced in our last results in January.

Q4 results decelerated from Q3, which we expected due to supply chain bottlenecks in the second half of 2022, which caused a meaningful shift of sales from Q3 into Q4, creating much harder comparisons.

Looking at the second half in total our underlying sales and margin trends remained healthy.

James Zheng: We retired approximately $4 billion worth of shareholder loans, and we refinanced the remaining $1.8 billion of third-party loans to more favorable terms and extended maturity to 2031. Digging in deeper, starting with our top line, for Q4, revenue rose 10% to $1.3 billion. For the full year 2023, group revenue grew 23%. DTC continued to grow at a very strong double-digit rate, led by Arc'teryx, while wholesale revenues for the group fell 4%, with all three segments experiencing declines due to the comparison issues mentioned above. DTC expanded 37% in Q4, led by technical apparel in the Americas and Greater China. In wholesale, high inventory levels at retail in the Americas and EMEA were a drag on shipments in the Ball & Racquet and Outdoor Performance segments.

Andrew Page: We retired approximately $4 billion worth of shareholder loans, and we refinanced the remaining $1.8 billion of third-party loans to more favorable terms and extended maturity to 2031. Digging in deeper, starting with our top line, for Q4, revenue rose 10% to $1.3 billion. For the full year 2023, group revenue grew 23%. DTC continued to grow at a very strong double-digit rate, led by Arc'teryx, while wholesale revenues for the group fell 4%, with all three segments experiencing declines due to the comparison issues mentioned above. DTC expanded 37% in Q4, led by technical apparel in the Americas and Greater China. In wholesale, high inventory levels at retail in the Americas and EMEA were a drag on shipments in the Ball & Racquet and Outdoor Performance segments.

We also experienced a capital structure transformation following our IPO last month, we retired approximately $4 billion worth of shareholder loans, and we refinanced the remaining $1 $8 billion of third party loans to more favorable terms and extended maturity to 2031.

Digging in deeper starting with our top line for the fourth quarter revenue rose, 10% to $1 3 billion for the full year 2023 group revenue grew 23%.

D to C continued to grow at a very strong double digit rate led by our terex, while wholesale revenues for the group fell 4% with all three segments experiencing declines due to the comparison issues mentioned above.

D to C expanded 37% in Q4 led by technical apparel in the Americas and greater China.

In wholesale.

High inventory levels at retail in the Americas, and EMEA were a drag on shipments and the ball and racket and outdoor performance segments.

James Zheng: In Q4, regional growth was led by a 45% increase in Greater China, where all three brand segments experienced solid growth, followed by 22% growth in Asia Pacific, albeit off a small base. The Americas grew mid-single digits, led by DTC's strength, partially offset by declines in our wholesale channel. Turning to profitability, adjusted gross profit margin rose 170 basis points to 52.2% in Q4 versus Q4 2022, primarily driven by our highest gross margin business, Arc'teryx, growing at a faster rate than our other franchises. This was partially offset by heavily promotional environment in ball and racket. Lower logistics costs, improved sourcing performance, and channel and regional mix also drove gross margin expansion. In Q4, strong gross profit gains were offset by SG&A deleverage. Adjusted SG&A, as a percentage of revenue, increased 410 basis points on slower sales growth and represented 42.6% of revenues in the quarter.

Andrew Page: In Q4, regional growth was led by a 45% increase in Greater China, where all three brand segments experienced solid growth, followed by 22% growth in Asia Pacific, albeit off a small base. The Americas grew mid-single digits, led by DTC's strength, partially offset by declines in our wholesale channel. Turning to profitability, adjusted gross profit margin rose 170 basis points to 52.2% in Q4 versus Q4 2022, primarily driven by our highest gross margin business, Arc'teryx, growing at a faster rate than our other franchises. This was partially offset by heavily promotional environment in ball and racket. Lower logistics costs, improved sourcing performance, and channel and regional mix also drove gross margin expansion. In Q4, strong gross profit gains were offset by SG&A deleverage. Adjusted SG&A, as a percentage of revenue, increased 410 basis points on slower sales growth and represented 42.6% of revenues in the quarter.

In Q4 regional growth was led by a 45% increase in greater China, where all three brand segments experienced solid growth followed by 22% growth in APAC, albeit off a small base.

The Americas grew mid single digits led by D to C strength, partially offset by declines in our wholesale channel.

Turning to profitability adjusted gross profit margin rose 170 basis points to 52, 2% in Q4 versus Q4 2022.

Primarily driven by our highest gross margin business, our terex growing at a faster rate than our other franchises.

This was partially offset by heavily promotional environment in Boston racquet.

Lower logistics costs improve sourcing performance and channel and regional mix also drove gross margin expansion.

In Q4 strong gross profit gains were offset by SG&A deleverage.

Adjusted SG&A as a percentage of revenue increased 410 basis points on slower sales growth and represented 42, 6% of revenues in the quarter.

James Zheng: This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10.4%. The key areas of expense growth included variable selling expenses, additional headcount, variable marketing expenses, higher rent costs driven by store openings, and strategic investments in IT. Our Q4 adjusted net income declined to a loss of $41 million compared with $46 million of income in Q4 2022, driven primarily by increased interest expense on higher variable interest compared to 2022. Adjusted diluted EPS fell to a $0.11 loss in Q4 as compared to $0.12 of income in Q4 2022. For the full year 2023, we generated a $0.35 adjusted diluted loss per share as compared to a $0.08 loss per share in the prior year. Excluding PPA, our Q4 adjusted net income would have been a loss of $31 million or a $0.08 per share loss.

Andrew Page: This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10.4%. The key areas of expense growth included variable selling expenses, additional headcount, variable marketing expenses, higher rent costs driven by store openings, and strategic investments in IT. Our Q4 adjusted net income declined to a loss of $41 million compared with $46 million of income in Q4 2022, driven primarily by increased interest expense on higher variable interest compared to 2022. Adjusted diluted EPS fell to a $0.11 loss in Q4 as compared to $0.12 of income in Q4 2022. For the full year 2023, we generated a $0.35 adjusted diluted loss per share as compared to a $0.08 loss per share in the prior year. Excluding PPA, our Q4 adjusted net income would have been a loss of $31 million or a $0.08 per share loss.

This drove the 220 basis points decline in our Q4 adjusted operating profit percentage to 10, 4%.

The key areas of expense growth included variable selling expenses additional head count.

Variable marketing expenses higher rent costs, driven by store openings and strategic investments in IP.

Our Q4, adjusted net income declined to a loss of $41 million.

Compared with $46 million of income in Q4 2022.

Driven primarily by increased interest expense on higher variable interest compared to 2022.

Adjusted diluted EPS fell to an <unk> 11 loss in the fourth quarter as compared to 12 <unk> of income in the fourth quarter of 2022.

For the full year 2023, we generated a 35 adjusted diluted loss per share as compared to an <unk> <unk> loss per share in the prior year.

Excluding PPA, our fourth quarter adjusted net income would have been a loss of $31 million or <unk> <unk> per share loss.

James Zheng: For the full year of 2023, adjusted net income excluding PPA would have been a loss of $92 million. Turning to the balance sheet and cash flow, as I mentioned, we improved our capital structure using the IPO proceeds to retire our EUR 1.3 billion shareholder loan. We also refinanced $2 billion of debt in the form of a EUR 700 million term loan, a $500 million term loan, and an $800 million senior secured notes. Following our IPO and debt restructuring, our net debt to adjusted EBITDA is down several turns to approximately 3x. We aim to bring that down below 2x over the next few years through both EBITDA expansion and debt paydown. Based on current interest rates, our net finance costs will run in the range of $45 to $50 million per quarter, a meaningful improvement from 2023.

Andrew Page: For the full year of 2023, adjusted net income excluding PPA would have been a loss of $92 million. Turning to the balance sheet and cash flow, as I mentioned, we improved our capital structure using the IPO proceeds to retire our EUR 1.3 billion shareholder loan. We also refinanced $2 billion of debt in the form of a EUR 700 million term loan, a $500 million term loan, and an $800 million senior secured notes. Following our IPO and debt restructuring, our net debt to adjusted EBITDA is down several turns to approximately 3x. We aim to bring that down below 2x over the next few years through both EBITDA expansion and debt paydown. Based on current interest rates, our net finance costs will run in the range of $45 to $50 million per quarter, a meaningful improvement from 2023.

For the full year of 2023, adjusted net income excluding PPA would have been a loss of $92 million.

Turning to the balance sheet and cash flow.

As I mentioned, we improved our capital structure using the IPO proceeds to retire our one 3 billion euro shareholder loan.

We also refinanced $2 billion of debt in the form of $700 million Euro term loan.

$500 million U S dollar term loan.

And an $800 million senior secured notes.

Okay.

Following our IPO and debt restructuring our net debt to adjusted EBITDA is down several turns to approximately three times.

We aim to bring that down below two times over the next few years through both EBITDA expansion and debt Paydown.

Based on current interest rates, our net finance costs will run in the range of $45 million to $50 million per quarter, a meaningful improvement from 2023.

James Zheng: Inventories finished 2023 in a healthy position, up 21% from the end of 2022, below our revenue growth of 23% for the full year. Our goal is to grow inventories at a rate that is in line or below revenue growth. Turning to the future, we are happy to share our five-year financial algorithm, which consists of low double-digit to mid-teens annual sales growth, 300 basis points of gross margin expansion, and 30 to 70 basis points of annual adjusted operating margin expansion. The group-level top-line algorithm reflects mid to high-teens sustainable growth for technical apparel, high single to low double-digit annual expansion for outdoor performance, and a mid-single-digit long-term growth rate for ball and racket. Turning to the near-term guidance, we are off to a solid start in 2024 and continue to enjoy healthy mix-shift benefits led by our fastest-growing, high-margin Arc'teryx business.

Andrew Page: Inventories finished 2023 in a healthy position, up 21% from the end of 2022, below our revenue growth of 23% for the full year. Our goal is to grow inventories at a rate that is in line or below revenue growth. Turning to the future, we are happy to share our five-year financial algorithm, which consists of low double-digit to mid-teens annual sales growth, 300 basis points of gross margin expansion, and 30 to 70 basis points of annual adjusted operating margin expansion. The group-level top-line algorithm reflects mid to high-teens sustainable growth for technical apparel, high single to low double-digit annual expansion for outdoor performance, and a mid-single-digit long-term growth rate for ball and racket. Turning to the near-term guidance, we are off to a solid start in 2024 and continue to enjoy healthy mix-shift benefits led by our fastest-growing, high-margin Arc'teryx business.

Inventories finished 2023 in a healthy position.

Up 21% from the end of 2022 below our revenue growth of 23% for the full year.

Our goal is to grow inventory at a rate that is in line or below revenue growth.

Turning to the future we are happy to share our five year financial algorithm, which consists of low double digit to mid teens annual sales growth.

300 basis points of gross margin expansion and 30% to 70 basis points of annual adjusted operating margin expansion.

The group level top line algorithm reflects mid to high teen sustainable growth for technical apparel.

High single to low double digit annual expansion for outdoor performance and a mid single digit long term growth rate for ball and racket.

Turning to the mid to near term guidance, we are off to a solid start in 2024 and continue to enjoy healthy mix shift benefits led by our fastest growing high margin <unk> business.

James Zheng: Given the difficult comparison from the strong growth at the beginning of 2023, we expect revenue growth for the group in the range of 6% to 8% in Q1, which will be our slowest growth quarter of the year. This incorporates greater than 30% growth in technical apparel, flattish revenues in outdoor performance, and a low double-digit decline in ball and racket. We expect Q1 adjusted gross profit margin to be approximately 53.5%, driven primarily by mix shift benefits, and an adjusted operating profit margin of 9% to 10%. Our net finance costs for the quarter will be $100 to $110 million, and our effective tax rate will be in the range of 25% to 35%. This equates to adjusted diluted EPS in the range of a $0.01 loss to $0.02 earnings per share.

Andrew Page: Given the difficult comparison from the strong growth at the beginning of 2023, we expect revenue growth for the group in the range of 6% to 8% in Q1, which will be our slowest growth quarter of the year. This incorporates greater than 30% growth in technical apparel, flattish revenues in outdoor performance, and a low double-digit decline in ball and racket. We expect Q1 adjusted gross profit margin to be approximately 53.5%, driven primarily by mix shift benefits, and an adjusted operating profit margin of 9% to 10%. Our net finance costs for the quarter will be $100 to $110 million, and our effective tax rate will be in the range of 25% to 35%. This equates to adjusted diluted EPS in the range of a $0.01 loss to $0.02 earnings per share.

Given the difficult comparison from the strong growth at the beginning of 2023, we expect revenue growth for the group in the range of 6% to 8% in Q1, which will be our slowest growth quarter of the year.

This incorporates greater than 30% growth in technical apparel flattish revenues in outdoor performance and a low double digit decline in Boston racquet.

We expect Q1 adjusted gross profit margin to be approximately 53, 5% driven primarily by mix shift benefit.

And an adjusted operating profit margin of 9% to 10%.

Our net finance cost for the quarter will be $100 million to $110 million and our effective tax rate will be in the range of 25% to 35%.

This equates to adjusted diluted EPS in the range of $1 <unk> loss to <unk> <unk> earnings per share.

James Zheng: Keep in mind that net finance costs for the quarter include approximately $60 million of non-recurring items associated with the early extinguishment of debt, related hedge contract exit costs, and the higher interest rate on the prior debt for the first 45 days of the quarter. This non-recurring net finance cost would negatively impact Q1 EPS by $0.08 to $0.09 per share. Going forward, we expect recurring net finance costs to be in the range of $45 to $50 million on a quarterly basis. For the segments, we expect an adjusted operating profit of slightly above 20% for Technical Apparel, mid-single digits for Outdoor Performance, and low to mid-single digits for Ball and Racquet.

Andrew Page: Keep in mind that net finance costs for the quarter include approximately $60 million of non-recurring items associated with the early extinguishment of debt, related hedge contract exit costs, and the higher interest rate on the prior debt for the first 45 days of the quarter. This non-recurring net finance cost would negatively impact Q1 EPS by $0.08 to $0.09 per share. Going forward, we expect recurring net finance costs to be in the range of $45 to $50 million on a quarterly basis. For the segments, we expect an adjusted operating profit of slightly above 20% for Technical Apparel, mid-single digits for Outdoor Performance, and low to mid-single digits for Ball and Racquet.

Keep in mind that net finance costs for the quarter includes approximately $60 million of nonrecurring items associated with the early extinguishment of debt.

<unk> hedge contract exit costs and the higher interest rate on the prior debt for the first 45 days of the quarter.

This nonrecurring net finance costs will negatively impact Q1, EPS by eight to nine cents per share.

Going forward, we expect recurring net finance costs to be in the range of $45 million to $50 million on a quarterly basis.

For the segments, we expect an adjusted operating profit of slightly above 20% for technical apparel mid single digits for outdoor performance and low to mid single digits for ball and racket.

James Zheng: Turning to the full year, we expect mid-teens revenue growth for the group, which incorporates greater than 20% growth in Technical Apparel, 8% to 10% growth in Outdoor Performance, and low to mid-single digits growth in Ball and Racket. We expect more than 100 basis points of adjusted gross margin expansion to 53.5% to 54.0% in 2024, driven primarily by mix shift. This will be partially offset by SG&A deleverage. We expect an adjusted operating margin of 10.5% to 11%. For the segments, we expect an adjusted operating margin of slightly above 20% for Technical Apparel, high single digits for Outdoor Performance, and mid-single digits for Ball and Racket. You should assume full-year net financing expenses of $240 to $250 million, or approximately $180 to $190 million excluding the non-recurring items that I mentioned above of $60 million in Q1, and an effective tax rate of 25% to 35%.

Andrew Page: Turning to the full year, we expect mid-teens revenue growth for the group, which incorporates greater than 20% growth in Technical Apparel, 8% to 10% growth in Outdoor Performance, and low to mid-single digits growth in Ball and Racket. We expect more than 100 basis points of adjusted gross margin expansion to 53.5% to 54.0% in 2024, driven primarily by mix shift. This will be partially offset by SG&A deleverage. We expect an adjusted operating margin of 10.5% to 11%. For the segments, we expect an adjusted operating margin of slightly above 20% for Technical Apparel, high single digits for Outdoor Performance, and mid-single digits for Ball and Racket. You should assume full-year net financing expenses of $240 to $250 million, or approximately $180 to $190 million excluding the non-recurring items that I mentioned above of $60 million in Q1, and an effective tax rate of 25% to 35%.

Turning to the full year, we expect mid teens revenue growth for the group, which incorporates greater than 20% growth in technical apparel eight.

8% to 10% growth in outdoor performance and low to mid single digits growth in Bollywood racket.

We expect more than a 100 basis points of adjusted gross margin expansion to 53, 5% to 54.0 in 2024, driven primarily by mix shift.

This will be partially offset by SG&A deleverage we.

We expect adjusted operating margin of 10, 5% to 11%.

While this segments, we expect adjusted operating margin of slightly above 20% for technical apparel.

High single digits for outdoor performance and mid single digits for Baldwin racket.

You should assume full year net financing expenses of $240 million to $250 million.

Or approximately 190 $180 million to $190 million, excluding the nonrecurring items that I mentioned above of $60 million in the first quarter.

James Zheng: This equates to a range of $0.30 to $0.40 of adjusted diluted EPS based on 510.1 million fully diluted share count. We are assuming $250 to $260 million of depreciation and amortization, which includes $100 to $110 million of ROU depreciation. CapEx is expected to be approximately $300 million, an increase of $120 million over 2023 to support new store expansion, our SAP implementation, and distribution and logistics investments. With that, I'll turn it back to the operator for Q&A.

Andrew Page: This equates to a range of $0.30 to $0.40 of adjusted diluted EPS based on 510.1 million fully diluted share count. We are assuming $250 to $260 million of depreciation and amortization, which includes $100 to $110 million of ROU depreciation. CapEx is expected to be approximately $300 million, an increase of $120 million over 2023 to support new store expansion, our SAP implementation, and distribution and logistics investments. With that, I'll turn it back to the operator for Q&A.

And an effective tax rate of 25% to 35%.

This equates to a range of 30 to 40 of adjusted diluted EPS based on $510 1 million fully diluted share count.

We are assuming $250 million to $260 million of depreciation and amortization, which includes a $100 million to $110 million of our oyu depreciation.

Capex is expected to be approximately $300 million.

An increase of $120 million over 2023 to support new store expansion.

Our SAP implementation.

And distribution and logistics investments.

Omar Saad: Thank you. As a reminder, if you would like to ask a question, please press star followed by the number one on your telephone keypad. We also ask that you ask one multi-part question or two single-part questions. Your first question comes from the line of Matthew Boss from JPMorgan. Please go ahead.

Operator: Thank you. As a reminder, if you would like to ask a question, please press star followed by the number one on your telephone keypad. We also ask that you ask one multi-part question or two single-part questions. Your first question comes from the line of Matthew Boss from JPMorgan. Please go ahead.

With that.

I'll turn it back to the operator for Q&A.

Yeah.

A reminder, if you would like to ask a question. Please press star followed by the number one on your telephone keypad. We also ask that you ask one multipart question or single part questions. Your first question comes from the line of Matthew Boss from Jpmorgan. Please go ahead.

Matthew Boss: Great. Thanks. Congrats on your Q1 out of the gate.

Matthew Boss: Great. Thanks. Congrats on your Q1 out of the gate.

Andrew Page: Thanks, Matt.

Andrew Page: Thanks, Matt.

Great. Thanks, and congrats on your first quarter out of the gate.

James Zheng: Two-part question. Maybe first, could you just elaborate on the momentum that you're seeing at the Arc'teryx brand across regions or channels, just supporting the Q1 guidance of more than 30% technical apparel revenue growth? Then for Andrew, could you just help bridge the embedded top-line progression from 6% to 8% revenue growth in the Q1 to mid-teens growth for the full year?

Matthew Boss: Two-part question. Maybe first, could you just elaborate on the momentum that you're seeing at the Arc'teryx brand across regions or channels, just supporting the Q1 guidance of more than 30% technical apparel revenue growth? Then for Andrew, could you just help bridge the embedded top-line progression from 6% to 8% revenue growth in the Q1 to mid-teens growth for the full year?

Thanks, Matt.

Two part question, maybe first could you just elaborate on the momentum that youre seeing at the art Terex brand across regions or channels, just supporting that first quarter guidance of more than 30% technical apparel revenue growth.

And then for Andrew could you just help bridge the embedded topline progression from 6% to 8% revenue growth in the first quarter to mid teens growth for the full year.

Stuart Haselden: Hey, Matt. It's Stuart. I'll speak to your first question there. Q4 ended very strong for Arc'teryx. We saw results that exceeded our expectations to end the year, and we've seen that momentum carry forward into the Q1. We're actually seeing sequential strengthening in our underlying KPIs across our direct-to-consumer business. Traffic and conversion in both our stores and our digital websites performing very well. We're in a very strong in-stock position from an inventory standpoint. The combination of those things are leading us to the guidance that we shared with you.

Stuart Haselden: Hey, Matt. It's Stuart. I'll speak to your first question there. Q4 ended very strong for Arc'teryx. We saw results that exceeded our expectations to end the year, and we've seen that momentum carry forward into the Q1. We're actually seeing sequential strengthening in our underlying KPIs across our direct-to-consumer business. Traffic and conversion in both our stores and our digital websites performing very well. We're in a very strong in-stock position from an inventory standpoint. The combination of those things are leading us to the guidance that we shared with you.

Hey, Matt It's Stuart I'll speak to the to your first question there so.

Fourth quarter <unk>.

And it's very strong for our Terex, we saw results that exceeded our expectations to end the year and we've seen that momentum carry forward into the first quarter, we're actually seeing sequential strengthening in our underlying kpis.

Across.

Our direct to consumer business.

So traffic and conversion in our stores and our digital websites and are performing very well.

We're in a very strong in stock position from an inventory standpoint, so the combination of those things.

Andrew Page: Hey, thanks, Matt. This is Andrew. As you think about the progression of our quarters, like I said in my prepared remarks, Q1 is going to be our lowest growth quarter given the comparison issues that we talked about exiting 2022 that carried over into Q1 2023. While we haven't given cadence for the full year, what I will tell you is that you could expect each of the rest of the year is mid-teens up for the rest of the year to equate to the full-year guidance of mid-teens, and Q4 being our strongest quarter of this year from a growth perspective, again, coming off of easy compare in 2023 for all the reasons that we talked about.

Andrew Page: Hey, thanks, Matt. This is Andrew. As you think about the progression of our quarters, like I said in my prepared remarks, Q1 is going to be our lowest growth quarter given the comparison issues that we talked about exiting 2022 that carried over into Q1 2023. While we haven't given cadence for the full year, what I will tell you is that you could expect each of the rest of the year is mid-teens up for the rest of the year to equate to the full-year guidance of mid-teens, and Q4 being our strongest quarter of this year from a growth perspective, again, coming off of easy compare in 2023 for all the reasons that we talked about.

<unk> are leading us to the guidance that we shared with you.

Okay.

Thanks, Matt. This is this is Andrew as you think about the progression of our quarters.

Like I said in my prepared remarks, Q1 is going to be our lowest growth quarter.

Given the comparison issues that we talked about exiting 2022 that carried over into the first quarter of 2023, while we haven't given cadence for the full year. What I will tell you is that you can expect each of the.

The rest of the year is mid double digit mid teens up for the rest of the year to equate to the full year guidance of mid teens in Q4.

Being our strongest quarter of this year from a growth perspective again coming off of an easy compare in 2023 for all the reasons that we've talked about.

Stuart Haselden: Hey, Matt. It's Omar. I'll just add one thing. The comparison's gotten 20 points easier going from Q1 to Q4. Also the Arc'teryx store openings. We're opening more new, larger Arc'teryx stores this year than we have in any year in the past, including some of the key store openings late in 2023 and in H1 2024, so well before the key winter season, which is going to just drive a much bigger kind of conversion and revenue volume in H2 for that brand, which is already growing at a fast rate. Thanks.

Omar Saad: Hey, Matt. It's Omar. I'll just add one thing. The comparison's gotten 20 points easier going from Q1 to Q4. Also the Arc'teryx store openings. We're opening more new, larger Arc'teryx stores this year than we have in any year in the past, including some of the key store openings late in 2023 and in H1 2024, so well before the key winter season, which is going to just drive a much bigger kind of conversion and revenue volume in H2 for that brand, which is already growing at a fast rate. Thanks.

Hey, Matt It's Omar I'll, just add one thing so the comparisons get 20 points easier going from the from the first quarter to the fourth quarter, but also the <unk> store openings were opening more new larger <unk> stores. This year than we have in any year in the past.

Including some of the key openings store openings late in 2023 and in the first half of 2024, so well before the key winter season, which is going to just drive a much bigger kind of conversion and revenue volume in the back half for that brand, which is already growing at a fast rate.

James Zheng: Great color. Best of luck.

Matthew Boss: Great color. Best of luck.

Omar Saad: Your next question comes from the line of Lorraine Hutchinson from Bank of America. Please go ahead.

Operator: Your next question comes from the line of Lorraine Hutchinson from Bank of America. Please go ahead.

Thats great color best of luck.

Your next question comes from the line of Lorraine Hutchinson from Bank of America. Please go ahead.

Lorraine Hutchinson: Thank you. Good morning. Can you talk about the drivers of the decline in outdoor margin that you're guiding to in Q1, and then what changes to lead to the nice expansion embedded in the guidance for the year?

Lorraine Hutchinson: Thank you. Good morning. Can you talk about the drivers of the decline in outdoor margin that you're guiding to in Q1, and then what changes to lead to the nice expansion embedded in the guidance for the year?

Thank you good morning.

Can you talk about the drivers.

Of the decline in outdoor margin that youre guiding to in the first quarter and then what changes to lead to the nice expansion and probably.

Andrew Page: Yeah. When you think about the Outdoor Performance, there is meaningful investment built into H1 of this year. As you know, that business is primarily D2C-driven in Greater China. But outside of Greater China, the meaningful wholesale business, we will continue to invest in the footwear business related to Outdoor Performance, especially into North America. The other phenomenon in there is winter sports equipment is part of Outdoor Performance. As you know, we talked about winter sports equipment having a strong Q4, which was primarily weather-driven in the sense that weather got bad early, people bought early, and that's created a softer Q1. Footwear within Outdoor Performance is performing really well. Winter sports equipment, which is part of Outdoor Performance, is having a softer Q1 coming off a really strong Q4.

Andrew Page: Yeah. When you think about the Outdoor Performance, there is meaningful investment built into H1 of this year. As you know, that business is primarily D2C-driven in Greater China. But outside of Greater China, the meaningful wholesale business, we will continue to invest in the footwear business related to Outdoor Performance, especially into North America. The other phenomenon in there is winter sports equipment is part of Outdoor Performance. As you know, we talked about winter sports equipment having a strong Q4, which was primarily weather-driven in the sense that weather got bad early, people bought early, and that's created a softer Q1. Footwear within Outdoor Performance is performing really well. Winter sports equipment, which is part of Outdoor Performance, is having a softer Q1 coming off a really strong Q4.

Within the guidance for the year.

Okay.

Yeah. So when you think about the outdoor performance there is meaningful investment built into the first half of this year as you know that business is primarily <unk>, driven and in greater China, but outside of greater China, the meaningful wholesale business, we will continue.

To invest in the business the footwear business related to outdoor performance.

Especially into North America. The other the other phenomenon in there is when a sports equipment as part of outdoor performance.

And as you know when we talked about winter sports equipment, having a strong fourth quarter, which was primarily weather driven in the sense that weather got bet early people bought early and Thats created a softer first quarter.

So footwear within outdoor performance.

<unk> is performing really really well when a sports equipment, which is part of outdoor performance is having a softer first quarter coming off a really strong fourth quarter.

Stuart Haselden: Randy, do you have another one?

Stuart Haselden: Randy, do you have another one?

Omar Saad: No. Thank you. Your next question comes from the line of Brooke Roach from Goldman Sachs. Please go ahead.

Lorraine Hutchinson: No. Thank you.

Operator: Your next question comes from the line of Brooke Roach from Goldman Sachs. Please go ahead.

Brian did you have another one.

No. Thank you.

Okay.

Brooke Roach: Good morning, and thank you for taking our question. I was hoping you could elaborate on the outlook for North America growth for both the outdoor performance and ball and racket segments as you move throughout the year. How are you thinking about the idiosyncratic growth opportunity given the momentum of your brand and growth of footwear, and what trends are you seeing with your partners as they manage through inventory and current demand levels? Thank you.

Brooke Roach: Good morning, and thank you for taking our question. I was hoping you could elaborate on the outlook for North America growth for both the outdoor performance and ball and racket segments as you move throughout the year. How are you thinking about the idiosyncratic growth opportunity given the momentum of your brand and growth of footwear, and what trends are you seeing with your partners as they manage through inventory and current demand levels? Thank you.

Your next question comes from the line of Brooke Roach from Goldman Sachs. Please go ahead.

Good morning, and thank you for taking our question I was hoping you could elaborate on the outlook for North America growth for both the outdoor performance and bond market segments. As you move throughout the year. How are you thinking about the idiosyncratic growth opportunity given the momentum of your brands Progressive footwear and what trends are you seeing with your partners as they manage through.

Tori and current demand levels. Thank you.

Franco Fogliato: Hi. This is Franco. Thanks for the question. Look, we're at the beginning of accelerating North America. We see definitely some consciousness from the retailers into pre-orders, but we're seeing also strong in-season reorders. We've seen that in Q4 as well as we enter the year. We announced later last year that we have recruited a new leader for our Americas business, a gentleman that used to run the Hoka brand for North America. We believe there are plenty of opportunities, in particular creating this unique competitive advantage through the outdoor sneakers, as well as there is a strong demand for an outsider brand into the specialty channel. Yeah. We're excited about the opportunity.

Franco Fogliato: Hi. This is Franco. Thanks for the question. Look, we're at the beginning of accelerating North America. We see definitely some consciousness from the retailers into pre-orders, but we're seeing also strong in-season reorders. We've seen that in Q4 as well as we enter the year. We announced later last year that we have recruited a new leader for our Americas business, a gentleman that used to run the Hoka brand for North America. We believe there are plenty of opportunities, in particular creating this unique competitive advantage through the outdoor sneakers, as well as there is a strong demand for an outsider brand into the specialty channel. Yeah. We're excited about the opportunity.

Okay.

Hi, This is Frank thanks.

Thanks for the question look at D.

At the beginning of accelerating North America, we see definitely some consciousness from the retailers into Reorders, but we're seeing also strong in season Reorders, we've seen that in Q4 as well as we enter the year.

We announced.

Later last year that we've recruited a new leader for our Americas business. The gentleman that used to run the <unk> brand for North America. We believe there are plenty of opportunities in particular 318. This unique competitive advantage to the out to door sneakers as well as there is strong demand for now.

Side, the brand into the specialty channel.

Andrew Page: From a Wilson perspective in ball and racket sports, again, we continue to be a market leader in almost every category that we participate in. We continue to win with our trade accounts. We obviously have talked about the excess inventory in the trade accounts, and our insights would suggest that you're going to see some of that trend, and some of the retailers moving through inventory in the H1 of the year, and that return to a more normalized cadence in the H2 of the year. The thing that's important to us is that we continue to be category leaders in each of the categories that we participate in. We continue to get strong insights from our retail partners. As that channel normalizes, we think we're going to continue to be a winner there.

Andrew Page: From a Wilson perspective in ball and racket sports, again, we continue to be a market leader in almost every category that we participate in. We continue to win with our trade accounts. We obviously have talked about the excess inventory in the trade accounts, and our insights would suggest that you're going to see some of that trend, and some of the retailers moving through inventory in the H1 of the year, and that return to a more normalized cadence in the H2 of the year. The thing that's important to us is that we continue to be category leaders in each of the categories that we participate in. We continue to get strong insights from our retail partners. As that channel normalizes, we think we're going to continue to be a winner there.

Yes, so we're excited about the opportunity.

Uh huh.

And from a Wilson perspective, and borrowing racquet sports again.

We continue to be a market leader in almost every category that we participate in we continue to.

When with our trade accounts.

We obviously have talked about the excess inventory in the trade accounts.

Our insights, which suggests that youre going to see some of the some of that trend in some of the retailers moving through inventory in the first half of the year and that return to a more normalized cadence in the back half of the year, but the thing Thats important to US is that we continue to be category leaders in each of the categories that we participate in we continue to get strong and rates from.

Our retail partners.

And as that as that.

Channel Normalizes, we think we're going to continue to be a winner there.

Stuart Haselden: Yeah. I would add, this is Omar, one of the things that gives us confidence early on in the year is seeing that gross margin actualization rate for the Wilson brand really pop back up again now that our inventories are clean. Yes, the retailers aren't, the industry is not right where we want it to be, but we feel in really good shape in terms of how our brand is performing in the market share there. Thanks.

Omar Saad: Yeah. I would add, this is Omar, one of the things that gives us confidence early on in the year is seeing that gross margin actualization rate for the Wilson brand really pop back up again now that our inventories are clean. Yes, the retailers aren't, the industry is not right where we want it to be, but we feel in really good shape in terms of how our brand is performing in the market share there. Thanks.

Yes, I would add Omar one of the things that gives us confidence early on the year is seeing that gross margin accurate actualization rate for the Wilson brand really popped back up again now that our inventories are clean yes, the retailers aren't in the industry and that right, where we wanted debate and we feel really good shape in terms of our brand is performing in the mark.

Omar Saad: Your next question comes from the line of Paul Lejuez from Citigroup. Please go ahead.

Operator: Your next question comes from the line of Paul Lejuez from Citigroup. Please go ahead.

Are there.

Thanks.

Your next question comes from the line of Paul <unk> from Citigroup. Please go ahead.

Kelly Crago: Hi. This is Kelly Crago for Paul. Thanks for taking your question. Just wanted to follow up on the ball and racket acceleration that's implied in your full-year guidance. Is that something you see based on your order books, or is this something related to some of the new innovation that you plan on putting out, particularly in the baseball category? Anything you could elaborate there? And then just if we could just get an update on what's going on in China. I know you have very strong performance there, but the macro has been volatile. So if you could just provide any additional color, that'd be helpful. Thank you.

Kelly Crago: Hi. This is Kelly Crago for Paul. Thanks for taking your question. Just wanted to follow up on the ball and racket acceleration that's implied in your full-year guidance. Is that something you see based on your order books, or is this something related to some of the new innovation that you plan on putting out, particularly in the baseball category? Anything you could elaborate there? And then just if we could just get an update on what's going on in China. I know you have very strong performance there, but the macro has been volatile. So if you could just provide any additional color, that'd be helpful. Thank you.

Hi, just a follow up on that.

I'm sorry. This is Kelly on for Paul Thanks for taking my question.

I just wanted to follow up on the bottle rocket acceleration that's implied in your full year guidance is that something you see with based on your order books or is this something related to some of the new innovation that you plan on putting out.

Particularly in the baseball category.

And you could elaborate there and then just if we could just get lucky on on what's going on in China. I know you had very strong performance there, but the macro.

Joe Dudy: Hi. This is Joe Doody, the CEO of Wilson. I'll comment on the Wilson question first. What we're really seeing is that the participation is still strong in our categories, and the sell-through from feedback from our retailers is positive too. It's working through the inventories. As you stated, we have great product launches, especially in tennis and baseball, our two largest categories, especially in North America. We recently just launched the Blade tennis racket, which is our No. 1-selling tennis racket, and the expectations have been exceeding our outlook so far, so we're confident in that. Then the baseball market, the new season really starts in June, July, and we have new product launches there. One of the things we're doing is we went through over the COVID period.

Joe Dudy: Hi. This is Joe Doody, the CEO of Wilson. I'll comment on the Wilson question first. What we're really seeing is that the participation is still strong in our categories, and the sell-through from feedback from our retailers is positive too. It's working through the inventories. As you stated, we have great product launches, especially in tennis and baseball, our two largest categories, especially in North America. We recently just launched the Blade tennis racket, which is our No. 1-selling tennis racket, and the expectations have been exceeding our outlook so far, so we're confident in that. Then the baseball market, the new season really starts in June, July, and we have new product launches there. One of the things we're doing is we went through over the COVID period.

And volatile, but if you could just provide any additional color there that'd be helpful. Thank you.

Yeah, Hi, this is Joe Doody, the CEO, Bob Wilson, So I'll comment on that.

Question first.

What we're really seeing is that the participation is still strong in our categories in the sell through from feedback from our retailers is positive.

Your first question comes from the line of Matthew Boss from Jpmorgan. Please go ahead.

Thanks, and congrats on your first quarter out of the gate.

Thanks, Matt.

Two part question, maybe first could you just elaborate on the momentum that youre seeing at the art Terex brand.

Ross regions or channels, just supporting that first quarter guidance of more than 30% technical apparel revenue growth and then for Andrew could you just help bridge the embedded topline progression from 6% to 8% revenue growth in the first quarter to mid teens growth for the full year.

Joe Dudy: We ended up moving our bat product launches to two-year product launches, and we're moving those back starting this year to one-year product launches to create that newness in the marketplace. We have a lot of confidence. I'd just add that we got out of the gates really strong last year. We grew 14% across the board in Q1 of 2023. That's not a sustainable number. It was replenishing and probably getting the inventories too high. The comps, as we get through the rest of the year, will be easier from the ball sports perspective.

Joe Dudy: We ended up moving our bat product launches to two-year product launches, and we're moving those back starting this year to one-year product launches to create that newness in the marketplace. We have a lot of confidence. I'd just add that we got out of the gates really strong last year. We grew 14% across the board in Q1 of 2023. That's not a sustainable number. It was replenishing and probably getting the inventories too high. The comps, as we get through the rest of the year, will be easier from the ball sports perspective.

Yeah.

Hey, Matt It's Stuart I'll speak to the to your first question there so.

Fourth quarter.

And it's very strong for our Terex, we saw results that exceeded our expectations to end the year and we've seen that momentum carry forward into the first quarter, we're actually seeing sequential strengthening in our underlying kpis are across.

Our direct to consumer business.

Stuart Haselden: James?

Stuart Haselden: James?

So traffic and conversion.

James Zheng: I'm trying. We see very positive growth for our business in China markets, and we believe our brands have a very good competitive advantage in China given the foundation and infrastructure we built that. In China, I mean, even the overall economy still faces level of challenge, but the category we are sitting in, I mean, I would say they're still on trend. Okay. All the brands, especially Arc'teryx and Salomon, really performed extremely well in 2023. Also the beginning of the year, we also see a great improvement from our business. We still see a very good progression of our business in China market.

James Zheng: I'm trying. We see very positive growth for our business in China markets, and we believe our brands have a very good competitive advantage in China given the foundation and infrastructure we built that. In China, I mean, even the overall economy still faces level of challenge, but the category we are sitting in, I mean, I would say they're still on trend. Okay. All the brands, especially Arc'teryx and Salomon, really performed extremely well in 2023. Also the beginning of the year, we also see a great improvement from our business. We still see a very good progression of our business in China market.

Both our stores and our digital websites.

Performing very well.

We're in a very strong in stock position from an inventory standpoint.

So the combination of those things are leading us to the guidance that we shared with you.

Thanks, Matt. This is this is Andrew as you think about the progression of our quarters.

As I said in my prepared remarks, Q1 is going to be our lowest growth quarter. Given the comparison issues that we talked about exiting 2022 that carried over into the first quarter of 2023, while we haven't given cadence for the full year. What I will tell you is that you can expect each of the the rest.

The year is mid double digit mid teens up for the rest of the year to equate to the full year guidance of mid teens in Q4.

Being our strongest quarter of this year from a growth perspective again coming off of an easy compare in 2023 for all the reasons that we've talked about.

Okay.

Hey, Matt It's Omar I'll, just add one thing so the comparisons get 20 points easier going from the from the first quarter to the fourth quarter, but also the <unk> store openings were opening more new larger <unk> stores. This year than we have in any year in the past the key including some of the key openings store openings late in 2023 and in the first half of 2024.

Omar Saad: Thank you. Your next question comes from the line of Alex Straton from Morgan Stanley. Please go ahead.

Operator: Thank you. Your next question comes from the line of Alex Straton from Morgan Stanley. Please go ahead.

Alex Straton: Perfect. Thanks for taking the question. I wanted to focus on technical apparel, the full-year guidance for over 20% growth. Can you just walk us through what you're assuming for D2C, China, and North America specifically, or any color? Also, what's driving that it looks like a deceleration throughout the year given Q1 is at 30%? Thanks a lot.

Alex Straton: Perfect. Thanks for taking the question. I wanted to focus on technical apparel, the full-year guidance for over 20% growth. Can you just walk us through what you're assuming for D2C, China, and North America specifically, or any color? Also, what's driving that it looks like a deceleration throughout the year given Q1 is at 30%? Thanks a lot.

Well before the key winter season, which is going to just drive a much bigger kind of conversion and revenue volume in the back half for that brand, which is already growing at a fast rate.

Great color best of luck.

Your next question comes from the line of Lorraine Hutchinson from Bank of America. Please go ahead.

Thank you good morning can.

Can you talk about the drivers.

Of the decline in outdoor margin that youre guiding to in the first quarter and then what changes to lead to the nice expansion and better than the guidance for the year.

Stuart Haselden: Hey, Alex. It's Stuart. We're really pleased with the balanced growth that we're seeing regionally across North America and China. Both regions grew at a similar pace, both in Q4 and through the initial portion of Q1. We're seeing just broad-based regional strength for the brand, and we're also really happy with what we're seeing in Europe and Asia outside of China. The underlying strength of the business, as I mentioned in the earlier question, is really from the fundamentals of our D2C business. Traffic conversion increases. We're actually seeing also reductions in markdown rate and return rate. It's both within our retail stores as well as our e-commerce business.

Stuart Haselden: Hey, Alex. It's Stuart. We're really pleased with the balanced growth that we're seeing regionally across North America and China. Both regions grew at a similar pace, both in Q4 and through the initial portion of Q1. We're seeing just broad-based regional strength for the brand, and we're also really happy with what we're seeing in Europe and Asia outside of China. The underlying strength of the business, as I mentioned in the earlier question, is really from the fundamentals of our D2C business. Traffic conversion increases. We're actually seeing also reductions in markdown rate and return rate. It's both within our retail stores as well as our e-commerce business.

Okay.

Yes, so when you think about the outdoor performance there is meaningful investment built into the first half of this year as you know that business is primarily <unk> driven and in.

In greater China, but outside of greater China, the meaningful wholesale business.

We will continue to invest in the business the footwear business related to outdoor performance.

Especially in North America. The other the other phenomenon in there is when a sports equipment as part of outdoor performance and.

And as you know when we talked about winter sports equipment, having a strong fourth quarter, which was primarily weather driven in the sense that weather got bet early people bought early and Thats created a softer first quarter.

Stuart Haselden: Broad-based strength, and we see that also connected to a really strong and healthy inventory position, stronger than we've been in prior periods just given the supply chain challenges that we had related to COVID going back 18 months. Overall, really healthy position. As we look forward for the full-year guide versus the Q1 guide, we're going to plan the business in a responsible manner. We're going to plan the sales and the inventory in a place that we feel is appropriate for the business. If demand materializes above these levels, we're in a position where we can capture higher sales levels. The inventory position we have will afford that. We're planning our expenses and our capital investments in a place that we see is responsible, and that's connected to that 20% full-year guide.

Stuart Haselden: Broad-based strength, and we see that also connected to a really strong and healthy inventory position, stronger than we've been in prior periods just given the supply chain challenges that we had related to COVID going back 18 months. Overall, really healthy position. As we look forward for the full-year guide versus the Q1 guide, we're going to plan the business in a responsible manner. We're going to plan the sales and the inventory in a place that we feel is appropriate for the business. If demand materializes above these levels, we're in a position where we can capture higher sales levels. The inventory position we have will afford that. We're planning our expenses and our capital investments in a place that we see is responsible, and that's connected to that 20% full-year guide.

Footwear within outdoor performance.

Is performing really really well when a sports equipment, which is part of outdoor performance is having a softer first quarter coming off a really strong fourth quarter.

Brian did you have another one.

No. Thank you.

Yes.

Your next question comes from the line of Brooke Roach from Goldman Sachs. Please go ahead.

Good morning, and thank you for taking our question I was hoping you could elaborate on the outlook for North America growth for both the outdoor performance and bond market segments. As you move throughout the year. How are you thinking about the idiosyncratic growth opportunity given the momentum of your brands across footwear and what trends are you seeing with your partners as they manage through.

<unk> current demand levels.

No.

Okay.

Hi, This is Frank thanks.

Thanks for the question look at D.

Omar Saad: Your next question comes from the line of Ike Boruchow from Wells Fargo. Please go ahead.

Operator: Your next question comes from the line of Ike Boruchow from Wells Fargo. Please go ahead.

At the beginning of accelerating North America, we see definitely some consciousness from the retailers into preorders, but we're seeing also strong in season Reorders, we've seen that in Q4 as well as we enter the year.

Ike Boruchow: Hey, guys. Good morning. Two from me, one specific to the guide and one bigger picture. Just on the guide, maybe to Stuart, can you give us specifically what's embedded in your guidance on door expansion this year? If you're able to, can you talk about what omni-comp you're baking in for both Q1 and the full year? To the team, just more detail on how the brands are positioned in China today. How do you think about them? How are they different? What would be really interesting to hear? Thanks.

Ike Boruchow: Hey, guys. Good morning. Two from me, one specific to the guide and one bigger picture. Just on the guide, maybe to Stuart, can you give us specifically what's embedded in your guidance on door expansion this year? If you're able to, can you talk about what omni-comp you're baking in for both Q1 and the full year? To the team, just more detail on how the brands are positioned in China today. How do you think about them? How are they different? What would be really interesting to hear? Thanks.

Announcer.

Late last year that we have recruited a new leader for our Americas business. The gentleman that used to run the <unk> brand for North America. We believe there are plenty of opportunities in particular, creating this unique competitive advantage that will be out of those sneakers as well as there is a stronger demand for now.

Outside the brand into the specialty channel.

Stuart Haselden: Yeah. Hey, it's Stuart. I'll start with your first question there. We're planning to open a net of around 30 doors in Arc'teryx this year, and we'll see more than half of those stores in North America. We're excited for a number of the new locations that we're opening and planning across all our regions. We'll see important flagships in Europe as well as North America. We just opened a 7,000 sq ft flagship in Covent Garden this past week. We'll open flagships in Toronto and also in New York City, a part of the projections that I just mentioned. Then from an omni-comp standpoint, I think we've shared mid-teens overall for the full year, and so pretty confident with that level of growth. James, on the different brand positioning in China?

Stuart Haselden: Yeah. Hey, it's Stuart. I'll start with your first question there. We're planning to open a net of around 30 doors in Arc'teryx this year, and we'll see more than half of those stores in North America. We're excited for a number of the new locations that we're opening and planning across all our regions. We'll see important flagships in Europe as well as North America. We just opened a 7,000 sq ft flagship in Covent Garden this past week. We'll open flagships in Toronto and also in New York City, a part of the projections that I just mentioned. Then from an omni-comp standpoint, I think we've shared mid-teens overall for the full year, and so pretty confident with that level of growth. James, on the different brand positioning in China?

Yes, so we're excited about the opportunity.

Uh huh.

And from a Wilson perspective, and borrowing racquet sports again.

We continue to be a market leader in almost every category that we participate in we continue to.

To win with our trade accounts.

We obviously have talked about the excess inventory in the trade accounts.

Our insights would suggest that youre going to see some of the some of that trend in some of the retailers moving through inventory in the first half of the year and that return to a more normalized cadence in the back half of the year, but the thing Thats important to US is that we continue to be category leaders in each of the categories that we participate in we continue to get strong insights.

Our retail partners.

And as that.

Channel Normalizes, we think we're going to continue to be a winner there.

Yes, I would add.

One of the things that gives us confidence early on the year is seeing that gross margin accurate actualization rate for the Wilson brand really popped back up again now that our inventories are clean yes, the retailers aren't in the industry and that right, where we wanted debate and we felt really good shape in terms of our brand is performing in the market share there.

Franco Fogliato: Yeah. I just add on certain points here. It's for Arc'teryx brand. Arc'teryx is really being positioned at the pinnacle in outdoor segments. After four years' cultivation, I mean, we really made Arc'teryx become the best sporting goods brand in China in terms of the quality of the retail environment we created in the market as well as the productivity by stores, and we really outperform the industry. I'll just give you an example. Recently, in mid January, we just opened a 20,000-square-foot flagship store in Shanghai, four-story independent buildings. Within 30 days, the sales revenue already reached $3.2 million. So it's, I mean, I think when you have a chance to visit China and you really look at the store, I mean, Arc'teryx stores, it's a big destination as kind of the level of the premiums.

James Zheng: Yeah. I just add on certain points here. It's for Arc'teryx brand. Arc'teryx is really being positioned at the pinnacle in outdoor segments. After four years' cultivation, I mean, we really made Arc'teryx become the best sporting goods brand in China in terms of the quality of the retail environment we created in the market as well as the productivity by stores, and we really outperform the industry. I'll just give you an example. Recently, in mid January, we just opened a 20,000-square-foot flagship store in Shanghai, four-story independent buildings. Within 30 days, the sales revenue already reached $3.2 million. So it's, I mean, I think when you have a chance to visit China and you really look at the store, I mean, Arc'teryx stores, it's a big destination as kind of the level of the premiums.

Thanks.

Your next question comes from the line of Paul <unk> from Citigroup. Please go ahead.

I can follow up on the I'm sorry. This is Kelly on for Paul Thanks for taking my question.

I just wanted to follow up on the bottle rocket acceleration that's implied in your full year guidance is that something you see with based on your order books or is this something related to the menu innovation that you plan on putting out.

Particularly in the baseball category.

And you could elaborate there and then just if we could just get lucky on on what's going on in China, I know you've had very strong performance there, but the macro.

Been volatile so if you could just provide any additional color there that'd be helpful. Thank you.

Yeah, Hi, this is Joe Doody, the CEO, Bob Wilson, So I'll comment on the <unk>.

Franco Fogliato: I mean, not only the premium, but also at the luxury segment. Our product is on par with a brand like Moncler, okay, in China markets.

James Zheng: I mean, not only the premium, but also at the luxury segment. Our product is on par with a brand like Moncler, okay, in China markets.

Question first.

What we're really seeing is that the participation is still strong in our categories in the sell through from feedback from our retailers is positive too. So it's working through the inventories, but as you stated we have great.

Andrew Page: Got it. Thank you very much.

Ike Boruchow: Got it. Thank you very much.

Omar Saad: Your next question comes from the line of Michael Binetti from Evercore ISI. Please go ahead.

Operator: Your next question comes from the line of Michael Binetti from Evercore ISI. Please go ahead.

Great product launches, especially in tennis and baseball, our two largest categories, especially in North America, and we recently just launched.

Michael Binetti: Hey, guys. Thanks for taking our questions. Congrats on the Q1 out of the gate here. I guess a few on coming into the year. Are the Wilson inventory issues past us at this point? On the cold weather, I know it's been a little bit unfavorable weather. Any sense from the channel of competitors that might have inventory stuck in the channel that might be cleared, or any consideration you added to your gross margin expectations for the year if we do see some competitor clearing?

Michael Binetti: Hey, guys. Thanks for taking our questions. Congrats on the Q1 out of the gate here. I guess a few on coming into the year. Are the Wilson inventory issues past us at this point? On the cold weather, I know it's been a little bit unfavorable weather. Any sense from the channel of competitors that might have inventory stuck in the channel that might be cleared, or any consideration you added to your gross margin expectations for the year if we do see some competitor clearing?

The blade tennis, racquet, which is our number one selling tennis rocket in the expectations.

<unk> been exceeding our outlook. So parcel we're confident in that and then the baseball market.

New season really starts in June July and we have new product launches there and one of the things we're doing as we went through over the Covid period, we ended up moving our bat product launches to to your product launches and we're moving those box starting this year to one year product launches to create that newness.

Joe Dudy: Yeah. Thanks, Michael. This is Andrew. We talked about this a lot. We feel really good about how we exited 2023 with our inventory in Wilson. As a matter of context, we cleared about $90 million of inventory in Wilson that was deemed desirable to move through a slower moving in H2 2023. We stepped into 2024, we feel good about it. As Omar alluded to earlier, you can meaningfully see the step-up in realized gross profit per product sold as soon as we got into 2024, which is an indicator in our minds, number one, of the heat of our brand, how our retail partners appreciate us, and the fact that moving through in the promotional environment, as it related to our product, was meaningfully tied to getting through December. We're moving our product at strong gross margins now.

Andrew Page: Yeah. Thanks, Michael. This is Andrew. We talked about this a lot. We feel really good about how we exited 2023 with our inventory in Wilson. As a matter of context, we cleared about $90 million of inventory in Wilson that was deemed desirable to move through a slower moving in H2 2023. We stepped into 2024, we feel good about it. As Omar alluded to earlier, you can meaningfully see the step-up in realized gross profit per product sold as soon as we got into 2024, which is an indicator in our minds, number one, of the heat of our brand, how our retail partners appreciate us, and the fact that moving through in the promotional environment, as it related to our product, was meaningfully tied to getting through December. We're moving our product at strong gross margins now.

In the marketplace. So we have a lot of confidence not just add that we got out of the gates really strong last year, we grew 14%.

Cross the board in Q1 of 2023, that's not a sustainable number was replenishing and probably getting the inventories too high so the comps as we get through the rest of the year will be easier from the ball sports perspective.

James.

Yes.

So we see.

Sure.

Very positive growth for our business in China market and.

We believe our brands have a very good competitive advantage in China, given the foundation that being.

Structure, we've built that.

And.

In China.

Joe Dudy: We definitely do continue to feel the excess inventory in the market with our retail partners. Again, we believe that we are positioned primarily as that moves through. To your point about what we've embedded in our plan, we've embedded in our plan that H1 2024 will continue to drive toward normalization, and you start to see more normalized rates in H2 2024.

Andrew Page: We definitely do continue to feel the excess inventory in the market with our retail partners. Again, we believe that we are positioned primarily as that moves through. To your point about what we've embedded in our plan, we've embedded in our plan that H1 2024 will continue to drive toward normalization, and you start to see more normalized rates in H2 2024.

I mean, even the overall economy still face level challenged category, we are sitting and Oh, I still I mean Barry.

I will say that Stu.

Downtrend, Okay. So.

Auto brands, especially our character Salamone really performed extremely well in 2043 and also the beginning of the year.

We also see.

Great improvement for our business, though.

Stuart Haselden: Maybe Joe and Franco, you guys could give a quick summary of what you're seeing, what your retail partners and what you're hearing in the market and what your retail partners are telling you, starting with Franco and then Joe.

Stuart Haselden: Maybe Joe and Franco, you guys could give a quick summary of what you're seeing, what your retail partners and what you're hearing in the market and what your retail partners are telling you, starting with Franco and then Joe.

We still see.

Very good progressing.

Our business in China market.

Franco Fogliato: Yeah. Thanks for the question. We're seeing inventory normalizing. We're very happy where we stand out there from a Salomon perspective, in particular with Footwear. We know retailers being very conscious on their booking for 2024, and this is really translating in the very strong replenishment business we're seeing at the beginning of the year, which was a continuation of Q4. We're very pleased with where we stand at the moment. We'd like to think that the wholesale sales will be a little healthier. We'll be in a longer term in a much better position. In the short term, some pain, but we're continuing to gain market shares.

Franco Fogliato: Yeah. Thanks for the question. We're seeing inventory normalizing. We're very happy where we stand out there from a Salomon perspective, in particular with Footwear. We know retailers being very conscious on their booking for 2024, and this is really translating in the very strong replenishment business we're seeing at the beginning of the year, which was a continuation of Q4. We're very pleased with where we stand at the moment. We'd like to think that the wholesale sales will be a little healthier. We'll be in a longer term in a much better position. In the short term, some pain, but we're continuing to gain market shares.

Yeah.

Yes.

Thanks.

Your next question comes from the line of Alex <unk> from Morgan Stanley. Please go ahead.

Perfect. Thanks for taking the question I wanted to focus on the technical apparel.

Full year guidance for over 20% growth can you just walk us through what you're assuming for DTC, China, and North America, specifically or any color.

And then also what's driving that it looks like a deceleration throughout the year given one came at that 30%. Thanks a lot.

James Zheng: Joe?

Michael Binetti: Joe?

Andrew Page: Yes. For Wilson, what we're hearing back is that the consumer, we know, that the wholesalers, from a trade perspective, are being more cautious on their replenishments and waiting until they have stronger visibility. What we're hearing from them also is that they're seeing the consumers are waiting closer until they need the product. There's not a fear of it maybe being out of stock, so they're waiting closer to, say, the baseball season starts till the weather breaks for golf. We're positive, and we see, again, that the participation rates are really staying robust and strong. We expect that consumer demand to come. Then some of the feedback we're getting from our retailers in our leading categories is we continue to outperform the competition in the sell-through. We're excited, and it shows that strength in our position in the marketplace for Wilson.

Joe Dudy: Yes. For Wilson, what we're hearing back is that the consumer, we know, that the wholesalers, from a trade perspective, are being more cautious on their replenishments and waiting until they have stronger visibility. What we're hearing from them also is that they're seeing the consumers are waiting closer until they need the product. There's not a fear of it maybe being out of stock, so they're waiting closer to, say, the baseball season starts till the weather breaks for golf. We're positive, and we see, again, that the participation rates are really staying robust and strong. We expect that consumer demand to come. Then some of the feedback we're getting from our retailers in our leading categories is we continue to outperform the competition in the sell-through. We're excited, and it shows that strength in our position in the marketplace for Wilson.

Hey, Alex it's Stuart so.

We're really pleased with the balanced growth that we're seeing regionally across.

North America and China.

Both regions grew at a similar pace both in the fourth quarter and through the initial.

A portion of the first quarter so.

Seeing just broad based regional strength for the brand and we're also really happy with what we're seeing in Europe and in Asia outside of China.

So the and the.

Underlying strength of the business as I mentioned in the earlier question is really from the fundamentals of our of our DTC business. So <unk>.

Traffic conversion increases, where we're actually seeing also reductions in markdown rate and return rate. So it's and it's both within our retail stores as well as our E Com E Commerce business. So.

Stuart Haselden: Michael, did you have a follow-up?

Stuart Haselden: Michael, did you have a follow-up?

James Zheng: I'm curious. You said bigger picture, the gross margin expansion over the years from mix effects. I'm curious, Stuart, how should we think about gross margin in the Arc'teryx brand? As you put the offense in, any opportunities to expand the gross margins within the brand?

Michael Binetti: I'm curious. You said bigger picture, the gross margin expansion over the years from mix effects. I'm curious, Stuart, how should we think about gross margin in the Arc'teryx brand? As you put the offense in, any opportunities to expand the gross margins within the brand?

Broad broad based strength and received it also connected to a really strong and healthy inventory position is stronger than we've been in prior periods just given the the supply chain.

Stuart Haselden: Yeah. We're pleased with how our margins are performing, gross margins and operating margins. We do see the opportunity for some modest expansion over the course of the year that we expect to flow through, and we expect to grow operating profit faster than we'll grow top line.

Stuart Haselden: Yeah. We're pleased with how our margins are performing, gross margins and operating margins. We do see the opportunity for some modest expansion over the course of the year that we expect to flow through, and we expect to grow operating profit faster than we'll grow top line.

Chain challenges that we had related to COVID-19 going back 18 months, but.

Overall really really healthy position and as we look forward for the full year guide versus the Q1 guide.

We're going to plan the business in a responsible manner, we're going to we're going to plan.

The sales in the inventory in a place that we feel is appropriate for the business.

James Zheng: Thank you.

Michael Binetti: Thank you.

If demand.

Omar Saad: Your next question comes from the line of Jay Sole from UBS. Please go ahead.

Operator: Your next question comes from the line of Jay Sole from UBS. Please go ahead.

Materializes above these levels, we're in a position where we can capture higher sales levels. The inventory position, we have will afford that but.

Jay Sole: Great. Thank you. Andrew, just want to ask you about working capital. Can you just give us a little reminder about how you expect working capital to develop this year and next year and sort of compare it to 2022 and 2023, kind of explain the differences? Thank you.

Jay Sole: Great. Thank you. Andrew, just want to ask you about working capital. Can you just give us a little reminder about how you expect working capital to develop this year and next year and sort of compare it to 2022 and 2023, kind of explain the differences? Thank you.

But were planning our expenses and our capital investments.

In a place that we see is responsible and thats connected to that 20%.

Full year guide.

Joe Dudy: I think as you think about working capital this year, you'll start to see our working capital efficiency improve this year, especially as it relates to 2022. Obviously, we were building inventory in 2023, exiting 2022 because of the fact that supply chain was pretty erratic. We built inventory up in 2023. We held it a little bit longer than we needed to. You'll start to see it start to drive efficiency in 2024. As you get out of 2024, I think that we start to get to a more normalized rate in 2025. We're going to grow inventory. Obviously, our biggest working capital element is inventory. We're going to keep inventory right in line with revenue growth as we move through the years. It's a key performance indicator for us.

Andrew Page: I think as you think about working capital this year, you'll start to see our working capital efficiency improve this year, especially as it relates to 2022. Obviously, we were building inventory in 2023, exiting 2022 because of the fact that supply chain was pretty erratic. We built inventory up in 2023. We held it a little bit longer than we needed to. You'll start to see it start to drive efficiency in 2024. As you get out of 2024, I think that we start to get to a more normalized rate in 2025. We're going to grow inventory. Obviously, our biggest working capital element is inventory. We're going to keep inventory right in line with revenue growth as we move through the years. It's a key performance indicator for us.

Your next question.

Your next question comes from the line of Ike borrow child from Wells Fargo. Please go ahead.

Hey, guys. Good morning, two for me one specific to the guided one bigger picture.

Just on the government maybe Stuart can.

Can you give us specifically, what's embedded in your guidance on door expansion. This year and then if you're able to can you talk about what comp you expect omni comp you're baking in for both the first quarter and the full year and then to the team just more detail on how the brands are positioned in China today, how do you think about them how are the diff.

That would be really interesting Peter thanks.

Yeah, Hey, it's Stuart I'll start with your first question there so.

We're planning to open.

And net of around 30 doors.

Joe Dudy: Obviously, with the refinance, we're going to be able to keep more of our cash to continue to invest in the business as our finance charges go down.

Andrew Page: Obviously, with the refinance, we're going to be able to keep more of our cash to continue to invest in the business as our finance charges go down.

In our.

Tariffs this year.

And we will see more than half of those stores in North America.

So we're excited for a number of the new locations that were opening and planning across the across all our regions that will see important flagships.

Andrew Page: Got it. Okay. You gave some CapEx guidance. Are you giving any sort of free cash flow guidance or operating cash flow guidance for the year?

Jay Sole: Got it. Okay. You gave some CapEx guidance. Are you giving any sort of free cash flow guidance or operating cash flow guidance for the year?

In Europe as well as North America, we just opened a.

Joe Dudy: We haven't given free cash flow guidance. We were just very, very early on in trying to understand where the financing was going to be. We haven't given free cash flow guidance. I'd like to get through Q1 and really start to see where we're going to come out with regard to stabilizing our interest rates, FX hedging programs, all of those things. Trying to squeeze it all in Q1 is a lot.

Andrew Page: We haven't given free cash flow guidance. We were just very, very early on in trying to understand where the financing was going to be. We haven't given free cash flow guidance. I'd like to get through Q1 and really start to see where we're going to come out with regard to stabilizing our interest rates, FX hedging programs, all of those things. Trying to squeeze it all in Q1 is a lot.

7000 square foot flagship in Covent Garden.

This past week.

We will open flagships in Toronto and also in New York City.

A part of the projections that I, just mentioned and then from an.

Omnicom standpoint, I think we've shared mid teens.

And overall for the for the full year.

Stuart Haselden: You guys saw in the guidance that even the tax rate is a range. We're still trying to narrow down the cash tax rate given the jurisdiction of the very debt and interest deductibility, etc.

Omar Saad: You guys saw in the guidance that even the tax rate is a range. We're still trying to narrow down the cash tax rate given the jurisdiction of the very debt and interest deductibility, etc.

So pretty confident with the with that level of growth.

And James on the different brand positioning in China.

Yes.

I'd just add on certain points here for October experience associated really being positioned the pinnacle in all those segments.

Andrew Page: Got it. Thanks, Omar. Thank you.

Jay Sole: Got it. Thanks, Omar. Thank you.

Omar Saad: Your next question comes from the line of John Kernan from TD Cowen. Please go ahead.

Operator: Your next question comes from the line of John Kernan from TD Cowen. Please go ahead.

After four years correlation when we really make a catalyst.

James Zheng: Excellent. Thank you. Congrats on a nice quarter out of the gate. Stuart, did you talk to Arc'teryx in China? Obviously, it's the biggest region for technical apparel and Arc'teryx. Just curious how we should think about the growth rate in China, both in 2024 and within the long-term outlook.

John Kernan: Excellent. Thank you. Congrats on a nice quarter out of the gate. Stuart, did you talk to Arc'teryx in China? Obviously, it's the biggest region for technical apparel and Arc'teryx. Just curious how we should think about the growth rate in China, both in 2024 and within the long-term outlook.

So it's become the best Sporting goods brand in China in terms of the.

The quality of the retail environment, we've created in the market as well as the productivity by stores and we're going to outperform in the industries and I'll just give you. A example recently.

January mid of January we just opened a $20.

Square foot flagship store in Shanghai caused forestall independent buildings within 30 days of SaaS revenue on any of which $3 2 million U S. Dollar so it's.

Stuart Haselden: Yeah, John. Hey, it's Stuart. Yeah, China business has been really strong. In 2023, it was just over 40% of the total. It is our largest region by sales and by profits. We enjoy slightly higher gross margins as a result of the price advantage that we have in China. The growth rates, what I would tell you, have been pretty consistent between North America and China, certainly in the latter part of 2023 and certainly into the beginning of 2024. We want to have balanced growth regionally. We're very focused on setting the business up to achieve that. I think we gave a little color in the prepared remarks around the pace of growth that we're seeing in China. We have seen a sequential acceleration into Q1 from Q4. That acceleration has been consistent with North America and China.

Stuart Haselden: Yeah, John. Hey, it's Stuart. Yeah, China business has been really strong. In 2023, it was just over 40% of the total. It is our largest region by sales and by profits. We enjoy slightly higher gross margins as a result of the price advantage that we have in China. The growth rates, what I would tell you, have been pretty consistent between North America and China, certainly in the latter part of 2023 and certainly into the beginning of 2024. We want to have balanced growth regionally. We're very focused on setting the business up to achieve that. I think we gave a little color in the prepared remarks around the pace of growth that we're seeing in China. We have seen a sequential acceleration into Q1 from Q4. That acceleration has been consistent with North America and China.

So I mean, I think I mean, when you have chance to visit China and as you look at the store.

Stores are being positioned as a kind of a.

The level of premiums I mean, not only premium but also at the luxury segment and we are we our approximately on par with the brand like among clear okay. So in China markets.

Got it thank you very much.

Our next question comes from the line of Michael Binetti from Evercore ISI. Please go ahead.

Hey, guys. Thanks for taking my questions. Congrats on the first quarter out of the gate here.

I guess a few on.

And coming into the year any are there Wilson inventory issues past us at this point and then on the cold weather I know, it's been a little bit unfavorable weather any senses from from the channel of competitors that might have inventory stocking the channel might be be cleared or any consideration you added to your gross margin expectations for the year. If we if we do see some competitor clearing.

Stuart Haselden: The stores that we operate there are the most productive of any region in the world. We've been focused on a strategy there of opening fewer stores that are larger and more productive. The stores that will open in North America, we're very happy with and very productive. But the China stores are tending to be larger and more revenue per unit. We shared some of that, certainly, in the IPO process and with the disclosure to date. I'll leave it there.

Stuart Haselden: The stores that we operate there are the most productive of any region in the world. We've been focused on a strategy there of opening fewer stores that are larger and more productive. The stores that will open in North America, we're very happy with and very productive. But the China stores are tending to be larger and more revenue per unit. We shared some of that, certainly, in the IPO process and with the disclosure to date. I'll leave it there.

Okay.

Yeah. Thanks, Michael This is Andrew.

We talked about this level, we feel really good about how we exited 2023 with our inventory and Wilson as a matter of context, we cleared about $90 million of inventory and Wilson.

<unk>.

Desirable to move through a slower moving in the second half of 2023.

And so as we as we step into 2024, we feel good about it and as Omar alluded to earlier you can meaningfully see the step up in realized gross profit per product sold as soon as we got into 2024, which which which is a indicator in our minds number one of the heat of our.

James Zheng: Excellent. Thank you.

John Kernan: Excellent. Thank you.

Omar Saad: Your next question comes from the line of Laura Velasco from BNP Paribas. Please go ahead.

Operator: Your next question comes from the line of Laura Velasco from BNP Paribas. Please go ahead.

Laura Velasco: Good morning. Thank you very much for taking my question. I wanted to ask first a modeling question. Andrew, in Q4, DTC was up 37% while wholesale was down 4%. Could you probably share with us how we think we should think about those two channels for Q1 as well as the full year? A bigger picture question on footwear. Could you maybe share with the audience how big Salomon Footwear was for 2023? Where can it go over the next few years? Are there any key learnings that you can share from Salomon's success in footwear that could extend into Arc'teryx? Thank you very much.

Laura Velasco: Good morning. Thank you very much for taking my question. I wanted to ask first a modeling question. Andrew, in Q4, DTC was up 37% while wholesale was down 4%. Could you probably share with us how we think we should think about those two channels for Q1 as well as the full year? A bigger picture question on footwear. Could you maybe share with the audience how big Salomon Footwear was for 2023? Where can it go over the next few years? Are there any key learnings that you can share from Salomon's success in footwear that could extend into Arc'teryx? Thank you very much.

Randy how are retail partners appreciate us and the fact that.

Moving through and the promotional environment was.

As it related to our product was really rose meaningfully tied to getting through December so we're moving our product.

Strong gross margins now we definitely do continue to feel the excess inventory in the market with our retail partners, but.

But we again, we believe that we are positioned primarily as that moves through and so your point about what we've embedded in our plan.

Embedded in our plan that the first half of 2024, we will continue to drive towards normalization and you're starting to see more normalized rates in the back half of 2024.

Stuart Haselden: First to Franco on Salomon Footwear.

Stuart Haselden: First to Franco on Salomon Footwear.

Franco Fogliato: Yeah. Look, we see in Q1, in particular, the pressure remaining. We said earlier the pressure on the order book is there from a wholesale perspective, but DTC performs very strong at the moment. We'll see that momentum in DTC to continue in Q1 as well as the strong momentum in Asia. We're very confident we're off to a good start of the year.

Franco Fogliato: Yeah. Look, we see in Q1, in particular, the pressure remaining. We said earlier the pressure on the order book is there from a wholesale perspective, but DTC performs very strong at the moment. We'll see that momentum in DTC to continue in Q1 as well as the strong momentum in Asia. We're very confident we're off to a good start of the year.

And maybe Joe and Franco you guys could give a quick summary of what Youre seeing with your retail partners and what Youre hearing in the market and what your retail partners are telling you starting with Bronco and then Joe Yes.

Thanks for the question.

We're seeing inventory normalizing, we're very happy where we stand out there from a settlement perspective in particular, which was worth.

So we know retailers being very cautious on their bookings for 2024 and this is really translating into very strong replenishment business, we'll see at the beginning of the year, which was a continuation of the Q4. So we're very pleased with where we stand at the moment, but we'd like to pick up the wall. So we'll be a little hard pivot would be.

Joe Dudy: Yeah. Thanks. As you think about DTC versus wholesale, obviously, wholesale was down for all the reasons we talked about in Q4, their promotional environment, excess inventory. We do not anticipate wholesale to be down like that as you move forward. In fact, we believe that wholesale will be for the full year up high single digits. DTC will continue to be up around in the 30s, like low 30%. That's how we anticipate the blended.

Andrew Page: Yeah. Thanks. As you think about DTC versus wholesale, obviously, wholesale was down for all the reasons we talked about in Q4, their promotional environment, excess inventory. We do not anticipate wholesale to be down like that as you move forward. In fact, we believe that wholesale will be for the full year up high single digits. DTC will continue to be up around in the 30s, like low 30%. That's how we anticipate the blended.

In the longer term are in much better position in the short term as some pain, but were.

We will continue to eat market shares.

Joe Yes.

Wilson.

What we're hearing back is that the consumer we know that the wholesalers from a trade perspective are being more cautious on the replenishment and waiting until they have stronger visibility, but what we're hearing from them also is that theyre seeing the consumers are waiting closer until they need the product.

Franco Fogliato: Very helpful.

Laura Velasco: Very helpful.

Joe Dudy: Yeah.

Andrew Page: Yeah.

[Analyst] (BNP Paribas): That's very helpful. If I could squeeze one more in, how do we think about China for this year, Andrew, if you can give some color on that in terms of growth rate?

Laura Velasco: That's very helpful. If I could squeeze one more in, how do we think about China for this year, Andrew, if you can give some color on that in terms of growth rate?

Theres not a fear of it maybe being out of stock. So they are waiting closer to say the baseball season starts until the weather breaks for golf.

Joe Dudy: With regard to China, the region, we still expect China to be a very strong growth rate. Again, when we talk about discipline planning, you're going to see us plan a number in the high 20s, low 30s, but we will have the inventory to be able to service it if the demand is there.

Andrew Page: With regard to China, the region, we still expect China to be a very strong growth rate. Again, when we talk about discipline planning, you're going to see us plan a number in the high 20s, low 30s, but we will have the inventory to be able to service it if the demand is there.

So were positive and we see again the part.

Patient rates or Sterling really staying robust and strong so we expect by consumer demand to come in and then some of the feedback we're getting from our retailers and.

[Analyst] (BNP Paribas): Thank you very much.

Laura Velasco: Thank you very much.

Our leading categories as we continue to outperform the competition in the sell through so we're excited and it shows that strengthen our position in the market place for Wilson.

Omar Saad: Your next question comes from the line of Jonathan Komp from Baird. Please go ahead.

Operator: Your next question comes from the line of Jonathan Komp from Baird. Please go ahead.

Jonathan Komp: Yeah. Hi. Hello. I want to follow up on the five-year targets for technical apparel. The targets imply reaching well above $3 billion in revenue over the next five years. Stuart, I'm just wondering, as you think about Arc'teryx, the long-term opportunity, how do you size up the potential, and what are some of the key drivers you're looking forward to in the near term here?

Jonathan Komp: Yeah. Hi. Hello. I want to follow up on the five-year targets for technical apparel. The targets imply reaching well above $3 billion in revenue over the next five years. Stuart, I'm just wondering, as you think about Arc'teryx, the long-term opportunity, how do you size up the potential, and what are some of the key drivers you're looking forward to in the near term here?

Michael did you have a follow up.

I was curious you said bigger picture of the gross margin expansion for the years from mix effect. So I'm curious Stuart is it how should we think about gross margins our terex brand as you put the offense and any opportunities to expand the gross margins within the brand.

Yes.

We're pleased with how our margins are performing gross margins and operating margins.

Stuart Haselden: Hey, Jonathan. Yeah, we're very excited for the prospects for the brand globally. We see a long runway in every region. In North America, we ended the year just under 50 stores. We see the potential for over 200. We see exciting additional store runway in Europe and Asia, both in China and outside of China. The very sort of concrete, objective way we're seeing the success in our store strategy is probably the easiest way to think about how we see the revenue development towards the five-year targets occurring. We're equally bullish on our digital business. In North America, our digital business is about the same size as our retail business. It's an exciting omnichannel strategy that we have where the channels are really closely intertwined.

Stuart Haselden: Hey, Jonathan. Yeah, we're very excited for the prospects for the brand globally. We see a long runway in every region. In North America, we ended the year just under 50 stores. We see the potential for over 200. We see exciting additional store runway in Europe and Asia, both in China and outside of China. The very sort of concrete, objective way we're seeing the success in our store strategy is probably the easiest way to think about how we see the revenue development towards the five-year targets occurring. We're equally bullish on our digital business. In North America, our digital business is about the same size as our retail business. It's an exciting omnichannel strategy that we have where the channels are really closely intertwined.

So we do see the opportunity for some modest expansion over the course of the year.

That that.

We expect to flow through and.

And we expect to grow operating profit faster than it will grow top line.

Thank you.

Okay.

Your next question comes from the line of Jay sole from UBS. Please go ahead.

Great. Thank you can you just wanted to ask you about working capital and can you just give us a.

A reminder, about how you expect working capital to develop this year next year and sort of compare it to 2022 and 2023, you kind of explain the differences.

Thanks.

I think I think as you think about working capital this year, you'll start to see our our working capital efficiency.

Improved this year, especially as it relates to 2022.

Obviously, we were building inventory in 2023 exiting 2022 because of the fact that.

Supply chain was pretty erratic so we built inventory.

Up in 2023, we held it a little bit longer than we needed to and so you'll start to see it.

Stuart Haselden: We capture demand and fulfill that demand in a very cross-channel manner in North America, Europe, and Asia. Our business in China is more weighted toward retail, and the store business there is a bigger part of the overall mix. We also see the continued focus on product innovation. While we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market in product innovation is critical to how we see our success developing as well. The footwear launch that we have happening this week, tomorrow, will actually launch three new footwear models, the first of which that have been designed in our Portland Footwear Design Center is emblematic of our commitment to innovation and the success that we're creating through that strategy.

Stuart Haselden: We capture demand and fulfill that demand in a very cross-channel manner in North America, Europe, and Asia. Our business in China is more weighted toward retail, and the store business there is a bigger part of the overall mix. We also see the continued focus on product innovation. While we have an exciting channel expansion story, the investments that we're making and the leadership position that we have in the market in product innovation is critical to how we see our success developing as well. The footwear launch that we have happening this week, tomorrow, will actually launch three new footwear models, the first of which that have been designed in our Portland Footwear Design Center is emblematic of our commitment to innovation and the success that we're creating through that strategy.

Start to drive efficiency in 2024, and as you get out of 2024, I think that we start to get to a more normalized rate in 2025, but we're going to we're going to grow inventory is our biggest obviously our biggest working capital element as inventory.

We're going to keep inventory right in line with revenue growth as we as we've moved through the key performance indicator for us and.

Obviously.

With the refinance we're going to be able to keep more of our cash to continue to invest in the business I've learned finance charges go down.

Got it Okay and then.

You gave some capex guidance are you, giving any sort of free cash flow guidance or operating cash flow guidance for the year.

Yes, so we haven't we haven't given a free cash flow guidance and we were just very very early on and trying to understand where the financing was going to be and so we haven't given free cash flow guidance I'd like to get through the first quarter and really start to see where we're going to come out with regard to <unk>.

Stuart Haselden: I would see certainly the channel expansion, product innovation. The third one I would highlight is really investment in our brand and our community strategy. The brand is very undeveloped, or the awareness levels are quite low in most of the geographies where we operate. How we're able to drive brand awareness will also drive engagement with the brand, traffic conversion to our channels. We see the investments that we're making across our brand and community activities as a third element of how we will achieve the targets that you mentioned.

Stuart Haselden: I would see certainly the channel expansion, product innovation. The third one I would highlight is really investment in our brand and our community strategy. The brand is very undeveloped, or the awareness levels are quite low in most of the geographies where we operate. How we're able to drive brand awareness will also drive engagement with the brand, traffic conversion to our channels. We see the investments that we're making across our brand and community activities as a third element of how we will achieve the targets that you mentioned.

Stabilized my interest rates FX hedging programs all of those things trying to squeeze it all in one quarter is a lot.

And you guys are not in the guidance, but even the tax rate is a range and we're still trying to narrow down the cash tax rate given the jurisdiction of the various debt.

Interest deductibility et cetera.

Yeah.

Got it thanks, all right. Thank you.

Your next question comes from the line of John Kernan from TD Cowen. Please go ahead.

Excellent. Thank you.

Rats on a nightclub navigate.

[Analyst] (BNP Paribas): Operator, I think we have time for one. Oh, sorry. Andrew, you had something to add.

Omar Saad: Operator, I think we have time for one. Oh, sorry. Andrew, you had something to add.

Stuart could you talk to architects in China.

Joe Dudy: Yeah. Hey, I want to go back and correct a comment. On the last question, I think this is an important comment for all of you guys for my correction on. Wholesale for the full year will be up mid-single digits. I think I said high single digits. Mid-single digits for the whole year. Retail up right around 30%. Then Q1, as you think about it, wholesale will be down slightly to flat to last year. I remember last year was a very strong wholesale Q1. DTC will be up around 20%. I think it's just to make sure that you guys update your models to reflect that.

Andrew Page: Yeah. Hey, I want to go back and correct a comment. On the last question, I think this is an important comment for all of you guys for my correction on. Wholesale for the full year will be up mid-single digits. I think I said high single digits. Mid-single digits for the whole year. Retail up right around 30%. Then Q1, as you think about it, wholesale will be down slightly to flat to last year. I remember last year was a very strong wholesale Q1. DTC will be up around 20%. I think it's just to make sure that you guys update your models to reflect that.

Obviously, it's the biggest region offer technical apparel and ARPA Eric.

Just curious how we should think about the growth rate in China, both in 2024 and within the long term algo.

Okay.

Yes, John Hey, it's Stuart so yes.

Yes.

China business has been really strong.

You know in 2023, it was just over 40% of the total it is our largest region.

By sales.

<unk> profits we enjoy.

Slightly higher gross margins as a result of the price advantage that we have in China.

[Analyst] (BNP Paribas): Operator, time for one more?

Omar Saad: Operator, time for one more?

Yiran Liu: Yes. Our final question today comes from Yiran Liu from CICC. Please go ahead.

Operator: Yes. Our final question today comes from Yiran Liu from CICC. Please go ahead.

The growth rates are what I would tell you have been pretty.

Pretty consistent between North America, and and China.

[Analyst] (BNP Paribas): Yeah. Thank you for taking my question. I just have a long-term question for Arc'teryx. As you have mentioned, the Arc'teryx expansion, the DTC expansion in North America is a very important strategy for us. I just wonder, while we are very glad to hear our new flagship store opening in North America recently, what has been the challenging part of our DTC expansion and what are our unique strengths that make us doing better than our competitors? Thank you.

Yiran Liu: Yeah. Thank you for taking my question. I just have a long-term question for Arc'teryx. As you have mentioned, the Arc'teryx expansion, the DTC expansion in North America is a very important strategy for us. I just wonder, while we are very glad to hear our new flagship store opening in North America recently, what has been the challenging part of our DTC expansion and what are our unique strengths that make us doing better than our competitors? Thank you.

Certainly in the latter part of 2023 and certainly into the beginning of 2024.

We want to have balanced growth regionally and so we're very focused on setting the business up to achieve that.

And so I think we gave a little color in the prepared remarks around the pace of growth that we're seeing in China.

And we can see have seen a sequential acceleration into Q1 from Q4.

And that acceleration has been consistent in both North America and China. So.

The stores that we operate there are are the most productive.

Any region in the world.

Stuart Haselden: Yeah. Hey, Yiran. It's Stuart. Yeah, in North America, we see an exciting story emerging, DTC story, as we've repositioned the brand from primarily wholesale to now primarily direct-to-consumer over the last three years. We're seeing exciting trends in Canada and in the United States. We're probably a little farther ahead in Canada as it's our home market, but we're really bullish on the United States as well. We'll open a couple of flagships that I mentioned. In Toronto, we'll open an 8,000-square-foot flagship on Bloor Street. In New York City, we're going to open a 14,000-square-foot flagship in the heart of Soho on Broadway that we're super excited about. That'll happen in July, in the summer. The overall momentum that we're seeing across every region where we're operating in North America is pretty exciting.

Stuart Haselden: Yeah. Hey, Yiran. It's Stuart. Yeah, in North America, we see an exciting story emerging, DTC story, as we've repositioned the brand from primarily wholesale to now primarily direct-to-consumer over the last three years. We're seeing exciting trends in Canada and in the United States. We're probably a little farther ahead in Canada as it's our home market, but we're really bullish on the United States as well. We'll open a couple of flagships that I mentioned. In Toronto, we'll open an 8,000-square-foot flagship on Bloor Street. In New York City, we're going to open a 14,000-square-foot flagship in the heart of Soho on Broadway that we're super excited about. That'll happen in July, in the summer. The overall momentum that we're seeing across every region where we're operating in North America is pretty exciting.

We've been focused on the strategy there of opening fewer stores are larger and more productive.

The stores that will open in north.

America, we're very happy with.

And very productive.

China stores are tending to be larger and more revenue per unit.

And we shared some of that in the certainly in the IPO process and what the.

The disclosure today, so I'll leave it there.

Excellent. Thank you.

Your next question comes from the line of Laura Velazco from BNP Paribas. Please go ahead.

Good morning. Thank you very much for taking my question I wanted to ask first a modeling question Andrew <unk> DTC was up 37%, while wholesale was down 4%.

You probably share with us how do we think we should think about those two channels for the first quarter as well as the full year and then a bigger picture bigger picture question on footwear could you maybe share with the audience, how big Solomon footwear.

It was for 2023, where can that go over the next few years and are there any key learnings that you can share.

Stuart Haselden: It quite balances, I mentioned, between our retail strategies and our e-commerce strategies. As you asked the question, how are we winning market share and how are we distinguishing ourselves in the market? We view Arc'teryx as the pinnacle competitor in the outdoor space. We believe we have the very best products, the highest level of innovation, the highest level of quality that separates our products based on the merits of its performance. We complement that with what we believe is really the only vertical brand in the outdoor space. We are building community where we open stores. We are engaging with our customers in a way we do not see other brands doing. When you listen to how other brands talk about how they develop their business, they talk about their stores as a transactional platform.

Stuart Haselden: It quite balances, I mentioned, between our retail strategies and our e-commerce strategies. As you asked the question, how are we winning market share and how are we distinguishing ourselves in the market? We view Arc'teryx as the pinnacle competitor in the outdoor space. We believe we have the very best products, the highest level of innovation, the highest level of quality that separates our products based on the merits of its performance. We complement that with what we believe is really the only vertical brand in the outdoor space. We are building community where we open stores. We are engaging with our customers in a way we do not see other brands doing. When you listen to how other brands talk about how they develop their business, they talk about their stores as a transactional platform.

From Solomon success in footwear that could extend into <unk>. Thank you very much.

First to Franco on selling on footwear, yes look we see we see in Q1 in particular of the pressure remaining we we said earlier.

The pressure on the order book is deer from a Rosa perspective, but DTC performance as a very strong at the moment.

And we'll see that the momentum in DTC to continue in Q1.

As well as the strong momentum in Asia. So.

Very confident we're off to good start of the year.

Yes.

Thanks, and then as you think about DTC versus wholesale.

Obviously wholesale was down for all the reasons, we thought fourth quarter very promotional environment excess inventory.

We do not anticipate wholesale to be down like that as you move forward. In fact, we believe that wholesale will be for us wholesale will be for the full year up high single digits.

Stuart Haselden: We operate our stores as a part of the communities where we operate, and we want to engage in those communities. A good example of this is our rebirth strategy where we not only want to sell you a jacket, we want to help you maintain it. We want to help you clean it properly. We want to help ensure that it's repaired when it needs it. When you're ready for a new jacket, you're going to trade it in, and we're going to keep that jacket in service with another guest through our rebirth program. We believe this creates a very distinct business model that is separated in the marketplace today and is part of the success that we're achieving.

Stuart Haselden: We operate our stores as a part of the communities where we operate, and we want to engage in those communities. A good example of this is our rebirth strategy where we not only want to sell you a jacket, we want to help you maintain it. We want to help you clean it properly. We want to help ensure that it's repaired when it needs it. When you're ready for a new jacket, you're going to trade it in, and we're going to keep that jacket in service with another guest through our rebirth program. We believe this creates a very distinct business model that is separated in the marketplace today and is part of the success that we're achieving.

And D to C. We will continue to be up around.

In the Thirty's like what low 30%.

That's very helpful and a blended yes.

Yes.

That's very helpful. If I could squeeze one more in it how do we think about China for this year, Andrew if you can give some color on that.

Terms of growth rate.

With regard to China the region.

It's really exciting.

A very strong growth rate again, when we talk about disciplined planning youre going to see us.

[Analyst] (BNP Paribas): Great. Perfect.

Yiran Liu: Great. Perfect.

Plan, a number in the high Twenty's low thirty's, but.

Omar Saad: That's all the time we have for questions today. I will now turn the call back over to Omar for closing remarks.

Operator: That's all the time we have for questions today. I will now turn the call back over to Omar for closing remarks.

We will have the inventory to be able to services.

The demand is there.

Thank you very much.

[Analyst] (BNP Paribas): Thanks, everyone, for joining. We'll see you after next quarter.

Omar Saad: Thanks, everyone, for joining. We'll see you after next quarter.

Your next question comes from the line of Jonathan Komp from Baird. Please go ahead.

Omar Saad: This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Operator: This concludes today's conference call. Thank you for your participation, and you may now disconnect.

Yes, Hi, Hello, I wanted to follow up on the five year targets for a technical apparel.

Targets imply reaching well above $3 billion of revenue over the next five years or so.

Stuart I'm just wondering as you think about our terex for long term opportunity how do you size up the potential and what are some of the key drivers youre looking forward to in the near term here.

Yeah.

Hey, Jonathan.

So yes, we're very.

We're excited for the prospects for the brand globally.

We're we see a long runway.

And in every region in North America.

No.

We ended the year just under 50 stores.

We see the potential for over 200.

And we see it.

Exciting additional store runway and in Europe and Asia.

Both in China and outside of China. So the.

The very sort of concrete objective way, we're seeing the success in our store strategy is probably the easiest way to think about how we see.

The revenue development.

Towards the five year targets occurring.

We are equally bullish on our digital business in North America, our digital business is.

It's about the same size as our retail business and.

It is an exciting.

Our omni channel strategy that we have where the channels are really closely intertwined. So we capture demand and fulfill that demand in a very cross channel manner.

And in North America, as well as as well as Europe and Asia, our business in China is more weighted towards retail.

So the store business there is a bigger part of the overall mix.

But we're but we also see the continued focus on product innovation. So while we have an exciting channel expansion story the investments that we're making in the leadership position that we have in the market and product innovation is critical.

So how we see our success developing as well so.

The footwear launch that we have happening this week tomorrow will actually launched three new footwear models, the first of which that have been designed in our Portland footwear design Center.

Is emblematic of our commitment to innovation and the success that we're creating through that strategy.

So I would see the certainly the channel expansion product innovation and then the third one I would highlight is really investment in our brand and our community strategy. So the brand is very.

And developed or the awareness levels are quite low and most of the geographies, where we operate and so how we're able to drive brand awareness will also drive.

Drive engagement with the brand traffic conversion to our channels. So.

So we see the investments that we're making across our brand and community.

Activities.

The third.

Element of how we will achieve the target that you mentioned.

Operator, I think we have time for one Oh, sorry, Andrew.

I just I wanted to go back and correct a comment so on the last question I think this is an important comment for all of you guys.

For my correction on.

Wholesale for the full year will be up mid single digits, I think I said high single digits or mid single digits for the whole year.

Retail up right around 30% and in the first quarter as you think about it wholesale will be down slightly to flat to last year I remember last year with a very strong wholesale first quarter.

<unk>.

<unk>.

And D to C will be up around 20%.

So I think that's perfect. So that you guys update your models to reflect that.

Operator time for one more.

Yes. Our final question today comes from Iran. Lu from CIC. Please go ahead.

Yeah. Thank you for taking my question I just have a long term question for Kurt.

As you have mentioned that our parents expansion that it does take time.

And in the United States and North America.

A very important strategy for us that's.

One game you know well we are very glad to hear.

Sure.

New flagship store opening in North America recently.

That's been the trend in part of our DTC expansion and.

And you know what her all of our unique strengths that are.

Yeah.

Does that make us doing better than our competitor. Thank you.

Okay.

Yeah, Hey, Yaron, it's Stuart so yeah in North America.

We see an exciting story emerging.

DTC story.

As you've repositioned the brand from primarily wholesale to now primarily direct to consumer over the last three years.

And we're seeing exciting trends in Canada and in the United States will probably a little farther ahead in Canada.

As its our home market.

But we're we're really bullish on the United States as well and so we will open a couple of flagships that I mentioned in Toronto will open 8000 square foot flagship on Bloor Street.

In New York City, we're going to open up 14000 square foot flagship in.

The heart of Soho on Broadway that we're super excited about that will happen.

And in July in the summer.

The.

But the overall momentum that we're seeing across every every part every region, where we're operating in North America is pretty exciting and it's quite balanced as I mentioned between.

Our retail strategies in our e-commerce strategies.

And as you asked the question like how are we winning market share and how are we distinguishing ourselves into the market.

We are we view <unk> as the pinnacle competitor in the outdoor space.

We believe we have the very best products.

The highest level of innovation and the highest level of quality that separates our products based on the merits of its performance.

We complement that with with what we believe is really the only vertical brand in the outdoor space and so we.

We are building community, where we open stores we are engaging.

With with our with our customers in a way we do not see other brands doing and when you listen to how other brands talk about how they develop their business.

Talk about their stores.

Transactional platform, we operate our stores as it is a part of the communities, where we operate we want to engage.

In in those communities are good example of this is this is a rebid strategy where.

We not only want to sell you a jacket, we want to help you maintain it we want to help you clean it properly you want to help ensure that it's repaired when it needs it.

And then when you are ready for a new jacket youre going to trade it in and we're going to we're going to keep that jacket in servicing with that with another guests through our rebuild program. So.

We believe this creates a very.

Zinc business model that is that is separated in the marketplace today.

As part of the success that we're achieving.

Okay great.

Okay. That's all the time, we have for questions today, I will now turn the call back over to Omar for closing remarks.

Thanks, everyone for joining we'll see after next quarter.

This concludes today's conference call. Thank you for your participation and you may now disconnect.