Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you update us on the longer-term store targets for Arc'teryx? A: Stuart Haselden, CEO of Arc'teryx, stated that they plan to continue opening a similar number of stores each year, with 33 net new stores in 2024 and a target of 25-30 for 2025. They see potential for around 200 stores in North America, 75-100 in Europe, 75-100 in APAC outside of China, and 150-200 in Mainland China, with a more bullish outlook for China.
Q: Could you elaborate on drivers of the comp acceleration to nearly 30% at Arc'teryx in the fourth quarter? A: Stuart Haselden explained that the biggest factor was increased traffic, both in-store and online, with healthy conversions and increases in average order value and selling prices. Post-holiday demand has remained strong, and they have improved inventory planning for 2025, particularly in footwear.
Q: Can you elaborate on the investments in SG&A throughout the year? A: Andrew Page, CFO, mentioned that investments are focused on new store build-outs, increasing consumer connection online and in-store, and infrastructure improvements like ERP systems and logistics. They expect SG&A to be relatively flat in 2025 as previous investments start to scale.
Q: How are you thinking about growth in footwear and women's segments within Arc'teryx? A: Stuart Haselden noted that footwear grew over 60% in 2024, reaching nearly 10% of sales, with potential to exceed 20% in the coming years. The women's segment grew faster than men's, approaching 40% of sales in Q4, with a goal to achieve a balanced gender mix in apparel.
Q: Can you unpack the gross margin expansion and its drivers? A: Andrew Page highlighted that Arc'teryx, as the highest-margin and fastest-growing business, is the main driver of gross margin expansion. Other factors include mix shift within segments, such as higher-margin footwear in outdoor performance and Tennis 360 in ball & racquet. Stuart Haselden added that lower transportation costs, markdowns, and higher product margins also contributed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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