Salt Lake City-based Clarus Corp., the parent company of Black Diamond Equipment, reported overall sales dropped 11.8% in the fourth quarter, partially because of inventory overhang at the outdoor brand’s North American retail accounts.
Sales in Clarus’ Outdoor segment, which includes the Black Diamond brand, were $55.3 million, or $57.7 million in constant currency, compared to $65.1 million in the year-ago quarter.
Outdoor segment sales were up 1% to $222.3 million for the full year compared to 2021.
In a conference call with investors, Clarus President John Walbrecht commented on the recent hiring of Neil Fiske as Black Diamond brand president.
Walbrecht said Fiske will be responsible for accelerating the growth and profitability of the brand by capitalizing on expansion opportunities across various categories, channels, and regions.
Walbrecht mentioned Fiske’s “extensive experience in outdoor active and apparel categories,” including leadership at DaKine, Body Glove, Eddie Bauer, Billabong, and Gap.
“Fiske brings deep experience in building brands, driving innovation, and improving operational performance,” Walbrecht added.
Inventory, Looking Ahead
Walbrecht mentioned the “explosion” during the COVID-19 pandemic of sales of camping gear and bike racks that slowed during the second half of 2022.
“It just manifests itself in too much inventory in the total system, which limited open-to-buys and made it difficult to chase those categories,” Walbrecht said.
However, Black Diamond has seen a stronger order book for both spring and fall 2023, according to Walbrecht, as well as an acceleration in direct-to-consumer business.
The company anticipates the inventory overhang that it has seen at key accounts will ease in the second half of 2023.
According to Walbrecht, in 2023 the company will identify improvements in its supply chain and operations as well as increase the number of touch points with retail partners and consumers.
“We believe that we are well positioned for continued market share gains as we seek to elevate the brand awareness and demand for our brand within our targeted markets,” he said, about Black Diamond.
Walbrecht added that the company will continue to innovate in the apparel and footwear segment as well as expand distribution in headlamps, trekking poles, gloves, and packs.
Q4 2022 Results vs. Q4 2021
- Sales down 11.8% to $104.2 million.
- Gross margin was 34.6% compared to 36.1%.
- Net loss of $81.6 million, compared to net income of $14 million. Net loss in Q4 2022 included a non-cash impairment charge of $92.3 million in the Adventure segment, which includes brands such as Rhino-Rack and Maxtrax.
- Adjusted net income before non-cash items of $7.3 million, compared to $17.4 million.
Fiscal 2022 Results vs. 2021
- Sales increased 19% to $448.1 million.
- Gross margin was 36.5% compared to 36.4%; adjusted gross margin was 36.5% compared to 37.7%.
- Net loss was $69.8 million, compared to net income of $26.1 million. Net loss in 2022 included the $92.3 million non-cash impairment expense in the Adventure segment.
- Adjusted net income before non-cash items was $45.3 million, compared to $52.5 million.
Bart Schaneman can be reached at bart@ordaily.outdoorretailer.com.
