Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you clarify if there is a path to a double-digit EBITDA margin on the current outdoor revenue base? A: Yes, you are understanding that correctly. We guided $175 million and are targeting a double-digit EBITDA margin for the outdoor segment specifically. It will be lower in the first half of the year and hopefully higher than double digits in the back half of the year. (Respondent: Mike Yates, CFO)
Q: How has the ordering behavior been affected by the current environment with tariffs, and what disruptions are you anticipating? A: It's too early to tell. We feel good about where we are through the first two months of the year, but the effect of macroeconomic trade issues and tariffs is yet to hit. We have started to pick up some signals that consumer sentiment has been rattled, but there is no material impact yet on our order book. (Respondent: Neil Fisk, President of Black Diamond Equipment)
Q: Could you comment on inventory levels in the IGD business and any disruptions in ordering? A: Over the last year, we've seen stability in the North American market for the outdoor space, and IGD was about a year behind. In the 4th quarter, the IGD business exceeded our expectations, and inventories are normalizing. The Asian markets we operate in are stabilizing as well. (Respondent: Mike Yates, CFO)
Q: What are the biggest opportunities for margin expansion in 2025, and is it more of a cost-cutting or product mix improvement exercise? A: For the adventure segment, the back half of the year is crucial due to new product launches and investments in the US and EMEA markets. For the outdoor segment, the real profit expansion is from continued lift in gross margin, expected to be up 350 to 450 basis points year over year. (Respondents: Matt Hayward, Managing Director of Adventure Segment; Neil Fisk, President of Black Diamond Equipment)
Q: How will the potential tariff impact of $2.5 million affect the gross margin line, and is it included in the guidance? A: The potential tariff impact is a headwind to the guidance and could be anywhere from $0 to $2.5 million. It is not included in the numbers, and we are working with partners to mitigate this impact. (Respondent: Mike Yates, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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