Outdoor Insight

N E W S / A N A L Y S I S OUTDOOR EYE A newly-formed alliance among three outdoor industry trade groups —Snowsports Industries America, Outdoor Industry Association and National Ski Area Association — known as the Outdoor Business Climate Partnership, is elevating its voice on Capitol Hill when it comes to climate change. For two days in late May, the trade group coalition and over 76 companies representing over $2.5 trillion in annual revenue, met with lawmakers in DC to advocate for immediate and bipartisan climate action, specifically, putting a price on carbon. The Outdoor Business Climate Partnership represents a large segment of the outdoor business sector, which helps to support the $887 billion outdoor recreation economy and 7.6 million jobs. The coalition is committed to leveraging the economic weight of the outdoor business sector to take action on climate, including putting a price on carbon. Aside from dozens of meetings with lawmakers on both side of the aisle, two CEO-only roundtable events were held, with Rossignol CEO Francois Goulet speaking directly with both Democrats and Republican lawmakers about climate change and its impacts on their business. "In each meeting, we heard that the business voice is a critical part of making the progress we need on climate," said SIA president Nick Sargent. "SIA is committed to engaging the entire snow sports business community to elevate their influence and dial up their voices on this important and urgent issue. Grassroots Outdoor Alliance topline sales reports for its member retailers indicated an increase of 5.78 percent in the month of April, extending a growth trend buoyed by increases in five out of the last six months. The group reported 3.6 percent overall growth since Jan. 1, 2019, and an increase of 2.53 percent nationally over the last 12 months. Notably, Grassroots Outdoor Alliance said positive sales are being led by stores with a single retail storefront — a group that reported growth of 3.93 percent year-over-year. Close behind, stores with 2-4 doors were up 2.95 percent in the same period. # T H E B U Z Z V F Corp's active and outdoor brands are key components of its go- forward strategy now that the parent company's jeans (Wrangler and Lee) and outlet business has been spun- off into a separate publicly traded company, Kontoor Brands. With 4-5 percent sales growth forecast for its Outdoor segment in the current fiscal year versus 9 percent in fiscal 2019, VFC senior management is banking on The North Face's multi-segments, including Mountain Lifestyle and Urban Exploration, and key innovations to push the brand to new heights. In fiscal year 2019, ended March 30, TNF generated 10 percent top line growth, including a high-single digit increase in North America and more than 20 percent expansion in digital sales. VF senior executives have high expectations for TNF's FutureLight outerwear technology. "We are going to invest around that because we think it's a game changer. We think it's disruptive in the industry," VFC CFO Scott Roe told analysts last month. Timberland generated 5 percent revenue growth in North America that was driven by double-digit sales growth in non-classics footwear, mid-single digit growth in apparel and a stabilized Classics footwear business. Roe confirmed that part of VFC's focus with Timberland is improving profitability, sometimes at the expense of the topline. An unspecified number of underperforming Timberland stores will shutter when their respective leases expire this year. Elsewhere, VFC's Icebreaker brand delivered low double-digit revenue growth last fiscal year and continues to innovate with Merino as its core product in apparel. "You will see some exciting things coming from this brand this year as we look to continue to evolve (Icebreaker's) retail representation," Steven Rendle, VFC president and CEO Rendle said. l Power Players: Inside the Numbers at VF Corp. and Deckers outdoorinsightmag.com 6 • Outdoor Insight • June 2019 The North Face/Timberland/Icebreaker Hoka One One/UGG/Koolaburra/Teva/Sanuk D eckers Outdoor, parent com- pany of UGG, Koolaburra, Teva, Sanuk, Hoka One One and others, sees Hoka as a shin- ing star. Fueled by four key styles and ongoing product diversification to broaden its consumer base, Hoka generated a 45 percent annual sales increase in fiscal year 2019 to $223 million. Citing 30 percent growth in the wholesale segment last year, Deckers reports that Hoka is now a Top Three brand in many specialty running accounts. The brand has expanded into the hiking category with its Sky Collection. Deckers will make key investments this fiscal year to grow UGG men's and UGG women's non-core categories. Domestic wholesale and ecommerce accounted for the majority of the brand's 2 percent global sales increase in fiscal year 2019 to $1.533 billion for the 12 months ended March 31. Company executives, citing Google Trends data, suggest U.S. consumer interest in the UGG brand grew 7 percent last year. UGG revenue is projected to increase low- single digits this FY with growth in domestic, wholesale and ecommerce offset by order timing shift from Q1/FY20 to Q4/FY19. Separately, the Koolaburra label grew 67 percent in Q4 to $3.6 million, helping to more than double its annual sales to $44 million. This fiscal year, the brand is projected to deliver mid-40 percent to upper 50 percent topline growth, fueled largely by continued U.S. expansion in the family value channel. Meanwhile, Teva, which generated a record $137 million in revenues in fiscal year 2019, mainly due to a "considerable" sales increase in Japan, is forecast to have flat sales this fiscal year as growth in U.S. wholesale and in Asia- Pacific is offset by a decline in EMEA. Sanuk annual revenues dipped 9 percent to $83 million in fiscal year 2019 as U.S. wholesale revenues fell high single digits. This year, Sanuk is forecast to have flat revenues as the business moves to drive higher Average Selling Prices (ASPs) and take better control of its North American presence. l

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