Footwear Insight - Business Report Quarterly

against a loss of more than $450.6 million in the year-ago quarter. Gross margin: Improved by 120 basis points to 52.2% driven by product cost tailwinds. Key developments: Continues to cut costs and work on the revival for its Vans business. Further cost and gross margin improvements projected for the subsequent quarter on a 1% to 3% revenue decline. Intends to invest $50 million in cost savings in FY26. Sales: Fell by nearly 11% to nearly $1.4 billion in period ended Sep. 30 with North American sales down by 12.9% to $863.3 million. Footwear sales came in 11% lower year-over-year at $312.8 million. Operating profit: Increased by 24% to $173.1 million from $139.5 million. Gross margin: Rose 20 basis points to 49.8%. Key developments: Under CEO Kevin Plank, company is working on a strategy to re-invigorate the brand's focus on team sports for a stronger connection with young athletes and is banking on a stronger product line-up for Fall 2025. Additionally, the company has eliminated redundant SKUs in its assortments and assigned its "best footwear designers" to develop lower price-point footwear styles. Sales: Declined by nearly 17% to $440.2 million in the period ended Sep. 30, but the figure from ongoing businesses was $20 million above an internal estimate. Merrell sales rose by 1.4% to $159.2 million on growth in D-T-C and wholesale. Saucony revenues fell 10% to $104.8 million despite "demand momentum" in e-commerce and U.S. wholesale. Operating profit: Rose by 29% year- over-year to $35.2 million from $27.3 million. Gross margin: Improved 450 basis points to 45.3% from 40.8% on a healthier sales mix and supply chain cost savings. Key developments: FY24 revenues from ongoing business is forecast at $1.73 to $1.745 billion. Company is seeing momentum grow for its brands due to additional product introductions, product design improvements, and cleaner and lower inventory levels at retail. Has opened its first innovation hub on the west side of Boston to augment its teams in Michigan. Sales: Jumped 3% for the period ended Nov. 2 that included a comparable sales increase of 6% and 11% comp gain within the Journeys Group that had an improved product assortment and a new visual presentation. Nashville-based company achieved 24% ecommerce penetration to $132 million. Operating profit: Fell by 5.9% to $10.2 million. Gross margin: Rose by 70 basis points to 47.8% but fell by 80 basis points at Journeys due to a product mix heavy on brands with lower initial margins, but higher ASPs (average selling prices). Key developments: More product assortment newness and brand storytelling are a major shi for Journeys, which is focused on casual, canvas and athletic brands and the underserved teen girl in the mall. Has opened updated store concepts for the Journeys chain in 10 locations thus far. Repositioning its Brands Group to emphasize key brands and channels. Sales: Increased 13.7% to $425.8 million for the period ended Sep. 28. Consolidated same store sales rose by 3.1% with retail up 2.5% and e-commerce increasing by 8.4%. Operating profit: Rose 3.6% to $40.0 million from $38.6 million. Gross margin: Inched up 10 basis points to 36.5%, driven by an 80-basis point increase in merchandise margin that was offset by 70 basis points of deleverage in buying, occupancy and distribution center costs. Key developments: e 426-store chain has named Chief Digital Officer John Hazen as its new CEO to replace Jim Conroy, who le the retailer to become CEO of Ross Stores. Ladies' western boots and apparel comped up "high single digits" and combined work boots/ apparel business comped up by a low- single digit during the recent quarter. Current FY outlook for the 12 months ending March 29, 2025, calls for same store sales growth of 3.0% to 5.0% with e-commerce same store sales expanding by 7.5% to 9.5%. n 12 Footwear Insight Business Report Quarterly ~ Q4 January 6, 2025 footwearinsight.com BRAND & RETAIL SCORECARD BASED ON RESULTS REPORTED IN CALENDAR Q4

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