Solo Brands, Inc. (NYSE:DTC) Q4 2022 Earnings Call Transcript

And what that’s led to is much better conversations and stronger partnerships and a willingness on DICK’s side to broaden the door count and also to most importantly, less than the doors because we already were pretty wide with the doors. But it was really just going deeper in the store getting more footprint like you mentioned, you’ve seen kind of more product being out there so carrying more SKUs almost a store and store type approach is what we’re starting to lean into. And that’s consistent not just with DICK’s but with other retailers as well. So doing a better job especially for Solo Stove that coordinating promotions at giving earlier visibility to new product launches and things like that has really helped us to build stronger partnerships with retailers that are now saying gosh with this level of visibility and this level of coordination we really want to go deeper and stronger with all the brands.

Randy Konik: Super helpful. Thanks, guys.

John Merris : Thanks, Randy.

Operator: Our next question is from Robby Ohmes from Bank of America. Robby, your line is now open. Please go ahead.

Unidentified Analyst: Hi. It’s Maddie on for Robby. Thanks for taking our question. Just first, what was the key reason for the decline in D2C revenue growth in 4Q? Was it driven by slower new customer acquisition? And how does the D2C channel revenue growth compared to yourself throughout brick-and-mortar retail?

John Merris : Yeah, thanks, Maddy and good morning. So, we grew — I think the stat was 196% in wholesale. Certainly there was a shift and just where consumers were buying. So I think that was definitely a driver. I think also, if you look at previous year 2021 Q4, the shopping behavior just happened it came way earlier. So consumers were concerned about being able to get the gifts that they were looking for Christmas. And it’s holiday shopping, we were even seeing holiday shopping happening in mid — early mid-October in 2021. This year, as you heard on our last call, the first part of Q4 look much different than it in 2021, it looked much more like a pre-COVID type buying behavior, where consumers seem to be waiting. The good news is that consumers did show up during the week of Thanksgiving and through the rest of the year.

And so we made up a ton of ground, not all of the ground. And the last thing I would just make note of is that Somer called this out, but Q4 of 2021, I think we were lapping something like 130% or something like that 160% year-over-year growth. So we just had a big laugh in addition. So those three factors I’d say the wholesale shift the overall just changing consumer buying behavior and then the year-over-year lap that we were facing. In terms of sell through at the retailers, and I think Randy kind of alluded to this and I didn’t address this one. But what we’re hearing very positive feedback overall from our retail partners on sell through and that’s reflected in they’re coming back with replenishment orders. So we’re happy with what we’re seeing on the wholesale front.

It’s not just a sell in scenario for us it’s definitely sell through and ultimately that’s been leading to replenishment order. So far so good on that breath and looking forward to continue to lean in to both D2C and wholesale this year.

Unidentified Analyst: Okay, great. Thank you. That’s helpful. And our second question, how does your perceived promotional strategy work in an inflationary environment and a time when the consumer is seeking a deal?