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

John Merris : Yeah, it’s a good question. I think the biggest shift for us is more around the coordination with our retail partners in the way we’re thinking about promotions moving forward. We have been, in large part in a great position because, in this inflationary environment, rather than passing cost onto the consumer, we’ve been able to hold our pricing for the most part. We’ve actually been slightly less promotional year-over-year in this first quarter. And our focus again, is on customer experience in delivering for the customer. And so in an environment like this, where they’re really, really tight and kind of pinching every dollar and making it stretch. We’d like to position we’re in from an overall pricing and promotional perspective, because it is allowing more consumers we think, to participate with our brands, and feel like we’re in it with them versus, versus gouging them and increasing our pricing.

So we’re in a good spot in that regard. And again, our marketing profile is allowing us to hold pricing to not increase pricing to the consumer and ultimately still deliver really strong margins, as a business.

Unidentified Analyst: Great, thank you. Best of luck going forward.

John Merris : Thanks.

Operator: Our next question is from Ryan Sundby from William Blair. Ryan, your line is now open. Please go ahead.

Ryan Sundby: Hey, guys. Thanks for the question. Can you talk a little more about what you’re seeing too far internationally, maybe how that ramp looks across the different markets. Its product mix, similar to what you’re seeing here in the U.S. And then as you think about a more even split between domestic and international over time? Is that based on kind of the current markets today? Or would that require further expansion? Thanks.

John Merris : Yeah, thanks, Ryan. And good morning. It definitely will include more markets than where we currently are. So I’ll just kind of address that one really quickly. On the product mix, and just overall strategy, we’re very early. Last year was our first full year, having localized sites both in Canada and in Europe, very pleased with what we’re seeing out of the gate, certainly a faster ramp up, as you would imagine than call it the first 18 months and when we launched domestically the brand. So overall, we’re really pleased. From a SKU mix standpoint, it looks very similar to the U.S., I’d say the one exception internationally is when we launch new products, there’s just generally a lag between our international business and our domestic business.

So if we launched for instance, Pizza Oven, we launched last spring here in the U.S., and did launch it until mid-fall to late fall in our international market. So you’ll then in general see lag with new products, but otherwise, we were carrying the majority of the SKUs. And as I’ve mentioned in the past, the other maybe note is that Solo Stove is generally in a new market is the lead brand. And then we look to follow on behind Solo Stove with the other brands, just based on size of opportunity. And overall brand awareness.

Ryan Sundby: Got it. Okay. Maybe just following up on Randy’s question, John you mentioned deepening penetration with existing customers be more coordinated moving forward. But it does seem like wholesale is a key growth driver next year. So how should we think about having new partners or maybe even more permanent presence and channels like club ?

John Merris : Yeah, I think all of that is in motion. And it’s all at the table right now. We’re still early and, the guide that we’re putting forth kind of reflects what we have in hand today, but recognizing that I think all of us would agree that we’re very under penetrated and under exposed right now from an overall wholesale retail standpoint. There’s a lot of opportunity for us to lean in here. And we’re exploring all options. So again, whether it’s going wider or going deeper so wider meaning more retailers more doors, going deeper meaning more permanent in store and store in store, more prominent displays within retailers, that sort of thing. Those are all things that we’re pretty excited to continue to lean into. And our conversations so far with our existing retail partners, suggests that we’re moving in the right direction there.