Greetings and welcome to Columbia Sportswear Third Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow today's presentation. Operator instructions: As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Andrew Burns, Vice President of Investor Relations and Strategic Planning. Thank you. You may begin.

Good afternoon and thanks for joining us to discuss Columbia Sportswear Company's third quarter results. In addition to the earnings release, we furnished an 8-K containing a detailed CFO commentary and financial review presentation explaining our results. This document is also available on our Investor Relations website investor.columbia.com. With me today on the call are Chairman, President and Chief Executive Officer, Tim Boyle; Executive Vice President and Chief Financial Officer, Jim Swanson; and Executive Vice President and Chief Administrative Officer, Peter Bragdon. This conference call will contain forward-looking statements regarding Columbia's expectations, anticipations or beliefs about the future. These statements are expressed in good faith and are believed to have a reasonable basis. However, each forward-looking statement is subject to many risks and uncertainties and actual results may differ materially from what is projected. Many of these risks and uncertainties are described in Columbia's SEC filings. We caution that forward-looking statements are inherently less reliable than historical information and we do not undertake any duty to update any of the forward-looking statements after the date of this conference call to conform the forward-looking statements to actual results or changes in our expectations. I'd also like to point out that during the call we may reference certain non-GAAP financial measures including constant currency net sales. For more information about non-GAAP financial measures and results including a reconciliation of GAAP to non-GAAP measures and an explanation of management's rationale for referencing these non-GAAP measures, please refer to the supplemental financial information section and financial tables included in our third quarter 2021 earnings release and the appendix of our CFO commentary and financial review. Following our prepared remarks, we will host a Q&A period during which we will limit each caller to two questions, so that we can get to everyone by the end of the hour. Now, I'll turn the call over to Tim.

Thanks Andrew and good afternoon. I hope everyone is well and vaccinated. Our third quarter results reflect the unique operating environment in which we find ourselves characterized by high consumer demand for our products and an unprecedented supply chain disruption. During the quarter, delayed inventory receipts impacted U.S. wholesale shipments and resulted in a net sales shortfall compared to our internal plan. I'd emphasize that our net sales shortfall was not a function of consumer demand, which remains robust. Early fall 2021 sell-through at our North American wholesale customers' stores, as well as our own DTC business has been very encouraging. The retail environment is healthy with low promotional activity, contributing to higher-than-planned gross margin. When combined with lower-than-planned SG&A spend, we were able to exceed our operating income forecast. Our fortress balance sheet is intact with cash and short-term investments of over $600 million and no bank borrowing. We had several brand highlights during the quarter. Columbia introduced Omni-Heat Infinity, the largest innovation launch in our company's history. This next evolution of the thermal reflective warmth further strengthens our portfolio of differentiated innovations while providing exceptional warmth and value to customers. SOREL's bold collection of sneakers, sandals and wedges drove meaningful growth on SOREL.com with e-commerce sales more than doubling compared to third quarter 2019 pre-pandemic levels. Mountain Hardwear's energized fall '21 product line fueled outstanding growth, including expanded distribution at new retail doors and healthy growth led by a broad-based recovery in its wholesale business. As we enter the important holiday sales season, we're acutely focused on navigating supply chain disruptions and maximizing sales potential. Our revised net sales outlook reflects the reality that we will not be able to entirely offset this headwind. Given our improved outlook for gross margin and updated operating expense assumptions, we're raising our diluted earnings per share outlook to $4.55 to $4.80. As we finish the year and look forward to 2022, I'm excited about our innovative product pipeline and the momentum we see across the brand portfolio. Based on this strength, we believe we can achieve mid-teens or better net sales growth in 2022, on top of the low 20% growth we anticipate in 2021. I will discuss our initial 2022 commentary in more detail later in the call. Now I'll quickly review our third quarter 2021 financial performance and reference year-over-year comparisons versus third quarter 2020. Third quarter net sales increased 15% reflecting DTC growth as well as higher fall '21 wholesale shipments as we anniversary prior year pandemic disruptions. By channel, net sales growth was driven by 25% growth in our DTC business and 10% growth in the wholesale business. Within the DTC business, brick-and-mortar net sales grew 36% in line with our expectations. Store traffic levels improved significantly compared to third quarter 2020, but remained below pre-pandemic levels. DTC e-commerce net sales grew 6% and represented 11% of the total sales mix. We are encouraged to see sales in this channel remain substantially above 2019 levels as consumers return to in-store shopping. Gross margin expanded 180 basis points to 50.7% of net sales and SG&A expenses grew 7% year-over-year. The combination of gross margin expansion and operating leverage resulted in 440 basis points of operating margin improvement compared to third quarter 2020. Diluted earnings per share increased 62% to $1.52. I will now review third quarter year-over-year net sales growth, performance by region and brand. For this review, I will reference constant currency net sales growth rates, unless otherwise noted. U.S. net sales increased 15% reflecting mid-30% DTC growth and low single-digit wholesale growth. U.S. wholesale shipments were below our internal plan and would have been higher absent supply chain disruptions. We're encouraged by our early fall '21 sell-throughs, which are up year-over-year despite lower retail inventory levels. The growth in our U.S. DTC brick-and-mortar business reflects year-over-year improvements in store traffic levels as well as lower promotional activity that resulted in higher average order values. Our U.S. DTC e-commerce business also benefited from significantly less promotional activity compared to the prior year. Turning to international sales performance. During the third quarter sales trends continued to be influenced by each region's COVID-19 restrictions, vaccination rates and consumers' willingness to shop in store. Canada and Europe experienced post-lockdown recoveries while other regions such as China and Japan were impacted by government-mandated COVID-19 restrictions during the quarter. Latin America and Asia Pacific region, or LAAP, third quarter net sales increased 10%. In China net sales were up mid-teens percent, primarily reflecting higher fall '21 wholesale shipments partially offset by lower DTC sales. In the quarter DTC performance was impacted by lower store traffic resulting from COVID-19 related government restrictions, as well as isolated flooding and power outages across several provinces. We remain focused on driving growth and enhancing the consumer experience in this important market. For fall '21, we're investing in demand creation, including a digital-first full-funnel marketing campaign highlighting Omni-Heat Infinity. Korea net sales increased mid-teens percent, primarily reflecting higher fall '21 wholesale shipments and, to a lesser extent, DTC growth. In Japan, net sales decreased low single-digit percent as demand was impacted by the state of emergency declaration that was in place from mid-July through quarter end year-to-date. There have been over 200 days with some level of state of emergency restrictions in place in Japan compared to approximately 50 days in 2020. LAAP distributor markets were up low-20% driven by higher fall '21 wholesale order shipments. Europe, Middle East and Africa region or EMEA third quarter net sales increased 9% driven by low double-digit growth in our Europe direct business and mid-single-digit growth in our EMEA distributor business. Growth was driven by higher fall '21 wholesale order shipments as well as improved DTC performance in our Europe direct business as lockdown restrictions eased. In Canada, net sales increased 18% in the third quarter, primarily driven by higher fall '21 wholesale shipments and improving DTC performance as this market reopened. Looking at performance by brand, Columbia brand net sales increased 15% in the third quarter as DTC brick-and-mortar growth was strong but wholesale net sales performance across all channels was constrained by supply chain disruptions. Sell-through of Columbia's fall '21 product line has been encouraging. Top performing categories include fleece, sportswear and rainwear with continued strength in PFG products. In October, we officially kicked off our global marketing campaign to support the launch of Omni-Heat Infinity, our new highly differentiated addition to the Omni-Heat family. This full-funnel campaign spans in-store, traditional and digital social outlets and will be engaging customers around the world throughout the season. In fact, later this winter Omni-Heat Infinity will enter new territory as the first Columbia product to reach the moon. Stay tuned for more details on that front. Our Omni-Heat Infinity launch has been covered extensively by media outlets, including Men's Journal, Gear Patrol, Good Housekeeping, Women's Health and Outside magazine among others. Combined media coverage of the launch has surpassed 340 million impressions and counting. Omni-Heat Infinity was also featured on The Late Show as host James Corden and his staff went head-to-head with our newest brand ambassadors from the USA Curling team. In September, we announced a multi-year sponsorship with USA Curling. Columbia will be working closely with the USA Curling national team program, including the men's, women's, junior and wheelchair teams. Curling is one of the most watched sports during the Winter Olympics, and the Columbia uniforms and our logo will be prominently displayed as the U.S. team defends its gold medal over multiple weeks of competition. I can't think of a better way to showcase our brand than a global sport that takes place completely on ice. In addition to the Omni-Heat Infinity launch, we had several unique brand stories to highlight across our digital platforms during the quarter. We featured brand ambassador Bubba Wallace and renowned National Geographic photographer Babak Tafreshi as they captured the brilliant Utah desert night sky. Together, they journeyed to Utah's remote Gooseberry Mesa to take Babak's passion for outdoor photography to the next level while relying on their Columbia gear to keep them warm. Earlier this month, we also got a chance to celebrate Babak's historic First Cup series win at Talladega Superspeedway. Congratulations, Babak. We also featured country musician and Columbia ambassador Luke Combs, as he found adventure on the wide open spaces of Montana with his wife and friends led by a Columbia Sportswear adventure crew. They explored some of Big Sky Country's hidden gems during a series of fishing, trap shooting and quad riding excursions. On the product partnership front, we're continuing our successful collaboration with Disney and Lucasfilm with another Star Wars collection for fall '21. This new special edition collection is inspired by the galaxy's most notorious bounty hunter Boba Fett, and will launch ahead of his highly anticipated new Disney+ series this December. Before testing our emerging brands, I'd like to update you on some recent Columbia brand management changes. We're pleased to announce that responsibility for global wholesale sales will be managed by Tim Sheran in the newly created position of Senior Vice President, Global Wholesale. Tim will leverage his extensive international experience as he oversees Asia direct, Canada, Europe direct, and our U.S. wholesale businesses. We are also taking this opportunity to further align our Columbia brand offense with our U.S. DTC leadership, who now report directly to Columbia Brand President Joe Boyle. Turning to our emerging brand portfolio, exceptional consumer demand for SOREL was evident in the third quarter. SOREL.com net sales increased over 30% versus third quarter 2020 and are up over 100% compared to third quarter 2019. This growth was led by sneaker, sandal and wedge category performance as well as popular winter style products. During the quarter, SOREL launched a multi-channel marketing campaign to introduce the new boot and heel collection, which is driving new customer traffic to SOREL.com and quickly becoming a favorite among influencers and celebrities. The continued success of these new categories and styles validates SOREL's evolution to become a year-round fashion footwear brand. Overall SOREL brand net sales decreased 5% as DTC e-commerce growth was more than offset by lower fall '21 wholesale shipments resulting from supply chain disruptions. prAna net sales increased 19% in the quarter led by broad-based wholesale growth. I'm encouraged to see prAna's account base, including national accounts, smaller independent retailers and new points of distribution, embrace the fall '21 product line. The latest outer collection, which features many sustainable features, is off to a promising start to the season. Female consumers are showing strong interest in the down collection, including the pre-priced SLA series. prAna will be emphasizing outerwear, which is an important growth category for the brand, in its new marketing campaign launching in early November. During the third quarter, we announced Monica Mirro was appointed prAna Brand President. She brings extensive expertise and leadership roles in building inspirational omnichannel brands. I'm confident that her growth mindset, strategic discipline and people-first approach will strengthen the product and brand. Mountain Hardwear net sales increased 47% in the quarter. Growth was led by higher fall '21 shipments that reflect the team's tremendous efforts to enhance the product line and extend the brand's reach into new retailers. The new in-store displays at important wholesale accounts look amazing. I hope you get a chance to see the Mountain Hardwear display at some of the newly opened public land stores. When reviewing Mountain Hardwear's innovative product, you start to get a sense for the tremendous potential of this authentic premium mountain sports brand. During the quarter Mountain Hardwear's innovation received awards and editorial callouts. Outside magazine recently gave the Pong ski pack a Gear of the Year award in its 2022 buyers guide. GearJunkie featured the Super DS Stretch Down Jacket in a recent article on the best puffy jackets of all time. During the quarter, we named Troy Sicotte as the new Mountain Hardwear Brand President. Troy has served as Vice President of Sales for the past three years and has been co-leading the brand on an interim basis. This well-deserved internal promotion facilitates a smooth transition and allows the team to focus on accelerating growth through this pivotal time in the brand's history. He is an energetic leader that will serve Mountain Hardwear well. I'll now discuss our 2021 financial outlook and preliminary 2022 commentary. This outlook and commentary includes forward-looking statements. Please see our CFO commentary and financial review presentations for additional details and disclosures related to these statements. Our updated 2021 outlook contemplates at 21.5% to 23% year-over-year net sales growth compared to pre-pandemic 2019 results. Our updated 2022 outlook currently contemplates flat to 1% net sales growth relative to 2019 on a comparable basis. Looking at the balance of the year, our updated guidance reflects the supply chain disruptions that have intensified in recent months. Inbound shipping times, port congestion and other logistic delays have elongated transit time from factory to inventory receipt. Additionally, factory closures in southern Vietnam have added additional pressures to an already stressed global supply chain. While Vietnam factories began to reopen in October, the factory downtime has impacted the availability of fall '21 products and timing of spring '22 production. To date order cancellations resulting from delayed receipts and deliveries have been minimal in this high demand, inflationary environment. We remain confident in our ability to profitably sell in-transit inventory in current or future seasons. I'd also note that the job market remains very tight; staffing challenges across our retail stores and distribution centers present further risk to realizing net sales during the peak holiday sales season. Based on year-to-date results and the healthy, full-price selling environment, we are raising our gross margin guidance for the full year. We now expect gross margin to expand by 190 to 210 basis points. We expect SG&A to grow slower than net sales. Demand creation is expected to increase as a percent of sales to 6% in 2021, compared to 5.7% in 2020. Combined, we expect operating margin to be in the range of 12.6% to 13.2%. Diluted earnings per share is expected to be in the range of $4.55 to $4.80 compared to our prior range of $4.30 to $4.55. While significant uncertainty persists and we have not completed our 2022 planning process, I'd like to share some initial thoughts on how we are approaching the year. This commentary incorporates our current view of the supply chain disruptions, constraints and expenses, but could materially change as conditions evolve. Our spring '22 wholesale sales forecast continues to improve since the last update and now reflects over 30% growth compared to spring '21 sales levels. Based on momentum we see across the business, we believe mid-teens or better net sales growth for the full year is attainable. Looking at gross margin performance, we expect higher product and freight costs, as well as the likelihood of a more normalized promotional environment, will create gross margin pressure. In 2022, we do not expect planned price increases will fully offset these inflationary headwinds. We are also planning to make investments across the business, including demand creation, retail store expansion, supply chain, and digital capabilities that will add to our overall spending levels. On the digital front, we're accelerating our digital and analytics capabilities to leverage consumer data, enhance the consumer experience across our platforms and drive efficiency across the organization. We're also investing in supply chain capabilities to expand distribution capacity, improve inventory management, and adapt to shifts in our sales mix. With these factors in mind, we're currently planning our 2022 operating margin to be similar to the range per our 2021 financial outlook. It's important to reiterate that we are maintaining this level of operating performance, despite significant cost pressures and growth investments across the business. In summary, I'm confident we have the right strategy in place to drive sustainable and profitable long-term growth. We're investing in our strategic priorities to drive global brand awareness and sales growth through increased demand creation investments, enhance the consumer experience and digital capabilities in all of our channels and geographies, expand and improve global direct-to-consumer operations with supporting processes and systems, and invest in our people and optimize our organization across our portfolio of brands. That concludes my prepared remarks. Operator, could you please help us get questions for the remainder of the hour?

Operator instructions: Our first question comes from the line of Bob Drbul with Guggenheim Securities. Please proceed with your question.

Tim, just for the record I am vaccinated. So we're doing well here. A couple questions: on the supply chain challenges in terms of the inventory receipts, you said minimal cancellations — what are you seeing in terms of where inventory is in transit and arrival times? When you talk about the spring product, you said spring is now looking up 30% — just the ability to actually get that product and make those numbers. Could you give us a little bit more insight in terms of how it's running operationally for you guys today?

Yeah, certainly. I would point out that the bulk of these supply chain logistics-related issues are in the U.S. It seems like Canada and Europe deliveries have been much more timely. As a reminder, we have product entering the U.S. in many different ports, including Seattle, Portland, Long Beach, Los Angeles, Savannah, and others. So it's a set of delays at multiple ports. By far, the bulk of our fall merchandise has been shipped from the factory and much of it has been received. Although at quarter end we had a fairly significant increase in our in-transit inventory. Jim may have the specific numbers, but it's fairly significant and it's unfortunately happening at a time when the brand is incredibly popular and selling very well. We are turning around this merchandise as it gets into our distribution centers as fast as possible. The constraints are not necessarily in our DCs, but rather in waiting for the merchandise to arrive from the ships.

Bob, just to add a little bit of color here. We're seeing significant consumer demand. Some of our challenges are on the supply chain as you're pointing out. To share some specific data, we've produced well over 90% of our total production for the fall 2021 season. We received right around 70% of that. So there's still an amount that's on the water or coming through a port in order for this to get in. Earlier this year, we were experiencing in-transit times from a logistic standpoint that were about three weeks longer than they'd ordinarily been. With the port situation and availability of trucks and drivers and so forth worsening as we came through the quarter, that's effectively doubled. So three weeks became six weeks and that's essentially what's leading to one the miss on the quarter and in part the reduction of revenue outlook for the year.

Okay, great. As you think about the remainder — the roughly 10% you haven't produced — and as you think about your spring orders and the orders you've placed with the factories, how will you address either canceling the orders or taking everything and sitting on it and working it through factory outlets? How are you philosophically thinking about that over the coming weeks and months?

Certainly. We have a high percentage of our merchandise that is carryover year after year. Our styles evolve slowly. Much of this merchandise is in-line and we would sell it in the springtime throughout the year, and in the southern U.S. we'd sell year-round. So we're in a position, frankly with the company's balance sheet, that we can buy and hold this merchandise. Especially in an inflationary environment on the sourcing side, we're going to be keeping this merchandise and generally selling it to our in-line wholesale customers in the proper time and proper season.

Great. One last question: regarding the price increases you have planned, can you talk us through how you're thinking about that with many of these higher costs in-season?

Certainly. The costs associated with ocean freight and shipping were relatively unseen and a surprise. We're going to include those costs as well as increased manufacturing costs in our calculations and in our pricing for future seasons. Our expectation is there will be minimal margin impact because the brand is selling incredibly well and there is a shortage of product. We expect to be able to pass on these price increases to consumers and retailers where we have pricing power. Jim and I did provide preliminary remarks regarding our 2022 outlook and, in light of the inflationary headwinds, we've increased price where we've got purchasing or pricing power. We do anticipate some degree of margin pressure and we'll come back with more specific full-year 2022 guidance at year end.

Our next question comes from the line of Laurent Vasilescu with Exane BNP Paribas. Please proceed with your question.

Thank you for taking my questions and congrats on solid results in this environment. I wanted to ask: did you parse out whether there was a shift from Q3 to Q4, and obviously you lowered your overall revenues by $80 to $90 million — is that lost revenue or potential slippage into next year? Hence why you raised your spring order book from effectively around 20% to now over 30%?

Laurent, it's incredibly difficult to measure timing effects between the third and fourth quarter. You have to keep in mind we're comping against a very difficult environment last year with order cancellations that were placed from a production standpoint. That said, if you look at the math on the quarter of about $50 million, that's at least the amount shifting out and we were already aware of certain in-transit times being longer and production delays. If you reference Q3 of 2019 as a baseline, that's going to be in the hundred-million-plus range in terms of timing shift, which is in the order of magnitude when comparing our wholesale business Q3 of this year over Q3 of 2019. As it relates to slippage, it's difficult to tell. We've not seen significant wholesale order cancellations to date; inventories are lean in the market. As soon as we can get things shipped we're working closely with logistics partners and our customers to expedite freight where possible. We hope to continue to convert those orders in the first part of Q1. It's probably important to note that for many of our retailers and including our own stores, the month of January for selling winter merchandise is about the same size as the month of November.

Thank you for that. And impressive — 30% potential growth for spring orders. Can you unpack that a little bit? Is it across footwear, apparel, emerging brands, or the Columbia brand? Any color would be helpful.

It's pretty broad-based growth, Laurent. It's growth across the entire brand portfolio with particular strength in Columbia, SOREL and Mountain Hardwear, but all four brands are growing. Geographically nearly all geographies are up, led by the U.S. Europe is up to a lesser degree but still meaningful. The only geography down a bit is Japan, which is not a surprise given the state of emergency and inventory that many wholesale customers continue to carry. As it relates to categories, footwear is outpacing apparel.

Our next question comes from the line of Camilo Lyon with BTIG. Please proceed with your question.

Great. This is Mackenzie Boyle for Camilo. First question is on gross margin next year. When you say you expect to see pressure, is there any quantification you can give us? Do you think it will be down versus FY21 or FY20? Any commentary on the puts and takes to gross margin next year would be helpful.

Nothing we can quantify at this stage. We'll come back as part of our February call and provide a more comprehensive update on the full-year outlook. By pressure, at this stage we've contemplated some degree of gross margin contraction as we look at 2022. The pressure points will be a combination of ongoing supply chain effects, namely ocean freight and the ability to absorb those costs into pricing, and a potential normalization of the promotional environment as inventory settles out in the marketplace. We'll provide more color in February.

Thanks. Did you see any impact in the U.S. from the Delta variant surging, any callouts specifically by geography and the impact on store traffic? Are you seeing a bounce back in October in geographies where people may have pulled back?

On the whole, it was modest. Our DTC business and store traffic showed steady progress through the quarter. We did see more meaningful effects internationally — Japan has been under a continued state of emergency for most of the quarter and we noted some similar government restrictions in parts of China.

Our next question comes from the line of Paul Lejuez with Citigroup. Please proceed with your question.

Thanks. I was wondering if you could talk in more detail about what factors benefited your SG&A this quarter. I think you mentioned some expense reductions and a last-term benefit, so was hoping you could quantify which buckets those were in. Also, there's some implied SG&A leverage next year — what is driving that?

In the quarter where we came in favorable relative to our outlook a couple of things come to mind. It's a tight labor market, and our distribution centers and retail stores have been light on staffing despite incentives we've put in place, which drove a significant component of SG&A being down on the quarter. To a lesser degree, there were reductions in discretionary and variable spend tied to the top line. Looking out to next year, we provided limited color relative to SG&A other than that we're targeting operating margin to approximate this year's range, and it's too preliminary to get into all the puts and takes. There are strategic investments we plan to make in demand creation, digital capabilities and supply chain.

How long do you forecast these positions will remain open and benefit your SG&A? Is this a couple of quarters or more?

It's going to be challenging at least through the fourth quarter, which is our peak. We need to work through staffing for our DCs, stores and call centers to process orders. That issue will be something we manage through the fourth quarter and then resettle and plan ahead for 2022.

Our next question comes from the line of Alex Perry with Bank of America Securities. Please proceed with your question.

Hi, thanks for taking my question. I was wondering if you could talk more about SOREL and how much of the decline was due to production issues and overall supply chain headwinds. Could you talk about the outlook for securing additional production capacity for SOREL and also the broader footwear business?

SOREL is an incredibly rapidly growing brand and it's very disappointing that we had supply chain disruptions this quarter. The brand has historically been known almost exclusively as a winter brand, but the real growth has been in sneaker categories, wedge categories and expansion beyond just winter. I would say 100% of the miss in that brand was a function of either supply chain disruptions at the factory or inbound logistics issues. We're working with large factory groups for future production where we want to be able to fulfill the promise of SOREL's growth. It's likely going to be at least one more season before we're completely able to get all the product the brand demands. It's been an enormous success and also disappointing from the supply side because the demand is certainly there.

Alex, to add a little color: the business was down in the quarter entirely due to wholesale being affected by later production and longer in-transit times and production capacity constraints. What's most indicative of where the brand is: the e-commerce business still grew well over 30% in the quarter and on a two-year stacked basis the brand has grown over 100% compared to the third quarter of 2019. Despite the lower revenue in the quarter, the underlying fundamentals are quite strong and we're encouraged looking out to next year with the brand.

As it relates to the Columbia brand and the footwear business in general, we are operating under a constrained environment with factory closures in many parts of Asia. The brand's footwear business has the capacity to be the largest product category for the business. It's disappointing to have these supply side issues because the demand is there.

Thanks. My follow-up: could you help parse out the mid-teens revenue growth outlook for 2022 a bit more? How much of that is from channel fill as competitors consolidate wholesale presence? And do supply constraints affect your ability to serve late-season reorders as we work into Q1 2022?

There has been some benefit as some brands have abandoned certain parts of the retail universe, and that's helped, but it hasn't been the entire reason for the brand growth. Growth has been driven by increased marketing spend, product innovations and the strength of our brands. The expectation for next year is a function of how much product we think we can get to supply demand because gross demand will be larger than what we can fulfill if constraints persist.

Alex, the underlying assumptions of the 2022 revenue plan are still early. We have the spring order book in hand, which largely drives the over-30% spring growth. The vast majority of the spring growth reflects the spring order book we've taken. We're wrapping up sales meetings and going to market for the fall season now, so there's not a lot of visibility for fall orders yet. Aside from the spring order book, the confidence in the level of growth next year comes from the strength we see in the brand, the product and the innovation coming into the marketplace.

That is all the time we have for questions. I'd like to hand it back over to management for closing remarks.

I want to thank everybody for joining in today. We're anxious to fulfill the promise of our order book and get our merchandise shipped to customers and consumers. We look forward to following up with you on fourth quarter results. Thanks for listening, and don't forget to get vaccinated.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.