Columbia sportswear

Columbia Sportswear reports first quarter results – WWD

Columbia Sportswear Co. president and CEO Tim Boyle said the pace of the fundamental recovery exceeded the company’s expectations for the first quarter.

First quarter sales increased 10% to $ 625.6 million compared to the same sales period last year.

In the release of results for the quarter ended March 31, Boyle noted “a return to net sales growth and stronger-than-expected financial results.” This meant a 35% increase for its direct-to-consumer e-commerce business compared to the same sales period last year. This sector now represents 20% of total sales.

Boyle noted “a good end of fall sales, excellent sales anticipated for spring,” strong consumer demand, low inventory and a “favorable full-price sales environment.”

Based on the strong first quarter performance, Columbia forecasts net sales of $ 3.04 billion to $ 3.08 billion in 2021, up 21.5-23% from 2020. Operating income is expected reach $ 347-369 million with an operating margin of 11.4. at 12 percent. Diluted earnings per share are between $ 4.05 and $ 4.30.

Founded in Portland, Oregon, in 1938, the company sells its branded products in approximately 90 countries. In addition to the Columbia brand, Columbia Sportswear owns Mountain Hardwear, Sorel and Prana. Clothing, accessories and equipment soared 4% to $ 469 million and footwear 35% to $ 157 million. For the first quarter, inventories were reduced 9% to $ 525.7 million, in part due to a decrease in inventory purchases in the spring, a reduction in excess inventory and delays in receiving inventory . “Aged inventory” represents “a manageable portion” of the company’s total inventory.

In terms of brand performance, Columbia was up 12 percent to $ 527 million and Sorel was up 20 percent to $ 46 million. Prana, however, fell 14 percent to $ 32 million and Mountain Hardwear fell 4 percent to $ 21 million. Overall, wholesale increased 3% to $ 336 million, and direct-to-consumer sales climbed 20% to $ 290 million.

Regionally, net sales in Europe, Middle East and Africa increased 27% to $ 71 million, Latin America / Asia-Pacific increased 9% to $ 112 million, United States rose 9% to $ 409 million and Canada edged up 1% to $ 34. million.

In a call with analysts Thursday, Boyle noted that Columbia had appointed a general manager for China. He also pointed out the planned investments for digital and supply chain improvement and the interest of young consumers in outdoor activities.

Concluding his remarks, Boyle said, “I am confident in our strategy and encouraged by the fundamental recovery underway. We are committed to driving sustainable, long-term growth and investing in our strategic priorities to drive global brand awareness and sales growth… ”

Port congestion and logistical constraints led to a “subsequent stalling” of receipts and deliveries of stocks in the spring. With supply chain and logistics constraints still an issue, delays are expected for fall receipts and deliveries. These factors, combined with health and safety measures implemented at its distribution center, have resulted in increased transportation, distribution and supply chain costs, the company said.

Going forward, the company’s capital allocation will involve investing in organic growth opportunities, returning at least 40% of free cash flow to shareholders and “opportunistic mergers and acquisitions,” according to the analysis. by Jim Swanson, Executive Vice President and Chief Financial Officer. These strategic priorities will depend on market conditions.

Columbia said the majority of its own stores remained open in the first quarter, with store traffic varying by region but “below pre-pandemic levels.”