In its first quarter of 2013, Columbia Sportswear managed to raise its total sales by 5 percent compared with the same period of last year, reaching $348.3 million. The impact of foreign currency changes was lower than 1 percent. Net income jumped by 159 percent to $10.1 million, including restructuring charges of about €2 million. The reorganization charges include the cost of improving product development in Europe under the region's new interim chief, Doug Morse.
Apparently, the weather conditions were better for the company than one year ago, notably in North America. The cold weather helped to reduce the company's inventories for the autumn season, primarily through Columbia's own factory outlets.
In geographical terms, the group's business was up everywhere except in Canada. U.S. sales were up by 4 percent to $200.5 million compared with last year's first quarter, while Latin America and Asia-Pacific had a rise of 8 percent to $83.1 million. Benefitting from exchange rate effects, the Europe, Middle East and Africa (EMEA) region managed to boost sales by 7 percent to $40.9 million. The Columbia brand recently shut down its single-brand store in Munich.
By brands, Sorel was the front-runner with a sales jump of 94 percent to $12.4 million. This compared, however, with a very poor period in the previous year. Mountain Hardwear was up by 5 percent to $32.1 million. The smallest increase came from the core Columbia brand with 3 percent higher sales of $301.1 million. In terms of product categories, shoes rose by 11 percent to $54.0 million, and apparel, accessories and equipment combined reached $294.3 million or 4 percent up from the first three months of 2012.
For the whole financial year, the company expects a slight decrease in sales and a stable gross margin overall. Ignoring a few items such as the joint venture in China and some restructuring charges, the operating margin should be around 7.5 percent.
Tim Boyle, the group's chief executive, expects Sorel, Columbia's most weather-sensitive brand, to suffer a sales decline this year, though only a modest one. Columbia is optimistic about the launch of its Omni-Freeze Zero technology, which hit the market with the support of the largest marketing campaign in the company's history. The new offer was especially welcomed in the south of the U.S. Retailers around the globe were supplied with no less than two million demonstration sleeves to enable the sales staff to explain the way the new technology works (more in The Outdoor Industry Compass).
