Columbia Sportswear saw its net earnings jump by 108 percent to $10.0 million in the second quarter in spite of an increase of only 3.3 percent in total revenues to $218.6 million. The gross margin increased to 41.4 percent from 38.5 percent in the same period a year ago because of better margins in sportswear, a higher mix of full-price sales and favorable currency exchange rates. Sales commissions declined.

In dollar terms, European sales were up by 8.6 percent to $31.6 million in the quarter, thanks in part to the warm weather conditions in the region. Sales were off by 1.5 percent in the USA and by 4.8 percent in Canada, but they increased by 13.5 percent in the rest of the world, with continued strength in Russia, Hong Kong and China.

While the other categories recorded declines of different magnitude, global sales of sportswear recorded a 10.9 percent increase to $124.4 million in the period. Footwear and outerwear declined by 1.6 percent and 7.9 percent, respectively. Sales increased by 6 percent at Mountain Hardwear and by 28 percent at Sorel, but they were flat at PacificTrail and down by 8 percent at Montrail.

Sales in the quarter were partly affected by a shift to the third quarter in the timing of shipments to foreign distributors. The management is thus forecasting a 5 percent sales increase and an increase of 50 basis points in the operating margin for the full year.

Meanwhile, some changes are being implemented for the development of products for the European market. Columbia is centralizing their development in the USA, where dedicated product managers will put out new styles specifically designed for Europe with the help of regional European merchandisers who will get feedback from key European clients. The change should begin its effect with the Fall 2008 collections. This reorganization goes with structural change where product development efforts are divided by categories rather than by geographical entities.