Columbia Sportswear Company made a net income of $45,720,000, up from $38,387,000, during the 4th quarter ended on Dec. 31, 2007. Sales increased by 4 percent to $376,758,000, but the weak dollar was responsible for 3 percentage points of the increase and the operating margin declined from 15.4 percent to 15.3 percent. Results this time around were boosted by a tax credit from the European Union of around $5 million.
For the full year 2007, net income rose by 17 percent to $144,452,000 and the operating margin went up to 14.7 percent from 14.0 percent. Sales increased by 5 percent to $1,356,039,000, or 3 percent up in terms of local currencies. Sales in Europe, the Middle East and Africa (EMEA) rose by 5 percent to $287.0 million, with a currency gain of 6 percentage points. Taken together, sales in Latin America and Asia-Pacific grew by 23 percent to $175.7 million, or by 22 percent in local currency. Canadian sales rose by 5 percent to $126.1 million and were even on a currency-neutral basis.
EMEA revenues and sales in Latin American and the Asia-Pacific region have been redefined to include sales to distributors in the respective territories.
During the 4th quarter, sales in the USA dipped by 1 percent to $210.4 million while EMEA sales climbed by 2 percent to $76.0 million, thanks to an 8 percent drop in the dollar exchange rate. Sales in Latin America and Asia-Pacific soared by 26 percent to $59.7 million, or by 23 percent on a currency-neutral basis. Sales in Canada rose by 10 percent to $30.6 million, but fell by 6 percent in the local currency.
In terms of product categories, sales of outerwear improved by just 1 percent in the quarter in U.S. dollars to $182.2 million; sportswear increased by 7 percent to $116.2 million; footwear went up by 7 percent to $60.6 million, while sales of accessories increased by 7 percent to $17.7 million.
The Columbia brand did 6 percent better overall at $330.0 million, but its U.S. sales were down by 1 percent due to minor declines in outerwear and footwear that were offset by increases in sportswear and accessories. Sales of Sorel were 3 percent higher at $19.8 million; Mountain Hardwear was 15 percent higher at $23.9 million; Montrail was 23 percent lower at $1.7 million, and Pacific Trail was 85 percent lower at $1.3 million.
Looking ahead, Columbia is anticipating a 2 percent decrease in sales for the 1st quarter of 2008 instead of a previously forecast increase of 4 percent. The revision was attributed to weaker re-orders and to the fact that some shipments to overseas distributors took place in December 2007 instead of the 1st quarter of 2008. The company also noted less fill-in activity for the current quarter. The company is expecting Montrail to perform better thanks to a new product line and new management team. And it believes that Pacific Trail has the potential to also perform better in the value market once more has been learnt about the value channel concerned.
