Announcing a 14 percent increase in its quarterly dividends, Columbia Sportswear's board of directors was said to be confident in better results going forward. In fact, while they were still largely negative, the results released for the third quarter ended on Sept. 30 were better than forecast, due especially to better than expected direct sales to consumers in North America.
The group's total revenues declined by 4 percent to $523.1 million for the quarter, with adverse currency exchange translations causing a negative effect of one percentage point. The gross margin dipped by 0.3 percentage points to 44.4 percent, due to currencies and a higher mix of sales to foreign distributors, which could not offset lower closeout sales and a higher proportion of own retail. With operating expenses rising to 31.2 percent of sales, net profit fell by 15 percent to $54.6 million for the period.
The management reported declines in wholesale orders in North America, Europe and the Latin America/Asia Pacific (LAAP) regions, but said that it was seeing signs of an inflection point in its retail sales in Europe, where it expects to grow again in 2014.
As expected, a shift in deliveries to distributors allowed the company to record sales increases in Europe, the Middle East and Africa (EMEA), which amounted to 29 percent in dollars and 25 percent in local currencies. Sales fell by 7 percent in the U.S., by 4 percent in Canada and by 15 percent in LAAP.
Footwear sales were off by 7 percent, while other product categories were virtually unchanged. By brand, Columbia was down by 1 percent, Mountain Hardwear by 9 percent and Sorel by 23 percent (more in The Outdoor Industry Compass).
