Despite persistent supply chain disruptions that negatively impacted its wholesale revenues, Columbia Sportswear reported impressive fourth-quarter results on the strength of its Direct-To-Consumer and e-commerce businesses and an improvement of 1.6 percentage points in the gross margin to 52.2 percent, as higher freight costs were more than offset by a better channel mix and more full-price sales. The 18.7 percent operating margin reached by the group in the quarter, which compares with 13.5 percent in the year-earlier period, was the company’s highest for any fourth quarter since 2004. Quarterly revenues rose by 23 percent to $1.13 billion, and net income expanded by 64 percent to $156.9 million. DTC revenues increased by 33 percent to $625 million, representing 47 percent of the total turnover, while wholesale was up by 13 percent to $505 million.

The group’s CEO, Tim Boyle, called the company’s order book for Summer and Fall 2022 “phenomenal,” claiming that the company is confident it has the right strategies in place to unlock further potential this year and despite continued logistics pressures and the likely additional closure of Asian factories. Columbia’s current outlook for 2022 calls for 16-18 percent topline growth to a range of $3.63-3.69 billion and an increase in net income of 1 to 7 percent to $359-379 million. On the other hand, the gross margin and the operating margin are likely to contract to levels of around 50.0 percent and 13.0-13.5 percent, respectively. While raising demand creation spending to 6.0 percent of sales from 5.9 percent in 2011, the company is implementing mid-single-digit price hikes in the U.S. this spring and budgeting high-single and low double-digit increases on select Fall ’22 products.

In Q4, Columbia realized 28 percent constant-currency growth in Apparel/Equipment/Accessories to $846 million and a 12 percent gain in footwear to $284 million. The Columbia brand’s sales were 28 percent higher than a year ago at $894 million, driven by a very successful global launch of the OmniHeat Infinity technology. Sorel climbed by 9 percent to $164 million, Mountain Hardwear increased by 30 percent to $38 million, and prAna was down by 7 percent to $34 million, despite an 8 percent gain for the full year. Boyle said Sorel would be the company’s fastest-growing brand in 2022, with a sales increase approaching 30 percent as the label continues its pivot away from being a pure winter brand. For example, in the last year, only 15 percent of Sorel’s revenues were generated by insulated winter boots.

Regionally, the group’s quarterly sales showed a 33 percent gain in Europe in the quarter, with direct sales up in the low 30 percent range on strong DTC and wholesale results and sales to European distributors rising in the high 30 percent range on later Fall ’21 shipments and higher Spring ’22 orders. In the U.S., sales rose by 27 percent, as DTC revenues increased in the “low 40 percent” range, while the wholesale channel rose in the low teens on a percentage basis, impacted by supply chain disruptions despite strong market demand. In local currencies, Latin America and Asia-Pacific (LAAP) grew by just 8 percent, as a drop in Japan partly offset increases in the mid-teens in China and the low teens in Korea.

For the full year, the group reported 25 percent topline growth in 2021 to $3.13 billion as DTC sales rose by 33 percent to $1.46 billion and wholesale improved by 18 percent to $1.64 billion. Annual net income came in at $354.1 million, up sharply from $108.0 million in the prior year. Footwear sales advanced by 16 percent to $737.2 million, performing less well than apparel and other categories.

EMEA sales grew by 25 percent in constant currencies, reaching $373.1 million, and U.S. sales were 28 percent higher at $2.06 billion. Mountain Hardwear, which added 350 new distribution points during the year, posted an annual sales gain of 33 percent to $105.7 million. The Columbia brand’s sales rose by 27 percent to $2.53 billion. Sorel was up by 9 percent to $318.5 million, and prAna rose by 8 percent to $141.9 million.

Boyle indicated that Columbia is testing an updated, experiential store format with a wider range of products after closing some flagship stores in 2020. Some of the new stores will be in secondary, less expensive locations.

Columbia Sportswear non-GAAP revenues
 
Quarter ended Dec. 31, 2021 ($ millions)
  Reported 
net sales
Constant-currency 
net sales
Reported 
net sales
Reported 
net sales 
% change
Constant-currency 
net sales 
% change
Geography          
U.S. 762.1 762.1 599.1 27% 27%
Latin America and Asia-Pacific 172.8 177.2 163.6 6% 8%
Europe, Middle East, Africa 113.6 114.2 85.6 33% 33%
Canada 81.2 77.1 67.4 20% 14%
Total 1,129.7 1,130.6 915.7 23% 23%
Brand          
Columbia 894.2 895.6 699.7 28% 28%
Sorel 163.4 162.8 150.0 9% 9%
Prana 34.3 34.3 36.9 -7% -7%
Mountain Headwear 37.8 37.9 29.1 30% 30%
Total 1,129.7 1,130.6 915.7 23% 23%
Product category          
Apparel, accessories, equipment 846.1 846.8 661.4 28% 28%
Footwear 283.6 283.8 254.3 12% 12%
Total 1,129.7 1,130.6 915.7 23% 23%
Channel          
Wholesale 504.5 504.2 446.0 13% 13%
DTC 625.2 626.4 469.7 33% 33%
Total 1,129.7 1,130.6 915.7 23% 23%
 
12 months ended Dec. 31, 2021 ($ millions)
  Reported 
net sales
Constant-currency 
net sales
Reported 
net sales
Reported 
net sales 
% change
Constant-currency 
net sales 
% change
Geography          
U.S. 2,060.3 2,060.3 1,603.8 28% 28%
Latin America and Asia-Pacific 465.5 458.0 424.5 10% 8%
Europe, Middle East, Africa 382.1 373.1 298.9 28% 25%
Canada 218.5 205.7 174.4 25% 18%
Total 3,126.4 3,097.1 2,501.6 25% 24%
Brand          
Columbia 2,557.4 2,531.0 1,996.9 28% 27%
Sorel 320.9 318.5 293.5 9% 9%
Prana 141.9 141.9 131.6 8% 8%
Mountain Headwear 106.2 105.7 79.6 33% 33%
Total 3,126.4 3,097.1 2,501.6 25% 24%
Product category          
Apparel, accessories, equipment 2,389.2 2,368.9 1,867.6 28% 27%
Footwear 737.2 728.2 634.0 16% 15%
Total 3,126.4 3,097.1 2,501.6 25% 24%
Channel          
Wholesale 1,660.4 1,640.9 1,403.3 18% 17%
DTC 1,466.0 1,456.2 1,098.3 33% 33%
Total 3,126.4 3,097.1 2,501.6 25% 24%
 
Source: Columbia Sportswear