After a difficult first half of 2020 due to the impact of the pandemic, Columbia Sportswear Company performed better in the third quarter, but the results remained far below those of last year. Its net income tumbled by 47 percent from the year-ago quarter to $62.8 million, while sales dropped by 23 percent to $701.1 million. The group took cost-containment actions and exited the quarter with $315 million in cash and short-term investments, no bank borrowings and nearly $1 billion in total liquidity.
The management said these results exceeded its internal forecast. E-commerce was once again a bright spot, with sales surging by 55 percent. During the quarter, the company completed the deployment of a new e-commerce platform, X1, with implementation in North America for the Columbia, Sorel and Mountain Hardwear brands, following a successful deployment across Europe in 2019. The newly refreshed sites have been aesthetically enhanced and were designed to offer an improved consumer experience.
In the three months to the end of September, sales in the apparel/accessories/equipment segment decreased by 26 percent from the year-ago quarter to $510.2 million, while footwear lost 15 percent to $190.9 million, both in constant currencies.
Also on a constant-currency basis, Covid-19 caused the group’s wholesale revenues to fall by 28 percent to $471.5 million and direct-to-consumer (DTC) sales to drop by 10 percent to $229.6 million.
In constant currencies, sales dropped by 8 percent in EMEA, by 23 percent in the U.S., by 33 percent in Canada and by 27 percent In Latin America and Asia-Pacific.
The Columbia brand suffered a 24 percent decrease in revenues during the quarter. At Sorel, revenues were down by 22 percent, while at Prana they declined by 21 percent. At Mountain Hardwear, sales tumbled by 15 percent.
Overall, the gross margin fell by 0.4 percentage points to 48.9 percent.
Looking at the fourth quarter, the management said it is encouraged by early trends in sell-through and reorders within the U.S. wholesale channel. It anticipates growth in the high-teens for the first half of 2021.