At the same time as announcing its results for the quarter with the seasonally lowest sales volume, Columbia Sportswear has reduced its sales and profit forecasts for the full year. The company is concerned about the current state of the consumer and potential retail order cancellations later this year. It cited deteriorating market conditions and the economic climate, particularly in the U.S., as the primary reasons for its revised FY22 outlook that calls for 10 to 12 percent revenue growth to a range of $3.44 to $3.50 billion, down from a prior estimate of $3.63 to $3.69 billion, but above FY21’s total reported sales of $3.13 billion. Supply chain issues remain elevated and persistent, the company said. Annual gross margins are forecast to contract by 180 to 21o basis points. Canada, the U.S. and Europe-direct are projected to drive most of the annual sales growth. China’s zero-covid policy combined with unfavorable currency impact is expected to slow the topline in the LAAP region and overall revenue growth by 300 basis points.
Meanwhile, the company’s annual profit forecast has been reduced by 11 to 13 percent to a range of $315 to $340 million from $363 to $382 million prior, with gross margins negatively impacted for spring and fall product lines negatively impacted by product cost inflationary pressures that include higher manufacturing labor and raw material costs. Columbia is implementing double-digit percentage price increases on its fall products to help neutralize the cost pressures.
Second quarter net profit sunk by 82 percent to $7,163,000 versus $40,684,000 in the year-ago period as total revenues inched 2.1 percent higher to $578,063,000 from $566,370,000. Period operating income was down by 75 percent to $8,773,000 from $34,995,000 as gross margin contracted 240 basis points to 49.2 percent from 51.6 percent.
More information and a breakdown of the earnings by brands, regions and categories are available in the comprehensive article in our sister publication The Outdoor Industry Compass.
| Columbia - Income | |||
|---|---|---|---|
| 2022 | 2021 | % change | |
| Quarter ended June 30 ($ thousand) | |||
| Net sales | 578,063 | 566,370 | 2.1% |
| Cost of sales | 293,903 | 273,853 | 7.3% |
| Gross profit | 284,160 | 292,517 | -2.9% |
| Gross margin | 49.2% | 51.6% | -2.4pp |
| Selling, general, admin. expenses | 281,258 | 261,766 | 7.4% |
| Net licensing income | 5,871 | 4,244 | 38.3% |
| Operating income | 8,773 | 34,995 | -74.9% |
| Net interest income | 499 | 598 | -16.6% |
| Net other non-operating expense | 1,435 | 294 | 388.1% |
| Pre-tax | 7,837 | 35,299 | -77.8% |
| Tax | 674 | -5,385 | – |
| Net | 7,163 | 40,684 | -82.4% |
| Earnings per share (diluted) | 0.11 | 0.61 | -82.0% |
| Half ended June 30 ($ thousand) | |||
| Net sales | 1,339,573 | 1,191,976 | 12.4% |
| Cost of sales | 676,966 | 578,057 | 17.1% |
| Gross profit | 662,607 | 613,919 | 7.9% |
| Gross margin | 49.5% | 51.5% | -2.0pp |
| Selling, general, admin. expenses | 580,344 | 516,155 | 12.4% |
| Net licensing income | 10,176 | 7,711 | 32.0% |
| Operating income | 92,439 | 105,475 | -12.4% |
| Net interest income | 894 | 876 | 2.1% |
| Net other non-operating expense | 1,391 | 598 | 132.6% |
| Pre-tax | 91,942 | 105,753 | -13.1% |
| Tax | 17,942 | 9,169 | 95.7% |
| Net | 74,000 | 96,584 | -23.4% |
| Earnings per share (diluted) | 1.16 | 1.44 | -19.4% |
| Source: Columbia Sportswear | |||
| Columbia - Sales (reported) | |||
|---|---|---|---|
| 2022 | 2021 | % change | |
| Quarter ended June 30 ($ million) | |||
| By region | |||
| U.S. | 412.5 | 379.1 | 8.8% |
| Latin America & Asia-Pacific | 72.8 | 78.0 | -6.7% |
| EMEA | 57.6 | 88.5 | -34.9% |
| Canada | 35.2 | 20.8 | 69.2% |
| Total | 578.1 | 566.4 | 2.1% |
| By brand | |||
| Columbia | 485.9 | 484.3 | 0.3% |
| Sorel | 28.7 | 23.1 | 24.2% |
| prAna | 40.7 | 39.7 | 2.5% |
| Mountain Hardware | 22.8 | 19.3 | 18.1% |
| Total | 578.1 | 566.4 | 2.1% |
| By product category | |||
| Apparel, accessories, equipment | 468.4 | 453.1 | 3.4% |
| Footwear | 109.7 | 113.3 | -3.2% |
| Total | 578.1 | 566.4 | 2.1% |
| By channel | |||
| Wholesale | 299.9 | 302.3 | -0.8% |
| DTC | 278.2 | 264.1 | 5.3% |
| Total | 578.1 | 566.4 | 2.1% |
| Half ended June 30 ($ million) | |||
| By region | |||
| U.S. | 914.4 | 787.7 | 16.1% |
| Latin America & Asia-Pacific | 194.5 | 190.0 | 2.4% |
| EMEA | 152.3 | 159.3 | -4.4% |
| Canada | 78.4 | 55.0 | 42.5% |
| Total | 1,339.6 | 1,192.0 | 12.4% |
| By brand | |||
| Columbia | 1,129.7 | 1,011.7 | 11.7% |
| Sorel | 92.3 | 69.4 | 33.0% |
| prAna | 73.4 | 71.2 | 3.1% |
| Mountain Hardware | 44.2 | 39.7 | 11.3% |
| Total | 1,339.6 | 1,192.0 | 12.4% |
| By product category | |||
| Apparel, accessories, equipment | 1,034.3 | 922.0 | 12.2% |
| Footwear | 305.3 | 270.0 | 13.1% |
| Total | 1,339.6 | 1,192.0 | 12.4% |
| By channel | |||
| Wholesale | 708.1 | 637.7 | 11.0% |
| DTC | 631.5 | 554.3 | 13.9% |
| Total | 1,339.6 | 1,192.0 | 12.4% |
| Source: Columbia Sportswear | |||
