Columbia Sportswear posts double-digit sales gains in EMEA, U.S., led by footwear

Columbia Sportswear’s first-quarter net income rose by 20 percent to $66.8 million as total sales increased by 22 percent to $761.5 million against $625.6 million for the period ended March 31. Operating income was down slightly at 11.0 percent versus 11.3 percent, while gross margin was off 170 basis points to 49.7 percent as a favorable full-price selling environment could not offset the impact of higher freight costs and regional net sales shifts. Wholesale revenues rose by 22 percent to $408 million, with the Direct-to-Consumer segment rising by the same percentage to $354 million. 

According to group CEO Tim Boyle, Columbia’s Fall 2022 order book has strengthened, so the company has increased its EPS outlook for the full year. With broad-based growth across brands, channels, and geographies, first-quarter results were described as “in line with the internal plan.”

Apparel, accessories, and equipment sales rose 22 percent to $566 million. Footwear sales, helped by more manufacturing partner capacity, increased 25 percent to $196 million. Buoyed by sneakers and a resurgence in the wedge category, Sorel generated a 37 percent sales gain to $64 million.

Quarterly results by brand showed a 22 percent jump in Columbia sales to $644 million; a 4 percent increase for prAna to $33 million as the label received spring inventory later than planned; and a 5 percent sales lift for Mountain Hardwear to $21 million which saw some of its sales moved into the second quarter due to late inventory receipts.

Regionally, sales in the home U.S. market were 23 percent higher at $501.9 million, driven by shipments of Spring 2022 orders and late-season cold-weather product sales that were partially offset by supply chain disruptions. Sales in the EMEA soared 42 percent in constant currency to $94.7 million on a high 30s percent increase for the direct business and a low 60s percent gain for the distributor business. Elsewhere, Japan was up mid-teens; Korean sales rose high teens and the China market, impacted by shutdowns and pandemic restrictions, was flat.

The outlook for Columbia’s second quarter, typically the company’s smallest, calls for mid-single-digit sales growth and flat earnings. While Columbia has raised its full-year net income outlook range by 2 to 8 percent to $363 to $382 million, its annual revenue forecast of 16 to 18 percent growth to a range of $3.63 to $3.69 billion remains unchanged. A decision to cease shipping to a Russian distributor in the first quarter after the war in Ukraine broke out, and the current climate in China are the primary reasons the sales forecast was not lifted. Annual operating income is projected at 13.2 to 13.6 percent versus 14.4 percent in 2021. Annual gross margin is now expected to contract 1.3 percent instead of 1.6 percent due to slightly less impact from ocean freight costs and lower DTC product margins due to an expected, gradual return to a more normalized promotional environment. Columbia, which has price increases in effect on Spring and Fall 2022 product collections, will open 15 new stores in North America this year.

“Growth on outdoor during the pandemic was significant and we expect it to continue,” Boyle commented.