Columbia Sportswear unveiled a three-year financial target plan last week that calls for potential double-digit growth on its profit & loss statement that will be driven by sales gains outside its home U.S. market, footwear and digital. In FY22, the company confirmed a guidance call for 10 to 12 percent revenue growth to a range of $3.44 to $3.50 billion.
Total company organic revenues are forecast to increase on three-year CAGAR of 9 to 11 percent from FY22 to FY25 to reach a range of $4.5 to $4.7 billion in FY25. Operating margin is seen as hitting 14 percent of net sales in FY25, as diluted EPS grows at a three-year CAGR of 12 to 15 percent from the mid-point of FY22 guidance. The ambitious view is projected to increase annual sales by more than $700 million over the period. Specific category outlooks include gains of 11 to 13 percent in EMEA sales, 9 to 11 percent in wholesale, 13 to 15 percent in DTC/e-commerce sales, and 6 to 8 percent in DTC brick-and-mortar sales.
Columbia will aim to accomplish its financial targets by strengthening its relationship with its strategic partners through more customized products and differentiated assortments. It will also continue working with key outdoor and specialty retailers, direct more effort toward “elevating the shopping experience” for its consumers and lead with its Columbia.com business (“the face of the brand”), which currently generates over $375 million in annual revenues from a dozen countries.
In the EMEA specifically, where FY21 operating income rose nearly 110 percent to $65.5 million on 28 percent revenue expansion to almost $382.1 million, Columbia’s business is described as “still relatively small” by Tim Sheerin, the company’s SVP of global wholesale. With plans to add more factory outlet stores in the U.K., the remainder of the continent’s principal focus will be on France and Germany and on forging tighter bonds with key strategic partners such as Intersport, Decathlon, Asos and JD Sports.
Elsewhere, Columbia is guiding for 9 to 11 percent growth in Asia, where the Chinese market was described as “complicated” over the last 6 to 24 months despite increased consumer discovery of the outdoors and the endeavors in it. The company’s international distributor business, which currently counts 26 covering 70 countries, will expand its 300+ branded door count in places such as Dubai, Chile, Mexico, Israel, Ecuador, Turkey and Mongolia over the next three years. In North America, U.S. sales are forecast to increase 8 to 10 percent, with revenues in neighboring Canada projected to jump 12 to 14 percent over the period.
Brand-wise, the group is most bullish on Sorel, which generated $320.9 million in FY21 sales and is expected to continue a push toward $1 billion in annual revenues. The brand’s sales forecast is for a 20 to 22 percent CAGR from 2023 to 2025, bolstered by its year-round offerings and brand momentum. By 2025, Columbia expects footwear to account for approximately 29 percent of total revenues, compared with 71 percent for apparel, accessories and equipment. Mountain Hardware will continue its mountain sports performance focus, as it works to achieve 9 to 11 percent CAGR through 2025.
