Higher sales of Marmot apparel, coupled with decent turnover from its action sports segment, helped boost K2’s total revenues by 4.9 percent to $356.9 million in the 3rd quarter, ended Sept. 30. The gross margin expanded by 180 basis points to 38.6 percent. Improved manufacturing efficiencies helped adjusted net income to reach a level $23.0 million, as compared to $18.1 million a year ago.
K2 ski and Ride snowboard products drove K2’s action sports segment to a growth of 2.4 percent to $149.5 million. They were offset by decreased sales of Völkl skis due to timing differences between 3rd and 4th quarter shipments. The segment’s operating profit climbed by 26.6 percent to $33.1 million, thanks to improved efficiencies.
The turnover of the company’s apparel and footwear division rose by 18.8 percent to $62.1 million. Increased sales of Marmot apparel were offset by declines in skateboard shoes and other apparel. The division’s operating profit fell to $5.8 million, as compared to $6.4 million in the year-ago quarter.
Team sports’ turnover was up by 2.4 percent to $64.5 million in the seasonally slow quarter. The division narrowed its operating loss to $3.0 million from $6.1 million, mainly due to an extraordinary gain and to heightened profitability for the company’s paintball and promotional product businesses.
In the marine sports division, turnover grew by 2.1 percent to $80.1 million, driven by increased sales of fishing products, which were offset by decreases in military antennas, cutting line, Hodgman waders and drywear. Divisional operating profits fell to $8.3 million as compared to $9.9 million.
K2 has appointed a new manager to develop and monitor opportunities for cross-business synergies and marketing for its technical apparel platform, including supply chain and community sustainability programs. The new position is filled by John Cooley, a veteran of Marmot who has been appointed as director of strategic development for the platform, which comprises the apparel operations of Marmot, Ex Officio, K2 Snow, Marker and Völkl.