Columbia Sportswear expects 2024 to be 'challenging' year

Fourth quarter net sales at Columbia Sportswear decreased 9 percent or 10 percent constant-currency to 1,060 million dollars.

The company’s full year net sales increased 1 percent reported and constant-currency to 3,487.2 million dollars.

Commenting on the trading results, the company’s chairman, president and CEO Tim Boyle said: “We successfully executed our inventory reduction plan, which contributed to operating cash flow generation of over 600 million dollars for the year. The Columbia brand generated healthy growth outside of the U.S., led by China and Europe-direct markets. In the U.S., we navigated a difficult U.S. marketplace and a warm winter, both of which impacted our fourth quarter performance.”

Review of Columbia Sportswear’s Q4 and full year results

Gross margin for the quarter expanded 20 basis points to 50.6 percent, operating income decreased 27 percent to 113.1 million dollars or 10.7 percent of net sales and net income decreased 26 percent to 93.3 million dollars or 1.55 dollars per diluted share.

Gross margin for the full year expanded 20 basis points to 49.6 percent of sales, operating income decreased 21 percent to 310.3 million dollars or 8.9 percent of net sales and net income decreased 19 percent to 251.4 million dollars or 4.09 dollars per diluted share.

The company’s board has approved a regular quarterly cash dividend of 30 cents per share, payable on March 22, 2024 to shareholders of record on March 8, 2024.

Columbia Sportswear expects FY24 net sales to decrease

For the fiscal year 2024, the company said, net sales are expected to decrease 4 to 2 percent to 3.35 to 3.42 billion dollars, gross margin is expected to expand 100 to 150 basis points to 50.6 to 51.1 percent of net sales, operating income is expected to be 256 to 288 million dollars and net income is expected to be 207 to 231 million dollars, resulting in diluted earnings per share of 3.45 dollars to 3.85 dollars.

“Looking ahead, we expect 2024 to be a challenging year. Retailers are placing orders cautiously, and economic and geopolitical uncertainty remains high. To mitigate erosion in profitability and to improve the efficiency of our operations, we are implementing a multi-year profit improvement program targeting 125 to 150 million dollars in annual savings by 2026,” Boyle added.

The company’s net sales are expected to be 1,310 to 1,352 million dollars for the first half period, representing a decline of 9 to 6 percent, operating income is expected to be negative 12 to 8 million dollars, resulting in operating margin of negative 0.9 to 0.6 percent, and diluted earnings per share are expected to be 1 cent to 26 cents.

For the first quarter, net sales are expected to be 730 to 753 million dollars, representing a decline of 11 to 8 percent, operating income to be 16 to 28 million dollars, resulting in operating margin of 2.2 to 3.8 percent, and diluted earnings per share to be 30 cents to 45 cents.