Columbia Sportswear Q1 profit increases 20 percent

Columbia Sportswear Company reported first quarter net sales of 525.1 million dollars, a 10 percent increase or 12 percent on constant-currency, compared with the same quarter of 2015. First quarter 2016 operating income increased to 44.3 million dollars, or 8.4 percent of net sales. Net income increased 20 percent to 31.8 million dollars or 0.45 dollar per diluted share and totalled 26.5 million dollars, or 0.37 dollar per diluted share.

“Our diverse brand portfolio drove strong growth during the first quarter, including high-20 percent growth in our US direct-to-consumer channels and low-teen percentage growth in our US wholesale channel. The Columbia, Sorel, prAna and Mountain Hardwear brands each generated double-digit percentage constant-currency net sales growth in North America. We're also extremely encouraged by our continued progress in our Europe-direct markets, where the Columbia brand drove high 20 percent constant-currency growth,” said Chief Executive Officer Tim Boyle.

First quarter results in detail

US net sales growth was 18 percent in the first quarter to 336.2 million dollars, consisting of low-teen percentage growth in wholesale channels and high 20-percent growth in the company's direct-to-consumer channels. There was a 7 percent net sales increase or 14 percent constant-currency in the Europe, Middle East and Africa (EMEA) region to 51.3 million dollars, including high-teen percentage growth and 20 percent constant-currency in the company's Europe-direct business. That growth was partially offset by a high 20 percent decline in net sales to EMEA distributors; and a 4 percent net sales increase or 18 percent in constant-currency in Canada.

This growth was partially offset by a 10 percent net sales decline or 7 percent constant-currency in the Latin America, Asia Pacific (LAAP) region to 101.8 million dollars, including declines of more than 30 percent in net sales in Korea and to LAAP distributors, partially offset by low-single-digit percentage growth in China and Japan.

Brands performed well in the first quarter

Global Columbia brand net sales increased 9 percent or 11 percent constant-currency to 437.1 million dollars compared with the first quarter of 2015. Global Sorel brand net sales increased 35 percent or 38 percent constant-currency to 18.1 million dollars. Global prAna brand net sales increased 12 percent to 41.4 million dollars, and global Mountain Hardwear brand net sales of 25.2 million dollars were essentially flat compared to the first quarter of 2015.

Global apparel, accessories & equipment net sales increased 9 percent or 11 percent constant-currency to 434 million dollars and footwear net sales increased 14 percent or 18 percent constant-currency to 91.1 million dollars. First quarter income from operations totalled 44.3 million dollars, or 8.4 percent of net sales, compared to 44.1 million dollars, or 9.2 percent of net sales, for the same period in 2015. Net income increased 20 percent to 31.8 million dollars, or 0.45 dollar per diluted share compared with first quarter 2015 net income of 26.5 million dollars, or 0.37 dollar per diluted share.

Dividend and outlook

The board of directors authorised a regular quarterly dividend of 0.17 dollar per share.

The company currently expects mid-single-digit percentage 2016 net sales growth, including approximately 1 percentage point negative effect from changes in foreign currency exchange rates, on a base of 2015 net sales of 2.33 billion dollars. The company expects gross margins to improve by up to 30 basis points and operating income to increase up to 6 percent, to between 254 million dollars and 263 million dollars, resulting in anticipated 2016 operating margin of up to 10.7 percent.

Net income after non-controlling interest is expected to increase approximately 9 percent, to between approximately 184 million dollars and 191 million dollars or approximately 2.60 dollars to 2.70 dollars per diluted share, up to 10 percent higher than 2015 EPS of 2.45 dollars.