Columbia Sportswear net sales increased 79 percent to 566.4 million dollars for the second quarter of 2021, which the company said primarily reflects a strong fundamental recovery in the U.S. wholesale and direct-to-consumer (DTC) brick & mortar channels and fewer pandemic related disruptions and temporary store closures compared to second quarter 2020.
The company added that gross margin expanded 540 basis points to 51.6 percent of net sales from 46.2 percent of net sales for the comparable period in 2020.
Operating income was 35 million dollars or 6.2 percent of net sales, compared to an operating loss of 70.3 million dollars or 22.2 percent of net sales, for the comparable period in 2020. Net income reached 40.7 million, or 61 cents per diluted share compared to net loss of 50.7 million dollars or 77 cents per share, for the comparable period in 2020.
Commenting on the trading results, the company’s chairman, president and CEO Tim Boyle said: “Our record financial performance clearly reflects the powerful fundamental recovery that is underway in our business. Overall, our Spring sell-through has been exceptional and our fall 21 and spring 22 order books point to continued momentum in the business. We are raising our full year financial outlook for 2021 despite ongoing pandemic-related supply chain disruptions and higher ocean freight costs.”
Highlights of Columbia Sportswear’s first half results
For the first half period, the company’s net sales increased 35 percent to 1,192 million dollars. Gross margin expanded 430 basis points to 51.5 percent of net sales from 47.2 percent of net sales for the comparable period in 2020.
The company said, operating income increased 246 percent to 105.5 million dollars or 8.8 percent of net sales compared to an operating loss of 72.3 million dollars or negative 8.2 percent of net sales, for the same period in 2020.
Net income increased 291 percent to 96.6 million dollars or 1.44 dollars per diluted share compared to a net loss of 50.5 million dollars or 76 cents per share, for the same period in 2020.
Columbia Sportswear raises full year outlook
The company further said that net sales are expected to increase 25 to 26.5 percent compared to prior outlook of 21.5 to 23 percent to 3.13 to 3.16 billion dollars (prior 3.04 to 3.08 billion dollars) from 2.50 billion dollars in 2020.
Gross margin is expected to improve 95 to 115 basis points compared to prior guidance of 110 to 130 basis points to 49.9 to 50.1 percent of net sales (prior approximately 50 to 50.2 percent) from 48.9 percent of net sales in 2020.
Operating income is expected to be 365 to 386 million dollars against prior outlook of 347 to 369 million dollars, resulting in operating margin of 11.7 to 12.2 percent (prior 11.4 to 12.0 percent) compared to operating margin of 5.5 percent in 2020.
Net income is expected to be 287 to 304 million dollars (prior 271 to 288 million dollars), resulting in diluted earnings per share of 4.30 dollars to 4.55 dollars compared to prior forecast of 4.05 dollars to 4.30 dollars.
The company expects low-20 percent year-over-year net sales growth in the second half of 2021. Based on current forecasted product delivery dates, the company anticipates that both third and fourth quarter year-over-year net sales growth will be in the low-20 percent range.
The company’s board of directors has approved a regular quarterly cash dividend of 26 cents per share, payable on August 26, 2021 to shareholders of record on August 12, 2021.