Columbia Sportswear continues to smash sales records
Columbia Sportswear Company reported the strongest quarterly and year-to-date results in the group’s history on Thursday, announcing particularly strong sales increases in its US direct-to-consumer (DTC) channel.
In the third quarter ended September 30, 2018, the company’s net sales hit a record-breaking total of $795.8 million, up 6% (7% in constant currencies) compared to the $747.4 million reported in the prior-year period.
While sales in the company’s wholesale channel remained essentially flat at $544.8 million, DTC shot up 23% to $251.0 million, with progress driven by growth in both brick-and-mortar stores and e-commerce.
Net sales in the US, by far Columbia’s biggest market, increased 9%, registering impressive DTC growth of 20%. The company’s Europe, the Middle East and Africa (EMEA) region also posted a strong performance, with net sales rising 15% compared to the same period in the previous year. News wasn’t quite so positive in Canada, where sales remained flat, or Latin America and Asia Pacific (LAAP), where they decreased 4%.
The Columbia brand, which currently accounts for around 80% of the Portland, Oregon-based company’s revenue, saw sales rise 7% to $640.9 million, while Sorel and prAna reported increases of 12% and 8%, respectively. Mountain Hardwear, however, proved to be a low point, with sales falling 22% to $23.0 million.
Progress was fairly consistent across Columbia’s different product categories with both footwear, and apparel, accessories and equipment seeing sales rise 6% to $617.6 million and $178.2 million, respectively.
Columbia’s positive sales performance pushed Q3 operating income up 5% to $129.1 million, while overall net income increased 14% to $100.2 million, compared to $87.7 million in the same period in the previous year.
The company’s year-to-date net sales and income were also record-breaking, the former totaling $1,884.7 million – up 12% –, while the latter skyrocketed 38% to hit $155.0 million.
In light of these results, Columbia has updated its full-year 2018 outlook and now expects net sales growth to be between 11.0% and 11.5%.
The company was keen to point out that, when considering this guidance, it is important to take into account that its net sales are heavily weighted towards the fall/winter season, leading to a strong seasonal profitability pattern which results in significantly higher levels of income in the second half of the year.
The company’s outlook for FY net income is now in the range of $240 to $244 million.
“These results and updated outlook demonstrate that our shift to become a more brand-led and consumer-focused organization is working,” said Columbia Sportswear President and CEO Tim Boyle in a release. “We have very strong momentum heading into the important holiday sales season and look forward to updating investors on fourth quarter results when we report next February.”
Boyle also highlighted four main points of focus for the company as it moves forward, namely driving brand awareness and sales growth, enhancing consumer experience and digital capabilities across geographies, expanding and improving global DTC operations, and optimizing organization across the company’s brand portfolio.
As the company works towards growing its brand awareness, international collaborations such as the recently announced renewal of its namesake label's partnership with the Ultra-Trail du Mont-Blanc (UTMB) should help boost the recognition of its brands around the globe.
Earlier this year, Columbia was already reporting record results with second-quarter sales that totaled $481.6 million, beating out analysts’ results with a 21% increase driven by strong growth in both wholesale and DTC.
On Thursday, Columbia also issued its preliminary 2019 outlook, reporting that it expects net sales to experience high-single-digit percent growth and net income to see a low-double-digit percent increase.
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