Columbia Sportswear first quarter sales up 4%
Despite its strong growth on international markets, Columbia Sportswear could not escape the impact of the changing retail landscape in U.S. sports apparel for its first quarter results.
The U.S. company’s domestic sales fall by 1% to 333 million dollars, attributed to a decline of more than 5% of its wholesale sales. The company says it has more than 800 stores carrying its products. Canada sales suffered the same drop, but a favorable exchange rate allowed the group to show a 3% increase in sales to nearly $37 million.
Chief Executive Officer Tim Boyle said in a statement that business in the U.S. had especially “been impacted by customer bankruptcies, liquidations and ongoing efforts by U.S. retailers to rationalize their store fleets and square footage.”
Overall sales across all regions grew by 3.6% to nearly $ 544 million, beating estimates of $536 million. Nevertheless, the weaker results for the U.S. market prompted Canaccord Genuity to downgrade the stock from a buy to a hold on Friday, citing the difficulties of the U.S. retail market in a note, which it says softens Columbia’s outlook.
The company’s Europe-Middle East- Africa region (EMEA) posted an 8% increase (+ 10% on a constant currency basis) to 55 million dollars. The group attributed its strong EMEA results to its takeover of its own e-commerce operations on March 1 for 10 markets in Europe. Sales in Russia were also rising again, with double-digit growth compared to last year.
For Latin America, the Pacific and Asia, the group grew by 16% (+ 17% on constant currency basis) to more than 118 million dollars. Columbia Sportswear posted double-digit growth in Japan and a drop in sales of around 5% in South Korea.
Commenting on the international growth, Boyle said: “We were encouraged by the Columbia brand's continued growth in Europe-direct markets during the first quarter and by the SOREL brand's successful launch of an expanded Spring assortment. In addition, our direct-to-consumer businesses were a source of growth in every region.”
By brand segments, the company’s Columbia label reported a 3% rise to $ 449 million; PrAna, the yoga fitness brand declined by 7% to less than 39 million; while Sorel jumped by 50% to $27 million, which the company attributes to a lighter warm-weather range. Mountain Hardwear sales increased by 10%, close to $ 28 million.
Columbia Sportswear reported an 8% increase in operating income to $48 million. Its net results rose 13% to 36 million euros.
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