Columbia Sportswear Q2 net sales up 2 percent

Second quarter net sales at Columbia Sportswear increased 2 percent on reported and constant-currency basis to 388.8 million dollars. Net loss totalled 8.2 million dollars or 0.12 dollar per share. First half net sales increased 6 percent on reported and 8 percent constant-currency to 913.9 million dollars and net income increased 19 percent to 23.6 million dollars or 0.33 dollar per diluted share.

Commenting on the results, Chief Executive Officer Tim Boyle said, “Our successful first half results were highlighted by solid growth from three of our four major brands and improved gross margins in a challenging global environment. High-single-digit wholesale growth and low-20-percent direct-to-consumer growth in the US, combined with mid-20-percent constant-currency growth in Europe-direct markets and 20 percent constant-currency growth in Canada, demonstrate that we gained market share in each of these important geographies during the first half of 2016.”

Review of the second quarter

Second quarter consolidated net sales growth was driven by US net sales growth of 8 percent to 228.8 million dollars, consisting of mid-teen percentage growth in the company's direct-to-consumer channels and low single-digit percentage growth in wholesale channels; and a 20 percent net sales increase or 27 percent constant-currency in Canada to 13.6 million dollars.

This growth was partially offset by a 1 percent or 2 percent constant currency net sales decline in the Europe, Middle East and Africa (EMEA) region to 59.1 million dollars, including a low-double-digit percentage decline in net sales to EMEA distributors, largely offset by high-teen percentage growth in the company's Europe-direct business; and a 10 percent net sales decline (11 percent constant-currency) in the Latin America, Asia Pacific (LAAP) region to 87.3 million dollars, primarily reflecting a low-twenty percent net sales decline in Korea, a low-twenty percent decline in net sales to LAAP distributors, and a mid-teen net sales decline in China, partially offset by a low-double-digit percentage net sales increase in Japan.

Global Columbia brand net sales increased 3 percent (2 percent constant-currency) to 333.4 million dollars. Global Sorel brand net sales declined 19 percent (16 percent constant-currency) to 3.5 million dollars. Global prAna brand net sales increased 23 percent to 32.2 million dollars, and global Mountain Hardwear brand net sales declined 20 percent to 17 million dollars. Global apparel, accessories & equipment net sales increased 4 percent to 321.5 million dollars and footwear net sales declined 4 percent to 67.3 million dollars.

Second quarter loss from operations totalled 11.8 million dollars or 3 percent of net sales, compared to 9 million dollars or 2.4 percent of net sales, for the same period in 2015. Net loss totalled 8.2 million dollars or 0.12 dollar per share, compared with net loss of 6.5 million dollars or 0.09 dollar per share.

Declares dividend, reiterates outlook

The board of directors approved a regular quarterly dividend of 0.17 dollars per share, payable on September 1, 2016.

The company reiterated its guidance for FY16, which includes mid-single-digit percentage net sales growth, including less than 1 percentage point negative effect from changes in currency exchange rates, mid-single-digit percentage increase in operating income to between 254 million dollars and 263 million dollars, representing operating margin of up to 10.7 percent of net sales.

High-single-digit percentage increase in net income to between 184 million dollars and 191 million dollars or approximately 2.60 dollars to 2.70 dollars per diluted share, on approximately 70.7 million diluted shares outstanding, up to 10 percent higher than 2015 EPS of 2.45 dollars.

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