Columbia Sportswear Q4 net income up 8 percent

Columbia Sportswear Company, a leading innovator

in the global outdoor apparel, footwear, accessories and equipment industries announced an 8 percent increase in net income despite a 5 percent decline in net sales for fourth quarter 2012 compared to fourth quarter 2011. Full year 2012 net income declined three percent on a one percent decline in net sales compared to 2011.

Tim Boyle, Columbia’s president and chief executive officer, commented saying, “Diligent expense management throughout the year enabled us to deliver solid results during what proved to be another year of unseasonably warm weather in North America. As a result, despite a slight decline in 2012 full year sales, we were able to achieve 8 percent operating margin, similar to 2011 operating margin of 8.1 percent.”

Consolidated net sales totalled 501.1 million dollars (Rs 2,682 crores) for the quarter ended December 31, 2012, a 5 percent decrease compared with net sales of 526.1 million dollars (Rs 2,817 crores) for the same period in 2011. Changes in currency exchange rates had a neutral effect on the net sales comparison. Mild winter weather in North America during most of the holiday shopping period and general consumer caution resulted in reduced retail traffic and a more promotional environment in key markets, which caused higher order cancellations and fewer reorders from wholesale customers, as well as lower than expected direct-to-consumer sales, primarily in the US. Fourth quarter net income increased 8 percent to 39.5 million dollars (Rs 211 crores), or 1.15 dollars (Rs 61.5) per diluted share, compared with net income of 36.7 million dollars (Rs 196 crores), or 1.08 dollars (Rs 57.7) per diluted share, for the same period in 2011. Fourth quarter US net sales declined 19.1 million dollars (Rs 102 crores), or 7 percent. Europe/Middle East/Africa (EMEA) region net sales declined 15.1 million dollars (Rs 80 crores), or 20 percent, including a three percentage point negative effect from changes in foreign currency exchange rates. Those declines were partially offset by a 7.7 million dollars (Rs 41 crores), or 6 percent, increase in Latin America/Asia Pacific (LAAP) region net sales, with a neutral effect of changes in currency exchange rates. Net sales in Canada increased 1.5 million dollars (Rs 8 crore), or 5 percent, primarily attributable to the positive impact of changes in currency exchange rates.

Apparel, accessories and equipment net sales decreased 7.7 million dollars (Rs 41 crores), or 2 percent, to 392.3 million dollars (Rs 2,099 crores), and footwear net sales declined 17.3 million dollars (Rs 92 crores), or 14 percent, to 108.8 million dollars (Rs 582 crores). Columbia brand net sales declined 16.0 million dollars (Rs 85 crores), or 4 percent, to 400.5 million dollars (Rs 2,144 crores), primarily due to lower sales of cold weather products. Sorel brand net sales declined 7.8 million dollars (Rs 41 crores), or 12 percent, to 56.5 million dollars (Rs 302 crores), also primarily due to lower sales of cold weather footwear. Mountain Hardwear and Montrail net sales each declined less than 1.0 million dollars (Rs 5 crore).

Consolidated 2012 net sales totalled 1.67 billion dollars (Rs 8,936 crores), a decrease of 24.4 million dollars (Rs 130 crores), or one percent, compared with 2011 net sales of 1.69 billion dollars (Rs 9,043 crores), including a one percentage point negative effect from changes in currency exchange rates. 2012 net income totalled 99.9 million dollars (Rs 534 crores), or 2.93 dollars (Rs 156.8) per diluted share, a decrease of 3.6 million dollars (Rs 19 crores), or 3 percent, compared with 2011 net income of 103.5 million dollars (Rs 554 crores), or 3.03 dollars (Rs 162.2) per diluted share.

EMEA region net sales declined 44.8 million dollars (Rs 240 crores) , or 16 percent, including a 4 percentage point negative effect from changes in currency exchange rates; Canada net sales declined 14.9 million dollars (Rs 79 crores), or 11 percent, with a neutral effect from changes in currency exchange rates; and US net sales declined 1.3 million dollars (Rs 6 crore), or less than one percent. Those declines were partially offset by an LAAP region net sales increase of 36.6 million dollars (Rs 196 crores), or 11 percent, including a neutral effect from changes in currency exchange rates.

Apparel, accessories and equipment net sales totalled 1.35 billion dollars (Rs 7, 234 crores), an increase of 12.1 million dollars (Rs 64 crores), or one percent. Footwear net sales totalled 322.6 million dollars (Rs 1, 729 crores), a decrease of 36.5 million dollars (Rs 195 crores), or 10 percent. Columbia brand net sales totalled 1.39 billion dollars (Rs 7,451 crores), essentially equal to 2011 Columbia brand net sales of 1.39 billion dollars (Rs 7,451 crores); Sorel brand net sales totalled 127.0 million dollars (Rs 680 crores), a decrease of 23.3 million dollars (Rs 124 crores), or 16 percent; and Mountain Hardwear brand net sales totalled 141.5 million dollars (Rs 758 crores), compared to 2011 net sales of 142.3 million dollars (Rs 762 crores).

Fiscal 2013 outlook anticipates net sales comparable to 2012 and operating margins between approximately 7.5 percent to 8.0 percent of net sales. First quarter 2013 outlook anticipates up to 50 basis points of operating margin expansion on net sales comparable to first quarter 2012.