Records were again smashed by Columbia Sportswear in the first quarter ended March 31, as sales increased by 9.6 percent to $525.1 million, up by 12 percent in constant currencies. The rise included sales growth of 7 percent to $51.3 million in Europe, the Middle East and Africa (EMEA), up by 14 percent in constant currencies, along with sales increases of 18 percent in the U.S. and 4 percent in Canada.
There was, however, a decline of 10 percent to $101.8 million in the Latin America Asia-Pacific region (LAAP). The group suffered a drop of more than 30 percent in its sales to South Korea and distributors in LAAP, while sales improved at a low single-digit rate in China and Japan.
| Columbia Sportswear - Consolidated Income Statement | |||
| ('000 $, Quarter Ended March 31) | |||
| 2016 | 2015 | % | |
| REVENUES | 525,136 | 478,982 | 9.6 |
| Cost of Sales | 277,759 | 250,208 | 11.0 |
| SG&A | 205,025 | 186,502 | 9.9 |
| Net Licensing Income | 1,913 | 1,850 | 3.4 |
| Income From Operations | 44,265 | 44,122 | 0.3 |
| Net Interest Income | 227 | 103 | - |
| Other Expense | 375 | 2,196 | - |
| Minority Interest | 2,424 | 1,448 | 67.4 |
| Pre-Tax Income | 44,117 | 42,029 | 5.0 |
| Tax Expense | 9,923 | 14,110 | -29.7 |
| NET INCOME | 31,770 | 26,471 | 20.0 |
| Earnings/Share, Diluted | 0.45 | 0.37 | 21.6 |
The management was pleased with the results in the directly controlled European markets, where the group should become profitable soon. Sales rose by more than 25 percent in these markets, but this was offset by a similar percentage decline in sales to distributors in the region, which include Sportmaster in Russia.
In the U.S., wholesale revenues went up by a low-teen percentage rate, while the direct-to-consumer (DTC) business surged by more than 25 percent. The favorable weather in January and February helped clear more inventory than planned.
The Columbia brand raised its sales by 9 percent to $437.1 million, with growth of 11 percent in local currencies. Sorel performed best, rising by 35 percent to $18.1 million. Sales went up by 12 percent for Prana in dollars and local currencies. Mountain Hardwear's turnover was flat in terms of dollars and up by 4 percent in constant currencies.
In terms of product categories, footwear remained the stand-out across the different brands of the group with a 14 percent sales increase to $91.1 million. Sales of apparel, accessories and equipment increased by 9 percent to $434.0 million. In constant dollars, sales grew by 18 percent for shoes and by 11 percent in the other categories.
| Columbia Sportswear - Breakdown Of Revenues | ||||
| (million $, Quarter Ended Sept. 30) | ||||
| 2015 | % / Total | 2014 | % | |
| Geographical | ||||
| United States | 513.1 | 66.8% | 406.3 | 26.3 |
| Latin America & Asia-Pacific | 109.4 | 14.3% | 123.5 | -11.4 |
| EMEA | 67.4 | 8.8% | 78.8 | -14.5 |
| Canada | 77.7 | 10.1% | 66.7 | 16.5 |
| Categorical | ||||
| Apparel, Accessories, Equipment | 596.1 | 77.7% | 549.4 | 8.5 |
| Footwear | 171.5 | 22.3% | 125.9 | 36.2 |
| By brands | ||||
| Columbia | 609.7 | 79.4% | 555.4 | 9.8 |
| Mountain Hardwear | 86.2 | 11.2% | 58.2 | 48.1 |
| Sorel | 34.8 | 4.5% | 31.0 | 12.3 |
| prAna | 34.4 | 4.5% | 28.2 | 22.0 |
| Other | 2.5 | 0.3% | 2.5 | 0.0 |
| TOTAL | 767.6 | - | 1,669.6 | -54.0 |
The group's operating profit margin of 8.4 percent in the quarter was 0.8 percentage points lower than a year ago, but its net profit jumped by 20 percent to $31.8 million, thanks in part to a tax gain of $4.1 million and despite a bad debt provision of $500,000.
For the full year, Columbia Sportswear is projecting a sales increase at a mid-single digit rate and an operating profit margin of up to 10.7 percent. The cautious sales outlook takes into account the bankruptcies of major U.S. retail clients and a continued downturn in South Korea.