Columbia Sportswear’s net sales decreased by 4 percent to $452.4 million in the third quarter. Net income slipped from $62.6 million to $58.3 million in the same period. Business was flat especially in the Europe, Middle East and Africa region, where sales went down by 10 percent to $78.2 million. While decreases in Canada were moderate at 2 percent, the Latin America/Asia/Pacific region was up by an impressive 10 percent to $46.1 million.

 

Breakdown of Columbia’s net sales by regions, product categories and brand for the third quarter of the fiscal year 2008:

 

 

Q3, 2008

Q3, 2007

Change in %

Geographical Net Sales

 

 

 

U.S.

271.3

284.2

-5

Europe/Middle East/Africa

78.2

87.3

-10

Latin America & Asia-Pacific

46.1

41.8

10

Canada

56.8

57.8

-2

Net Sales by Categories

 

 

 

Sportswear

157.5

161.9

-3

Outerwear

208.6

215.8

-3

Footwear

63.6

71.4

-11

Accessories & Equipment

22, 7

22.0

3

Net Sales by Brands

 

 

 

Columbia

395.2

418.2

-5

Mountain Hardwear

35.2

29, 5

19

Sorel

19.0

19, 1

-1

Montrail

2, 6

2, 6

+/-0

Pacific Trail

0.4

1, 7

-76

Total

452.4

471.1

-4

 

The overview highlights that sales were significantly down in Europe and the affiliated regions in Asia and Africa (EMEA). However, the Columbia group had great success in South America and the Far East; it is widely considered to be market leader at the Chinese outdoor market. The declines at Columbia’s home and core market at a rate of 5 percent, however, even outpaced the global decrease in sales. The company’s darling within its portfolio of brands was definitely Mountain Hardwear. The high-end equipment and apparel brand increased its sales by an impressive 19 percent to $35.2 million, basically due to improved market penetration among U.S. specialty outdoor retailers.

Columbia’s net income decreased accordingly with the net sales. Income slipped from $62.6 million to $58.3 million compared with the third quarter of 2007. Meanwhile, management has announced a significant decrease in backlog for spring 2009. As of Sept. 30, the backlog went down by 11 percent to $414.4 million. Tim Boyle, the company’s chief executive and president, was disappointed with the decline in spring backlog, but believes that this development reflects the retailers’ continued efforts to reduce their inventory.

The future strategy to partially offset the decline in the wholesale business is to continue with corporate stores, especially in the United States. The company is opening four Columbia-branded stores in Portland, Seattle and Minneapolis through this November. By the end of the year, Columbia intends to more than double the number of outlet stores from 13 at last year’s end to 28.