After a difficult first quarter to 2020 because of the Covid-19 pandemic, Columbia Sportswear Company is not having more luck in the second one. It has posted a net loss of $50.7 million, compared with net income of $23.0 million for the year-ago quarter, while sales dropped by 40 percent to $316.6 million, as the vast majority of owned stores across the U.S., Europe, Japan and Canada were closed over the pandemic. By the second quarter’s end, however, nearly all the company’s owned stores were open globally. The management said that recovery in the home market has lagged behind the recovery in places like Europe and South Korea.
The group took cost-containment actions and remains on track to lower 2020 operating expenses by more than $100 million from 2019’s figure. It has not released any guidance for the full year, but expects sales volume to stay below prior-year levels for the balance of 2020. Absent further deterioration in trends from the ongoing pandemic, management believes that sales should not decline in the second half to the level seen in the second quarter. It added that Columbia’s financial position remains strong, with $476 million in cash and short-term investments. Taken together with available credit capacity, total liquidity at the quarter’s end exceeded $1 billion.
In the three months to June, sales in the apparel/accessories/equipment segment decreased by 43 percent from the year-ago quarter to $243.8 million, while footwear lost 15 percent to $188.8 million, both in constant currencies.
Also on a constant currency basis, Covid-19 caused the group’s wholesale revenues to tumble by 26 percent to $485.8 million and direct-to-consumer (DTC) sales to drop by 23 percent to $399.0 million. However, e-commerce was a highlight, soaring by 72 percent.
Overall, the gross margin fell by 2.0 percentage points to 46.2 percent.
All on a constant currency basis, sales dropped by 36 percent in EMEA, by 42 percent in the U.S., by 54 percent in Canada and by 32 percent In Latin America and Asia-Pacific.
The Columbia brand suffered a 42 percent decrease in revenues during the quarter. At Sorel, revenues were down by 11 percent, while at prAna they declined by 28 percent. At Mountain Hardwear, sales tumbled by 44 percent.