Columbia Sportswear Company performed better than expected in the first quarter, despite port congestion problems in North America. The group’s net income reached $55.9 million, jumping from $213,000 in the year-ago quarter when the pandemic first hit the company.
Revenues gained 10 percent to $625.6 million, including a 20 percent rise in DTC sales to $290.2 million, with e-commerce climbing by 35 percent, boosted by the new e-commerce platform X1, implemented since the fall in North America for the Columbia, Sorel and Mountain Hardwear brands, following a successful deployment across Europe in 2019. The newly refreshed sites have been aesthetically enhanced and were designed to offer an improved consumer experience. Meanwhile, brick-and-mortar sales advanced by 10 percent, despite lower traffic, especially in tourist areas.
Based on these strong results, Columbia raised its full-year guidance and now expects revenues to reach between $3.04 and $3.08 billion, up from prior guidance of $2.95 to $3.00 billion. It is seeing solid early spring sell-though, as well as an improving fall order book, and expects all four brands to post sales gains in 2021, including a similar growth rate for footwear and apparel. It also forecasts net income of $271 to $288 million in 2021, compared to prior guidance of $250 to $270 million.
First-quarter wholesale revenues declined 3 percent to $335.4 million, impacted by delayed merchandise shipments due to congestion at U.S. West Coast seaports. However, this was offset by low inventory levels in partner stores, which helped with full-price sales.
The Columbia brand grew 12 percent to $527.4 million in the quarter, helped by late-season winter weather. Management said the PFG fishing line did well, and so did new outdoor footwear styles. It added that OmniHeat Infinity, a technology designed to increase the insulation power of a garment by reflecting the body’s own heat and that will be unveiled later this fall, will be the largest platform launch in the company’s history, with a digital and social media-focused global marketing campaign.
Meanwhile, at Sorel, revenues were up by 20 percent, while at prAna and Mountain Hardwear, they fell by 14 percent and 4 percent, respectively, due to late deliveries and lower Spring orders. Licensing income lost 10 percent.
Sales in the apparel/accessories/equipment segment increased by 4 percent from the year-ago quarter to $468.9 million, while footwear surged by 35 percent to $156.7 million.
In constant currencies, sales jumped by 18 percent in EMEA, including a high-teens growth in direct sales, while distributor revenues doubled due to shipments delayed from the fourth to the first quarter.
Revenues advanced by 9 percent in the U.S. and also by 9 percent In Latin America and Asia-Pacific. Canada inched up by 1 percent.
Overall, the gross margin rose by 3.6 percentage points to 51.4 percent, led by lower promotions, higher DTC sales and reduced inventory reserve provisions.
The group took cost-containment actions, realizing about $22 million in SG&A savings. It exited the quarter with $875 million in cash and short-term investments, with no bank borrowings.