Columbia Sportswear's net income rocketed by 137 percent to $23.0 million in the seasonally small second quarter ended June 30. One of the drivers was an exceptionally strong counter-seasonal business with Columbia's line of performance fishing gear, PFG, which is approaching an annual turnover of $200 million.
The group's quarterly revenues rose by 9 percent from last year's second quarter to $526.2 million, led by increases of 10 percent for the Columbia brand and 32 percent for Sorel. Finally, Mountain Hardwear returned to growth in the quarter, rising by 9 percent, and Prana went up by 2 percent.
All four brands are now expected to register increases this year. The company raised the low end of its full-year sales guidance, and now expects a growth of 7 to 8.5 percent, up from a previous forecast of 6.5 to 8.5 percent, with the gross margin expanding by 0.8 percentage points and the operating margin reaching a level of up to 13.0 percent.
The U.S. region led the growth in the second quarter with a 13 percent increase for the period to $315.5 million, followed closely by Canada, which rose by 12 percent. In Europe, the Middle-East and Africa, sales were up by 8 percent to $91.6 million despite challenges from Brexit in the U.K. and the Yellow Vests movement in France, with a good performance in Spain and Germany.
The management said that, given its relatively low market share in the region today, it continues to see tremendous long-term growth opportunities in Europe. Meanwhile, the Latin America/Asia-Pacific region was up by 1 percent to $101.6 million, as the group is making good progress in China after taking full control of its distribution there.
By category, the apparel segment advanced by 10 percent to $432.2 million, while footwear, accessories and equipment were up by 8 percent to $94.0 million. Revenues from wholesale jumped by 12 percent to $296.2 million, while direct-to-consumer sales improved by 6 percent to $230.0 million.
During the quarter, the company unveiled a new technology for non-winter footwear called Shift, which will be launched in August in certain retail chains and some sneaker stores. The shoes, which target younger adults, are aiming to combine city-inspired style and athletic comfort for outdoor activities.
The management said the company is seeing momentum across its various distribution channels. It pointed to the financial benefits of its Project Connect, a new transformation plan launched in 2017 and designed to adjust the business to the structural changes facing the retail sector. It calls for measures such as driving brand awareness and sales through increased and more focused demand creation, and enhancing the consumer experience and digital capabilities. The project helped the group to expand its gross margin by 0.7 percentage points to 48.2 percent during the latest quarter.