Columbia Sportswear's sales were up by just 2 percent in dollars and local currencies in the second quarter ended June 30, but they still reached a record level of $388.8 million for the period. The variation is not very significant as this is the weakest quarter in the group's financial year.
In fact, the group's sales were still up by 6 percent in dollars and by 8 percent in local currencies for the first six months of the year, and the management's guidance is for mid-single-digit increase for the full financial year, with the operating margin at 10.7 percent of sales.On a constant-currency basis, sales increased in the latest quarter by 8 percent in the U.S. and by 27 percent in Canada, but they were off by 2 percent in Europe, Middle East and Africa (EMEA) and by 11 percent in Latin America and Asia-Pacific (LAAP).
In EMEA, sales to distributors fell by a low double-digit percentage rate, but sales in the directly controlled markets went up by a mid-teen rate in constant currencies.
Across the group, footwear sales were down by 4 percent in the quarter, while apparel, accessories and equipment inched up by 4 percent. Also on a currency-neutral basis, sales under the Columbia brand went up by 2 and Prana by 23 percent, while Sorel declined by 16 percent and Mountain Hardwear by 20 percent.
The relatively weak quarterly turnover led the group to post a net loss of $8.2 million for the period, up from a year-ago loss of $6.5 million.
For the first half, net income was up by 19 percent to $23.6 million, while sales grew by 6 percent to $913.9 million, with growth of 8 percent in constant currencies.
Sales rose by 5 percent in constant currencies in EMEA. They jumped by more than 20 percent in all but one of the company's 17 directly controlled markets in Europe, driven by trail running shoes and rainwear. The group is not yet profitable in the region, however.
Prana grew by 16 percent in the first half, mostly in the U.S., thanks to an expanded range of products, including swimwear. With sales of $74 million it was the second-largest brand in the group's portfolio.
Sorel grew by 22 percent in dollars and by 26 percent in local currencies during the first half. The group will continue to “de-winterize” the Sorel brand, adding lighter-weight styles in the autumn.
The company also introduced OutDry Extreme Eco rain shells in the spring and will follow up with insulated jackets and gloves in the autumn. The next move will be into footwear.
The management's outlook for the full financial year calls for mid-single-digit percentage growth in sales and operating income, indicating a target operating margin of up to 10.7 percent.