Columbia Sportswear's major brands perform well in Q2

02 Aug '11

5 min read

Second quarter 2011 sportswear net sales increased 12 percent to $136.2 million, outerwear net sales increased 43 percent to $62.1 million, footwear net sales increased 29 percent to $50.0 million, and accessories and equipment net sales increased 11 percent to $19.7 million.

The company ended the second quarter of 2011 with approximately $298.3 million in cash and short-term investments, compared with approximately $398.3 million at June 30, 2010.

Inventories totaled $422.0 million at June 30, 2011, an increase of 36 percent from June 30, 2010. The increase resulted from:

- earlier receipts of Fall 2011 production to fulfill advance orders for delivery in the second half of 2011;
- excess Fall 2010 inventory intentionally held for sale primarily through company-owned retail outlet stores in the second half of 2011;
- higher Spring 2011 inventory compared to Spring 2010, partially due to unseasonable weather which resulted in fewer reorders and greater cancellations of advance orders; and
- the effect of a weaker U.S. dollar on translation of non-U.S. inventory balances.

2011 Financial Outlook
The company reaffirmed its previous expectations for full year 2011 operating margin to increase approximately 50 to 70 basis points compared with 2010 operating margin of 7.0 percent, driven by:

- an expected net sales increase of 14 to 16 percent compared with 2010,
- an approximate 100 basis point increase in gross margins compared to 2010 gross margins of 42.4 percent, and
- increased licensing income, partially offset by
- an estimated 50 basis point increase in selling, general and administrative expenses (SG&A) as a percentage of sales.

The company is currently planning for a full-year income tax rate of approximately 27 percent.

The company expects a low double-digit percentage increase in third quarter 2011 net sales compared with third quarter 2010 and operating income of approximately $70 million to $74 million, with a 25 basis point increase in gross margins, and 100 basis points of SG&A expense expansion as a percentage of net sales, partially offset by an increase in licensing income.

All projections related to anticipated future results are forward-looking in nature and are based on a variety of factors and assumptions, which may change, perhaps significantly.

Dividend
The board of directors approved a dividend of $0.22 per share, payable on September 1, 2011 to shareholders of record on August 18, 2011.

Columbia Sportswear Company

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