Columbia Sportswear reports record third quarter sales
Columbia Sportswear Company, a leading innovator in the global outdoor apparel, footwear, accessories and equipment industries, announced record net sales of $566.8 million for the quarter ended September 30, 2011, a 12 percent increase compared with net sales of $504.0 million for the same period of 2010, including a benefit of 3 percentage points from changes in currency exchange rates.
Third quarter net income increased 29 percent to $67.5 million, or $1.98 per diluted share, including a benefit of $0.04 per share from a lower income tax rate, compared to net income of $52.2 million, or $1.53 per diluted share, for the same period of 2010.
Tim Boyle, Columbia's president and chief executive officer, commented, "Our third quarter sales growth reflects the previously reported increase in our Fall season backlog, as well as strong performance in our global direct-to-consumer business. Improved operational execution resulted in a significant reduction in airfreight costs and produced meaningful operating margin leverage. Our increased profitability outlook for the full year reflects the strength of the third quarter and our expectations for continued growth through the remainder of the year."
Review of Third Quarter Results
(All comparisons are between third quarter 2011 and third quarter 2010, unless otherwise noted.)
Third quarter 2011 net sales increased $62.8 million, or 12 percent, led by a 116 percent increase in sales of the Sorel brand to $72.0 million. Sales of the Columbia brand increased 4 percent to $447.8 million and Mountain Hardwear sales grew 17 percent to $44.7 million.
On a geographic basis, the increase in third quarter 2011 net sales was led by a 51 percent increase in the EMEA region to $100.3 million, including a 13 percentage point benefit from changes in currency rates. Sales in the LAAP region increased 23 percent, to $72.8 million, including a 9 percentage point benefit from changes in currency exchange rates. U.S. sales increased 2 percent to $333.6 million and sales in Canada increased 13 percent to $60.1 million, including a 9 percentage point benefit from changes in currency exchange rates.
Third quarter 2011 footwear net sales increased 55 percent to $128.6 million. Sportswear net sales increased 7 percent to $179.8 million. Accessories and equipment net sales increased 23 percent to $35.9 million. Outerwear net sales were essentially unchanged at $222.5 million.
The company ended the quarter with $90.4 million in cash and short-term investments, compared with $236.3 million at September 30, 2010.
Inventories totaled $432.1 million at September 30, 2011, an increase of $73.9 million, or 21 percent, from September 30, 2010. Higher average unit costs accounted for almost 80 percent of the dollar increase, with unit growth representing the remainder.
Increased Full Year 2011 Financial Outlook
Based onthe stronger-than-expected third quarter results, the company raised its outlook for full year 2011 operating margin to increase approximately 100 basis points compared with 2010 operating margin of 7.0 percent, driven by: