Columbia Sportswear Company, a leading innovator in active outdoor apparel, footwear, accessories and equipment, reported growth in net sales by 4 per cent to a record $954.9 million in the fourth quarter (Q4) FY19 that ended on December 31, 2019. Net sales for the complete year jumped 9 per cent compared to 2018, to a record $3,042.5 million.
Company sales surpassed the $3 billion mark reportedly for the first time in their history. Company reported that a challenging retail environment, particularly in outerwear, impacted sell-through performance in Q4.
In Q4 FY19, operating income decreased 9 per cent to $138.6 million and operating margin declined to 14.5 per cent of net sales, compared to Q4 FY18 of $152.8 million or 16.6 per cent of net sales. SG&A expenses increased 6 per cent to $344.4 million, or 36.1 per cent of net sales, from $326.3 million, or 35.6 per cent of net sales, for the comparable period in 2018. Net income increased 1 per cent to $114 million from $113.3 million for the comparable period in 2018.
For the complete year, operating income increased 13 per cent to $395 million, or 13 per cent of net sales, from operating income of $351 million, or 12.5 per cent of net sales, in 2018. SG&A expenses increased 8 per cent to $1,136.2 million, or 37.3 per cent of net sales, from $1,051.2 million, or 37.5 per cent of net sales, in 2018. Net income increased 23 per cent to $330.5 million from $268.3 million in 2018.
Total net sales in US increased by 8 per cent to $634 million. Wholesale net sales increased high-single-digit per cent driven by growth in the Columbia and Sorel brands. Direct-to-consumer (DTC) net sales increased mid-single-digit per cent driven by new store openings as well as high-single-digit percent ecommerce growth. Both our brick & mortar and e-commerce businesses faced difficult comparisons, against exceptional sales performance in the prior year period.
Latin America and Asia Pacific (LAAP) net sales reduced 4 per cent to $171.6 million. Japan net sales increased high-single-digit per cent. China net sales decreased mid-single-digit per cent. LAAP Distributor net sales decreased mid-teens per cent primarily driven by a shift in Fall 2019 shipments with a greater portion falling into Q3 FY19 compared to Fall 2018 shipments in the prior year. Korea net sales decreased low-double-digit per cent.
Europe, Middle East and Africa (EMEA) net sales for FY19 increased 7 per cent to $99.8 million. EMEA distributor net sales increased mid-teens per cent, driven by higher Spring 2020 advance orders and favorable timing of Spring 2020 shipments, with a greater portion falling into Q4 FY19 compared to Spring 2019 shipments in the prior year.
Net sales in Canada decreased 10 per cent driven primarily by a shift in Fall 2019 shipments with a greater portion falling into third quarter 2019 compared to Fall 2018 shipments in the prior year, partially offset by DTC growth.
Company in their future outlook for FY20 stated that with respect to the coronavirus outbreak, company reported that they have closed stores in China, implemented strategies designed to mitigate the impact on their employees in China and put in place company-wide travel limitations.
Company in their strategic priorities for sustainable and profitable growth are, to drive brand awareness and sales growth through increased, focused demand creation investments; enhance consumer experience and digital capabilities in all channels and geographies; expand and improve global DTC operations with support processes and systems; and invest in people and optimising organisation across company's portfolio of brands.
Fibre2Fashion News Desk (JL)