Columbia Sportswear Company's operating income increased by 8 per cent to a first-quarter record of $48 million, while net income increased to 13 per cent to a first-quarter record of $36 million, or $0.51 per diluted share. Cash and short term investments totalled $590.5 million as on March 31, 2017. Its inventory decreased by 3 per cent to $398.8 million.
Global Columbia, Sorel and Mountain Hardwear brands net sales increased 3 per cent to $449.1 million, 50 per cent to $27.2 million and 10 per cent to $27.7 million, respectively. Global prAna brand net sales decreased by 7 per cent to $38.7 million.
"Our first quarter results provide a good start to a year that presents many challenges, especially in the US, which has been impacted by customer bankruptcies, liquidations and ongoing efforts by US retailers to rationalise their store fleets and square footage. We were encouraged by the Columbia brand's continued growth in Europe-direct markets during the first quarter and by the Sorel brand's successful launch of an expanded Spring assortment. In addition, our direct-to-consumer businesses were a source of growth in every region," said Tim Boyle, chief executive officer, Columbia Sportswear Company.
The company currently expects 2017 net sales growth of approximately 3 per cent compared with 2016 net sales of $2.38 billion, including approximately 1 percentage point negative effect from changes in foreign currency exchange rates. The company's US direct-to-consumer channel is expected to account for a majority of the projected full year 2017 global net sales increase.
The company expects fiscal year 2017 gross margins to improve by approximately 30 basis points, and for selling, general and administrative (SG&A) expenses to increase at a rate slightly higher than net sales, resulting in approximately 30 basis points of SG&A expense deleverage, including a planned increase in global demand creation spend. The full year effective tax rate is expected to be approximately 23 per cent.
"Our updated 2017 outlook anticipates up to 4 percent earnings growth on approximately 3 percent net sales growth, driven by contributions from three of our four brands and all four of our geographic regions. In the midst of changing consumer shopping patterns, our portfolio of powerful brands and strong balance sheet give us the ability to continue to drive sustainable, profitable growth," added Boyle. (KD)
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