US-based outdoor and active lifestyle apparel and accessories firm Columbia Sportswear has reported a 3 per cent increase in net sales for the third quarter of fiscal 2023 (Q3 FY23), reaching $985.7 million, up from $955 million for the same period in FY22. This growth was uniform across both the company's direct-to-consumer (DTC) and wholesale businesses. The increase in wholesale was particularly boosted by earlier shipments of fall 2023 orders, counterbalancing lower distributor sales.

The gross margin expanded by 70 basis points, moving up to 48.7 per cent of net sales from 48 per cent in the comparable period of FY22. However, selling, general and administrative expenses increased by 10 per cent to $351.6 million, making up 35.7 per cent of net sales, compared to $319 million or 33.4 per cent of net sales in Q3 FY22.

As a result, the operating income for the quarter decreased by 7 per cent to $134.6 million, accounting for 13.7 per cent of net sales. This compares to $145.3 million, or 15.2 per cent of net sales, for the same period last year. Net income also declined by 7 per cent to $103.5 million, or $1.70 per diluted share, down from $111.8 million, or $1.80 per diluted share, in Q3 FY22.

Looking at the first nine months of FY23, the company's net sales showed an increase of 6 per cent (7 per cent in constant currency), totalling $2,427.2 million, up from $2,294.6 million in the comparable period last year. The gross margin improved by 30 basis points, standing at 49.2 per cent of sales compared to 48.9 per cent in the first nine months of FY22.

Selling, general and administrative expenses, however, showed a 12 per cent hike to $1,011.5 million, making up 41.7 per cent of net sales. This is in contrast to $899.3 million, or 39.2 per cent of net sales, in the prior year. Consequently, the operating income for this period suffered a 17 per cent decrease, falling to $197.2 million, or 8.1 per cent of net sales, compared to $237.7 million, or 10.4 per cent of net sales, in FY22.

Net income for the first nine months also decreased by 15 per cent to $158.1 million, or $2.56 per diluted share, from $185.8 million, or $2.94 per diluted share, in the comparable period of the previous year.

The company's inventories declined by 16 per cent to $885.2 million, in comparison to $1,056.9 million as of September 30, 2022.

“Third quarter performance was led by international-direct markets, with Canada, Europe-direct and China all delivering over 20 per cent year-over-year growth in constant currency. In the US, the marketplace remains challenging, but we are making meaningful progress on our inventory reduction plan, with inventory exiting the quarter down 16 per cent year-over-year. As we enter our peak selling season, we have numerous activations across our brand portfolio to engage consumers and drive sales, including product collaborations, pop-up shops, and continued momentum in Columbia’s Omni-Heat Infinity collection,” said Tim Boyle, chairman, president and chief executive officer.

Fibre2Fashion News Desk (DP)

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