US' Columbia Sportswear Company's net sales up 2% to $578.1 mn in Q2

The increase in net sales primarily reflects growth across the US, Canada, Europe-direct, Japan and Korea, partially offset by substantially lower Russia-based distributor and China net sales, the company said in a press release.

The company’s operating income decreased 75 per cent to $8.8 million, or 1.5 per cent of net sales, compared to Q2 2021’s operating income of $35 million, or 6.2 per cent of net sales. Its diluted earnings per share decreased 82 per cent to $0.11, compared to $0.61 in Q2 2021.

Its gross margin contracted 240 basis points to 49.2 per cent of net sales from 51.6 per cent of net sales for the comparable period in 2021. Gross margin contraction was primarily driven by higher inbound freight costs and lower wholesale margins, partially offset by favourable channel and regional sales mix.

SG&A expenses increased 7 per cent to $281.3 million, or 48.7 per cent of net sales, from $261.8 million, or 46.2 per cent of net sales, for the comparable period in 2021. SG&A expense growth primarily reflects broad-based increases across the enterprise led by personnel expenses, which were driven by incremental headcount as well as wage increases.

Income tax expense of $0.7 million resulted in an effective income tax rate of 8.6 per cent, compared to an income tax benefit of $5.4 million, or a negative effective tax rate of 15.3 per cent, for the comparable period in 2021.

Net income decreased 82 per cent to $7.2 million, or $0.11 per diluted share, compared to net income of $40.7 million, or $0.61 per diluted share, for the comparable period in 2021.

For the first half (H1) of 2022, Columbia Sportswear Company’s net sales increased 12 per cent (14 per cent constant-currency) to $1,339.6 million from $1,192.0 million for the comparable period in 2021. Gross margin contracted 200 basis points to 49.5 per cent of net sales from 51.5 per cent of net sales for the comparable period in 2021.

SG&A expenses of the company increased 12 per cent to $580.3 million, or 43.3 per cent of net sales, in the first six months of 2022 compared to $516.2 million, or 43.3 per cent of net sales, for the same period in 2021. Operating income decreased 12 per cent to $92.4 million, or 6.9 per cent of net sales, compared to operating income of $105.5 million, or 8.8 per cent of net sales in H1 2021.

The company’s net income decreased 23 per cent to $74 million, or $1.16 per diluted share in H1 2022, compared to net income of $96.6 million, or $1.44 per diluted share in H1 2021.

Chairman, president and chief executive officer Tim Boyle commented, "First half net sales increased 12 per cent, reflecting the strength of our brand portfolio amidst a rapidly changing and increasingly challenging economic environment. All of our brands contributed to this growth, with SOREL leading the charge, surging 33 per cent, fuelled by the brand’s bold new summer and year-round styles. During the second quarter, which is our lowest volume sales quarter, performance trends varied greatly by region. Many markets continued to experience meaningful sales growth, while others were impacted by external headwinds and shipment delays. As we head into the important Fall sales season, we are eager to get our innovative product into the marketplace.”

For the full year 2022, the company expects net sales of $3.44 to $3.50 billion (prior $3.63 to $3.69 billion) representing net sales growth of 10 to 12 per cent (prior 16 to 18 per cent) compared to 2021. It expects operating income to be $415 to $449 million (prior $477 to $502 million), representing operating margin of 12.1 to 12.8 per cent (prior 13.2 to 13.6 per cent).

Fibre2Fashion News Desk (KD)