Columbia Sportswear Q3 net income increases 5 percent
Columbia Sportswear Company has announced net sales of 747.4 million dollars for the third quarter ended September 30, 2017, an increase of less than 1 percent compared with net sales of 745.7 million dollars for the third quarter of 2016. Net income increased 5 percent to 87.7 million dollars or 1.25 dollars per diluted share.
"We are also pleased to reiterate our full year 2017 financial outlook, which now incorporates the anticipated costs of ‘Project Connect’. In addition, based upon advance orders for spring 2018, we are optimistic that we will continue to generate global growth, including a return to growth in our US wholesale business in the first half of 2018. Our powerful balance sheet, with 430 million dollars in cash and no long-term debt, provides the flexibility to adapt our business as our major markets evolve," said the company’s President and CEO Tim Boyle in a statement.
Third quarter result highlights
Third quarter consolidated net sales included 20 percent or 15 percent constant currency net sales growth in the EMEA region to 87.5 million dollars, including a net sales increase of more than 20 percent or high-teen percent constant-currency in the company's European wholesale and direct-to-consumer businesses, and a low-double-digit percentage increase in net sales to EMEA distributors.
The net sales rise also included 9 percent or 11 percent constant currency net sales growth in the LAAP region to 123 million dollars, reflecting increased net sales to LAAP distributors and increased net sales in China and Korea, partially offset by a small net sales decline in Japan; and 8 percent or 4 percent constant currency net sales growth in Canada to 80.9 million dollars; partially offset by: a 6 percent net sales decline in the US to 456 million dollars, consisting of a low-double-digit percentage decline in wholesale net sales, partially offset by low-double-digit percentage growth in direct-to-consumer net sales.
Global Columbia brand net sales increased 2 percent to 598.3 million dollars, Global Sorel brand net sales decreased 7 percent (8 percent constant-currency) to 81.7 million dollars, while Global Prana brand net sales decreased 3 percent to 36.8 million dollars. Global Mountain Hardwear brand net sales decreased 4 percent to 29.4 million dollars.
Global apparel, accessories and equipment net sales increased 1 percent to 580 million dollars, global footwear net sales decreased 2 percent (3 percent constant-currency) to 167.4 million dollars.
Through the first nine months of 2017, net sales increased 30.5 million dollars or 2 percent, to 1,690.1 million dollars. Year-to-date net income increased 5 percent to 112.2 million dollars or 1.59 dollars per diluted share.
Columbia Sportswear updates FY17 outlook
Compared with the company's previous 2017 financial outlook provided on July 27, the following updated 2017 financial outlook now includes program expenses and discrete costs related to Project Connect of approximately 15 million dollars. The company currently expects 2017 net sales growth of approximately 3 percent compared with 2016 net sales of 2.38 billion dollars, including less than 1 percentage point positive effect from changes in foreign currency exchange rates.
The company expects gross margins to improve by approximately 20 basis points compared with 2016 gross margins of 46.7 percent. Based on the above assumptions, the company expects operating income between approximately 243 million dollars and 252 million dollars, representing anticipated operating margin of up to approximately 10.3 percent. Net income attributable to Columbia Sportswear Company is expected to be between approximately 183 million dollars and 190 million dollars, or approximately 2.60 to 2.70 dollars per diluted share.