Columbia Sportswear: 16% sales growth in second quarter
Columbia is revising its growth forecast upwards for its 2014 fiscal year. While early in the year it expected net sales up 15% to 17%, the American sports brands group now aims for growth of 19% to 21% along with an improvement in its operating margin from 7.8% in 2013 to 8.3%.
After a very strong first quarter, the group announced a 16% growth in sales in the second quarter ending in late June, at 241 million euros (324 million US dollars). Without taking into account the contribution of 4 million euros from the brand PrAna, which it recently acquired, the rise was almost 14%.
Mountain Hardwear, with 16.2 million euros, is the group’s only brand to experience a decline in sales. Sorel increased by 3% to 2.2 million, while the group’s Other" division recorded +12%. Columbia posted +15% at 216.4 million euros.
By product category, the group announced +37% for its footwear sales at 45.5 million euros. Sales of clothing, accessories and equipment amounted to 195.5 million euros, a 12% increase.
Finally, by region, the group recorded improvements in all its markets. The United States remains the group’s largest market group at 108.8 million euros (+5%), Latin American and the Asia Pacific recorded +18% at 71.4 million, benefiting in particular from its new joint venture in China despite a difficult climate in Korea and Japan. And sales in Canada and in Europe, the Middle East and Africa respectively jumped by 39% and 37% at 6.6 and 54.2 million euros.
Yet, not everything was completely positive this quarter. While the group’s gross margin improved from 42.9% to 44.4%, it has also seen costs soar.
Depending on the accounting calendars, the second quarter is generally in the red. But its operating loss increased from 7.4 million to 12.6 million euros this year.
This last point does not change CEO Timothy Boyle’s optimism. In the quarterly presentation, he emphasized that "compared to the first half of last year, we increased our operating income sevenfold (13.8 million euros), making these the most profitable six months since the first half of 2008, despite 3.5 million euros of acquisition and amortization-related costs related to the purchase of PrAna."
The brand, present in North America, could be developed internationally by 2015.
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