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Columbia Sportswear lowers full year outlook

Aug 9, 2022 United States
Columbia Sportswear lowers full year outlook
Despite a revenue growth in the first half of the year, the US-based sportswear company has decided to cut its full year outlook based on a growing economic uncertainty environment
"First half net sales increased 12 percent, 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 percent, 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", commented Tim Boyle, Chairman, President and Chief Executive Officer of Columbia Sportswear.

Second Quarter Results

In the second quarter of fiscal 2022, Columbia's net sales totalled 578.1 million US dollars, reflecting an increase of 2% (4% in constant currency), as compared to the same period of last year. This figure mainly reflects growth across the US, Canada, Europe-direct, Japan and Korea regions, "partially offset by substantially lower Russia-based distributor and China net sales".

Gross margin contracted 240 basis points in this period to 49.2%, on a comparable basis to 51.6% in the second quarter of 2021, mainly due to higher inbound freight costs and lower wholesale margins, which were partially offset by a favourable channel and regional sales mix.

The company posted a net income decline of 82% to 7.2 million US dollars, or 0.11 US dollars per diluted share, in the three months that ended on the 30th of June, as compared to a net income of 40.7 million US dollars, or 0.61 US dollars per diluted share, in the second quarter of fiscal 2021.

First Half Results

In the first half of the current fiscal year, Columbia Sportswear's net sales reached 1.34 billion US dollars, which indicates an increase of 12% (14% in constant currency), as compared to the same period of the prior fiscal year.

The company's net income declined by 23% in the first six months of the year, totalling 74.0 million US dollars, or 1.16 US dollars per diluted share, on a comparable basis to net income of 96.6 million US dollars, or 1.44 US dollars per diluted share, in similar period of fiscal 2021.

Full Year Outlook

"Our confidence in our strategies and ability to unlock tremendous long-term growth opportunities remains intact. However, as 2022 has progressed, it is increasingly clear that the operating environment has become more challenging. Based on growing economic uncertainty we believe it is prudent to take a more conservative approach to our financial outlook for the balance of the year", added Tim Boyle, Chairman, President and Chief Executive Officer of Columbia Sportswear.

So, for fiscal 2022, the company is anticipating net sales between 3.44 billion US dollars to 3.50 billion US dollars from 3.31 billion US dollars in 2021, as compared to the prior guidance of 3.63 billion US dollars to 3.69 billion US dollars.

Net income is now expected to be 315 million US dollars to 340 million US dollars, resulting in diluted earnings per share of 5.00 US dollars to 5.40 US dollars, as compared to the prior outlook of between 364 million US dollars and 382 million US dollars, or diluted earnings per share of 5.70 US dollars to 6.00 US dollars.


Image Credits: outdoorsportswire.com


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