REPORTColumbia Sportswear Company announced record net sales of 767.6 million dollars for the quarter ended September 30, 2015, an increase of 14 percent (18 percent constant-currency), compared with net sales of 675.3 million dollars for the same period in 2014. Net sales through the first nine months of 2015 increased 14 percent (19 percent constant-currency), to 1,626.8 million dollars.
“During the third quarter, the Columbia, Sorel and prAna brands combined to generate 26 percent net sales growth across North America. The Columbia brand also continued to demonstrate its resurgence in Europe-direct markets, posting mid-twenty-percent constant-currency growth in that important region during the quarter. Our expanded gross margins are enabling us to increase our demand creation investments by 13 percent this year, while driving significantly improved operating margins,” said Tim Boyle, Columbia's Chief Executive Officer.
Record sales and income growth
The company said, this growth included double-digit net sales increases from each of the company's brands, 25 percent growth in North America and high-teen constant-currency percentage growth in Europe-direct markets.
Third quarter operating income increased 35 percent to a record 132.3 million dollars, or 17.2 percent of net sales, and net income grew 39 percent to 91.1 million dollars, or 1.28 percent per diluted share. Operating income through the first nine months increased 43 percent to 167.4 million dollars, compared with operating income of 116.7 million dollars for the same period last year and net income including incremental profit from the prAna brand, increased 36 percent to a record 111 million dollars, or 1.56 dollars per diluted share.
Brands and segment-wise review
Third quarter consolidated net sales growth included US net sales growth of 26 percent, reflecting growth from each of the company's brands, led by Columbia and Sorel, including the effects of more timely delivery of wholesale advance orders. And net sales growth of 16 percent in Canada (39 percent constant-currency), led by the Sorel and Columbia brands; partially offset by an 11 percent net sales decline (5 percent constant-currency) in the Latin America/Asia Pacific (LAAP) region, concentrated in the Columbia brand in the company's Asian markets; and a 14 percent net sales decline (3 percent constant-currency) in the Europe/Middle East/Africa (EMEA) region.
Global Columbia brand net sales increased 10 percent (14 percent constant-currency) to 609.7 million dollars. Global Sorel brand net sales increased 48 percent (59 percent constant-currency) to 86.2 million dollars and global prAna brand net sales increased 22 percent (22 percent constant-currency) to 34.4 million dollars. Global Mountain Hardwear brand net sales increased 12 percent (17 percent constant-currency) to 34.8 million dollars.
Global apparel, accessories & equipment net sales increased 9 percent (12 percent constant-currency) to 596.1 million dollars, and footwear net sales increased 36 percent (46 percent constant-currency) to 171.5 million dollars. Third quarter gross margins expanded 100 basis points to 46.4 percent, compared to 45.4 percent for the third quarter of 2014.
13 percent rise in dividend, revises outlook
The board of directors authorized a 13 percent increase in the company's regular quarterly dividend to 0.17 dollar per share from the prior 0.15 dollars per share.
The company expects 2015 net sales growth of approximately 10.5 percent (14.5 percent constant-currency) to more than 2.3 billion dollars, compared to 2014 net sales of 2.1 billion dollars. Gross margins are expected to improve by approximately 75 basis points and approximately 30 basis points of operating expense leverage, resulting in projected operating margin expansion of approximately 90 to 100 basis points.
Based on the above assumptions, the company expects approximately 20 percent to 23 percent growth in operating income to between approximately 239 million dollars and 244 million dollars.