Press Release:
Columbia Sportswear Company Reports Preliminary Fourth Quarter 2012 Financial Results Below Prior Outlook
PORTLAND, Ore.–(BUSINESS WIRE)–
Columbia Sportswear Company (COLM), a leading innovator in the global active outdoor apparel and footwear industries, today announced preliminary financial results for the fourth quarter ended December 31, 2012 that are below the company’s prior outlook provided on October 25, 2012.
The company now expects to report fourth quarter net sales of approximately $499.0 – $503.0 million, a decline of approximately 5 percent compared with fourth quarter 2011 net sales of $526.1 million. Prior fourth quarter outlook anticipated net sales growth of up to 1.5 percent.
Net sales were hampered by a combination of mild winter weather in North America during most of the holiday shopping period, general consumer caution and reduced retail traffic in key markets, and a more promotional environment. These factors, among others, combined to produce lower-than-expected direct-to-consumer sales, as well as higher order cancellations and fewer reorders from wholesale customers, primarily in the U.S. In addition, approximately one-third of the fourth quarter net sales shortfall reflected a timing shift into the first quarter of 2013 of factory-direct shipments of international distributors’ Spring 2013 advance orders.
The company now expects fourth quarter gross margin to contract approximately 120 to 130 basis points, to 41.2 to 41.3 percent. Prior fourth quarter outlook anticipated gross margin contraction of 50 to 75 basis points from gross margin of 42.5 percent in last year’s fourth quarter. Lower-than-expected gross margin primarily reflects increased promotional activity and liquidation of excess inventory in response to the slower sales discussed above.
Consolidated inventories at December 31, 2012 are expected to be essentially equal to those at December 31, 2011.
The company now expects fourth quarter selling, general and administrative (SG&A) expenses to decline to approximately $158 to $162 million, or approximately 31.5 percent to 32.3 percent of sales. Prior fourth quarter outlook anticipated SG&A expense of approximately 32.0 percent to 32.5 percent of sales, compared with 34.0 percent of sales, or $178.6 million, in last year’s fourth quarter. The reduction in SG&A expense reflects continued disciplined management of discretionary spending.
The company now expects fourth quarter operating income of approximately $47.0 to $52.0 million, or approximately 9.4 percent to 10.3 percent operating margin, compared with fourth quarter 2011 operating income of $50.5 million, or 9.6 percent operating margin. Prior fourth quarter outlook anticipated operating margin of 10.6 percent to 11.1 percent.
The company now expects to report fourth quarter net income of between approximately $37.0 million to $40.0 million, including a lower than expected income tax rate.
Prior outlook anticipated fourth quarter net income of approximately $44.0 million, compared with net income of $36.7 million for the fourth quarter of 2011.
No conference call will be held in conjunction with this preliminary report. The company plans to announce actual fourth quarter and full year 2012 results and update its preliminary 2013 outlook on February 7, 2013.
Fourth Quarter 2012 Reporting Schedule
Columbia Sportswear plans to report actual fourth quarter and full year 2012 financial results on Thursday, February 7, 2013 at approximately 4:00 p.m. ET. Following issuance of the earnings release, a commentary reviewing the company’s financial results will be furnished to the SEC on Form 8-K and published on the investor relations section of the company’s website at https://investor.columbia.com/results.cfm.
About Columbia Sportswear
Columbia Sportswear Company is a leading innovator in the global outdoor apparel, footwear, accessories and equipment industry. Founded in 1938 in Portland, Oregon, Columbia products are sold in approximately 100 countries and have earned an international reputation for innovation, quality and performance. Columbia products feature innovative technologies and designs that protect outdoor enthusiasts from the elements, increase comfort, and make outdoor activities more enjoyable. In addition to the Columbia® brand, Columbia Sportswear Company also owns outdoor brands Mountain Hardwear®, Sorel®, and Montrail®. To learn more, please visit the company’s websites at www.columbia.com, www.mountainhardwear.com, www.sorel.com, and www.montrail.com.
