Columbia, Sorel, and Prana are still struggling against weak wholesale orders and warmer weather leading to low consumer demand in North America, according to the latest results from Columbia Sportswear Company.
Similar to last quarter’s results, Mountain Hardwear was the only brand in Columbia’s portfolio that grew its year-over-year revenue.
“Our third quarter financial results are a continuation of the trends we’ve experienced all year in the North American outdoor market, which remains challenged,” said CEO Tim Boyle on the company’s Oct. 30 earnings call.
For the third quarter ended Sept. 30:
- Columbia brand’s net sales declined by 1% year-over-year to $800 million.
- Sorel’s net sales declined by 39% to $74 million.
- Prana’s net sales decreased by 7% to $28 million.
- Mountain Hardwear’s net sales increased by 2% to $30 million.
The company’s total net sales were down 5% year-over-year to $931.8 million. Its net income was $120 million in the quarter, down from $158 million the prior year.
Demand for footwear in the U.S. was particularly challenging for the company overall, which reported a 23% decline year-over-year in the category. Apparel was up by 1%
Lower fall wholesale orders company-wide led to a 9% decline in the channel, while DTC revenue was up 2% in the quarter.
Demand was softer in North America, with revenues declining by 10% year-over-year in the U.S. and down by 21% in Canada. Revenue from EMEA grew by 10% to $141.8 million, and increased by 17% to $135 million in LAAP.
Columbia Brand Readies for a Refresh
To boost its turnaround efforts, Columbia launched a new growth strategy, dubbed Accelerate, in recent months, designed in part to reach younger and new consumers in the U.S.
As part of that strategy, the Columbia brand will undergo a creative refresh led by new hire Matt Sutton and agency adam&eveDDB.
“The Columbia brand is fun, irreverent and authentic, and this will become increasingly evident in our marketing,” Boyle said.
Columbia will also narrow its product assortment and focus on innovation, both with new designs and updated classics. To better showcase the brand, the company will work with its retail partners and invest in its web presence to elevate how it’s presented to consumers.
“This will be a multi-year strategy that steadily builds momentum in the seasons ahead as 2025 progresses,” Boyle said. “The changes we’re making will be increasingly evident to consumers.”
Asia continues to be one of Columbia’s fastest growing markets, and the company brought on Jeff McPike to be the new general manager of Columbia Sportswear in Korea. Creative marketing efforts in Europe, such as The Hike Society hiking community, have connected consumers to Columbia’s products
Net sales at the Columbia brand are expected to be flat or decline “modestly” this fiscal year.
Updates from Mountain Hardwear, Sorel, and Prana
Mountain Hardwear’s net sales are projected to increase by the mid-single digits.
“I’m encouraged by the progress the product development team has made in recent months, activating wholesale distribution, refreshing marketing, and recruiting new talent to the team,” Boyle said. “I’m confident these actions position the brand for growth, starting with a positive order book for Spring ‘25.”
Lower orders in the fall of 2024 drove sales declines at Sorel, and Boyle said he expects sales to stay under pressure as the brand develops its product and marketplace strategies.
Sorel’s net sales for the full year are anticipated to be down by approximately 25%, and Prana’s net sales are estimated to decline by the mid-single digits.
Outlook for 2024
Columbia adjusted its outlook for the year, pointing toward uncertainty in weather, geopolitical events, and supply chain.
The company now projects a 3% to 5% net sales decrease compared to the prior year, resulting in sales of $3.31 billion to $3.38 billion. The company previously anticipated a net sales decrease of 2% to 4%.
Its net income is expected to be $217 million to $238 million.
Kate Robertson can be reached at kate.robertson@emeraldx.com.
