Columbia announces 47% decline in earnings, reshuffles management
Portland, Oregon-based outdoor apparel and footwear company Columbia Sportswear reported a 47% decrease in its third-quarter earnings on Thursday and announced a number of changes to its leadership, including moves aiming to align the group’s management with its renewed focus on its digital business.
In the third quarter ended September 30, 2020, Columbia’s net income totaled $62.8 million, or $0.94 per diluted share, down from $119.3 million, or $1.75 per diluted share, in the same period in the previous year.
Net sales at the company, which, along with its namesake Columbia label, also owns the Mountain Hardwear, Sorel and prAna brands, decreased 23% to $701.1 million, compared to $906.8 million in the prior-year period.
Columbia’s e-commerce channel was, nonetheless, a bright spot, posting a 55% year-over-year rise in quarterly net sales. In order to support the development of its digital business, the company successfully completed the deployment of its new e-commerce platform in North America during the quarter.
“I’m pleased to report third quarter results exceeded our internal forecast,” commented Columbia chairman, president and CEO Tim Boyle in a release. “While results were down substantially in comparison to last year, sales and profitability trends sequentially improved compared to the second quarter and we expect continued improvement in the fourth quarter and into 2021.”
Year to date, Columbia’s net sales totaled $1.59 billion, decreasing 24% from the $2.09 billion reported by the company in the same nine-month period in the previous year. Net income for the period fell 94% to $12.3 million, or $0.18 per diluted share, compared to $216.5 million, or $3.15 per diluted share, last year.
Looking to the future, Columbia expects to report net sales of between $850 million and $880 million in the fourth quarter, figures which would represent a decline of between 8% and 11% compared to Q4 in the prior year. Diluted earning per share are predicted to be in the range of $1.07 to $1.32.
Boyle explained that, while it is still early in the Fall 2020 season, he is encouraged by positive early sell-through and reorder trends in the U.S. wholesale channel.
He also pointed out that outdoor activities have been experiencing a surge in interest during the pandemic, highlighting that the company’s spring order book and expectations for a return to growth in its direct-to-consumer business indicate that net sales will see growth in the high-teens percentage range in the first half of 2021.
As Columbia moves forward, one of its key focuses is the development of its omni-channel business, notably through the enhancement of its digital capabilities.
In support of these efforts, EVP and Americas general manager Franco Fogliato is transitioning to the role of EVP for global omni-channel, a newly created leadership position overseeing all Columbia brand sales in direct markets.
VP for e-commerce Patricia Higgins is also being promoted to SVP for e-commerce, a role in which she will report directly to Fogliato, as will VP and general manager for EMEA Matthieu Schegg, and SVP for Asia direct Peter Rauch.
On top of this, Columbia is creating the new role of chief digital information officer, which will replace the chief information officer position when it is vacated by Michael Hirt in April 2021. This role will also report directly to Fogliato.
The company further specified that, in its ongoing search for a chief marketing officer, it is emphasizing the importance of enhancing its marketing and social engagement in a digital marketplace.
These aren’t the only management changes taking place at Columbia, though. EVP and chief operating officer Thomas B. Cusick has also announced that he will be transitioning to a part-time role focusing on IT and supply chain initiatives in February 2021, before retiring definitively in the second half of the year.
With Cusick stepping down, SVP for global supply chain operations and manufacturing Lisa A. Kulok will transition into the role of EVP and chief supply chain officer, while Jim A. Swanson, SVP and CFO, is being promoted to the position of EVP and CFO. Both Kulok and Swanson will report directly to the company’s CEO.
Finally, Brent Beeson, who currently serves as VP for apparel manufacturing, will become SVP for manufacturing. He will report to Kulok.
“The leadership changes we are making today are intended to accelerate sustainable growth for the organization,” explained Boyle, going on to highlight the company’s continued focus on driving global brand awareness and improving its digital services.
“We believe that these changes will make Columbia stronger in the future,” he concluded.
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