Columbia Sportswear posts 18% drop in sales in 2020

By

Olivier Guyot

Published
Feb 16, 2021

In the fourth quarter ended December 31, 2020, American sports apparel and equipment company Columbia Sportswear saw gradual progress being made in most of the regions in which it has operations. Its European business, however, continued to lag behind due to the sanitation measures taken to contain the spread of the Covid-19 pandemic. 

The Portland, Oregon-based company, which owns brands including Columbia, Sorel and PrAna, reported that its quarterly global sales fell 4% year over year, from $945.9 million to $915.7 million. In constant currencies, sales dropped 4% to $905.8 million. 

On the bright side, e-commerce sales increased 41%, representing 23% of the company's total revenues. Less positively, the group's Europe, Middle East and Africa (EMEA) zone experienced an 18% decline in sales, as operations were negatively affected by the lockdowns imposed in various markets, as well as by the closure of a number of ski resorts.

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Over the course of the full fiscal year 2020, the company's sales fell 18% to $2.5 billion. In the U.S., where revenues totaled $1.6 billion, the decline was 17%, while in Canada sales fell 14% to $174.4 million.

Annual sales in the company's Latin America and Asia Pacific zone saw a decline of 20% to $424.5 million, with EMEA posting a 19% decrease to $298.9 million. 

"A bright spot for the year was our DTC e-commerce net sales, which grew 39% year-over-year and represented 19% of the total net sales mix," commented Columbia Sportswear chairman, president and CEO Tim Boyle in the company's earnings call. "If you include our partners wholesale online businesses along with our own e-commerce sites, we estimate online sales well over 30% of our global net sales mix in 2020."

By brand, sales at the company's namesake Columbia label fell 20% from $2.5 billion to $2.0 billion. At PrAna, revenues declined 13% to $131.6 million, while at Mountain Hardwear they fell 11% to $79.6 million. Sorel did a little better, posting a decrease of only 7% in revenues which totaled $293.9 million, largely thanks to the brand's footwear sales, which tripled over the course of the year, according to Columbia's management. 

Annual wholesale revenues at the company decreased 21% to $1.4 billion, while the DTC channel saw a smaller decline of 13%, posting revenues of $1.1 billion. 

The group's full-year net income came to $108.0 million, or $1.62 per diluted share, down from $330.5 million, or $4.83 per diluted share, in the previous year. 

Columbia also announced that it hopes to "unlock China's full potential" in 2021. Franco Fogliato, who took over the company's Americas zone in 2017, has now been tasked with developing the group's activities in the Middle Kingdom. "Franco will be working to support and build strong commercial channel teams in China that will drive global brand messaging while optimizing local product and marketing," explained Boyle.

In 2021, Columbia expects to announce growth of between 18% and 20% in its annual net sales, which it predicts will be in the range of $2.95 to $3.00 billion.