Columbia Sportswear reports record sales of $607 million in Q1, ups 2018 outlook
Portland, Oregon-based outdoor and sportswear group Columbia Sportswear Company reported on Thursday higher-than-expected sales growth in Q1 2018, driven by strong progress in the group’s global direct-to-consumer channel and modest wholesales gains.
Net sales for the first quarter ended March 31, 2018 increased 12% (8% in constant currencies) to a record $607.3 million.
This improvement was pushed mainly by direct-to-consumer sales which grew 23% in the period, while wholesale rose 5%.
The company’s EMEA (Europe, Middle East and Africa) region saw the strongest sales growth, rising 30% (15% in constant currencies), with a particularly strong performance from Europe-direct. Columbia also achieved 11% sales growth in Latin America and Asia Pacific (5% in constant currencies), led by Japan, China and Korea.
In North America, US sales rose 9%, while Canada experienced an 11% increase, driven overwhelmingly by the direct-to-consumer channel which grew mid-40%.
Broken down by brand, the company’s Columbia and Sorel labels both saw sales rise 13% (10% in constant currencies), and prAna sales increased 9%. Mountain Hardwear, on the other hand, saw sales decrease by 12% due to lower spring 2018 advance orders from US wholesalers, as well as the company’s decision to pull the brand from the Korean market in 2017.
Overall, net income for the first quarter 2018 grew 25% to $45.1 million, compared to $36.0 million in the first quarter of 2017.
“We are pleased to report better than expected first quarter net sales and profitability led by strength in our direct-to-consumer businesses, growth in our wholesale businesses, including a return to growth in U.S. wholesale, and the favorable effect of strengthening foreign currencies relative to the U.S. dollar,” stated Columbia President and CEO Tim Boyle in a release.
“First quarter 2018 net sales and earnings results, as well as healthy advance orders for Fall 2018 across our regions demonstrate the power of our global brands and our initiatives to become a more brand-led and consumer-focused organization.”
Due to its stronger-than-expected performance in the first quarter, the group has also updated its outlook for 2018. Columbia now expects sales growth of 8 to 10% this year (compared to its previous outlook of a 5.5 to 7.5% rise), and net income between $213 million and $220 million (previously between $203 million and $211 million).
The announcement of these positive results comes on the heels of the company’s recent announcement of its intention to acquire the remaining 40% of its Chinese joint venture Columbia Sportswear Commercial (Shanghai) Company, which saw net sales of $168 million in 2017.
The acquisition is expected to complete around January 1, 2019 but is subject to a number of conditions, including regulatory approval in China.
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