Columbia third quarter sales drop, posts record nine month sales
Columbia Sportswear on Thursday released its third quarter and year-to-date 2016 results ended on September 30, 2016.
Third quarter net sales decreased 3% to $745.7 million, and consolidated net sales fell 3% driven by a 6% decrease in US net sales to $484.8 million and a 3% decline in Canada net sales to $75.2 million. The sales declines were partially offset by 8% growth in the EMEA region and a 3% growth in the Latin America, Asia Pacific region.
Global Columbia brand and Mountain Hardwear net sales decreased 4% and 12%, respectively, while global Sorel and prAna net sales increased 2% and 11%, respectively. Global Apparel, Accessories & Equipment net sales decreased 4% to $574.1 million and footwear net sales were flat at $171.6 million.
Chief Executive Officer Tim Boyle commented, "During the third quarter, our go-to-market and operational teams around the world continued to execute well against a challenging consumer environment, setting the stage across the global retail landscape with innovative, trend-right Fall season products supported by compelling brand marketing campaigns. The Columbia, prAna and SOREL brands drove mid-teen percentage growth in our North American direct-to-consumer channel, high-20-percent growth in Europe-direct markets and high-single-digit percentage growth in China, helping to partially offset the negative effects of bankruptcies and cautious inventory management by North American wholesale customers, as well as continued challenges in Russia and Korea."
Net income fell to $83.6 million, or $1.18 per diluted share, from $91.1 million, or $1.28 per diluted share, in the previous third quarter, and income from operations was $123.6 million, or 16.6% of net sales, compared to $132.3 million, or 17.2% of net sales, in the prior year.
Year-to-date net sales increased 2%, or 3% in constant currency, to a record $1,659.6 million, and net income decreased 3% to $107.2 million, or $1.52 per diluted share. Columbia ended the third quarter with $219.7 million of cash and short-term investments, compared with $174.0 million in the prior year. Approximately 82% of the cast and short-term investments were held in foreign jurisdictions and will likely result in a significant tax cost for the company.
Columbia expects its full year 2016 net sales to increase 4% and for net income to increase 8% over last year and range between $180.0 million and $187.5 million if global weather conditions remain normal this fall and winter.
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