Columbia Sportswear cautious for 2013 despite rebound
It is no doubt very good news. After its bitter results for 2012, the Columbia Sportswear Group (Columbia, Sorel, Mountain Hardwear) has reentered growth territory.
For its first quarter 2013 ended in March 31, the U.S. outdoor apparel and sports equipment group posted a 5% increase in revenues, reaching $348 million. And the group is growing on almost all fronts.
In its primary market, the United States, the company posted sales of $200.5 million, up 4%. Its vast region of Asia-Pacific Latin America recorded 8% growth with $83.1 million. Europe (EMEA) is undergoing a complete transformation with the restructuring of its teams, the closing of its shop in Munich and the departure of its CEO, Christian Finell, replaced by Doug Morse. Sales for the region rose 7% with $40.9 million, thanks to the performance of its distributor in Russia. Only Canada was down 6% with $23.8 million.
The group is betting on its Omni-Freeze Zero line to buoy its summer activity. And from Columbia to Mountain Hardwear, its main brands regained their equilibrium. Columbia sales rose 3% to earn $301.1 million. Mountain Hardwear brought in $32.1 million in sales, or a 5% increase. And Sorel is making a surprising comeback with a 94% spike, earning $12.4 million. Other brands (Montrail) were down 7% to $2.7 million.
But despite this progress, Columbia Sportswear management is not getting ahead of itself. "During the first quarter, cold weather in North America helped us liquidate additional fall season inventory, primarily through our direct-to-consumer channels. Cold weather also helped our wholesale customers liquidate more of their fall 2012 inventory," said Tim Boyle, CEO of Columbia Sportswear. "However, it did not alter their cautious posture in placing advance orders for our fall 2013 product offering."
And the group also expects a slight downturn for fiscal year 2013. Its operating margin is expected to be at 6.6%, mainly affected by a different distribution system in China. Although the company has been working with a distributor there, it is now creating a joint venture (JV) with the same distributor for the beginning of 2014.
In the medium term, the group will continue in its efforts to diversify its offer for the rest of the year. The launch of its product lines Omni Freeze Zero under Columbia and Zero Cool-Q for Mountain Hardwear should enable it to gain ground during the summer season.
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