Columbia Sportswear Inc. COLM reported narrower-than-expected loss in the second quarter of 2016.
The company’s second-quarter loss per share of 12 cents was narrower than the Zacks Consensus Estimate of a loss of 18 cents. The quarterly loss, however, was wider than the net loss of 9 cents per share reported a year ago.
Revenues and Operating Profits
Quarterly revenues increased 2% (up 2% on a constant currency basis) to $388.8 million on higher sales in the U.S. and Canada. The upside was partially offset by weakness in Latin America. Sales came in slightly below the Zacks Consensus Estimate of $390 million.
Cost of sales inched up 0.11% to $209.16 million. Gross profit increased 4.8% to $179.58 million buoyed by higher revenues. Gross margin expanded 110 basis points (bps) to 46.2%. The company reported net operating loss of $11.8 million, wider than a loss of $9 million incurred a year ago.
COLUMBIA SPORTS Price, Consensus and EPS Surprise
COLUMBIA SPORTS Price, Consensus and EPS Surprise | COLUMBIA SPORTS Quote
Regional Segments
U.S.: Net sales grew 8% to $228.8 million supported by growth in wholesale channels and direct-to-consumer channels along with strong sales of the Sorel brand.
Canada: Net sales surged 20% (up 27% at constant dollar) to $13.6 million.
Latin America/ Asia Pacific: Net sales declined 10% (down 11% at constant dollar) to $87 million due to lower sales in Korea.
Europe/Middle East/Africa (EMEA): Net sales dipped 1% (down 2% at constant dollar) to $59.1 million, as soft sales in Russia offset high teen sales growth in European markets.
Category Segments
Apparel, Accessories & Equipment segment’s net sales increased 4% (also up 4% in constant dollar) to $321.5 million. Footwear net sales fell 4% both in constant dollar and absolute terms to $67.3 million.
Brands
For the first half of 2016, Columbia brand’s net sales increased 3% (up 2% in constant dollar) on the back of progress in Europe-direct markets in categories like sportswear and rainwear. Sorel brand’s net sales climbed 22% (up 25% in constant dollar) due to strong performance by the Spring apparel category and late winter weather that drove higher sales of Fall styles. Sales of Mountain Hardwear slipped 9% year over year (down 7% in constant currency) to $25.2 million. Net sales in the prAna brand surged 16%.
Other Financial Updates
During the quarter, management approved a quarterly dividend of 17 cents per share, payable on Sep 1, 2016 to shareholders on record as of Aug 18, 2016.
2016 Guidance Maintained
Columbia Sportswear maintained its full-year 2016 earnings guidance. Net sales growth outlook was maintained at mid-single digits growth from the 2015 levels. Currency is expected to affect sales by less than 1%. Operating income is expected between $254 million and $263 million, up mid-single-digit percentage year over year.