- Prachi Singh |
Columbia Sportswear Company’s fourth quarter net sales of 717.4 million dollars increased 3 percent or 2 percent constant-currency compared with net sales of 699.4 million dollars for the fourth quarter of 2015. Full year net sales increased 2 percent on current and constant-currency basis to 2.38 billion dollars.
“We are very proud of our fourth quarter and full year 2016 performance against a challenging backdrop in many of our largest markets. Our 2017 outlook anticipates up to 4 percent earnings growth on 4 percent net sales growth, driven by contributions from three of our four brands and all four of our geographic regions,” said Chief Executive Officer, Tim Boyle in a media release.
Q4 and FY16 net income witness healthy improvement
Fourth quarter operating income increased 22 percent to 100.4 million dollars, while net income increased 34 percent to 84.7 million dollars or 1.20 dollars per diluted share. Operating income increased 3 percent to 256.5 million dollars, representing operating margin of 10.8 percent in 2016. Full year net income increased 10 percent to 191.9 million dollars or 2.72 dollars per diluted share.
The company reported a 2 percent net sales increase in the US to 455.4 million dollars, primarily reflecting growth from the Columbia brand; a 20 percent net sales increase in the Europe/Middle East/Africa (EMEA) region to 70.1 million dollars, including low-20 percent net sales growth in the company's Europe-direct business and a 17 percent increase in net sales to EMEA distributors; a 1 percent net sales increase (1 percent decline constant-currency) in the Latin America/Asia Pacific (LAAP) region to 151.9 million dollars, including net sales growth in Japan and China, offset by declines in Korea and in sales to LAAP distributors; and a 12 percent net sales decline (11 percent constant-currency) in Canada.
For the full year, the company posted a 3 percent net sales increase in the US to 1.51 billion dollars; a 9 percent net sales increase in the EMEA region (10 percent constant-currency) to 253.5 million dollars, reflecting a low-20 percent increase (mid-20 percent constant-currency) in the company's Europe-direct markets, partially offset by a low-double-digit decline in net sales to EMEA distributors; and a 3 percent net sales decrease in the LAAP region (4 percent constant-currency) to 453.7 million dollars, reflecting a low-20 percent net sales decline in Korea and a high-teen percentage decline in net sales to LAAP distributors, partially offset by low-double-digit percentage growth in Japan (low-single-digit constant currency) and low-single-digit percentage growth in China (high-single-digit constant currency); and a 2 percent net sales decrease in Canada (1 percent growth constant-currency) to 164.6 million dollars.
Global Columbia brand sales up 4 percent in Q4
Global Columbia brand net sales increased 4 percent to 552.3 million dollars in the fourth quarter. Global Sorel brand net sales decreased 1 percent (2 percent constant-currency) to 103.8 million dollars, while global PrAna brand net sales increased 2 percent to 28.2 million dollars and global Mountain Hardwear brand net sales decreased 11 percent (12 percent constant-currency) to 31.3 million dollars.
Global Columbia brand net sales increased 2 percent (3 percent constant-currency) to 1.91 billion dollars in FY16, while global Sorel brand net sales increased 2 percent (1 percent constant-currency) to 213 million dollars. Global PrAna brand net sales increased 12 percent to 139.9 million dollars and global Mountain Hardwear brand net sales declined 11 percent (10 percent constant-currency) to 104.0 million dollars.
Global Apparel, Accessories & Equipment net sales increased 4 percent to 535.8 million dollars and Footwear net sales decreased 1 percent (2 percent constant-currency) to 181.6 million dollars during the quarter. In FY16, Global Apparel, Accessories & Equipment net sales increased 2 percent (3 percent constant-currency) to 1.87 billion dollars and global Footwear net sales increased 1 percent to 511.6 million dollars.
Projects positive financial outlook for 2017
The company's US direct-to-consumer channel is expected to account for a majority of the projected full year 2017 global net sales increase. In addition, the company's anticipated growth in full year 2017 operating income and net income is expected to occur in the second half. The company currently expects net sales growth of approximately 4 percent, including approximately 1 percentage point negative effect from changes in foreign currency exchange rates.
Gross margins are expected to improve by approximately 25 basis points and operating income to increase up to 5 percent, to between 260 million dollars and 270 million dollars, resulting in anticipated 2017 operating margin of up to 10.9 percent. Net income after non-controlling interest is expected to be between approximately 192 million dollars and 200 million dollars, or approximately 2.72 dollars to 2.82 dollars per diluted share.
The board of directors authorized a regular quarterly dividend of 0.18 dollar per share, payable on March 22, 2017 to shareholders of record on March 9, 2017.