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Columbia Sportswear Company Reports Record Third Quarter and First Nine Months 2019 Financial Results; Updates Full Year 2019 Financial Outlook

October 30, 2019 GMT

PORTLAND, Ore.--(BUSINESS WIRE)--Oct 30, 2019--

Columbia Sportswear Company (NASDAQ: COLM), a leading innovator in active outdoor apparel, footwear, accessories and equipment, today announced third quarter 2019 financial results for the period ended September 30, 2019.

President and Chief Executive Officer Tim Boyle commented, “Record third quarter results exceeded our expectations, with broad based growth across our geographic segments, channels and product categories. During the quarter, we were able to ship a greater portion of our Fall 2019 order book compared to the Fall 2018 season as retailers restocked depleted inventory positions after harsh winter weather and exceptional sell-through in North America last year. Higher advance orders and earlier shipments contributed to 14 percent growth for the Columbia brand and 27 percent growth for the SOREL brand in the quarter. SOREL’s impressive growth was led by strong demand for fall fashion styles, further validating the brand’s success as a year-round fashion footwear brand. Our net sales growth momentum combined with Project CONNECT margin benefits drove earnings per share growth in excess of 20 percent with continued investment in our strategic priorities.”

“As we enter our peak selling season, I’m confident that our powerful brand portfolio, globally diversified business model and the dedication and focus of our talented global team position us to deliver another year of record sales and profit.”

“Our profitable growth trajectory and fortress balance sheet provide a foundation of strength and confidence from which we will continue investing in our strategic priorities to:

“We are making these investments to build on our strengths as a brand-led, consumer-focused organization and to enable sustainable long-term profitable growth.”

CFO’s Commentary Available Online

For a detailed review of the Company’s third quarter and first nine months 2019 financial results and full year 2019 financial outlook, please refer to the CFO Commentary exhibit furnished to the Securities and Exchange Commission (the “SEC”) on Form 8‑K and published on the Investor Relations section of the Company’s website at http://investor.columbia.com/results.cfm at approximately 4:15 p.m. ET today. Analysts and investors are encouraged to review this commentary prior to participating in the conference call.

Non-GAAP Financial Measures

Throughout this press release, non-GAAP amounts in third quarter 2018 exclude a $4.3 million benefit in connection with an insurance claim ($3.3 million net of tax), $1.5 million in incremental income tax expense related to the Tax Cuts and Jobs Act (“TCJA”) and $1.2 million in Project CONNECT expenses and discrete costs ($0.9 million net of tax). References to non-GAAP financial measures in first nine months 2018 exclude $14.1 million in Project CONNECT program expenses and discrete costs ($10.7 million net of tax), a $4.3 million benefit in connection with an insurance claim ($3.3 million net of tax), and $2.7 million in incremental provisional income tax expense related to the TCJA. These excluded items were not applicable to third quarter and first nine months 2019 results.

Third Quarter 2019 Financial Results
(All comparisons are between third quarter 2019 and third quarter 2018, unless otherwise noted.)

Net sales increased 14 percent (15 percent constant-currency) to $906.8 million, from $795.8 million for the comparable period in 2018.

Gross margin expanded 110 basis points to 49.3 percent of net sales from 48.2 percent for the comparable period in 2018.

SG&A expenses increased 15 percent to $299.2 million, or 33.0 percent of net sales, from $259.3 million, or 32.6 percent of net sales, for the comparable period in 2018. SG&A expenses increased 14 percent from non-GAAP SG&A expenses of $262.4 million, or 33.0 percent of net sales, for the comparable period in 2018.

Operating income increased 18 percent to $152.0 million, or 16.8 percent of net sales, from $129.1 million, or 16.2 percent of net sales, for the comparable period in 2018. Operating income increased 21 percent from non-GAAP operating income of $126.0 million, or 15.8 percent of sales, for the comparable period in 2018.

Net income increased 19 percent to $119.3 million, or $1.75 per diluted share, from $100.2 million, or $1.42 per diluted share, for the comparable period in 2018. Net income increased 20 percent from non-GAAP net income of $99.3 million, or $1.41 per diluted share for the comparable period in 2018. Third quarter 2019 net income also includes the benefit of full ownership of our China business, which became a wholly-owned subsidiary effective January 2019. In third quarter 2018, the non-controlling interest share of net income was $2.2 million, or $0.03 per diluted share.

First Nine Months 2019 Financial Results
(All comparisons are between first nine months 2019 and first nine months 2018, unless otherwise noted).

Net sales increased 11 percent (12 percent constant-currency) to $2,087.6 million, compared to $1,884.7 million for the comparable period in 2018.

Gross margin expanded 130 basis points to 49.7 percent of net sales, from 48.4 percent for the comparable period in 2018.

SG&A expenses increased 9 percent to $791.8 million, or 37.9 percent of net sales, from $724.8 million, or 38.5 percent of net sales, for the comparable period in 2018. SG&A expenses increased 11 percent from non-GAAP SG&A expenses of $715.1 million, or 37.9 percent of net sales, for the comparable period in 2018.

Operating income increased 29 percent to $256.3 million, or 12.3 percent of net sales, compared to operating income of $198.2 million, or 10.5 percent of net sales, for the comparable period in 2018. Operating income increased 23 percent from non-GAAP operating income of $208.0 million, or 11.0 percent of net sales, for the comparable period in 2018.

Net income increased 40 percent to $216.5 million, or $3.15 per diluted share, compared to $155.0 million, or $2.19 per diluted share, for the comparable period in 2018. Net income increased 31 percent from non-GAAP net income of $165.1 million, or $2.34 per diluted share for the comparable period in 2018. First nine months 2019 net income includes the benefit of full ownership of our China business. In the first nine months of 2018, the non-controlling interest share of net income was $6.6 million, or $0.09 per diluted share.

Balance Sheet as of September 30, 2019

Cash, cash equivalents and short-term investments totaled $240.8 million, compared to $451.5 million at September 30, 2018.

Inventories increased 16 percent to $717.4 million, compared to $617.2 million at September 30, 2018.

Share Repurchases for the Nine Months Ended September 30, 2019

The Company repurchased 1,191,684 shares of common stock for an aggregate of $116.2 million, or an average price per share of $97.50.

Regular Quarterly Cash Dividend

At its regular board meeting on October 25, 2019, the board of directors declared a regular quarterly cash dividend of $0.24 per share, payable on December 5, 2019 to shareholders of record on November 21, 2019.

Conference Call

The Company will hold its third quarter 2019 conference call at 5:00 p.m. ET today. Dial (877) 407-9205 to participate. The call will also be webcast live on the Investor Relations section of the Company’s website at http://investor.columbia.com.

Fourth Quarter 2019 Reporting Date

Columbia Sportswear Company plans to report fourth quarter and full year 2019 financial results on Thursday, February 6, 2020 at approximately 4:00 p.m.

Supplemental Financial Information

Since Columbia Sportswear Company is a global company, the comparability of its operating results reported in U.S. dollars is affected by foreign currency exchange rate fluctuations because the underlying currencies in which it transacts change in value over time compared to the U.S. dollar. To supplement financial information reported in accordance with GAAP, the Company discloses constant-currency net sales information, which is a non-GAAP financial measure, to provide a framework to assess how the business performed excluding the effects of changes in the exchange rates used to translate net sales generated in foreign currencies into U.S. dollars. The Company calculates constant-currency net sales by translating net sales in foreign currencies for the current period into U.S. dollars at the average exchange rates that were in effect during the comparable period of the prior year. Management believes that this non-GAAP financial measure reflects an additional and useful way of viewing an aspect of our operations that, when viewed in conjunction with our GAAP results, provides a more comprehensive understanding of our business and operations. In particular, investors may find the non-GAAP measures useful by reviewing our net sales results without the volatility in foreign currency exchange rates. This non-GAAP financial measure also facilitates management’s internal comparisons to our historical net sales results and comparisons to competitors’ net sales results.

Additionally, this document includes references to various other non-GAAP financial measures related to 2018 that may exclude program expenses, discrete costs and associated tax effects related to Project CONNECT, TCJA-related income tax expense, and a recovery in connection with an insurance claim and related tax effects. The related tax effects of program expenses and discrete costs related to Project CONNECT and the insurance claim recovery benefit were calculated using the respective statutory tax rates for applicable jurisdictions. Management believes that these non-GAAP financial measures enable useful and meaningful comparisons of our operating performance from period to period because they exclude the effects of the aforementioned items above that may not be indicative of our core operating results.

These non-GAAP financial measures, including constant-currency net sales, should be viewed in addition to, and not in lieu of or superior to, our financial measures calculated in accordance with GAAP. The Company provides a reconciliation of non-GAAP measures to the most directly comparable financial measure calculated in accordance with GAAP. See the “Reconciliation of GAAP to Non-GAAP Financial Measures” table included herein. The non-GAAP financial measures and constant-currency information presented may not be comparable to similarly titled measures reported by other companies.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of the federal securities laws, including statements regarding our strategic priorities, anticipated results, net sales and net sales growth, operating income, and diluted earnings per share. Forward-looking statements often use words such as “will”, “anticipate”, “estimate”, “expect”, “should”, “may” and other words and terms of similar meaning or reference future dates. The Company’s expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis; however, each forward-looking statement involves a number of risks and uncertainties, including those set forth in this document, those described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading “Risk Factors,” and those that have been or may be described in other reports filed by the Company, including reports on Form 8-K. Potential risks and uncertainties that may affect our future revenues, earnings and performance and could cause the actual results of operations or financial condition of the Company to differ materially from the anticipated results expressed or implied by forward-looking statements in this document include: loss of key customer accounts; our ability to effectively execute our business strategies, including initiatives to upgrade our business processes and information technology (“IT”) systems and investments in our DTC businesses; our ability to maintain the strength and security of our IT systems; the effects of unseasonable weather, including global climate change; the seasonality of our business and timing of orders; trends affecting consumer spending, including changes in the level of consumer spending, and retail traffic patterns; unfavorable economic conditions generally, the financial health of our customers and retailer consolidation; higher than expected rates of order cancellations; changes affecting consumer demand and preferences and fashion trends; changes in international, federal or state tax, labor and other laws and regulations that affect our business, including changes in corporate tax rates, unanticipated impacts resulting from additional guidance about and/or the application of the TCJA, tariffs, international trade policy and geopolitical tensions, or increasing wage rates; our ability to attract and retain key personnel; risks inherent in doing business in foreign markets, including fluctuations in currency exchange rates, global credit market conditions and changes in global regulation and economic and political conditions; volatility in global production and transportation costs and capacity; our ability to effectively manage our inventory; our dependence on third-party manufacturers and suppliers and our ability to source at competitive prices from them or at all; the effectiveness of our sales and marketing efforts; business disruptions and acts of terrorism, cyber-attacks or military activities around the globe; intense competition in the industry; our ability to establish and protect our intellectual property; and our ability to develop innovative products. The Company cautions that forward-looking statements are inherently less reliable than historical information. The Company does not undertake any duty to update any of the forward-looking statements after the date of this document to conform them to actual results or to reflect changes in events, circumstances or its expectations. New factors emerge from time to time and it is not possible for the Company to predict or assess the effects of all such factors or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.

About Columbia Sportswear Company

Columbia Sportswear Company has assembled a portfolio of brands for active lives, making it a leader in the global active lifestyle apparel, footwear, accessories, and equipment industry. Founded in 1938 in Portland, Oregon, the Company’s brands are today sold in approximately 90 countries. In addition to the Columbia® brand, Columbia Sportswear Company also owns the Mountain Hardwear®, SOREL® and prAna® brands. To learn more, please visit the Company’s websites at www.columbia.com, www.mountainhardwear.com, www.sorel.com, and www.prana.com.

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

 

 

September 30,

 

 

2019

 

2018

ASSETS

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

 

239,311

 

 

$

 

182,175

 

Restricted cash

 

 

 

 

13,970

 

Short-term investments

 

 

1,477

 

 

 

269,313

 

Accounts receivable, net

 

 

646,414

 

 

 

552,442

 

Inventories

 

 

717,396

 

 

 

617,194

 

Prepaid expenses and other current assets

 

 

94,253

 

 

 

77,763

 

Total current assets

 

 

1,698,851

 

 

 

1,712,857

 

Property, plant, and equipment, net

 

 

349,302

 

 

 

284,744

 

Operating lease right-of-use assets

 

 

389,558

 

 

 

Intangible assets, net

 

 

124,340

 

 

 

127,320

 

Goodwill

 

 

68,594

 

 

 

68,594

 

Deferred income taxes

 

 

80,193

 

 

 

68,913

 

Other non-current assets

 

 

40,242

 

 

 

36,911

 

Total assets

 

$

 

2,751,080

 

 

$

 

2,299,339

 

LIABILITIES AND EQUITY

 

 

 

 

Current Liabilities:

 

 

 

 

Short-term borrowings

 

$

 

 

 

$

 

8,311

 

Accounts payable

 

 

201,806

 

 

 

237,344

 

Accrued liabilities

 

 

279,932

 

 

 

255,682

 

Operating lease liabilities

 

 

62,756

 

 

 

Income taxes payable

 

 

13,653

 

 

 

8,247

 

Total current liabilities

 

 

558,147

 

 

 

509,584

 

Non-current operating lease liabilities

 

 

366,515

 

 

 

Income taxes payable

 

 

48,619

 

 

 

62,090

 

Deferred income taxes

 

 

7,711

 

 

 

13

 

Other long-term liabilities

 

 

22,982

 

 

 

46,056

 

Total liabilities

 

 

1,003,974

 

 

 

617,743

 

Equity:

 

 

 

 

Columbia Sportswear Company shareholders' equity

 

 

1,747,106

 

 

 

1,665,365

 

Non-controlling interest

 

 

 

 

16,231

 

Total equity

 

 

1,747,106

 

 

 

1,681,596

 

Total liabilities and equity

 

$

 

2,751,080

 

 

$

 

2,299,339

 

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2019

 

2018

 

2019

 

2018

Net sales

 

$

 

906,793

 

 

$

 

795,801

 

 

$

 

2,087,611

 

 

$

 

1,884,728

 

Cost of sales

 

 

460,098

 

 

 

412,098

 

 

 

1,050,596

 

 

 

972,966

 

Gross profit

 

 

446,695

 

 

 

383,703

 

 

 

1,037,015

 

 

 

911,762

 

 

 

 

49.3

%

 

 

48.2

%

 

 

49.7

%

 

 

48.4

%

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

299,249

 

 

 

259,267

 

 

 

791,767

 

 

 

724,827

 

Net licensing income

 

 

4,569

 

 

 

4,708

 

 

 

11,090

 

 

 

11,279

 

Income from operations

 

 

152,015

 

 

 

129,144

 

 

 

256,338

 

 

 

198,214

 

Interest income, net

 

 

1,399

 

 

 

2,524

 

 

 

7,370

 

 

 

7,748

 

Other non-operating income (expense), net

 

 

(563

)

 

 

736

 

 

 

915

 

 

 

372

 

Income before income tax

 

 

152,851

 

 

 

132,404

 

 

 

264,623

 

 

 

206,334

 

Income tax expense

 

 

(33,593

)

 

 

(30,029

)

 

 

(48,159

)

 

 

(44,735

)

Net income

 

 

119,258

 

 

 

102,375

 

 

 

216,464

 

 

 

161,599

 

Net income attributable to non-controlling interest

 

 

 

 

2,223

 

 

 

 

 

6,603

 

Net income attributable to Columbia Sportswear Company

 

$

 

119,258

 

 

$

 

100,152

 

 

$

 

216,464

 

 

$

 

154,996

 

 

 

 

 

 

 

 

 

 

Earnings per share attributable to Columbia Sportswear Company:

 

 

 

 

 

 

 

 

Basic

 

$

 

1.76

 

 

$

 

1.44

 

 

$

 

3.19

 

 

$

 

2.22

 

Diluted

 

$

 

1.75

 

 

$

 

1.42

 

 

$

 

3.15

 

 

$

 

2.19

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

67,593

 

 

 

69,589

 

 

67,935

 

 

 

69,895

 

Diluted

 

 

68,180

 

 

 

70,357

 

 

68,620

 

 

 

70,685

 

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

 

 

Nine Months Ended September 30,

 

 

2019

 

2018

Cash flows from operating activities:

 

 

 

 

Net income

 

$

 

216,464

 

 

$

 

161,599

 

Adjustments to reconcile net income to net cash used in operating activities:

 

 

 

 

Depreciation, amortization and non-cash lease expense

 

 

88,775

 

 

 

43,544

 

Loss on disposal or impairment of property, plant, and equipment

 

 

4,866

 

 

 

1,979

 

Deferred income taxes

 

 

(3,157

)

 

 

2,103

 

Stock-based compensation

 

 

13,159

 

 

 

10,247

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(199,416

)

 

 

(125,433

)

Inventories

 

 

(198,999

)

 

 

(188,544

)

Prepaid expenses and other current assets

 

 

(12,596

)

 

 

(7,968

)

Other assets

 

 

(3,981

)

 

 

(9,782

)

Accounts payable

 

 

(65,191

)

 

 

(14,263

)

Accrued liabilities

 

 

6,497

 

 

 

38,193

 

Income taxes payable

 

 

(11,286

)

 

 

(7,200

)

Operating lease assets and liabilities

 

 

(39,010

)

 

 

Other liabilities

 

 

5,716

 

 

 

(2,541

)

Net cash used in operating activities

 

 

(198,159

)

 

 

(98,066

)

Cash flows from investing activities:

 

 

 

 

Purchases of short-term investments

 

 

(181,257

)

 

 

(426,278

)

Sales and maturities of short-term investments

 

 

445,501

 

 

 

252,727

 

Capital expenditures

 

 

(104,527

)

 

 

(45,189

)

Proceeds from sale of property, plant, and equipment

 

 

 

 

18

 

Net cash provided by (used in) investing activities

 

 

159,717

 

 

 

(218,722

)

Cash flows from financing activities:

 

 

 

 

Proceeds from credit facilities

 

 

74,053

 

 

 

36,051

 

Repayments on credit facilities

 

 

(74,053

)

 

 

(27,740

)

Proceeds from issuance of common stock related to stock-based compensation

 

 

17,687

 

 

 

16,508

 

Tax payments related to stock-based compensation

 

 

(5,739

)

 

 

(4,221

)

Repurchase of common stock

 

 

(116,239

)

 

 

(107,222

)

Purchase of non-controlling interest

 

 

(17,880

)

 

 

Cash dividends paid

 

 

(48,917

)

 

 

(46,160

)

Cash dividends paid to non-controlling interest

 

 

 

 

(19,949

)

Net cash used in financing activities

 

 

(171,088

)

 

 

(152,733

)

Net effect of exchange rate changes on cash

 

 

(2,954

)

 

 

(7,500

)

Net decrease in cash, cash equivalents and restricted cash

 

 

(212,484

)

 

 

(477,021

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

451,795

 

 

 

673,166

 

Cash, cash equivalents and restricted cash, end of period

 

$

 

239,311

 

 

$

 

196,145

 

Supplemental disclosures of non-cash investing and financing activities:

 

 

 

 

Property, plant and equipment acquired through increase in liabilities

 

$

 

11,638

 

 

$

 

7,380

 

COLUMBIA SPORTSWEAR COMPANY

Supplemental Financial Information

Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended September 30, 2018

 

GAAP Measures

(As Reported)

 

Adjust for Project CONNECT Costs(1)

 

Adjust for Effects of the TCJA(2)

 

Adjust for Effects of Insurance Recovery(3)

 

Non-GAAP Measures

Selling, general and administrative expenses

$

 

 

259,267

 

 

$

 

 

(1,190

)

 

$

 

 

 

 

$

 

 

4,317

 

 

$

 

 

262,394

 

Income from operations

 

129,144

 

 

 

1,190

 

 

 

 

 

(4,317

)

 

 

126,017

 

Income before income tax

 

132,404

 

 

 

1,190

 

 

 

 

 

(4,317

)

 

 

129,277

 

Income tax benefit (expense)

 

(30,029

)

 

 

(283

)

 

 

1,493

 

 

 

1,027

 

 

 

(27,792

)

Net income

 

102,375

 

 

 

907

 

 

 

1,493

 

 

 

(3,290

)

 

 

101,485

 

Net income attributable to Columbia Sportswear Company

 

100,152

 

 

 

907

 

 

 

1,493

 

 

 

(3,290

)

 

 

99,262

 

Earnings per share attributable to Columbia Sportswear Company:

 

 

 

 

 

 

 

 

 

Basic

$

 

 

1.44

 

 

 

 

 

 

 

 

$

 

 

1.43

 

Diluted

$

 

 

1.42

 

 

 

 

 

 

 

 

$

 

 

1.41

 

 

Nine Months Ended September 30, 2018

 

GAAP Measures (As Reported)

 

Adjust for Project CONNECT Costs(1)

 

Adjust for Effects of the TCJA(2)

 

Adjust for Effects of Insurance Recovery (3)

 

Non-GAAP Measures

Selling, general and administrative expenses

$

 

 

724,827

 

 

$

 

 

(14,068

)

 

$

 

 

 

 

$

 

 

4,317

 

 

$

 

 

715,076

 

Income from operations

 

198,214

 

 

 

14,068

 

 

 

 

 

(4,317

)

 

 

207,965

 

Income before income tax

 

206,334

 

 

 

14,068

 

 

 

 

 

(4,317

)

 

 

216,085

 

Income tax benefit (expense)

 

(44,735

)

 

 

(3,348

)

 

 

2,672

 

 

 

1,027

 

 

 

(44,384

)

Net income

 

161,599

 

 

 

10,720

 

 

 

2,672

 

 

 

(3,290

)

 

 

171,701

 

Net income attributable to Columbia Sportswear Company

 

154,996

 

 

 

10,720

 

 

 

2,672

 

 

 

(3,290

)

 

 

165,098

 

Earnings per share attributable to Columbia Sportswear Company:

 

 

 

 

 

 

 

 

 

Basic

$

 

 

2.22

 

 

 

 

 

 

 

 

$

 

 

2.36

 

Diluted

$

 

 

2.19

 

 

 

 

 

 

 

 

$

 

 

2.34

 

(1) Amounts reflect professional fees, severance and other program expenses related to Project CONNECT in 2018 that the Company believes are incremental to the Company's ongoing operations. The related tax effects of these charges were calculated using the respective statutory tax rates for applicable jurisdictions.

(2) Amounts reflect an incremental provisional TCJA-related tax expense, primarily driven by refinement in the calculation of withholding taxes on our deferred tax liabilities, which drove further refinement of the Company's provisional estimates that were recorded in fourth quarter 2017.

(3) Amounts reflect a benefit from a recovery in connection with an insurance claim received in the third quarter of 2018 that the Company believes is incremental to the Company's ongoing operations.

COLUMBIA SPORTSWEAR COMPANY

Supplemental Financial Information

Net Sales Growth - Constant-currency Basis

(In millions, except percentage changes)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

 

Adjust for

 

Constant-

 

 

 

 

 

Constant-

 

Reported

 

Foreign

 

currency

 

Reported

 

Reported

 

currency

 

Net Sales

 

Currency

 

Net Sales

 

Net Sales

 

Net Sales

 

Net Sales

 

2019

 

Translation

 

2019 (1)

 

2018

 

% Change

 

% Change (1)

Geographical Net Sales:

 

 

 

 

 

 

 

 

 

 

 

United States

$

 

581.3

 

 

$

 

 

 

$

 

581.3

 

 

$

 

496.2

 

 

17

%

 

17

%

LAAP

 

123.2

 

 

 

1.7

 

 

 

124.9

 

 

 

118.4

 

 

4

%

 

5

%

EMEA

 

104.4

 

 

 

4.1

 

 

 

108.5

 

 

 

100.3

 

 

4

%

 

8

%

Canada

 

97.9

 

 

 

0.9

 

 

 

98.8

 

 

 

80.9

 

 

21

%

 

22

%

Total

$

 

906.8

 

 

$

 

6.7

 

 

$

 

913.5

 

 

$

 

795.8

 

 

14

%

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

Brand Net Sales:

 

 

 

 

 

 

 

 

 

 

 

Columbia

$

 

729.5

 

 

$

 

5.6

 

 

$

 

735.1

 

 

$

 

640.9

 

 

14

%

 

15

%

SOREL

 

116.1

 

 

 

1.1

 

 

 

117.2

 

 

 

91.2

 

 

27

%

 

29

%

prAna

 

38.5

 

 

 

0.1

 

 

 

38.6

 

 

 

39.9

 

 

(4

)%

 

(3

)%

Mountain Hardwear

 

22.7

 

 

 

(0.1

)

 

 

22.6

 

 

 

23.0

 

 

(1

)%

 

(2

)%

Other

 

 

 

 

 

 

 

0.8

 

 

(100

)%

 

(100

)%

Total

$

 

906.8

 

 

$

 

6.7

 

 

$

 

913.5

 

 

$

 

795.8

 

 

14

%

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

Product Category Net Sales:

 

 

 

 

 

 

 

 

 

 

 

Apparel, Accessories and Equipment

$

 

684.7

 

 

$

 

4.5

 

 

$

 

689.2

 

 

$

 

617.6

 

 

11

%

 

12

%

Footwear

 

222.1

 

 

 

2.2

 

 

 

224.3

 

 

 

178.2

 

 

25

%

 

26

%

Total

$

 

906.8

 

 

$

 

6.7

 

 

$

 

913.5

 

 

$

 

795.8

 

 

14

%

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

Channel Net Sales:

 

 

 

 

 

 

 

 

 

 

 

Wholesale

$

 

652.6

 

 

$

 

5.3

 

 

$

 

657.9

 

 

$

 

549.8

 

 

19

%

 

20

%

DTC

 

254.2

 

 

 

1.4

 

 

 

255.6

 

 

 

246.0

 

 

3

%

 

4

%

Total

$

 

906.8

 

 

$

 

6.7

 

 

$

 

913.5

 

 

$

 

795.8

 

 

14

%

 

15

%

(1) Constant-currency net sales information is a non-GAAP financial measure that excludes the effect of changes in foreign currency exchange rates against the U.S. dollar between comparable reporting periods. The Company calculates constant-currency net sales by translating net sales in foreign currencies for the current period into U.S. dollars at the average exchange rates that were in effect during the comparable period of the prior year.

COLUMBIA SPORTSWEAR COMPANY

Supplemental Financial Information

Net Sales Growth - Constant-currency Basis

(In millions, except percentage changes)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

Adjust for

 

Constant-

 

 

 

 

 

Constant-

 

Reported

 

Foreign

 

currency

 

Reported

 

Reported

 

currency

 

Net Sales

 

Currency

 

Net Sales

 

Net Sales

 

Net Sales

 

Net Sales

 

2019

 

Translation

 

2019 (1)

 

2018

 

% Change

 

% Change (1)

Geographical Net Sales:

 

 

 

 

 

 

 

 

 

 

 

United States

$

 

1,309.0

 

 

$

 

 

 

$

 

1,309.0

 

 

$

 

1,139.2

 

 

15

%

 

15

%

LAAP

 

357.7

 

 

 

9.9

 

 

 

367.6

 

 

 

350.8

 

 

2

%

 

5

%

EMEA

 

267.3

 

 

 

10.8

 

 

 

278.1

 

 

 

257.1

 

 

4

%

 

8

%

Canada

 

153.6

 

 

 

4.0

 

 

 

157.6

 

 

 

137.6

 

 

12

%

 

15

%

Total

$

 

2,087.6

 

 

$

 

24.7

 

 

$

 

2,112.3

 

 

$

 

1,884.7

 

 

11

%

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

Brand Net Sales:

 

 

 

 

 

 

 

 

 

 

 

Columbia

$

 

1,736.6

 

 

$

 

22.4

 

 

$

 

1,759.0

 

 

$

 

1,564.5

 

 

11

%

 

12

%

SOREL

 

170.7

 

 

 

1.7

 

 

 

172.4

 

 

 

133.4

 

 

28

%

 

29

%

prAna

 

118.4

 

 

 

0.1

 

 

 

118.5

 

 

 

120.3

 

 

(2

)%

 

(1

)%

Mountain Hardwear

 

61.9

 

 

 

0.5

 

 

 

62.4

 

 

 

63.4

 

 

(2

)%

 

(2

)%

Other

 

 

 

 

 

 

 

3.1

 

 

(100

)%

 

(100

)%

Total

$

 

2,087.6

 

 

$

 

24.7

 

 

$

 

2,112.3

 

 

$

 

1,884.7

 

 

11

%

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

Product Category Net Sales:

 

 

 

 

 

 

 

 

 

 

 

Apparel, Accessories and Equipment

$

 

1,642.9

 

 

$

 

17.4

 

 

$

 

1,660.3

 

 

$

 

1,502.2

 

 

9

%

 

11

%

Footwear

 

444.7

 

 

 

7.3

 

 

 

452.0

 

 

 

382.5

 

 

16

%

 

18

%

Total

$

 

2,087.6

 

 

$

 

24.7

 

 

$

 

2,112.3

 

 

$

 

1,884.7

 

 

11

%

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

Channel Net Sales:

 

 

 

 

 

 

 

 

 

 

 

Wholesale

$

 

1,312.0

 

 

$

 

16.4

 

 

$

 

1,328.4

 

 

$

 

1,161.4

 

 

13

%

 

14

%

DTC

 

775.6

 

 

 

8.3

 

 

 

783.9

 

 

 

723.3

 

 

7

%

 

8

%

Total

$

 

2,087.6

 

 

$

 

24.7

 

 

$

 

2,112.3

 

 

$

 

1,884.7

 

 

11

%

 

12

%

(1) Constant-currency net sales information is a non-GAAP financial measure that excludes the effect of changes in foreign currency exchange rates against the U.S. dollar between comparable reporting periods. The Company calculates constant-currency net sales by translating net sales in foreign currencies for the current period into U.S. dollars at the average exchange rates that were in effect during the comparable period of the prior year.

COLUMBIA SPORTSWEAR COMPANY

Supplemental Financial Information

Reconciliation of GAAP to Non-GAAP Updated Full Year 2019 Financial Outlook

(Unaudited)

 

All projections related to anticipated future results are forward-looking in nature and are subject to risks and uncertainties which may cause actual results to differ, perhaps materially. For more information on these risks and uncertainties please refer to the "Forward Looking Statements" section.

 

 

Twelve Months Ended December 31, 2018

 

2019 Financial Outlook

 

GAAP Measures (As Reported)

 

Adjust for Project CONNECT Costs (1)

 

Adjust for Effects of the TCJA (2)

 

Adjust for Effects of Insurance Recovery (3)

 

Non-GAAP Measures

 

 

 

Commentary compared to:

(In thousands, except per share amounts)

 

 

 

 

 

2019 Financial Outlook

 

2018

 

2018 non-GAAP

Net sales

$

 

2,802,326

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$3.01 to $3.04 billion

 

7.5% to 8.5% growth

 

 

Gross profit

 

1,386,348

 

 

 

 

 

 

 

 

 

 

gross margin of approximately 50.1%

 

approximately 60 bps expansion

 

 

Selling, general and administrative expenses

 

1,051,152

 

 

 

(15,766

)

 

 

 

 

4,317

 

 

 

1,039,703

 

 

37.4% to 37.6%

percent of net sales

 

10 bps leverage to 10 bps deleverage

 

30 bps to 50 bps deleverage

Income from operations

 

350,982

 

 

 

15,766

 

 

 

 

 

(4,317

)

 

 

362,431

 

 

$392 to $401 million

 

 

 

 

Operating Margin

 

 

 

 

 

 

 

 

 

 

13.0% to 13.2%

 

50 bps to 70 bps expansion

 

10 bps to 30 bps expansion

Income tax expense

 

(85,769

)

 

 

(3,752

)

 

 

5,064

 

 

 

1,027

 

 

 

(83,430

)

 

approximately 20%

 

 

 

 

Net income attributable to non-controlling interest

 

6,692

 

 

 

 

 

 

 

 

 

 

$

0

 

 

 

 

Net income attributable to Columbia Sportswear Company

$

 

268,256

 

 

$

 

12,014

 

 

$

 

5,064

 

 

$

 

(3,290

)

 

$

 

282,044

 

 

$322 to $329 million

 

 

 

 

Earnings per share attributable to Columbia Sportswear Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

$

 

3.81

 

 

 

 

 

 

 

 

$

 

4.01

 

 

$4.70 to $4.80

 

 

 

 

(1) Amounts reflect professional fees, severance and other program expenses related to Project CONNECT that the Company believes are incremental to its ongoing operations. The related tax effects of these charges were calculated using the respective statutory tax rates for applicable jurisdictions.

(2) In 2018, the Company incurred $5.1 million in incremental income tax expense related to the TCJA.

(3) Amounts reflect a benefit from a recovery in connection with an insurance claim received in third quarter 2018 that the Company believes is incremental to the Company's ongoing operations.

©2019 Columbia Sportswear Company

View source version on businesswire.com:https://www.businesswire.com/news/home/20191030005855/en/

CONTACT: Andrew Burns

Director of Investor Relations

Columbia Sportswear Company

(503) 985-4112

aburns@columbia.com

KEYWORD: OREGON UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: RETAIL SPECIALTY TEXTILES MANUFACTURING

SOURCE: Columbia Sportswear Company

Copyright Business Wire 2019.

PUB: 10/30/2019 04:05 PM/DISC: 10/30/2019 04:05 PM

http://www.businesswire.com/news/home/20191030005855/en