Portland, OR—Columbia Sportswear Company posted a double-digit decline in third quarter net profit, with sales falling 4% on the back of a slump in demand for footwear.
For the quarter ended Sept. 30, the outdoors apparel and footwear company posted net income of $54.6 million, or $1.57 a share, compared with net income of $64.4 million, or $1.88 a share, a year ago. A higher effective tax rate accounted for $2.2 million, or 6 cents a share, of the decline.
Total net sales were down 4% to $523.1 million. The figures still beat analysts’ estimate for $1.43 a share and $514 million in sales.
‘Reinvigorating Growth’ in Global Wholesale
While apparel, accessories and equipment revenues were essentially flat at $428.6 million, footwear sales fell 18% to $94.5 million.
Net sales in the United States declined 7% to $323.1 million, revenues in Latin America/Asia Pacific slumped 15% to $72 million and Canada revenues were down 4% to $49.9 million, but sales in Europe, the Middle East and Africa were up 29% to $78.1 million.
The company’s core Columbia brand suffered a 1% revenue decline to $431.5 million, while Sorel plummeted 23% to $47.4 million and Mountain Hardwear was down 9% to $40.6 million.
“Our third quarter results benefited from strong performance across our direct-to-consumer platform while we continue to focus on reinvigorating growth in our wholesale channels globally,” said CEO Tim Boyle. “A 14% decline in inventory levels and our continued focus on managing discretionary spending also contributed to better-than-expected profitability and cash flow during the quarter, leading us to raise our financial outlook for 2013.”
Columbia now expects new sales to decline up to 1.5% , a 1 percentage point improvement from the decline predicted when the company released second quarter earnings.
“We also expect to generate growth through our new joint venture in China, grow and expand our direct-to-consumer operations, generate growth in our North American and European wholesale businesses, and grow in key international markets served by independent distributors,” Boyle added.