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Columbia Sportswear's Q1 net incomes increases to 36 mn dollars

By Prachi Singh

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Business

Columbia Sportswear Company reported net sales of 543.8 million dollars for the first quarter ended March 31, 2017, a 4 percent increase compared with net sales of 525.1 million dollars for the first quarter of 2016. Net income totalled 36 million dollars or 0.51 dollar per diluted share, compared to first quarter 2016 net income of 31.8 million dollars or 0.45 dollar per diluted share.

Commenting on the first quarter trading, Chief Executive Officer Tim Boyle said in a press release, "Our first quarter results provide a good start to a year that presents many challenges, especially in the US, which has been impacted by customer bankruptcies, liquidations and ongoing efforts by US retailers to rationalize their store fleets and square footage. Our updated 2017 outlook anticipates up to 4 percent earnings growth on approximately 3 percent net sales growth, driven by contributions from three of our four brands and all four of our geographic regions.”

Columbia Sportswear posts strong Q1 growth

The company said, first quarter consolidated net sales increased 4 percent driven by 16 percent net sales growth or 17 percent constant-currency in the LAAP region to 118.3 million dollars. This rise was driven by growth in net sales to LAAP distributors combined with growth in China and Japan, partially offset by a net sales decline in Korea. 8 percent or 10 percent constant-currency sales rise in the EMEA region to 55.4 million dollars, including growth in the company's Europe-direct business, partially offset by a decline in net sales to EMEA distributors also contributed to the overall results.

In addition, the sales growth was driven by 3 percent net sales growth or 1 percent decline constant-currency in Canada to 36.9 million dollars; partially offset by a US net sales decrease of 1 percent to 333.2 million dollars, due to a decline in wholesale net sales, partially offset by an increase in direct-to-consumer net sales.

Global Columbia brand net sales up 3 percent

Global Columbia brand net sales for the quarter increased 3 percent to 449.1 million dollars, while Global Sorel brand net sales increased 50 percent to 27.2 million dollars. Global Mountain Hardwear brand net sales increased 10 percent to 27.7 million dollars and global prAna brand net sales decreased 7 percent to 38.7 million dollars.

Global apparel, accessories and equipment net sales increased 1 percent to 440 million dollars. Global footwear net sales increased 14 percent or 15 percent constant-currency to 103.8 million dollars.

Profitability improves in Q1

First quarter income from operations increased 8 percent to 48 million dollars or 8.8 percent of net sales, compared to 44.3 million dollars or 8.4 percent of net sales, for the same period in 2016. First quarter net income increased 13 percent to 36 million dollars or 0.51 dollar per share.

The board of directors authorized a regular quarterly cash dividend of 0.18 dollar per share, payable on June 1, 2017 to shareholders of record on May 18, 2017.

Expects FY17 net sales growth of 3 percent

The company currently expects 2017 net sales growth of approximately 3 percent compared with 2016 net sales of 2.38 billion dollars, including approximately 1 percentage point negative effect from changes in foreign currency exchange rates. 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.

The company expects fiscal year gross margins to improve by approximately 30 basis points and operating income to increase approximately 3 percent, to between 256 million dollars and 265 million dollars, resulting in anticipated 2017 operating margin of approximately 10.8 percent. Net income after non-controlling interest is expected to increase up to 4 percent to between approximately 192 million dollars and 199 million dollars or approximately 2.72 dollars to 2.82 dollars per diluted share.

Picture:Facebook/Columbia

Columbia Sportswear