Columbia Sportswear Company net sales for the quarter ended June 30, grew 17 percent (21 percent currency-neutral), to a second-quarter record $380.2 million, compared with net sales of $324.2 million for the same period in 2014.
Second quarter 2015 net loss totaled $6.5 million, or $(0.09) per share, or about flat with the year earlier quarter, when earnings got a $0.03 per share boost from the favorable resolution of uncertain tax positions and acquisition costs related to its acquisition of Prana Living, LLC.
Through the first six months of 2015, the company’s net sales grew $110.9 million, or 15 percent (19 percent currency-neutral), to $859.2 million, compared to $748.3 million in the first half of 2014, including approximately $57.7 million of incremental net sales from the Prana brand.
First-half 2015 operating income, including accretion from the Prana brand, grew 90 percent to $35.2 million, compared with operating income of $18.5 million in the first half of 2014, which included acquisition costs totaling approximately $3.4 million related to the purchase of Prana.
First half net income increased 25 percent to $19.9 million, or $0.28 per diluted share, compared with net income of $15.9 million, or $0.23 per diluted share, in last year’s first half. This included the net tax benefit of $5.6 million, or $0.08 per diluted share, related to the Prana acquisition and acquisition costs totaling approximately $2.1 million net of tax, or $(0.03) per diluted share, related to the purchase of Prana.
“Our exceptional first-half results and our improved full year outlook illustrate the increasing earnings power of our expanded brand portfolio, seasonally diverse product offerings and enhanced operational platforms,” said Tim Boyle, Columbia CEO. “Strong sell-through of Spring 2015 products in North America and Europe drove demand in the second quarter and is fueling encouraging Spring 2016 wholesale advance orders.”
Boyle concluded, “We enter the Fall season with robust momentum in North America behind our Columbia, Sorel and Prana brands. In addition, we are gaining traction with the Columbia brand in Europe, despite slow economic growth in that region. As planned, with earlier receipt of Fall season inventory, we are very well positioned to deliver against our strong Fall advance order book. Together, these factors give us confidence in our expectations to deliver mid-teen constant-dollar net sales growth, operating margin of approximately 10.3 percent, and better than expected earnings growth in 2015.”
Second Quarter Results
(All comparisons are between second quarter 2015 and second quarter 2014, unless otherwise noted.)
The second quarter is the company’s smallest revenue quarter, historically accounting for a mid-teens percentage of annual net sales. As a result, year-over-year regional, brand and category net sales comparisons often produce large percentage variances in relation to the prior year’s comparable period due to the small base of comparison and shifts in timing of shipments, which, when coupled with the company’s fixed cost structure, can have an amplified effect on operating results.
U.S. net sales increased 45 percent, including $19.0 million of incremental Prana net sales. Net sales in Canada increased 27 percent (43 percent constant-dollar), including $1.0 million of incremental Prana net sales. Latin America/Asia Pacific (LAAP) region net sales increased 1 percent (7 percent constant-dollar), including $0.3 million of incremental Prana net sales. Europe/Middle East/Africa (EMEA) region net sales decreased 18 percent (11 percent constant-dollar), including $0.3 million of incremental Prana net sales. (See “Geographical Net Sales” table below.)
Columbia brand net sales increased 12 percent (16 percent constant-dollar) to $325.1 million. Sorel brand net sales increased 43 percent to $4.3 million. Mountain Hardwear net sales decreased 3 percent to $21.2 million. Prana net sales totaled $26.1 million, including $20.6 million of incremental sales. (See “Brand Net Sales” table below.)
Apparel, Accessories and Equipment net sales increased 18 percent (21 percent constant-dollar) to $310.2 million, and Footwear net sales increased 14 percent (21 percent constant-dollar) to $70.0 million. (See “Categorical Net Sales” table below.)
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COLUMBIA SPORTSWEAR COMPANY |
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| (In millions, except percentage changes) | ||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2015 | 2014 | % Change | Constant Dollar
% Change(1) |
2015 |
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2014 | % Change | Constant Dollar
% Change(1) |
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| Geographical Net Sales: | ||||||||||||||||||||||||
| United States | $ | 212.1 | $ | 146.3 | 45 | % | 45 | % | $ | 495.9 | $ | 387.5 | 28 | % | 28 | % | ||||||||
| LAAP | 97.0 | 96.1 | 1 | % | 7 | % | 210.1 | 212.9 | (1 | )% | 5 | % | ||||||||||||
| EMEA | 59.8 | 72.9 | (18 | )% | (11 | )% | 107.6 | 112.1 | (4 | )% | ||||||||||||||
