Columbia Sees U.S. Business Shrink…

Columbia Sportswear saw its share price drop 16.4% for the week even as the company outpaced both earning and sales estimates for the fourth quarter. However, analysts were disappointed with company estimates for full year 2003.

The company affirmed its Q1 2003 earnings growth target of 14% to 16% and revenue growth in the 13% to 15% range. COLM expects Q2 net income to increase 6% to 9% and revenue to grow 13% to 15%.

The issue seems to be the second half, with the company projecting full year 2003 revenue growth between 5% and 7% and stating that earnings growth of “up to 2% is achievable.”

On a positive note, Columbia reported net income of $29.1 million for Q4 2002, a 20.2% increase over net income of $24.2 million for the same period of 2001. Fourth quarter net sales increased 1.4% to $217.3 million compared to $214.3 million for Q4 2001.

Sales for the quarter were bolstered by gains outside the U.S. Domestic sales for the period decreased 4.5% to $145.8 million, Canadian sales increased 3.3% to $24.9 million, European sales increased 16.1% to $23.1 million, and Other International sales increased 33.5% to reach $23.5 million. Sales were driven by strong apparel sales, with COLM reporting a 20.4% increase in the sportswear category but a 19.5% decline in footwear.

KEY METRICS:

• For Fourth Quarter:
  • Net Sales inched up 1.4%
  • Net Income increased 20.2%
  • GM increased 140 bps to 47.2%
  • SG&A decreased 100 bps to 25.9% of sales
• For the Full Year 2002:
  • Net Sales up 4.7% to $816.3 million
  • Net Income grew 15.4% to $88.8 million
  • EPS $2.56 versus $2.23 in 2001
  • Outerwear up 4.8% to $422.5 million
  • Sportswear sales up 5.3% to $245.2 million
  • Footwear sales up 1.3% to $110.0 million
  • Columbia brand footwear sales down 4.5%
  • Sorel sales grew 33.1% to $22.1 million
  • Domestic sales grew 1.1% to $557.5 million
  • Canadian sales up 6.6%
  • European sales increased by 16.5%
  • Other International sales increased 17.8%

>>> Although COLM won’t report Q3 backlog until April, bookings due the end of December must not have been very positive…