Columbia Sportswear sold and earned less than expected in the fourth quarter due to mild winter weather in North America, flagging consumer confidence and a deeper than expected discounting.



These factors, among others, combined to produce lower-than-expected direct-to-consumer sales, as well as higher order cancellations and fewer reorders from wholesale customers, primarily in the U.S., the company said in a Jan. 16 statement.  In addition, approximately one-third of the fourth quarter net sales shortfall reflected a timing shift into the first quarter of 2013 of factory-direct shipments of international distributors Spring 2013 advance orders.


COLM expects to report fourth quarter net sales of approximately $499.0-$503.0 million, a decline of approximately 5 percent compared with fourth quarter 2011 net sales of $526.1 million. Guidance provided by the company Oct. 25, 2012 anticipated net sales growth of up to 1.5 percent.


The company, which makes apparel and footwear under the Columbia, Montrail, Mountain Hardwear and Sorel brands, expects fourth quarter gross margin to contract by 120 to 130 basis points to 41.2 to 41.3 percent. Prior fourth quarter outlook anticipated gross margin contraction of 50 to 75 basis points from gross margin of 42.5 percent in last years fourth quarter. Lower-than-expected gross margin primarily reflects increased promotional activity and liquidation of excess inventory in response to slower sales.


The company ended the year with consolidated inventories equal to levels of a year earlier.


COLM now expects fourth quarter selling, general and administrative (SG&A) expenses to decline to $158 to $162 million, or approximately 31.5 percent to 32.3 percent of sales. Prior fourth quarter outlook anticipated SG&A expense of approximately 32.0 percent to 32.5 percent of sales, compared with 34.0 percent of sales, or $178.6 million, in last years fourth quarter. The reduction in SG&A expense reflects continued disciplined management of discretionary spending.


Fourth quarter operating income is expected to reach approximately $47.0 to $52.0 million, or approximately 9.4 percent to 10.3 percent operating margin, compared with fourth quarter 2011 operating income of $50.5 million, or 9.6 percent operating margin. Prior fourth quarter outlook anticipated operating margin of 10.6 percent to 11.1 percent.


Net income for the fourth quarter is forecast to be between $37.0 million to $40.0 million, including a lower than expected income tax rate. Prior outlook anticipated fourth quarter net income of approximately $44.0 million, compared with net income of $36.7 million for the fourth quarter of 2011.