Columbia Sportswear Company reported that 2024 first-quarter net sales decreased 6 percent, or 6 percent constant-currency (CC), to $770.0 million, compared to $820.6 million in the comparative period in 2023. 

The decline in net sales primarily reflects lower wholesale net sales in the U.S. and Canada, driven by retailer cautiousness, a challenging competitive environment and generally soft consumer demand.

Gross margin increased 190 basis points to 50.6 percent of sales in Q1, compared to 48.7 percent of net sales for the Q1 period in 2023. Gross margin expansion primarily reflects lower inbound freight costs and favorable region and channel net sales mix, which offset the gross margin impact of inventory reduction efforts in the company’s direct-to-consumer brick-and-mortar business.

In the first quarter, SG&A expenses were relatively flat at $349.3 million, or 45.4 percent of net sales, compared to $347.4 million, or 42.3 percent of net sales, for the comparable period in 2023. The largest changes in SG&A expenses primarily reflect higher DTC expenses, partially offset by lower supply chain costs and decreased variable demand creation expenses.

Operating income decreased 21 percent to $44.7 million, or 5.8 percent of net sales, compared to operating income of $56.4 million, or 6.9 percent of net sales, for the comparable period in 2023.

Interest income, net, was $9.2 million, compared to $3.3 million for the comparable period in 2023, reflecting higher yields on increased levels of cash, cash equivalents and short-term investments.

Income tax expense of $11.8 million resulted in an effective income tax rate of 21.9 percent, compared to income tax expense of $14.4 million, or an effective income tax rate of 23.7 percent, for the comparable period in 2023.

Net income decreased 8 percent to $42.3 million, or 71 cents per diluted share, compared to net income of $46.2 million, or 74 cents per diluted share, for the comparable period in 2023.

Balance Sheet

  • Cash, cash equivalents and short-term investments totaled $787.7 million at quarter-end, compared to $460.6 million as of March 31, 2023.
  • The company had no borrowings as of March 31, 2024 or March 31, 2023.
  • Inventories decreased 37 percent to $607.4 million at quarter-end, compared to $959.2 million on March 31, 2023.

Full Year 2024 Financial Outlook
The company’s full-year 2024 and second-quarter 2024 Financial Outlook are forward-looking, and the following forward-looking statements reflect expectations as of April 25, 2024.

  • Net sales are expected to decrease 4.0 percent to 2.0 percent (unchanged), resulting in net sales of $3.35 billion to $3.42 billion (unchanged), compared to $3.49 billion in 2023.
  • Net income is expected to be $217 million to $240 million (prior $207 million to $231 million), resulting in diluted earnings per share of $3.65 to $4.05 (prior $3.45 to $3.85). This diluted earnings per share range is based on an estimated weighted average diluted shares outstanding of 59.3 million (prior 60.1 million).

 

See below for more SGB Media coverage of Columbia Sportswear’s first quarter results, including brand, region and channel commentary from CEO Time Boyle:

EXEC: Columbia Using Temp Stores to Offload Excess Goods as it Fights to Right-Size