Columbia Sportswear Co. easily beat analysts’ expectations for its fourth-quarter sales and profits, and the company said the strength in its results had to do with more than just cold weather.
Tim Boyle, president and chief executive officer, said the year ended “with strong sales momentum.
Increased consumer demand that became evident across our U.S. direct-to-consumer platform during the third quarter, well before seasonal weather arrived, has sustained through the fourth quarter of 2013 and into the first quarter of 2014.”
In the three months ended Dec. 31, the Portland, Ore.-based outerwear, sportswear and footwear firm generated net income of $36.7 million, or $1.05 a diluted share, down 7 percent from the $39.5 million, or $1.15, reported in the last quarter of 2012. Excluding a noncash asset impairment charge equal to 16 cents, earnings per share were $1.21, 29 cents better than the 92-cent result expected, on average, by analysts.
Sales in the quarter rose 6.4 percent, to $533.1 million from $501.1 million, with increases of 6.8 percent for the Columbia brand, to $427.8 million, and 16.8 percent for the Sorel brand, to $66 million, more than offsetting Mountain Hardwear’s 7 percent decline to $37.3 million. North America dominated regional sales increases, with U.S. sales up 12.5 percent to $307.9 million and Canadian revenues ahead 15.6 percent to $38.5 million. Sales in Europe, the Middle East and Africa were up 10.6 percent to $68.6 million, while Latin America and Asia-Pacific registered a decline of 10.5 percent to $118.1 million.
Apparel, accessories and equipment brought in $416 million in sales, a 6 percent uptick, while footwear grew at a 7.6 percent clip to $117.1 million.
Sales were expected to reach $498.8 million in the quarter.
The company said that currency fluctuations subtracted 2 points from the sales increase. Gross margin expanded 330 basis points to end the quarter at 44.6 percent of sales from 41.3 percent a year ago.
Columbia issued upbeat guidance for the year ahead, projecting a revenue increase of between 15 and 17 percent, to between $1.94 billion and $1.97 billion, and improvement of at least 50 basis points in gross margin, which would take the figure to 44.6 percent from 44.1 percent for the full year just concluded.
“Our wholesale customers are exhibiting a greater appetite for broader and deeper assortments of our new fall 2014 line, which features our best innovations at more accessible prices,” Boyle added.
For the full year, net income declined 5.5 percent to $94.3 million, or $2.72 a diluted share, while revenues ticked up 0.9 percent to $1.68 billion.
The company’s board declared a 12 percent increase in its quarterly dividend to 28 cents a share, payable March 18 to shareholders of record March 7.
Shares closed up 2.2 percent at $78.67 prior to the earnings report and continued their climb in after-hours trading, rising 6.1 percent to $83.50.