NEW YORK — A 6.8 percent decrease in Columbia Sportswear Co.’s third-quarter profits was good enough to beat analysts’ estimates, and the company backed the effort with a boost in its full-year outlook despite declining sales.
Crediting improved gross margins from footwear and sportswear, as well as cost-saving initiatives, the Portland, Ore.-based outerwear and sportswear company posted net income of $58.3 million, or $1.69 a diluted share, versus profits of $62.6 million, or $1.72 a diluted share, in the year-ago period. Net sales were down 4 percent to $452.4 million from $471.1 million. Wall Street expected earnings of $1.40 on revenues of just under $450 million, according to Yahoo Finance.
“We continue to maintain a solid balance sheet free of long-term debt, enabling us to move forward as planned with investments in new retail stores and increased marketing,” said president and CEO Tim Boyle. ‘’Despite a weak global retail environment, the outdoor market has been resilient and we’ve continued to generate growth through our international distributors and our subsidiaries in Japan and Korea.”
For the nine months, net income contracted 22.5 percent to $76.5 million, or $2.19 a share, from $98.7 million, or $2.70 a share, for the comparable 2007 period. Revenues slipped 1.7 percent to $962.9 million from $979.3 million.
The company said its spring 2009 backlog was $370.9 million, 11 percent below year-ago levels. “We are disappointed with the decline in spring backlog, but believe it reflects, in part, continued efforts by our retail partners to reduce partners to reduce overall inventory,” Boyle commented. “We expect incremental sales from our new retail stores to help offset a portion of that wholesale business.”
Looking to the fourth quarter, Boyle said the company anticipates net sales to decrease approximately 6 to 10 percent, while earnings per share are expected to range between 60 and 70 cents. Analysts expected EPS of 65 cents on sales of $352.3 million.
Combining fourth-quarter expectations with year-to-date performance, Columbia raised its full-year guidance to earnings of $2.80 to $2.90 a share, up from $2.60 to $2.70. Analysts are looking for $2.58. The company also said 2008 net sales were expected to decline between 3 percent and 4 percent.
In other Columbia news, the company has teamed with Tanner Creek Energy has begun installation of a 100-kilowatt grid-tied solar electric system at the outdoor apparel and footwear company’s Portland, Ore., headquarters. Columbia said it expects to recover the initial cost of the system within the next three-and-a-half to four years. When the system is completed by the end of the year, it will consist of a total of 570 photovoltaic panels mounted on the roof of two of Columbia’s buildings. Power generated by the system will be fed back into the power grid through a meter and credited to Columbia’s account.
Tanner Creek Energy, an Oregon-based developer of commercial and industrial scale solar electric systems, designed the solar system for Columbia and is acting as the project’s general contractor.
Kristen Sagan, Columbia’s sustainability manager, said, “Columbia is actively seeking to implement best practices that will reduce the use of non-renewable energy sources at our headquarters in Washington County. We chose to partner with Tanner Creek Energy for this project because of our shared commitment to the local economy and to supporting the adoption of more renewable energy sources.”
Columbia also embarked on a solar energy project at its Mountain Hardwear subsidiary in Richmond, Calif., this year.
Said Tim Boyle, Columbia’s president and CEO, “By implementing renewable energy projects such as these, Columbia is proud to join the growing list of pioneers who are demonstrating that solar energy systems are not only environmentally responsible but also make good business sense.”