Accelerated deliveries to international distributors enabled Columbia Sportswear Co. to lift its second-quarter sales and sharply reduce its losses for the period.
In the three months ended June 30, the Portland, Ore.-based outerwear and sportswear firm registered a net loss of $7.9 million, or 23 cents a diluted share, down from the year-ago loss of $13.6 million, or 40 cents a share. On average, Wall Street analysts had expected a loss of 30 cents a share for the 2012 quarter.
Led by a double-digit spike in sales in the Europe-Middle East-Africa, or EMEA, region, overall revenues improved 8.3 percent to $290.4 million from $268 million in the 2011 period. U.S. sales rose 2.4 percent to $132.1 million, sales in the Latin America-Asia-Pacific sector rose 9.8 percent to $84.1 million and EMEA sales added 30.6 percent to land at $70 million. Sales attributable to the Columbia brand were up 9 percent to $260.7 million.
Gross margin declined to 40.6 percent of sales from 41.9 percent in last year’s quarter as the cost of sales expanded more rapidly than revenues, growing 10.8 percent to $172.5 million.
“Second-quarter sales growth reflected improved operational execution and supply-chain capacities, which allowed us to deliver a larger portion of our international distributors’ fall 2012 advance orders in the second quarter,” said Tim Boyle, president and chief executive officer. “We are also in good position entering the third quarter to fulfill wholesale customers’ orders on a timely basis because we have received fall 2012 inventory earlier this year.”
He noted sales strength in Columbia’s direct-to-consumer and Japanese businesses, with “10 percent growth in Japan helping to offset lower wholesale revenues in the U.S., Europe and Canada.”
DTC business is expected to account for 29 percent of 2012 sales against 25 percent in 2011, according to Thomas Cusick, chief financial officer. The company’s outlet store count is expected to hit 55 this year, following the addition of 12 units. There are seven stores in Europe and one in Canada.
“We’re constantly evaluating how the stores are performing, and we want to make sure that they don’t impact our wholesale business,” Boyle said in a response to an analyst’s question during the firm’s quarterly conference call. “So we want to have the right amount for how we predict the business. They do seem to be running quite well, so that’s encouraging, but we’ll probably be making more decisions as it relates to outlet stores and certainly where they are over the next year or so.”
In the first half, the net loss grew to $4 million, or 12 cents a share, from $788,000, or 2 cents, while revenues ascended 3.7 percent to $623.5 million from $601.1 million.