In reporting improved third-quarter results late Thursday, Columbia Sportswear Co. also made a few key management changes as it continues to focus on omnichannel growth opportunities.
The Portland, Ore.-based outdoors brand said Thomas B. Cusick, executive vice president and chief operating officer, will retire in February and transition to a part-time role, assisting with operational duties including information technology and supply chain initiatives until exiting the company in the second half of next year. Cusick joined the company in 2002 as corporate controller and assumed the role of chief operating officer in 2017.
Lisa A. Kulok, senior vice president of global supply chain operations and manufacturing, will become executive vice president, chief supply chain officer, and Jim A. Swanson, senior vice president and chief financial officer, will become executive vice president and cfo. Both will report to Timothy Boyle, chairman, president and chief executive officer. In addition, Brent Beeson, vice president of apparel manufacturing, will become senior vice president of manufacturing, reporting to Kulok.
In a move to support its omnichannel initiatives, the company has elevated Franco Fogliato, executive vice president and Americas general manager, to executive vice president of global omnichannel. He will oversee Columbia’s sales in all direct markets globally.
“Franco has been instrumental in driving growth in Europe and in the U.S., and I believe he will now be enabled to do so on a more global scale,” said Boyle.
Columbia created a new chief digital information officer role which will replace the chief information officer position when Michael Hirt retires next April. The company is seeking to fill this as well as a chief marketing officer role with executives focused on enhancing marketing and social engagement in a digital marketplace.
“The leadership changes we are making today are intended to accelerate sustainable growth for the organization,” Boyle said. “We will continue to focus on our strategic priorities to drive global brand awareness and sales growth through increased, focused demand creation investments; enhance consumer experience and digital capabilities in all of our channels and geographies; expand and improve global direct-to-consumer operations with supporting processes and systems, and invest in our people and optimize our organization across our portfolio of brands. We believe that these changes will make Columbia stronger in the future.”
The management changes were revealed as the company reported operating income declined 44 percent to $85.6 million in the third quarter, compared to $152 million last year. Diluted earnings per share fell 46 percent to 94 cents a share, compared to $1.75 in the year-ago period. Net sales dropped 23 percent to $701.1 million from $906.8 million a year ago.
In the nine months, operating income fell 95 percent to $13.4 million from $256.3 million in the prior year. Net sales decreased 24 percent to $1.59 billion, compared to $2.09 billion in the year-ago.
“While results were down substantially in comparison to last year, sales and profitability trends sequentially improved compared to the second quarter and we expect continued improvement in the fourth quarter and into 2021,” Boyle said. “E-commerce was once again a bright spot, with net sales surging 55 percent year-over-year. During the quarter, we successfully completed the deployment of our new e-commerce platform, X1, with implementation in North America for the Columbia, Sorel and Mountain Hardwear brands, following a successful deployment across Europe and Prana in 2019. The newly refreshed sites have been aesthetically enhanced and are delivering an improved consumer experience right in time for the peak holiday sales season.”
Boyle said that although it is still early in the fall season, he is “encouraged by early sell-through and reorder trends within the U.S. wholesale channel.” The company is celebrating the 10th anniversary of its Omni-Heat winter technology, which will continue to be exploited with the addition of other products in the fall of 2021.
“Looking to 2021, our spring order book and expectation for a return to growth in our direct-to-consumer business would indicate high-teens percent net sales growth in the first half of 2021,” Boyle added. “Outdoor recreational activities are surging during the pandemic and we are well positioned to equip these outdoor adventurers.”
The company also provided an outlook for the fourth quarter, saying operating income is expected to come in at $91 million to $112 million, and diluted earnings per share of $1.07 to $1.32 while sales are expected to decline 8 to 11 percent to $850 million to $880 million.