Columbia Sportswear Co. stock jumped over 8 percent to $52 in after-hours trading after the apparel company reported that net income increased 14 percent to a record $63.4 million, or 90 cents per diluted share.
This easily beat the FactSet earnings estimate of 75 cents per share and last year’s fourth-quarter earnings of 79 cents per share. Fourth quarter net sales increased 3 percent to $699.4 million and beat the FactSet estimate for sales of $685 million.
For the full year, net sales increased 11 percent to $2.33 billion and net income increased 27 percent to $174.3 million, or $2.45 per diluted share.
Chief executive officer Tim Boyle said, “2015 was another outstanding year for Columbia Sportswear Company. Record net sales, record operating income, expanded operating margin, and record net income validate that our strategies are driving growth and improved profitability. The Columbia, Sorel and Prana brands each generated double-digit constant-currency net sales growth, concentrated in North America.”
Colombia managed to overcome the unseasonably warm weather that bedeviled most retailers around the holidays. Growth in the U.S. for the Columbia, Sorel, Prana and Mountain Hardwear brands offset declines in the Europe/Middle East region, Latin America, Asia and Canada.
U.S. net sales increased 10 percent to $446.2 million, while Europe/Middle East dropped 15 percent. Canada fell 7 percent and Latin America/Asia fell 4 percent.
Global Sorel brand net sales increased 14 percent and global Prana brand net sales increased 39 percent, while global Mountain Hardwear increased 2 percent. Columbia global brand sales increased less than 1 percent.
Gross margins contracted approximately 10 basis points to 45.3 percent of net sales reflecting a higher volume of close-out product sales and unfavorable currency hedges. This was offset by a higher proportion of direct-to-consumer sales.
Looking ahead, Columbia forecast that 2016 net sales would grow in the midsingle-digits over 2015’s $2.33 billion. The company anticipates a lower net sales growth rate in the first half of the year than in the second half of the year.