COLUMBIA RETURNS TO BLACK IN QUARTER

NEW YORK — Columbia Sportswear Co. put a year-ago loss behind it and posted earnings that were a dime stronger than Wall Street expectations.
Earnings for the second quarter ended June 30 were $3.6 million, or 14 cents a diluted share, against a loss of $238,000 in the year-ago quarter. The loss in the 1999 quarter principally was due to $1.4 million in depreciation expenses related to the $33 million spent on its North American distribution center, which contributed to earnings strength in the 2000 quarter. Analysts’ estimates had average 4 cents a share for the quarter.
Shares of Columbia were up 2 1/4 Wednesday to close at 36 on the Nasdaq. Early in the day, they had established a new 52-week high of 37 3/4.
Richard Jaffe, an analyst for Paine Webber, said, “The biggest surprise was the apparel result, which was up 45 percent.” The apparel division’s sales reached $47.7 million.
Net sales rose 36 percent to $97.2 million from last year’s second-quarter sales of $71.4 million. U.S. sales increased 35 percent to $71.8 million. Internationally, sales in Japan had the strongest gains, leaping 65.7 percent to $5.3 million, while European sales had 58 percent growth to $8.5 million. Canadian revenues increased at a slower rate of 5.2 percent to $6.9 million.
“They’ve taken a very compelling brand in outerwear and extended it to footwear and apparel during the last several years,” said Jaffe. “The major appeal of the brand is authenticity — it’s not fashion, it’s functional.”
Jennifer Black, a First Security Van Kasper analyst, also saw strength in the brand’s development. “I believe that they’re like Nike was ten years ago,” said Black. “They have a technically advanced product line with something for everyone.”
A Van Kasper report prepared by Black said “brand momentum and continued weakness among competitors in the outerwear and footwear arenas are likely to provide upside in the coming year, as well.”
The strong earnings were also due in part to higher-than-expected domestic demand for fall 2000 outerwear. Unscheduled early shipments of the high-margin children’s wear line totaled about $4 million. Reduced off-price selling and improved gross margins on spring merchandise closeouts, including healthy sell-through in retail stores, reinforced the unexpected early shipments.
For the six months, net earnings for the Portland, Ore.-based marketer were $6.9 million, or 27 cents a share, versus $2,000 a year ago. First half sales were up 28 percent to $205.6 million from $160.6 in the year-ago half.

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