Good winter weather, product innovations and its Prana acquisition all helped Columbia Sportswear report record fourth-quarter sales in 2014 as the brand continues to regain its swagger with consumers and investors.
The company (Nasdaq:COLM), parent to Columbia, Mountain Harwear, Sorel and Prana brands, reported fourth-quarter sales of $677 million, up 27 percent from year ago, or up 15 percent on an organic basis, excluding this year’s Prana acquisition and new China joint ventue. Quarterly net income came in at $55.6 million versus $36.7 million a year ago.
Full-year 2014 sales surpassed $2.1 billion, up 25 percent from 2013, or 12 percent on an organic basis. 2014 net income rose to $137.2 million, compared to $94.3 million in 2013. The results beat Wall Street expectations and Columbia's stock price jumped 18 percent on Friday to $51.50 per share.
By brand, Columbia sales jumped 23 percent to $527.9 million in the fourth quarter, and rose 24 percent to $1.75 billion for the year. Sorel sales were up a whopping 40 percent to $92.1 million in the fourth quarter (it’s amazing what some snow will do for winter footwear), and climbed 29 percent to $166.2 million for the year.
Meanwhile, fourth-quarter sales at Mountain Hardwear fell 7 percent to $34.6 million, and dropped 10 percent to $119.8 million for the full year as the brand realigns some of its product. Officials have admitted some previous pricing missteps for the brand (pricing too high) and the recognition to be more competitive.
“We’re really focusing on the product offering to make sure that we have products that we call "gateway products" that fans of the brand can acquire without having to spend $300 on a jacket,” Columbia Sportswear CEO Tim Boyle told investors on the Feb. 12 conference call. “So we've built products that have lower entry price points to allow consumers that love the brand to get into them without taking out a mortgage. We believe Mountain Hardwear is poised to resume growth in the U.S. in 2015, largely offset by the continuing effects of difficult market conditions in Korea, Mountain Hardwear's largest international market.”
Prana, which Columbia acquired this spring, recorded $20 million in sales for the fourth quarter, and $53.7 million for the partial year, with an estimated $100 million if it had been owned the entire year.
Looking ahead, Boyle said he sees the biggest growth potential for Columbia in footwear.
“We believe footwear has the potential to be our largest product category as we become less dependent on cold-weather products and expand our presence in the much larger year-round trail category,” Boyle said. Expanding Prana into international markets, as well as further growing its recognition in the United States is another key opportunity for the company. Company officials also pointed to strong direct-to-consumer sales as a driver, which, for example, accounted for half of the company’s U.S. gains in 2014. The company plans to open 11 more outlet stores and two new branded stores in North America in 2015.
And then there’s always the weather. Cold temps and plenty of snow these past two winters in the U.S. Midwest and Northeast, despite drier and warmer weather out West, have rocketed sales. That all bodes well for 2015-16 orders.
“Our weather in North America couldn't have been better, really,” Boyle said. “It was spectacular.”