Columbia 3Q earnings dip on slashed European sales

Columbia's sales in Europe fell 40 percent, largely due to Europe’s ongoing economic troubles, fewer retail winter orders and shift in timing of those orders.
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Columbia Sportswear (Nasdaq: COLM) got a triple whammy of bad news in Europe for the third quarter 2012.

The outdoor company’s sales in the region fell 40 percent to $60.5 million, largely due to Europe’s ongoing economic troubles, fewer retail winter orders and shift in timing of those orders. The latter, while helping boosting sales 70 percent in Europe a year ago, made for a tough comparison this year.

Stronger sales in North and South America, partially helped offset the losses, and Columbia, along with its Mountain Hardwear, Sorel and Montrail brands, ended the third quarter with a 4 percent decline in revenue to $545 million. Third quarter net income fell slightly to $64.4 million, or $1.88 per diluted share, compared with a net income of $67.5 million, or $1.98 per diluted share, a year ago.

By brand, in the third quarter, Columbia sales dropped 2 percent to $436.8 million, Mountain Hardwear fell 1 percent to $44.4 million, Sorel dropped 15 percent to $62.1 million and it’s other brands, including Montrail, gained 13 percent to $2.6 million.

By product category, the overall company’s apparel, accessories and equipment rose dropped 2 percent to $429.5 million, while footwear fell 10 percent to $115.5 percent.

“Looking ahead to 2013, we anticipate continued slow growth through at least the first half of the year, based in part on advance spring 2013 wholesale orders, the fragile U.S. recovery, continued uncertainty in Europe, and signs of slowing in key Asian markets,” CEO Tim Boyle said.

In the more near term, Columbia projects full-year 2012 revenue of $1.7 billion, about a 1 percent increase from a year ago. It expects fourth-quarter 2012 revenue to rise by 1.5 percent “reflecting increased U.S. direct-to-consumer sales, growth in the company’s Korea and Japan markets, and increased sales to international distributors, largely offset by declines in the company’s U.S. and European wholesale businesses.”

--David Clucas

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