Columbia Sportswear (NYSE: COLM) is back.
After a tough couple of years recovering from unfavorable winter weather and excess inventory, the parent company to Columbia, Mountain Hardwear, Sorel, and now Prana, reported a 29 percent increase in third-quarter 2014 sales to $675.3 million.
Its acquisition of Prana earlier this year helped — brining in an extra $28.2 million for the third quarter, plus a boost from Columbia’s new China joint venture. Yet even negating those two, Columbia still grew its organic revenue a healthy 14 percent for the quarter.
The Columbia brand lead the way, increasing third-quarter sales 29 percent to $555.4 million fueled by a boost in both wholesale and direct-to-consumer orders. Sorel sales grew 23 percent to $58.2 million, while Mountain Hardwear sales slumped 24 percent to $31 million. Most of the growth came from the United States and Asia, while Europe gained about 1 percent on continuing economic challenges across the pond, plus some pushed back early-order dates.
The weakness of Mountain Hardwear’s fall 2014 sales, contrasted with the strength the brand is seeing in its spring 2015 bookings are related, Columbia’s Director of Corporate Communications Ron Parham told SNEWS.
“For a variety of reasons, by spring 2013 and fall 2013, Mountain Hardwear’s line had skewed a bit too much to the premium level, leaving some key historical ‘gateway’ price points for the brand vacated — price points that were especially key for consumers who aspired to step up to the Mountain Hardwear brand,” he said. “As a result, fall 2013 sell-through to consumers underperformed. Mountain Hardwear’s fall 2014 line was already designed by then and had not yet been augmented to include more of those key gateway products, so retailers’ advance orders for fall 2014 were muted.”
Mountain Hardwear’s spring and fall 2015 lines were developed with goals to repopulate those gateway price zones, Parham said. And as a result, retailers are coming back to the brand. He stressed that Mountain Hardwear will continue “to be positioned as the premium brand in our portfolio." It’s just adding gateway priced pieces that are competitive with other premium brands in the market.
Back to the company-wide results, third-quarter net income came in at $65.6 million, up from 54.6 million during the same period a year ago.
Company officials expect more growth in the fourth quarter, increasing their 2014 annual sales growth projections to 22 percent for a total of $2.06 billion with net income of $127 million. Double-digit sales growth is expected to continue into 2015.
“We see solid momentum continuing into 2015, assuming seasonal weather prevails in key global markets,” Columbia Sportwear CEO Tim Boyle said. “Our confidence is based on strong early fall 2014 sell-through, coupled with growth in spring 2015 advance wholesale orders, and our plans for continued growth in our direct-to-consumer channels.”
It took two years for retailers to clean out their leftover winter inventory, but a cooler, snowier and wetter year in the United States (minus the West Coast) seems to have re-energized wholesale orders for Columbia and others.