Columbia 4Q sales slip, but cost tightening raises profit

Columbia Sportswear Co. (Nasdaq: COLM) reported a decline in sales for the fourth quarter 2012, but was able to swing a profit on cost-tightening measures.
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Columbia Sportswear Co. (Nasdaq: COLM) reported a decline in sales for the fourth quarter 2012, but was able to swing a profit on cost-tightening measures.

The Portland, Ore.-based parent company of Mountain Hardwear, Montrail, Sorel and Columbia brands, said its fourth-quarter sales fell 5 percent to $501.1 million, compared to a year ago. Officials blamed a warm start to winter in addition to approximately $9 million of factory-direct shipments of international distributors’ Spring 2013 advance orders shifted into the first quarter of 2013.

“Mild winter weather in North America during most of the holiday shopping period and general consumer caution resulted in reduced retail traffic and a more promotional environment in key markets, which caused higher order cancellations and fewer reorders from wholesale customers, as well as lower than expected direct-to-consumer sales, primarily in the U.S.,” officials said.

Columbia also is dealing with a recall and suspension of its 2012 and future Omni-Heat Electric line of products, as reported by SNEWS last week. The cost to the company is estimated in the single-digit millions of dollars, officials said.

Despite the tough environment, Columbia turned out a quarterly net profit increase to $39.5 million, or $1.15 per diluted share, compared to a net profit of $36.7 million, or $1.08 per diluted share, a year ago.

Breaking down the quarterly sales figures by product category, the company’s apparel, accessories and equipment net sales fell 2 percent to $392.3 million, and its footwear net sales declined 14 percent to $108.8 million.

By brand in the fourth quarter, Columbia sales fell 4 percent to $400.5 million, primarily due to lower sales of cold weather products. Sorel sales declined $7.8 million to $56.5 million, also primarily due to lower sales of cold weather footwear. Mountain Hardwear sales slipped 1 percent to $42.7 million.

For the full-year 2012, Columbia Sportswear’s overall sales rose 1.2 percent to $1.69 billion. Full-year net income slipped to $99.9 million, or $2.93 per diluted share, compared to a net income of $103.5 million, or $3.03 per diluted share, a year ago.

Looking ahead, Columbia Sportswear projected a slight decline in total sales back to $1.67 billion for 2013.

--David Clucas

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