Columbia Sportswear Q3 profit falls despite Mountain Hardwear's 19-percent sales boost
Columbia Sportswear (Nasdaq: COLM), parent of the Columbia, Mountain Hardwear, Sorel and Montrail brands, said its third-quarter profit fell 7 percent, hurt by lower demand amid a difficult economy.
Profit for the quarter ended Sept. 30 fell to $58.3 million, or $1.69 per share, from $62.6 million, or $1.72 per share last year.
Revenue fell 4 percent to $452.4 million from $471.1 million last year. Revenue fell in all regions expect Latin American and Asia Pacific.
The sales drop reflected a 5-percent decline in U.S. net sales to $271.3 million, a 10-percent decline in EMEA region net sales to $78.2 million and a 2-percent decline in Canada net sales to $56.8 million, partially offset by 10 percent growth in LAAP region net sales to $46.1 million.
Compared with the third quarter of 2007, third quarter 2008 outerwear and sportswear net sales each declined 3 percent to $208.6 million and $157.5 million, respectively; and footwear net sales declined 11 percent to $63.6 million. The company said these declines were partially offset by a 3-percent increase in accessories and equipment net sales to $22.7 million.
For the quarter, Columbia brand net sales decreased 5 percent to $395.2 million and Sorel brand net sales decreased 1 percent to $19.0 million. These decreases were partially offset by a 19-percent increase in Mountain Hardwear brand net sales to $35.2 million. Combined, net sales of Montrail and Pacific Trail brand products did not comprise a significant percentage of sales in the third quarter of either year.
The company ended the quarter with $145.3 million in cash and short-term investments, compared with $115.8 million at September 30, 2007. Accounts receivable declined $27.4 million, or 7 percent, to $366.2 million and inventories declined $19.2 million, or 6 percent, to $301.4 million, compared with September 30, 2007.
Columbia said the outdoor category has been resilient despite a weak retail environment and raised guidance for the fiscal year.
Looking forward, Columbia raised its full-year guidance but tweaked its revenue guidance slightly downward. The company now expects earnings of $2.80 to $2.90 per share for the year, up from prior estimates of $2.60 to $2.70 per share.
The company did forecast a revenue decline of 3 percent to 4 percent, from earlier estimates for a 3 percent drop. The new range implies revenue of $1.31 billion to $1.32 billion.
For the fourth quarter, the company expects earnings of $0.60 to $0.70 per share, with revenue projected to decline 6 percent to 10 percent to a range of $339.1 million to $354.2 million.
Columbia also predicted a difficult first quarter, hurt by lower backlog, but did not give specific guidance. Sales of discretionary items have suffered as struggling consumers pull back on spending.
The company said it plans to open a Chicago branded store next fall on Michigan Avenue in Chicago and is actively negotiating on locations in several other major metropolitan cities in the U.S., Canada and Europe where it expects to open another 10 to 15 branded stores over the next several years.
Additionally, Columbia declared a regular quarterly dividend of $0.16. The dividend is payable on Nov. 26 to shareholders of record as of Nov. 13.
Deckers Outdoors Q3 income up on surge in Ugg sales
Deckers Outdoor (Nasdaq: DECK), parent of Ugg, Teva, Simple and newly acquired Tsubo, said its third-quarter net income rose 34.6 percent on a surge in Ugg shoes.
For the quarter ended Sept. 30, net income rose to $26 million, or $1.97 a share, up from $19.3 million, or $1.47 a share in the same period last year.
Sales in the period rose 52.5 percent to $197.3 million from $129.4 million last year.
Ugg brand net sales for the third quarter increased 57.1 percent to $178.7 million, up from $113.7 million for the same period last year. Teva sales were $11.2 million for the third quarter, the same as last year over the same period. Sales of Simple increased 16.6 percent to $5.2 million compared to $4.4 million for the same period last year. Acquired in the second quarter of 2008, Tsubo brand net sales were $2.2 million in the third quarter.
The company said international sales of all its brands more than doubled to $35 million. Domestic sales rose nearly 41 percent to $162.3 million, up from $115.2 million last year.
Also, it's expecting fourth-quarter revenue will grow 52 percent in the fourth quarter, and earnings will be up 44 percent. That was up from previous predictions that revenue would grow 45 percent and earnings would grow 42 percent. The company earned $2.69 a share in the fourth quarter of 2007 and revenue of $194.2 million.
The company said it expects full-year revenue to increase 52 percent, up from previous guidance of 43 percent, and it expects earnings per share to increase approximately 40 percent from last year, up from previous guidance of about 34 percent. Last year the company's revenue was $448.9 million, and earnings per share were $5.06 in fiscal 2007.
The company said the outlook includes the impact of the non-cash charge related to the second quarter write-down of the Teva trademarks.
LaCrosse's profit down for Q3
LaCrosse Footwear (Nasdaq: BOOT), parent of the Danner and LaCrosse brands, reported a drop in third-quarter net income after being saddled with start-up expenses for its new European subsidiary.
For the quarter ended Sept. 27, net income was $2.8 million, or $0.43 per diluted share, compared to $3.3 million, or $0.52 per diluted share, in the third quarter of 2007. Results for the third quarter of 2008 included expenses of approximately $1.2 million related to the set-up and operation of the company's new European subsidiary.
Consolidated net sales were $40.3 million, up 9 percent from $36.9 million in the third quarter of 2007.
Sales to the outdoor market dropped to $20.8 million from $21.8 million for the same period of 2007. While the company said it saw strong at-once demand in certain segments and geographies of the outdoor market, the overall decline in outdoor sales reflected the sluggish retail environment.
Sales to the work market were $19.4 million for the third quarter of 2008, up 29 percent from $15.1 million for the same period of 2007. Growth was precipitated by boot shipments of about $3.2 million to the U.S. Marine Corps and the U.S. Army.
LaCrosse said it continued to maintain strong gross margins: 39.2 percent of net sales, up from 39.1 percent in the same period of 2007.
For the third quarter, its total operating expenses were $11.2 million, or 28 percent of net sales, compared to $9.5 million, or 26 percent of net sales, last year. The year-over-year increase reflects costs from the company's new European subsidiary, increased sales and product development activities.
At the end of the third quarter, LaCrosse's inventory increased $0.7 million or 2 percent from the end of the same period in 2007.
Hanesbrands says Mervyns liquidation will hurt Q3 results
Hanesbrands (NYSE: HBI), parent of Duofold, said it would take a charge in the third quarter due to Mervyns' decision to liquidate its stores. It will take a bad-debt charge, related to the filing, of $5.5 million, or $0.04 per share, for the quarter ended Sept. 27.
Excluding one-time charges, the company expects earnings of $0.56 per share. Including the bad-debt charge and $0.35 per share in restructuring costs, the company expects a profit of $0.17 per share.
Department-store chain Mervyns, which filed for Chapter 11 bankruptcy protection in July, said last week it will begin to liquidate its remaining 149 stores and wind down its business.
West Marine's Q3 sales drop 4.3 percent
Sales for West Marine (Nasdaq: WMAR) were down 4.3 percent to $180.2 million compared to $188.4 million the year before. Comparable store sales were down 4.7 percent.
For the quarter ended Sept. 27, net income was $3.4 million. Gross profit was $49.7 million, a decrease of $8.2 million compared to 2007. As a percentage of net sales, gross profit was 27.6 percent, a decrease of 310 basis points compared to the gross profit of 30.7 percent last year.
Selling, general and administrative expense for the quarter was $43.9 million compared to $46.8 million for the same period last year.
West Marine revised its full-year 2008 earnings guidance downward, from a previous earnings range of an after-tax loss of $0.32 to $0.42 per share to a revised after-tax loss range of $0.55 to $0.65 per share. It anticipates an after-tax loss of $2.14 to $2.24 per share. It is maintaining sales guidance of $625 million to $635 million. The company also revised comparable store expectations range is a decline of 6.5 percent to 8.0 percent, versus a previous decline of 7.0 percent to 8.5 percent.
--Compiled by Wendy Geister
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