Columbia Sportwear Co. posted a 14% sales increase in constant currency for the full year ended Dec. 31, despite significant retailer order cancellations due to late fall shipments.
The company also grew sales 8% in Q4, thanks to a 13% jump in sales for the Columbia brand.
Executives said the company’s results would have been even better if not for the delayed shipments to retailers due to late arriving product from Asia.
Company-wide, Columbia Sportwear Co. posted gains pretty much across the board for the full year.
Geographically, the U.S. business company-wide grew 12% in constant currency for the full year, the Europe direct business surged 31%, and sales in Canada jumped 19%.
Both distribution channels posted gains. The company’s DTC channel (stores plus online) grew sales by 12% in constant currency for the year, while wholesale sales jumped 16%.
DTC e-commerce sales company-wide grew 10% in constant currency and represented 18% of total net sales.
The company’s shipping has improved for Spring 2023 and is approaching pre-pandemic service levels, executives said on an earnings call Thursday.
As far as sell-through of fall and winter product in the current season, those trends are generally positive.
“With the season almost complete, sell-through is tracking roughly in line with Fall 2021, which was exceptionally strong,” Columbia Sportswear CEO Tim Boyle said.
For the Columbia brand, recent innovations such as the Omni-Heat Infinity and Omni-Heat Helix are helping to drive growth.
However, the company ended its fiscal year with inventories up 59% versus the same period last year, in part because of unrealized fall sales due to late shipments and early arrival of spring receipts.
Columbia purposely ensures that a large portion of its product lines are evergreen styles that do not change season to season. That has allowed the company to roll over some of that inventory to sell in the Fall ’23 season. The company has also adjusted its inventory buys for product made for its outlets and instead will sell more of the excess inventory from Fall ’22 in that channel.
“Given our strong balance sheet, we can be patient as to when and where we sell our product. We expect to continue utilizing our fleet of outlet stores to profitably liquidate remaining excess inventories,” Boyle said.
The company ended the year with $431 million in cash and short term investments, and no debt.
While Columbia executives were pleased with fiscal 2022 results and their momentum, they expressed caution about expectations for the current year due to the threat of recession and retailers being very careful with orders.
The company expects fiscal 2023 sales to increase 3% to 6%, which is below its target compound annual growth rate. However, “Our confidence in our long-term growth opportunity has not wavered,” Boyle said on the call.
Here are more details about Columbia Sportswear Co.’s Q4 and full-year results, including results by brand.
For a more detailed look at the performance of Sorel and Prana, see The Daily’s other stories from the Columbia earnings call:
Q4 Company Financial Results
Net sales: $1.2 billion, up 8% in constant currency. The Columbia brand drove the growth while emerging brands posted declines.
Gross margin: fell to 50.4% vs 52.2% during the same period last year largely due to increased promotions.
Net income: fell 20% to $125.7 million.
Q4 Results by Brand
Columbia: $961.3 million, up 13% in constant currency
Sorel: $142.6 million, down 9%
Prana: $32.3 million, down 6%
Mountain Hardwear: $33.4 million, down 9%
Full-Year Company Financial Results
Net sales: $3.5 billion, up 14% in constant currency.
Gross margin: fell to 49.4% vs. 51.6% in the same period last year.
Net income: dropped 12% to $311.4 million.
Full-Year Results by Brand
Columbia: $2.9 billion, up 16% in constant currency
Sorel: $347.3 million, up 11% in constant currency
Prana: $143.1 million, up 1% in constant currency
Mountain Hardwear: $109.5 million, up 5% in constant currency
Full-Year Results by Channel
Wholesale: $1.9 billion, up 16% in constant currency
DTC (stores plus online): $1.6 billion, up 12% in constant currency