Third Quarter 2019
Highlights
- Net sales increased 14 percent (15 percent
constant-currency) compared to third quarter 2018, to a record
$906.8 million.
- Gross margin expanded 110 basis points to a record 49.3
percent of net sales, compared to third quarter 2018 gross margin
of 48.2 percent of net sales.
- Operating income increased 18 percent to a record $152.0
million and operating margin expanded 60 basis points to 16.8
percent of net sales, compared to third quarter 2018 operating
income of $129.1 million, or 16.2 percent of net sales. Compared to
non-GAAP third quarter 2018 operating income of $126.0 million, or
15.8 percent of net sales, operating income increased 21 percent
and operating margin expanded 100 basis points.
- Diluted earnings per share increased 23 percent to a record
$1.75, compared to third quarter 2018 diluted earnings per share of
$1.42. Compared to non-GAAP third quarter 2018 diluted earnings per
share of $1.41, diluted earnings per share increased 24
percent.
Full Year 2019 Financial
Outlook (Financial outlook details can be found in the
"Supplemental Financial Information" section and CFO Commentary
document)
For full year 2019, management currently expects:
- Net sales of $3.01 to $3.04 billion (prior $3.00 to $3.04
billion), representing net sales growth of 7.5 to 8.5 percent
(prior 7.0 to 8.5 percent). The net sales outlook includes a
foreign currency translation impact that is anticipated to reduce
net sales growth by approximately 90 basis points.
- Operating income of $392 to $401 million (prior $388 to $396
million), representing operating margin of 13.0 to 13.2 percent
(prior 12.9 to 13.0 percent).
- Diluted earnings per share of $4.70 to $4.80 (prior $4.65 to
$4.75).
Throughout this press release, amounts stated to be non-GAAP
exclude items described in the "Non-GAAP Financial Measures"
section below. Additionally, constant-currency net sales, a
non-GAAP financial measure, is referenced throughout this press
release. Please see the "Supplemental Financial Information"
section and financial tables included below for a more detailed
description of this and other non-GAAP financial measures.
Columbia Sportswear Company (NASDAQ: COLM), a leading innovator
in active outdoor apparel, footwear, accessories and equipment,
today announced third quarter 2019 financial results for the period
ended September 30, 2019.
President and Chief Executive Officer Tim Boyle commented,
"Record third quarter results exceeded our expectations, with broad
based growth across our geographic segments, channels and product
categories. During the quarter, we were able to ship a greater
portion of our Fall 2019 order book compared to the Fall 2018
season as retailers restocked depleted inventory positions after
harsh winter weather and exceptional sell-through in North America
last year. Higher advance orders and earlier shipments contributed
to 14 percent growth for the Columbia brand and 27 percent growth
for the SOREL brand in the quarter. SOREL's impressive growth was
led by strong demand for fall fashion styles, further validating
the brand's success as a year-round fashion footwear brand. Our net
sales growth momentum combined with Project CONNECT margin benefits
drove earnings per share growth in excess of 20 percent with
continued investment in our strategic priorities.”
"As we enter our peak selling season, I’m confident that our
powerful brand portfolio, globally diversified business model and
the dedication and focus of our talented global team position us to
deliver another year of record sales and profit.”
“Our profitable growth trajectory and fortress balance sheet
provide a foundation of strength and confidence from which we will
continue investing in our strategic priorities to:
- drive brand awareness and sales growth through increased,
focused demand creation investments;
- enhance consumer experience and digital capabilities in all our
channels and geographies;
- expand and improve global direct-to-consumer operations with
supporting processes and systems; and
- invest in our people and optimize our organization across our
portfolio of brands."
"We are making these investments to build on our strengths as a
brand-led, consumer-focused organization and to enable sustainable
long-term profitable growth."
CFO's Commentary Available
Online
For a detailed review of the Company's third quarter and first
nine months 2019 financial results and full year 2019 financial
outlook, please refer to the CFO Commentary exhibit furnished to
the Securities and Exchange Commission (the "SEC") on Form 8‑K and
published on the Investor Relations section of the Company's
website at http://investor.columbia.com/results.cfm at
approximately 4:15 p.m. ET today. Analysts and investors are
encouraged to review this commentary prior to participating in the
conference call.
Non-GAAP Financial
Measures
Throughout this press release, non-GAAP amounts in third quarter
2018 exclude a $4.3 million benefit in connection with an insurance
claim ($3.3 million net of tax), $1.5 million in incremental income
tax expense related to the Tax Cuts and Jobs Act (“TCJA”) and $1.2
million in Project CONNECT expenses and discrete costs ($0.9
million net of tax). References to non-GAAP financial measures in
first nine months 2018 exclude $14.1 million in Project CONNECT
program expenses and discrete costs ($10.7 million net of tax), a
$4.3 million benefit in connection with an insurance claim ($3.3
million net of tax), and $2.7 million in incremental provisional
income tax expense related to the TCJA. These excluded items were
not applicable to third quarter and first nine months 2019
results.
Third Quarter 2019 Financial
Results (All comparisons are between third quarter 2019
and third quarter 2018, unless otherwise noted.)
Net sales increased 14 percent (15 percent
constant-currency) to $906.8 million, from $795.8 million for the
comparable period in 2018.
Gross margin expanded 110 basis points to 49.3 percent of
net sales from 48.2 percent for the comparable period in 2018.
SG&A expenses increased 15 percent to $299.2 million,
or 33.0 percent of net sales, from $259.3 million, or 32.6 percent
of net sales, for the comparable period in 2018. SG&A expenses
increased 14 percent from non-GAAP SG&A expenses of $262.4
million, or 33.0 percent of net sales, for the comparable period in
2018.
Operating income increased 18 percent to $152.0 million,
or 16.8 percent of net sales, from $129.1 million, or 16.2 percent
of net sales, for the comparable period in 2018. Operating income
increased 21 percent from non-GAAP operating income of $126.0
million, or 15.8 percent of sales, for the comparable period in
2018.
Net income increased 19 percent to $119.3 million, or
$1.75 per diluted share, from $100.2 million, or $1.42 per diluted
share, for the comparable period in 2018. Net income increased 20
percent from non-GAAP net income of $99.3 million, or $1.41 per
diluted share for the comparable period in 2018. Third quarter 2019
net income also includes the benefit of full ownership of our China
business, which became a wholly-owned subsidiary effective January
2019. In third quarter 2018, the non-controlling interest share of
net income was $2.2 million, or $0.03 per diluted share.
First Nine Months 2019 Financial
Results (All comparisons are between first nine months
2019 and first nine months 2018, unless otherwise noted).
Net sales increased 11 percent (12 percent
constant-currency) to $2,087.6 million, compared to $1,884.7
million for the comparable period in 2018.
Gross margin expanded 130 basis points to 49.7 percent of
net sales, from 48.4 percent for the comparable period in 2018.
SG&A expenses increased 9 percent to $791.8 million,
or 37.9 percent of net sales, from $724.8 million, or 38.5 percent
of net sales, for the comparable period in 2018. SG&A expenses
increased 11 percent from non-GAAP SG&A expenses of $715.1
million, or 37.9 percent of net sales, for the comparable period in
2018.
Operating income increased 29 percent to $256.3 million,
or 12.3 percent of net sales, compared to operating income of
$198.2 million, or 10.5 percent of net sales, for the comparable
period in 2018. Operating income increased 23 percent from non-GAAP
operating income of $208.0 million, or 11.0 percent of net sales,
for the comparable period in 2018.
Net income increased 40 percent to $216.5 million, or
$3.15 per diluted share, compared to $155.0 million, or $2.19 per
diluted share, for the comparable period in 2018. Net income
increased 31 percent from non-GAAP net income of $165.1 million, or
$2.34 per diluted share for the comparable period in 2018. First
nine months 2019 net income includes the benefit of full ownership
of our China business. In the first nine months of 2018, the
non-controlling interest share of net income was $6.6 million, or
$0.09 per diluted share.
Balance Sheet as of September 30,
2019
Cash, cash equivalents and short-term investments totaled $240.8
million, compared to $451.5 million at September 30, 2018.
Inventories increased 16 percent to $717.4 million, compared to
$617.2 million at September 30, 2018.
Share Repurchases for the Nine Months
Ended September 30, 2019
The Company repurchased 1,191,684 shares of common stock for an
aggregate of $116.2 million, or an average price per share of
$97.50.
Regular Quarterly Cash
Dividend
At its regular board meeting on October 25, 2019, the board of
directors declared a regular quarterly cash dividend of $0.24 per
share, payable on December 5, 2019 to shareholders of record on
November 21, 2019.
Conference Call
The Company will hold its third quarter 2019 conference call at
5:00 p.m. ET today. Dial (877) 407-9205 to participate. The call
will also be webcast live on the Investor Relations section of the
Company's website at http://investor.columbia.com.
Fourth Quarter 2019 Reporting
Date
Columbia Sportswear Company plans to report fourth quarter and
full year 2019 financial results on Thursday, February 6, 2020 at
approximately 4:00 p.m.
Supplemental Financial
Information
Since Columbia Sportswear Company is a global company, the
comparability of its operating results reported in U.S. dollars is
affected by foreign currency exchange rate fluctuations because the
underlying currencies in which it transacts change in value over
time compared to the U.S. dollar. To supplement financial
information reported in accordance with GAAP, the Company discloses
constant-currency net sales information, which is a non-GAAP
financial measure, to provide a framework to assess how the
business performed excluding the effects of changes in the exchange
rates used to translate net sales generated in foreign currencies
into U.S. dollars. The Company calculates constant-currency net
sales by translating net sales in foreign currencies for the
current period into U.S. dollars at the average exchange rates that
were in effect during the comparable period of the prior year.
Management believes that this non-GAAP financial measure reflects
an additional and useful way of viewing an aspect of our operations
that, when viewed in conjunction with our GAAP results, provides a
more comprehensive understanding of our business and operations. In
particular, investors may find the non-GAAP measures useful by
reviewing our net sales results without the volatility in foreign
currency exchange rates. This non-GAAP financial measure also
facilitates management's internal comparisons to our historical net
sales results and comparisons to competitors' net sales
results.
Additionally, this document includes references to various other
non-GAAP financial measures related to 2018 that may exclude
program expenses, discrete costs and associated tax effects related
to Project CONNECT, TCJA-related income tax expense, and a recovery
in connection with an insurance claim and related tax effects. The
related tax effects of program expenses and discrete costs related
to Project CONNECT and the insurance claim recovery benefit were
calculated using the respective statutory tax rates for applicable
jurisdictions. Management believes that these non-GAAP financial
measures enable useful and meaningful comparisons of our operating
performance from period to period because they exclude the effects
of the aforementioned items above that may not be indicative of our
core operating results.
These non-GAAP financial measures, including constant-currency
net sales, should be viewed in addition to, and not in lieu of or
superior to, our financial measures calculated in accordance with
GAAP. The Company provides a reconciliation of non-GAAP measures to
the most directly comparable financial measure calculated in
accordance with GAAP. See the "Reconciliation of GAAP to Non-GAAP
Financial Measures" table included herein. The non-GAAP financial
measures and constant-currency information presented may not be
comparable to similarly titled measures reported by other
companies.
Forward-Looking
Statements
This document contains forward-looking statements within the
meaning of the federal securities laws, including statements
regarding our strategic priorities, anticipated results, net sales
and net sales growth, operating income, and diluted earnings per
share. Forward-looking statements often use words such as "will",
"anticipate", "estimate", "expect", "should", "may" and other words
and terms of similar meaning or reference future dates. The
Company's expectations, beliefs and projections are expressed in
good faith and are believed to have a reasonable basis; however,
each forward-looking statement involves a number of risks and
uncertainties, including those set forth in this document, those
described in the Company's Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q under the heading "Risk Factors," and those
that have been or may be described in other reports filed by the
Company, including reports on Form 8-K. Potential risks and
uncertainties that may affect our future revenues, earnings and
performance and could cause the actual results of operations or
financial condition of the Company to differ materially from the
anticipated results expressed or implied by forward-looking
statements in this document include: loss of key customer accounts;
our ability to effectively execute our business strategies,
including initiatives to upgrade our business processes and
information technology (“IT”) systems and investments in our DTC
businesses; our ability to maintain the strength and security of
our IT systems; the effects of unseasonable weather, including
global climate change; the seasonality of our business and timing
of orders; trends affecting consumer spending, including changes in
the level of consumer spending, and retail traffic patterns;
unfavorable economic conditions generally, the financial health of
our customers and retailer consolidation; higher than expected
rates of order cancellations; changes affecting consumer demand and
preferences and fashion trends; changes in international, federal
or state tax, labor and other laws and regulations that affect our
business, including changes in corporate tax rates, unanticipated
impacts resulting from additional guidance about and/or the
application of the TCJA, tariffs, international trade policy and
geopolitical tensions, or increasing wage rates; our ability to
attract and retain key personnel; risks inherent in doing business
in foreign markets, including fluctuations in currency exchange
rates, global credit market conditions and changes in global
regulation and economic and political conditions; volatility in
global production and transportation costs and capacity; our
ability to effectively manage our inventory; our dependence on
third-party manufacturers and suppliers and our ability to source
at competitive prices from them or at all; the effectiveness of our
sales and marketing efforts; business disruptions and acts of
terrorism, cyber-attacks or military activities around the globe;
intense competition in the industry; our ability to establish and
protect our intellectual property; and our ability to develop
innovative products. The Company cautions that forward-looking
statements are inherently less reliable than historical
information. The Company does not undertake any duty to update any
of the forward-looking statements after the date of this document
to conform them to actual results or to reflect changes in events,
circumstances or its expectations. New factors emerge from time to
time and it is not possible for the Company to predict or assess
the effects of all such factors or the extent to which any factor,
or combination of factors, may cause results to differ materially
from those contained in any forward-looking statement.
About Columbia Sportswear
Company
Columbia Sportswear Company has assembled a portfolio of brands
for active lives, making it a leader in the global active lifestyle
apparel, footwear, accessories, and equipment industry. Founded in
1938 in Portland, Oregon, the Company's brands are today sold in
approximately 90 countries. In addition to the Columbia® brand,
Columbia Sportswear Company also owns the Mountain Hardwear®,
SOREL® and prAna® brands. To learn more, please visit the Company's
websites at www.columbia.com,
www.mountainhardwear.com, www.sorel.com, and www.prana.com.
COLUMBIA SPORTSWEAR
COMPANY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
September 30,
2019
2018
ASSETS
Current Assets:
Cash and cash equivalents
$
239,311
$
182,175
Restricted cash
—
13,970
Short-term investments
1,477
269,313
Accounts receivable, net
646,414
552,442
Inventories
717,396
617,194
Prepaid expenses and other current
assets
94,253
77,763
Total current assets
1,698,851
1,712,857
Property, plant, and equipment, net
349,302
284,744
Operating lease right-of-use assets
389,558
—
Intangible assets, net
124,340
127,320
Goodwill
68,594
68,594
Deferred income taxes
80,193
68,913
Other non-current assets
40,242
36,911
Total assets
$
2,751,080
$
2,299,339
LIABILITIES AND EQUITY
Current Liabilities:
Short-term borrowings
$
—
$
8,311
Accounts payable
201,806
237,344
Accrued liabilities
279,932
255,682
Operating lease liabilities
62,756
—
Income taxes payable
13,653
8,247
Total current liabilities
558,147
509,584
Non-current operating lease
liabilities
366,515
—
Income taxes payable
48,619
62,090
Deferred income taxes
7,711
13
Other long-term liabilities
22,982
46,056
Total liabilities
1,003,974
617,743
Equity:
Columbia Sportswear Company shareholders'
equity
1,747,106
1,665,365
Non-controlling interest
—
16,231
Total equity
1,747,106
1,681,596
Total liabilities and equity
$
2,751,080
$
2,299,339
COLUMBIA SPORTSWEAR
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Net sales
$
906,793
$
795,801
$
2,087,611
$
1,884,728
Cost of sales
460,098
412,098
1,050,596
972,966
Gross profit
446,695
383,703
1,037,015
911,762
49.3
%
48.2
%
49.7
%
48.4
%
Selling, general and administrative
expenses
299,249
259,267
791,767
724,827
Net licensing income
4,569
4,708
11,090
11,279
Income from operations
152,015
129,144
256,338
198,214
Interest income, net
1,399
2,524
7,370
7,748
Other non-operating income (expense),
net
(563
)
736
915
372
Income before income tax
152,851
132,404
264,623
206,334
Income tax expense
(33,593
)
(30,029
)
(48,159
)
(44,735
)
Net income
119,258
102,375
216,464
161,599
Net income attributable to non-controlling
interest
—
2,223
—
6,603
Net income attributable to Columbia
Sportswear Company
$
119,258
$
100,152
$
216,464
$
154,996
Earnings per share attributable to
Columbia Sportswear Company:
Basic
$
1.76
$
1.44
$
3.19
$
2.22
Diluted
$
1.75
$
1.42
$
3.15
$
2.19
Weighted average shares outstanding:
Basic
67,593
69,589
67,935
69,895
Diluted
68,180
70,357
68,620
70,685
COLUMBIA SPORTSWEAR
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended September
30,
2019
2018
Cash flows from operating
activities:
Net income
$
216,464
$
161,599
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation, amortization and non-cash
lease expense
88,775
43,544
Loss on disposal or impairment of
property, plant, and equipment
4,866
1,979
Deferred income taxes
(3,157
)
2,103
Stock-based compensation
13,159
10,247
Changes in operating assets and
liabilities:
Accounts receivable
(199,416
)
(125,433
)
Inventories
(198,999
)
(188,544
)
Prepaid expenses and other current
assets
(12,596
)
(7,968
)
Other assets
(3,981
)
(9,782
)
Accounts payable
(65,191
)
(14,263
)
Accrued liabilities
6,497
38,193
Income taxes payable
(11,286
)
(7,200
)
Operating lease assets and liabilities
(39,010
)
—
Other liabilities
5,716
(2,541
)
Net cash used in operating activities
(198,159
)
(98,066
)
Cash flows from investing
activities:
Purchases of short-term investments
(181,257
)
(426,278
)
Sales and maturities of short-term
investments
445,501
252,727
Capital expenditures
(104,527
)
(45,189
)
Proceeds from sale of property, plant, and
equipment
—
18
Net cash provided by (used in) investing
activities
159,717
(218,722
)
Cash flows from financing
activities:
Proceeds from credit facilities
74,053
36,051
Repayments on credit facilities
(74,053
)
(27,740
)
Proceeds from issuance of common stock
related to stock-based compensation
17,687
16,508
Tax payments related to stock-based
compensation
(5,739
)
(4,221
)
Repurchase of common stock
(116,239
)
(107,222
)
Purchase of non-controlling interest
(17,880
)
—
Cash dividends paid
(48,917
)
(46,160
)
Cash dividends paid to non-controlling
interest
—
(19,949
)
Net cash used in financing activities
(171,088
)
(152,733
)
Net effect of exchange rate changes on
cash
(2,954
)
(7,500
)
Net decrease in cash, cash equivalents
and restricted cash
(212,484
)
(477,021
)
Cash, cash equivalents and restricted
cash, beginning of period
451,795
673,166
Cash, cash equivalents and restricted
cash, end of period
$
239,311
$
196,145
Supplemental disclosures of non-cash
investing and financing activities:
Property, plant and equipment acquired
through increase in liabilities
$
11,638
$
7,380
COLUMBIA SPORTSWEAR
COMPANY
Supplemental Financial
Information
Reconciliation of GAAP to
Non-GAAP Financial Measures
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended September
30, 2018
GAAP Measures
(As Reported)
Adjust for Project CONNECT
Costs (1)
Adjust for Effects of the
TCJA (2)
Adjust for Effects of
Insurance Recovery (3)
Non-GAAP Measures
Selling, general and administrative
expenses
$
259,267
$
(1,190
)
$
—
$
4,317
$
262,394
Income from operations
129,144
1,190
—
(4,317
)
126,017
Income before income tax
132,404
1,190
—
(4,317
)
129,277
Income tax benefit (expense)
(30,029
)
(283
)
1,493
1,027
(27,792
)
Net income
102,375
907
1,493
(3,290
)
101,485
Net income attributable to Columbia
Sportswear Company
100,152
907
1,493
(3,290
)
99,262
Earnings per share attributable to
Columbia Sportswear Company:
Basic
$
1.44
$
1.43
Diluted
$
1.42
$
1.41
Nine Months Ended September
30, 2018
GAAP Measures (As
Reported)
Adjust for Project CONNECT
Costs (1)
Adjust for Effects of the
TCJA (2)
Adjust for Effects of
Insurance Recovery (3)
Non-GAAP Measures
Selling, general and administrative
expenses
$
724,827
$
(14,068
)
$
—
$
4,317
$
715,076
Income from operations
198,214
14,068
—
(4,317
)
207,965
Income before income tax
206,334
14,068
—
(4,317
)
216,085
Income tax benefit (expense)
(44,735
)
(3,348
)
2,672
1,027
(44,384
)
Net income
161,599
10,720
2,672
(3,290
)
171,701
Net income attributable to Columbia
Sportswear Company
154,996
10,720
2,672
(3,290
)
165,098
Earnings per share attributable to
Columbia Sportswear Company:
Basic
$
2.22
$
2.36
Diluted
$
2.19
$
2.34
(1) Amounts reflect professional fees,
severance and other program expenses related to Project CONNECT in
2018 that the Company believes are incremental to the Company's
ongoing operations. The related tax effects of these charges were
calculated using the respective statutory tax rates for applicable
jurisdictions.
(2) Amounts reflect an incremental
provisional TCJA-related tax expense, primarily driven by
refinement in the calculation of withholding taxes on our deferred
tax liabilities, which drove further refinement of the Company's
provisional estimates that were recorded in fourth quarter
2017.
(3) Amounts reflect a benefit from a
recovery in connection with an insurance claim received in the
third quarter of 2018 that the Company believes is incremental to
the Company's ongoing operations.
COLUMBIA SPORTSWEAR
COMPANY
Supplemental Financial
Information
Net Sales Growth -
Constant-currency Basis
(In millions, except
percentage changes)
(Unaudited)
Three Months Ended September
30,
Adjust for
Constant-
Constant-
Reported
Foreign
currency
Reported
Reported
currency
Net Sales
Currency
Net Sales
Net Sales
Net Sales
Net Sales
2019
Translation
2019(1)
2018
% Change
% Change(1)
Geographical Net Sales:
United States
$
581.3
$
—
$
581.3
$
496.2
17
%
17
%
LAAP
123.2
1.7
124.9
118.4
4
%
5
%
EMEA
104.4
4.1
108.5
100.3
4
%
8
%
Canada
97.9
0.9
98.8
80.9
21
%
22
%
Total
$
906.8
$
6.7
$
913.5
$
795.8
14
%
15
%
Brand Net Sales:
Columbia
$
729.5
$
5.6
$
735.1
$
640.9
14
%
15
%
SOREL
116.1
1.1
117.2
91.2
27
%
29
%
prAna
38.5
0.1
38.6
39.9
(4
)%
(3
)%
Mountain Hardwear
22.7
(0.1
)
22.6
23.0
(1
)%
(2
)%
Other
—
—
—
0.8
(100
)%
(100
)%
Total
$
906.8
$
6.7
$
913.5
$
795.8
14
%
15
%
Product Category Net Sales:
Apparel, Accessories and Equipment
$
684.7
$
4.5
$
689.2
$
617.6
11
%
12
%
Footwear
222.1
2.2
224.3
178.2
25
%
26
%
Total
$
906.8
$
6.7
$
913.5
$
795.8
14
%
15
%
Channel Net Sales:
Wholesale
$
652.6
$
5.3
$
657.9
$
549.8
19
%
20
%
DTC
254.2
1.4
255.6
246.0
3
%
4
%
Total
$
906.8
$
6.7
$
913.5
$
795.8
14
%
15
%
(1) Constant-currency net sales
information is a non-GAAP financial measure that excludes the
effect of changes in foreign currency exchange rates against the
U.S. dollar between comparable reporting periods. The Company
calculates constant-currency net sales by translating net sales in
foreign currencies for the current period into U.S. dollars at the
average exchange rates that were in effect during the comparable
period of the prior year.
COLUMBIA SPORTSWEAR
COMPANY
Supplemental Financial
Information
Net Sales Growth -
Constant-currency Basis
(In millions, except
percentage changes)
(Unaudited)
Nine Months Ended September
30,
Adjust for
Constant-
Constant-
Reported
Foreign
currency
Reported
Reported
currency
Net Sales
Currency
Net Sales
Net Sales
Net Sales
Net Sales
2019
Translation
2019(1)
2018
% Change
% Change(1)
Geographical Net Sales:
United States
$
1,309.0
$
—
$
1,309.0
$
1,139.2
15
%
15
%
LAAP
357.7
9.9
367.6
350.8
2
%
5
%
EMEA
267.3
10.8
278.1
257.1
4
%
8
%
Canada
153.6
4.0
157.6
137.6
12
%
15
%
Total
$
2,087.6
$
24.7
$
2,112.3
$
1,884.7
11
%
12
%
Brand Net Sales:
Columbia
$
1,736.6
$
22.4
$
1,759.0
$
1,564.5
11
%
12
%
SOREL
170.7
1.7
172.4
133.4
28
%
29
%
prAna
118.4
0.1
118.5
120.3
(2
)%
(1
)%
Mountain Hardwear
61.9
0.5
62.4
63.4
(2
)%
(2
)%
Other
—
—
—
3.1
(100
)%
(100
)%
Total
$
2,087.6
$
24.7
$
2,112.3
$
1,884.7
11
%
12
%
Product Category Net Sales:
Apparel, Accessories and Equipment
$
1,642.9
$
17.4
$
1,660.3
$
1,502.2
9
%
11
%
Footwear
444.7
7.3
452.0
382.5
16
%
18
%
Total
$
2,087.6
$
24.7
$
2,112.3
$
1,884.7
11
%
12
%
Channel Net Sales:
Wholesale
$
1,312.0
$
16.4
$
1,328.4
$
1,161.4
13
%
14
%
DTC
775.6
8.3
783.9
723.3
7
%
8
%
Total
$
2,087.6
$
24.7
$
2,112.3
$
1,884.7
11
%
12
%
(1) Constant-currency net sales
information is a non-GAAP financial measure that excludes the
effect of changes in foreign currency exchange rates against the
U.S. dollar between comparable reporting periods. The Company
calculates constant-currency net sales by translating net sales in
foreign currencies for the current period into U.S. dollars at the
average exchange rates that were in effect during the comparable
period of the prior year.
COLUMBIA SPORTSWEAR
COMPANY
Supplemental Financial
Information
Reconciliation of GAAP to
Non-GAAP Updated Full Year 2019 Financial Outlook
(Unaudited)
All projections related to anticipated
future results are forward-looking in nature and are subject to
risks and uncertainties which may cause actual results to differ,
perhaps materially. For more information on these risks and
uncertainties please refer to the "Forward Looking Statements"
section.
Twelve Months Ended December
31, 2018
2019 Financial Outlook
GAAP Measures (As
Reported)
Adjust for Project CONNECT
Costs(1)
Adjust for Effects of the TCJA
(2)
Adjust for Effects of
Insurance Recovery (3)
Non-GAAP Measures
Commentary compared
to:
(In thousands, except per share
amounts)
2019 Financial Outlook
2018
2018 non-GAAP
Net sales
$
2,802,326
$
—
$
—
$
—
$
—
$3.01 to $3.04 billion
7.5% to 8.5% growth
Gross profit
1,386,348
—
—
—
—
gross margin of approximately
50.1%
approximately 60 bps
expansion
Selling, general and administrative
expenses
1,051,152
(15,766
)
—
4,317
1,039,703
37.4% to 37.6%
percent of net sales
10 bps leverage to 10 bps
deleverage
30 bps to 50 bps deleverage
Income from operations
350,982
15,766
—
(4,317
)
362,431
$392 to $401 million
Operating Margin
13.0% to 13.2%
50 bps to 70 bps expansion
10 bps to 30 bps expansion
Income tax expense
(85,769
)
(3,752
)
5,064
1,027
(83,430
)
approximately 20%
Net income attributable to non-controlling
interest
6,692
—
—
—
—
$
0
Net income attributable to Columbia
Sportswear Company
$
268,256
$
12,014
$
5,064
$
(3,290
)
$
282,044
$322 to $329 million
Earnings per share attributable to
Columbia Sportswear Company:
Diluted
$
3.81
$
4.01
$4.70 to $4.80
(1) Amounts reflect professional fees,
severance and other program expenses related to Project CONNECT
that the Company believes are incremental to its ongoing
operations. The related tax effects of these charges were
calculated using the respective statutory tax rates for applicable
jurisdictions.
(2) In 2018, the Company incurred $5.1
million in incremental income tax expense related to the TCJA.
(3) Amounts reflect a benefit from a
recovery in connection with an insurance claim received in third
quarter 2018 that the Company believes is incremental to the
Company's ongoing operations.
©2019 Columbia Sportswear Company
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191030005855/en/
Andrew Burns Director of Investor Relations Columbia Sportswear
Company (503) 985-4112 aburns@columbia.com
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