Fourth Quarter 2020
Highlights
Lower net sales and profitability in fourth quarter 2020
compared to fourth quarter 2019 primarily reflect the ongoing
negative effects of the COVID-19 pandemic.
- Net sales decreased 4 percent to $915.7 million, compared to
fourth quarter 2019. Net sales benefited from later shipment of
Fall 2020 wholesale orders as outlined in the third quarter 2020
earnings release.
- In the direct-to-consumer channel, e-commerce net sales
increased 41 percent year-over-year while brick & mortar store
traffic and sales trends improved sequentially but remained well
below prior year levels.
- Operating income decreased 11 percent to $123.7 million, or
13.5 percent of net sales, compared to fourth quarter 2019
operating income of $138.6 million, or 14.5 percent of net sales.
Fourth quarter 2020 operating income includes $18.1 million in
retail impairments and store closure charges and a $17.5 million
prAna trademark impairment.
- Diluted earnings per share decreased 14 percent to $1.44
compared to fourth quarter 2019 diluted earnings per share of
$1.67.
- Exited the quarter with $791.9 million in cash and
short-term investments and no borrowings. The Company also
refinanced its domestic credit agreement with a new agreement
providing a $500 million five year unsecured revolving credit
facility.
- On January 29, 2021, the Board of Directors approved a
quarterly dividend at its pre-pandemic level of $0.26 per
share.
- On January 29, 2021, the Board of Directors approved a $400
million increase in share repurchase authorization, bringing total
available share repurchase authorization to $482 million.
Full Year 2021 Financial
Outlook (Financial outlook details can be found in the
"Supplemental Financial Information" section below and the CFO
Commentary document).
The following forward-looking statements reflect our
expectations as of February 4, 2021 and are subject to significant
risks and business uncertainties, including those factors described
under “Forward-Looking Statements” below. These risks and
uncertainties limit our ability to accurately forecast results.
This outlook reflects our estimates as of February 4, 2021
regarding the impact on our operations of the COVID-19 pandemic,
economic conditions, supply chain and logistics capacity
constraints, and changes in consumer behavior and confidence, as
well as geopolitical tensions. This outlook assumes a sequential
recovery in brick & mortar retail traffic and sales throughout
2021. However, it is not possible to determine the ultimate impact
on our operations for 2021, or whether other currently
unanticipated direct or indirect consequences of the pandemic are
reasonably likely to materially affect our operations.
- Net sales of $2.95 to $3.00 billion, representing a net
sales growth of 18.0 to 20.0 percent.
- Operating income of $320 to $346 million, representing
operating margin of 10.8 to 11.5 percent.
- Diluted earnings per share of $3.75 to $4.05.
Columbia Sportswear Company (NASDAQ: COLM, the "Company"), a
leading innovator in active outdoor lifestyle apparel, footwear,
accessories and equipment, today announced fourth quarter 2020
financial results for the period ended December 31, 2020.
Chairman, President and Chief Executive Officer Tim Boyle
commented, "I’m encouraged to see better than expected fourth
quarter results and broad-based momentum across our powerful brand
portfolio as we begin 2021. These results are particularly
impressive with the backdrop of a global pandemic and demonstrate
the dedication and commitment of our global workforce of employees
who overcame the impact of COVID-19 safety protocols, supply chain
constraints and regional lockdowns. E-commerce net sales grew an
impressive 41 percent year-over-year in the quarter, representing
nearly a quarter of our total sales mix. With strong Fall 2020
sell-through rates, our wholesale partners are well positioned to
exit the season with clean inventory positions.
“As we begin 2021, there is continued uncertainty and business
risks surrounding the ongoing pandemic, including the timing and
effectiveness of global efforts to contain the spread of COVID-19.
With that said, I’m encouraged by our e-commerce growth as well as
wholesale orders for the Spring and Fall 2021 seasons, which we
anticipate fueling our continued recovery in 2021.
“Our profitable growth trajectory and fortress balance sheet,
with cash and short-term investments of over $790 million and no
borrowings, have given our Board of Directors the confidence to
approve a quarterly cash dividend, increase our share repurchase
authorization and return to our pre-pandemic capital allocation
strategy. We are committed to driving sustainable and profitable
long-term growth and 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."
CFO's Commentary Available
Online
For a detailed review of the Company's fourth quarter 2020
financial results and additional updates relating to the COVID-19
pandemic, please refer to the CFO Commentary exhibit furnished to
the Securities and Exchange Commission (the "SEC") on a Current
Report 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 our
conference call.
COVID-19 Update
While there were isolated temporary store closures resulting
from local regulations or safety concerns, the majority of the
Company's owned stores remained open throughout the fourth quarter.
Overall brick & mortar store traffic trends remain well below
prior year levels. We delivered fourth quarter 2020 results ahead
of our financial outlook, despite port congestion, logistics and
parcel shipping capacity constraints and enhanced distribution
center health and safety protocols that strained fulfillment
service levels. During fourth quarter 2020, the Company realized
approximately $30 million in SG&A savings from cost containment
actions and lower variable expenses. Please refer to the CFO
Commentary exhibit for a detailed review of COVID-19 pandemic
related issues and our response.
Fourth Quarter 2020 Financial
Results (All comparisons are between fourth quarter 2020
and fourth quarter 2019, unless otherwise noted).
Net sales decreased 4 percent to $915.7 million from
$954.9 million for the comparable period in 2019.
Gross margin expanded 50 basis points to 50.6 percent of
net sales from 50.1 percent of net sales for the comparable period
in 2019.
SG&A expenses were essentially flat at $343.3
million, or 37.5 percent of net sales, from $344.4 million, or 36.1
percent of net sales, for the comparable period in 2019.
Operating income decreased 11 percent to $123.7 million,
or 13.5 percent of net sales, from operating income of $138.6
million, or 14.5 percent of net sales, for the comparable period in
2019.
Net income decreased 16 percent to $95.8 million, or
$1.44 per diluted share, from net income of $114.0 million, or
$1.67 per diluted share, for the comparable period in 2019.
Full Year 2020 Financial
Results (All comparisons are between full year 2020 and
full year 2019, unless otherwise noted.)
Net sales decreased 18 percent to $2,501.6 million from
$3,042.5 million in 2019.
Gross margin contracted 90 basis points to 48.9 percent
of net sales from 49.8 percent of net sales in 2019.
SG&A expenses decreased 3 percent to $1,098.9
million, or 43.9 percent of net sales, compared to $1,136.2
million, or 37.3 percent of net sales, in 2019.
Operating income decreased 65 percent to $137.0 million,
or 5.5 percent of net sales, from operating income of $395.0
million, or 13.0 percent of net sales, in 2019.
Net income decreased 67 percent to $108.0 million, or
$1.62 per diluted share, compared to net income of $330.5 million,
or $4.83 per diluted share, in 2019.
Balance Sheet as of December 31,
2020
Cash, cash equivalents and short-term investments totaled $791.9
million, compared to $687.7 million at December 31, 2019.
The company had no borrowings at quarter-end. During fourth
quarter 2020, the Company refinanced its domestic credit agreement
with a new agreement providing a $500 million five year unsecured
revolving credit facility.
Inventories decreased 8 percent to $556.5 million, compared to
$606.0 million at December 31, 2019.
Share Repurchases for the Twelve Months
Ended December 31, 2020
In first quarter 2020, the Company repurchased 1,557,184 shares
of common stock for an aggregate of $132.9 million, or an average
price per share of $85.34. As part of a broader capital
preservation effort during the ongoing COVID-19 pandemic, the
Company suspended share repurchases and has not repurchased shares
since first quarter 2020. Management intends to resume share
repurchase activity in 2021.
At its regular board meeting on January 29, 2021, the Board of
Directors approved an additional $400.0 million share repurchase
authorization. This is in addition to the $82.2 million currently
remaining available under the prior share repurchase authorization.
The share repurchase authorization does not obligate the company to
acquire any specific number of shares or to acquire shares over any
specified period of time.
Quarterly Cash Dividend
The Board of Directors approved a regular quarterly cash
dividend of $0.26 per share, payable on March 22, 2021 to
shareholders of record on March 9, 2021.
Conference Call
The Company will hold its fourth quarter 2020 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.
First Quarter 2021 Reporting
Date
Columbia Sportswear Company plans to report first quarter 2021
financial results on Thursday, April 29, 2021 at approximately 4:00
p.m. ET.
Supplemental Financial
Information
Since Columbia Sportswear Company is a global company, the
comparability of its operating results reported in United States
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 United States 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 United States dollars. The Company calculates
constant-currency net sales by translating net sales in foreign
currencies for the current period into United States 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 financial measure 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.
The non-GAAP financial measures 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 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 the Company’s expectations, anticipations or beliefs
about brick and mortar retail traffic, net sales, operating income
and diluted earnings per share for 2021. 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 include those relating to the
impact of the COVID-19 pandemic on our operations, which is highly
dependent on numerous factors that we may not be able to predict or
control, including: the duration and scope of the COVID-19
pandemic, including any recurrence due to variants; actions that
may be taken to contain the pandemic or to treat its impact,
including lock-downs and the speed of the vaccination roll-out;
economic slowdowns that have and may continue to result from the
pandemic; workforce staffing and productivity; our ability to
continue operations in affected areas; supply chain and logistics
capacity constraints; and consumer demand and spending patterns, as
well as the effects on suppliers, creditors, and wholesale
customers, all of which are uncertain. 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 outdoor
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
(Unaudited)
December 31,
(in thousands)
2020
2019
ASSETS
Current Assets:
Cash and cash equivalents
$
790,725
$
686,009
Short-term investments
1,224
1,668
Accounts receivable, net
452,945
488,233
Inventories, net
556,530
605,968
Prepaid expenses and other current
assets
54,197
93,868
Total current assets
1,855,621
1,875,746
Property, plant, and equipment, net
309,792
346,651
Operating lease right-of-use assets
339,244
394,501
Intangible assets, net
103,558
123,595
Goodwill
68,594
68,594
Deferred income taxes
96,126
78,849
Other non-current assets
63,636
43,655
Total assets
$
2,836,571
$
2,931,591
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable
206,697
255,372
Accrued liabilities
257,278
295,723
Operating lease liabilities
65,466
64,019
Income taxes payable
23,181
15,801
Total current liabilities
552,622
630,915
Non-current operating lease
liabilities
353,181
371,507
Income taxes payable
49,922
48,427
Deferred income taxes
5,205
6,361
Other long-term liabilities
42,870
24,934
Total liabilities
1,003,800
1,082,144
Shareholders' equity
1,832,771
1,849,447
Total liabilities and shareholders'
equity
$
2,836,571
$
2,931,591
COLUMBIA SPORTSWEAR
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
(In thousands, except per share
amounts)
2020
2019
2020
2019
Net sales
$
915,623
$
954,867
$
2,501,554
$
3,042,478
Cost of sales
452,586
476,212
1,277,665
1,526,808
Gross profit
463,037
478,655
1,223,889
1,515,670
50.6
%
50.1
%
48.9
%
49.8
%
Selling, general and administrative
expenses
343,284
344,419
1,098,948
1,136,186
Net licensing income
3,940
4,397
12,108
15,487
Income from operations
123,693
138,633
137,049
394,971
Interest income (expense), net
(293
)
932
435
8,302
Other non-operating income (expense),
net
(169
)
1,241
2,039
2,156
Income before income tax
123,231
140,806
139,523
405,429
Income tax expense
(27,475
)
(26,781
)
(31,510
)
(74,940
)
Net income
$
95,756
$
114,025
$
108,013
$
330,489
Earnings per share:
Basic
$
1.45
$
1.69
$
1.63
$
4.87
Diluted
$
1.44
$
1.67
$
1.62
$
4.83
Weighted average shares outstanding:
Basic
66,225
67,544
66,376
67,837
Diluted
66,642
68,086
66,772
68,493
COLUMBIA SPORTSWEAR
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Year Ended December
31,
(In thousands)
2020
2019
Cash flows from operating
activities:
Net income
$
108,013
$
330,489
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and non-cash
lease expense
146,601
121,725
Provision for uncollectible accounts
receivable
19,156
(108
)
Loss on disposal or impairment of
intangible assets, property, plant, and equipment, and right-of-use
assets
31,342
5,442
Deferred income taxes
(11,263
)
(1,808
)
Stock-based compensation
17,778
17,832
Changes in operating assets and
liabilities:
Accounts receivable
22,885
(37,429
)
Inventories
64,884
(84,058
)
Prepaid expenses and other current
assets
33,712
(15,068
)
Other assets
(21,224
)
(3,547
)
Accounts payable
(49,275
)
(10,419
)
Accrued liabilities
(52,115
)
18,863
Income taxes payable
9,082
(9,402
)
Operating lease assets and liabilities
(52,112
)
(54,197
)
Other liabilities
8,613
7,137
Net cash provided by operating
activities
276,077
285,452
Cash flows from investing
activities:
Purchases of short-term investments
(35,044
)
(136,257
)
Sales and maturities of short-term
investments
36,631
400,501
Capital expenditures
(28,758
)
(123,516
)
Net cash provided by (used in) investing
activities
(27,171
)
140,728
Cash flows from financing
activities:
Proceeds from credit facilities
402,422
78,186
Repayments on credit facilities
(403,146
)
(78,186
)
Payment of line of credit issuance
fees
(3,278
)
—
Proceeds from issuance of common stock
related to stock-based compensation
6,919
19,793
Tax payments related to stock-based
compensation
(4,533
)
(5,806
)
Repurchase of common stock
(132,889
)
(121,702
)
Purchase of non-controlling interest
—
(17,880
)
Cash dividends paid
(17,195
)
(65,127
)
Net cash used in financing activities
(151,700
)
(190,722
)
Net effect of exchange rate changes on
cash
7,510
(1,244
)
Net increase in cash and cash
equivalents
104,716
234,214
Cash and cash equivalents, beginning of
period
686,009
451,795
Cash and cash equivalents, end of
period
$
790,725
$
686,009
Supplemental disclosures of non-cash
investing and financing activities:
Property, plant and equipment acquired
through increase in liabilities
$
3,831
$
9,543
COLUMBIA SPORTSWEAR
COMPANY
Reconciliation of GAAP to
Non-GAAP Financial Measures
Net Sales Growth -
Constant-currency Basis
(Unaudited)
Three Months Ended December
31,
Reported Net Sales
Adjust for Foreign
Currency
Constant- currency Net
Sales
Reported Net Sales
Reported Net Sales
Constant- currency Net
Sales
(In millions, except percentage
changes)
2020
Translation
2020(1
)
2019
% Change
% Change(1)
Geographical Net Sales:
United States
$
599.1
$
—
$
599.1
$
634.0
(6
)%
(6
)%
Latin America and Asia Pacific
163.6
(6.3
)
157.3
171.6
(5
)%
(8
)%
Europe, Middle East and Africa
85.6
(3.9
)
81.7
99.8
(14
)%
(18
)%
Canada
67.4
0.3
67.7
49.5
36
%
37
%
Total
$
915.7
$
(9.9
)
$
905.8
$
954.9
(4
)%
(5
)%
Brand Net Sales:
Columbia
$
699.7
$
(8.5
)
$
691.2
$
751.1
(7
)%
(8
)%
SOREL
150.0
(1.2
)
148.8
143.5
5
%
4
%
prAna
36.9
—
36.9
33.1
11
%
11
%
Mountain Hardwear
29.1
(0.2
)
28.9
27.2
7
%
6
%
Total
$
915.7
$
(9.9
)
$
905.8
$
954.9
(4
)%
(5
)%
Product Category Net Sales:
Apparel, Accessories and Equipment
$
661.4
$
(7.0
)
$
654.4
$
698.3
(5
)%
(6
)%
Footwear
254.3
(2.9
)
251.4
256.6
(1
)%
(2
)%
Total
$
915.7
$
(9.9
)
$
905.8
$
954.9
(4
)%
(5
)%
Channel Net Sales:
Wholesale
$
446.0
$
(4.6
)
$
441.4
$
470.8
(5
)%
(6
)%
DTC
469.7
(5.3
)
464.4
484.1
(3
)%
(4
)%
Total
$
915.7
$
(9.9
)
$
905.8
$
954.9
(4
)%
(5
)%
(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
United States dollar between comparable reporting periods. The
Company calculates constant-currency net sales by translating net
sales in foreign currencies for the current period into United
States dollars at the average exchange rates that were in effect
during the comparable period of the prior year.
COLUMBIA SPORTSWEAR
COMPANY
Reconciliation of GAAP to
Non-GAAP Financial Measures
Net Sales Growth -
Constant-currency Basis
(Unaudited)
Twelve Months Ended December
31, 2020
Reported Net Sales
Adjust for Foreign
Currency
Constant- currency Net
Sales
Reported Net Sales
Reported
Net Sales
Constant- currency Net
Sales
(In millions, except percentage
changes)
2020
Translation
2020(1
)
2019
% Change
% Change(1)
Geographical Net Sales:
United States
$
1,603.8
$
—
$
1,603.8
$
1,943.0
(17
)%
(17
)%
Latin America and Asia Pacific
424.5
(3.6
)
420.9
529.3
(20
)%
(20
)%
Europe, Middle East and Africa
298.9
(5.6
)
293.3
367.1
(19
)%
(20
)%
Canada
174.4
0.5
174.9
203.1
(14
)%
(14
)%
Total
$
2,501.6
$
(8.7
)
$
2,492.9
$
3,042.5
(18
)%
(18
)%
Brand Net Sales:
Columbia
$
1,996.9
$
(7.0
)
$
1,989.9
$
2,487.7
(20
)%
(20
)%
SOREL
293.5
(1.6
)
291.9
314.2
(7
)%
(7
)%
prAna
131.6
—
131.6
151.5
(13
)%
(13
)%
Mountain Hardwear
79.6
(0.1
)
79.5
89.1
(11
)%
(11
)%
Total
$
2,501.6
$
(8.7
)
$
2,492.9
$
3,042.5
(18
)%
(18
)%
Product Category Net Sales:
Apparel, Accessories and Equipment
$
1,867.6
$
(6.2
)
$
1,861.4
$
2,341.2
(20
)%
(20
)%
Footwear
634.0
(2.5
)
631.5
701.3
(10
)%
(10
)%
Total
$
2,501.6
$
(8.7
)
$
2,492.9
$
3,042.5
(18
)%
(18
)%
Channel Net Sales:
Wholesale
$
1,403.3
$
(5.2
)
$
1,398.1
$
1,782.8
(21
)%
(22
)%
DTC
1,098.3
(3.5
)
1,094.8
1,259.7
(13
)%
(13
)%
Total
$
2,501.6
$
(8.7
)
$
2,492.9
$
3,042.5
(18
)%
(18
)%
(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
United States dollar between comparable reporting periods. The
Company calculates constant-currency net sales by translating net
sales in foreign currencies for the current period into United
States dollars at the average exchange rates that were in effect
during the comparable period of the prior year.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210204005930/en/
Andrew Burns, CFA Director of Investor Relations and Competitive
Intelligence Columbia Sportswear Company (503) 985-4112
aburns@columbia.com
Columbia Sportswear (NASDAQ:COLM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Columbia Sportswear (NASDAQ:COLM)
Historical Stock Chart
From Jul 2023 to Jul 2024