First Quarter 2021
Highlights
- Net sales increased 10 percent to $625.6 million, compared
to first quarter 2020.
- Operating income of $70.5 million, or 11.3 percent of net
sales, compared to first quarter 2020 operating loss of $2.0
million, or (0.3) percent of net sales.
- Diluted earnings per share of $0.84, compared to break even
diluted earnings per share in first quarter 2020.
- Exited the quarter with $874.6 million in cash and
short-term investments and no borrowings.
- The Company repurchased $11.2 million of common stock during
the quarter.
- On April 23, 2021, the Board of Directors approved a regular
quarterly dividend of $0.26 per share.
Full Year 2021 Financial
Outlook
The following forward-looking statements reflect our
expectations as of April 29, 2021 and are subject to significant
risks and business uncertainties, including those factors described
under “Forward-Looking Statements” below. Additional disclosures
and financial outlook details can be found in the Full Year 2021
Financial Outlook section below and the CFO Commentary and
Financial Review presentation.
- Net sales of $3.04 to $3.08 billion, representing net sales
growth of 21.5 to 23.0 percent compared to 2020.
- Operating income of $347 to $369 million, representing
operating margin of 11.4 to 12.0 percent.
- Diluted earnings per share of $4.05 to $4.30.
Columbia Sportswear Company (NASDAQ: COLM, the "Company"), a
leading innovator in outdoor, active and everyday lifestyle
apparel, footwear, accessories and equipment products, today
announced first quarter 2021 financial results for the period ended
March 31, 2021.
Chairman, President and Chief Executive Officer Tim Boyle
commented, "I’m pleased to report the pace of fundamental recovery
exceeded our expectations in the first quarter, resulting in a
return to net sales growth and financial results that were stronger
than we anticipated. Business momentum was led by our
direct-to-consumer e-commerce business which grew 35 percent
year-over-year, reaching 20 percent of our total net sales mix. In
our wholesale business, we experienced a strong finish to the Fall
2020 sales season as well as excellent early season sell-through of
our Spring 2021 assortment. Consumer demand is high and retail
inventories are lean, resulting in a favorable full price selling
environment. I’d like to thank our operations and distribution
center teams that did an amazing job mitigating industry-wide
supply chain disruptions and enabling us to deliver these results
today.
“Based on first quarter results and visibility provided by early
Spring 2021 sell-through, our Fall 2021 order book and business
fundamentals, we are increasing our full year financial outlook.
I’m encouraged by the strong start to the year, but mindful that we
must continue to carefully navigate operational challenges and
quickly adapt to changing business conditions and ongoing pandemic
related disruptions.
“Our fortress balance sheet remains strong, with cash and
short-term investments totaling $875 million with no bank
borrowings at quarter end. 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 and Financial Review
Presentation Available Online
For a detailed review of the Company's first quarter 2021
financial results and additional updates relating to the COVID-19
pandemic, please refer to the CFO Commentary and Financial Review
presentation 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
The Company's top priority throughout this pandemic remains to
protect the health and safety of our employees, their families, our
customers and our communities. 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
first quarter 2021. Overall brick & mortar store traffic trends
vary by region but remain below prior year levels. First quarter
2021 results include the impact of port congestion and logistics
constraints that resulted in later timing of Spring 2021 inventory
receipts and deliveries. Please refer to the CFO Commentary and
Financial Review presentation for a detailed review of COVID-19
pandemic related issues and our responses.
First Quarter 2021 Financial
Results
(All comparisons are between first quarter 2021 and first
quarter 2020, unless otherwise noted.)
Net sales increased 10 percent to $625.6 million from
$568.2 million for the comparable period in 2020. Business momentum
was led by direct-to-consumer ("DTC") e-commerce net sales growth
as well as better than planned sequential improvement in DTC brick
& mortar trends.
Gross margin expanded 360 basis points to 51.4 percent of
net sales from 47.8 percent of net sales for the comparable period
in 2020. Gross margin expansion was primarily driven by decreased
reserve provisions related to less excess inventory, lower DTC
promotional levels and favorable channel and region sales mix.
SG&A expenses decreased 8 percent to $254.4 million,
or 40.7 percent of net sales, from $276.8 million, or 48.7 percent
of net sales, for the comparable period in 2020. The decrease in
SG&A expenses primarily reflects a reduction in bad debt
expense driven by a healthier wholesale customer base, partially
offset by higher incentive and personnel expenses. The reduction in
bad debt expense was driven by incremental COVID-related bad debt
reserve provisions in first quarter 2020, compared to a reduction
of bad debt reserves in first quarter 2021.
Operating income of $70.5 million, or 11.3 percent of net
sales, compared to an operating loss of $2.0 million, or (0.3)
percent of net sales, for the comparable period in 2020.
Net income of $55.9 million, or $0.84 per diluted share,
compared to net income of $0.2 million, or break even diluted
earnings per share, for the comparable period in 2020.
Balance Sheet as of March 31,
2021
Cash, cash equivalents and short-term investments totaled $874.6
million, compared to $706.9 million at March 31, 2020.
The Company had no borrowings, compared to short-term borrowings
of $174.4 million at March 31, 2020.
Inventories decreased 9 percent to $525.7 million, compared to
$577.1 million at March 31, 2020. The reduction in inventory was
primarily driven by lower Spring 2021 inventory purchases, a
reduction of excess inventory and delayed receipts of Spring 2021
inventory. Inventory at quarter-end primarily consisted of current
and future season product. Aged inventories represent a manageable
portion of our total inventory mix.
Cash Flow for the Three Months Ended
March 31, 2021
Net cash flow from operating activities was $110.9 million,
compared to net cash flow from operating activities of $12.8
million for the same period in 2020.
Capital expenditures totaled $3.9 million, compared to $9.5
million for the same period in 2020.
Share Repurchases for the Three Months
Ended March 31, 2021
In first quarter 2021, the Company repurchased 108,987 shares of
common stock for an aggregate of $11.2 million, or an average price
per share of $102.98.
At March 31, 2021, $471.0 million remained available under our
current stock repurchase authorization, which 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 May 27, 2021 to
shareholders of record on May 13, 2021.
Full Year 2021 Financial
Outlook
(Additional financial outlook details can be found in the CFO
Commentary and Financial Review presentation.)
The Company's 2021 Financial Outlook is forward-looking in
nature, and the following forward-looking statements reflect our
expectations as of April 29, 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 April 29, 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. Projections are
predicated on normal seasonal weather globally.
Net sales are expected to increase 21.5 to 23.0 percent
(prior 18 to 20 percent) to $3.04 to $3.08 billion (prior $2.95 to
$3.00 billion) from $2.50 billion in 2020.
Gross margin is expected to improve 110 to 130 basis
points to 50.0 to 50.2 percent of net sales (prior approximately 50
percent) from 48.9 percent of net sales in 2020.
SG&A expenses are expected to increase at a slower
rate than net sales growth. SG&A expenses as a percent of net
sales is expected to be 38.7 to 39.1 percent (prior 39.2 to 39.7
percent), compared to SG&A expenses as a percent of net sales
of 43.9 percent in 2020. Demand creation as a percent of net sales
is anticipated to be 6.0 percent in 2021, compared to 5.7 percent
in 2020.
Operating income is expected to be $347 to $369 million
(prior $320 to $346 million), resulting in operating margin of 11.4
to 12.0 percent (prior 10.8 to 11.5 percent) compared to operating
margin of 5.5 percent in 2020.
Effective income tax rate is expected to be approximately
22 percent. The effective income tax rate may be affected by
unanticipated impacts from changes in international, federal or
state tax policies, changes in the Company's geographic mix of
pre-tax income, other discrete events, as well as differences from
our estimate of the tax benefits associated with employee equity
awards and our estimate of the tax impact of various tax
initiatives.
Net income is expected to be $271 to $288 million (prior
$250 to $270 million), resulting in diluted earnings per share of
$4.05 to $4.30 (prior $3.75 to $4.05).
Foreign Currency
Foreign currency translation is anticipated to increase 2021 net
sales growth by approximately 130 basis points.
Foreign currency is expected to have essentially no impact on
earnings as favorable foreign currency translation impacts are
anticipated to be offset by foreign currency transactional effects
from hedging of production.
Balance Sheet and Cash Flows
Operating cash flow is expected to be $250 to $270
million (prior $300 to $320 million). The lower operating cash flow
forecast for 2021 is primarily driven by changes to projected
year-end inventory. This change in outlook is based on the
expectation of receiving Spring 2022 inventory earlier than
previously projected.
Capital expenditures are planned to be $60 to $80
million.
First Half 2021 Commentary
Our annual net sales are weighted more heavily toward the
Fall/Winter season, while operating expenses are more equally
distributed throughout the year, resulting in a highly seasonal net
sales and profitability pattern weighted toward the second half of
the year.
Based on first quarter 2021 results, advance wholesale orders
for the Spring 2021 season and plans for growth in our global DTC
businesses as we anniversary prior year temporary store closures,
we believe mid to high-20 percent first half year-over-year net
sales growth is achievable (prior high-teens percent to low-20
percent). In second quarter 2021, year-over-year net sales growth
by channel will be impacted by the anniversary of prior year
temporary brick & mortar store closures as well as elevated DTC
e-commerce net sales penetration levels as demand shifted online
when consumers were unable shop in store.
Please note the second quarter is typically our lowest volume
sales quarter and small changes in the timing of product shipments
and expenses can have a material impact on reported results.
Historically, second quarter profitability has been challenging
given our fixed cost structure, resulting in the Company reporting
a second quarter earnings loss in most years.
Conference Call
The Company will hold its first quarter 2021 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.
Second Quarter 2021 Reporting
Date
Columbia Sportswear Company plans to report second quarter 2021
financial results on Monday, August 2, 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 full year 2021 net sales, gross margin, SG&A expense,
demand creation spend, operating income, effective income tax rate,
net income, diluted earnings per share, foreign currency
translation, inventory, cash flows, and capital expenditures, as
well as growth of its global DTC businesses, and first half 2021
net sales growth. 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 connects active people with their
passions through its portfolio of well-known brands, making it a
global leader in outdoor, active and everyday lifestyle apparel,
footwear, accessories, and equipment products. Founded in 1938 in
Portland, Oregon, the Company's brands are sold in approximately 90
countries. In addition to the Columbia® brand, Columbia Sportswear
Company also owns the Mountain Hard Wear®, 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)
March 31,
(in thousands)
2021
2020
ASSETS
Current Assets:
Cash and cash equivalents
$
873,641
$
671,108
Short-term investments
920
35,828
Accounts receivable, net
338,787
312,951
Inventories, net
525,704
577,124
Prepaid expenses and other current
assets
66,173
113,726
Total current assets
1,805,225
1,710,737
Property, plant, and equipment, net
300,063
332,997
Operating lease right-of-use assets
363,652
387,984
Intangible assets, net
103,146
122,850
Goodwill
68,594
68,594
Deferred income taxes
86,825
73,827
Other non-current assets
66,401
54,498
Total assets
$
2,793,906
$
2,751,487
LIABILITIES AND EQUITY
Current Liabilities:
Short-term borrowings
$
—
$
174,443
Accounts payable
165,555
150,971
Accrued liabilities
224,674
214,044
Operating lease liabilities
81,308
64,456
Income taxes payable
3,431
6,441
Total current liabilities
474,968
610,355
Non-current operating lease
liabilities
356,766
364,300
Income taxes payable
50,285
48,320
Deferred income taxes
4,406
8,944
Other long-term liabilities
38,671
22,977
Total liabilities
925,096
1,054,896
Shareholders' equity
1,868,810
1,696,591
Total liabilities and shareholders'
equity
$
2,793,906
$
2,751,487
COLUMBIA SPORTSWEAR
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March
31,
(In thousands, except per share
amounts)
2021
2020
Net sales
$
625,606
$
568,228
Cost of sales
304,204
296,514
Gross profit
321,402
271,714
51.4
%
47.8
%
Selling, general and administrative
expenses
254,389
276,820
Net licensing income
3,467
3,119
Income (loss) from operations
70,480
(1,987
)
Interest income, net
278
1,813
Other non-operating income (expense),
net
(304
)
1,738
Income before income tax
70,454
1,564
Income tax expense
(14,554
)
(1,351
)
Net income
$
55,900
$
213
Earnings per share:
Basic
$
0.84
$
0.00
Diluted
$
0.84
$
0.00
Weighted average shares outstanding:
Basic
66,363
66,970
Diluted
66,885
67,412
COLUMBIA SPORTSWEAR
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March
31,
(In thousands)
2021
2020
Cash flows from operating
activities:
Net income
55,900
213
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization and non-cash
lease expense
30,459
32,994
Provision for uncollectible accounts
receivable
(7,849
)
19,229
Loss on disposal or impairment of
property, plant and equipment
131
2,138
Deferred income taxes
4,577
3,802
Stock-based compensation
4,874
3,675
Changes in operating assets and
liabilities:
Accounts receivable
117,818
150,687
Inventories
25,117
23,510
Prepaid expenses and other current
assets
(11,150
)
(11,922
)
Other assets
51
(5,873
)
Accounts payable
(41,194
)
(100,402
)
Accrued liabilities
(27,253
)
(77,861
)
Income taxes payable
(19,291
)
(9,429
)
Operating lease assets and liabilities
(21,273
)
(16,807
)
Other liabilities
(18
)
(1,200
)
Net cash provided by operating
activities
110,899
12,754
Cash flows from investing
activities:
Purchases of short-term investments
—
(35,044
)
Sales and maturities of short-term
investments
1,054
1,631
Capital expenditures
(3,896
)
(9,452
)
Net cash used in investing activities
(2,842
)
(42,865
)
Cash flows from financing
activities:
Proceeds from credit facilities
7,753
175,719
Repayments on credit facilities
(7,532
)
(1,054
)
Proceeds from issuance of common stock
related to stock-based compensation
13,772
1,096
Tax payments related to stock-based
compensation
(5,358
)
(4,207
)
Repurchase of common stock
(11,223
)
(132,889
)
Cash dividends paid
(17,285
)
(17,195
)
Net cash provided by (used in) financing
activities
(19,873
)
21,470
Net effect of exchange rate changes on
cash
(5,268
)
(6,260
)
Net increase (decrease) in cash and
cash equivalents
82,916
(14,901
)
Cash and cash equivalents, beginning of
period
790,725
686,009
Cash and cash equivalents, end of
period
$
873,641
$
671,108
Supplemental disclosures of non-cash
investing and financing activities:
Property, plant and equipment acquired
through increase in liabilities
$
2,832
$
2,503
COLUMBIA SPORTSWEAR
COMPANY
Reconciliation of GAAP to
Non-GAAP Financial Measures
Net Sales Growth -
Constant-currency Basis
(Unaudited)
Three Months Ended March
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)
2021
Translation
2021(1)
2020
% Change
% Change(1)
Geographical Net Sales:
United States
$
408.6
$
—
$
408.6
$
375.9
9
%
9
%
Latin America and Asia Pacific
112.0
(6.3
)
105.7
102.6
9
%
3
%
Europe, Middle East and Africa
70.8
(5.1
)
65.7
55.8
27
%
18
%
Canada
34.2
(1.4
)
32.8
33.9
1
%
(3
)%
Total
$
625.6
$
(12.8
)
$
612.8
$
568.2
10
%
8
%
Brand Net Sales:
Columbia
$
527.4
$
(11.9
)
$
515.5
$
471.7
12
%
9
%
SOREL
46.3
(0.6
)
45.7
38.7
20
%
18
%
prAna
31.5
—
31.5
36.5
(14
)%
(14
)%
Mountain Hardwear
20.4
(0.3
)
20.1
21.3
(4
)%
(6
)%
Total
$
625.6
$
(12.8
)
$
612.8
$
568.2
10
%
8
%
Product Category Net Sales:
Apparel, Accessories and Equipment
$
468.9
$
(8.7
)
$
460.2
$
452.2
4
%
2
%
Footwear
156.7
(4.1
)
152.6
116.0
35
%
32
%
Total
$
625.6
$
(12.8
)
$
612.8
$
568.2
10
%
8
%
Channel Net Sales:
Wholesale
$
335.4
$
(7.8
)
$
327.6
$
325.9
3
%
1
%
DTC
290.2
(5.0
)
285.2
242.3
20
%
18
%
Total
$
625.6
$
(12.8
)
$
612.8
$
568.2
10
%
8
%
(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/20210429005978/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 Nov 2024 to Dec 2024
Columbia Sportswear (NASDAQ:COLM)
Historical Stock Chart
From Dec 2023 to Dec 2024