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First quarter 2010 net sales increased 10 percent to $300.4 million, compared to first quarter 2009 net sales of $272.0 million, including a 3 percentage point positive effect from changes in foreign currency exchange rates.
First quarter 2010 net income was $9.2 million, or $0.27 per diluted share, compared to net income of $6.9 million, or $0.20 per diluted share, for the first quarter of 2009.
Global fall 2010 wholesale order backlog was $725.3 million at March 31, 2010, a 19 percent increase compared with March 31, 2009, including a 3 percentage point positive effect from changes in foreign currency exchange rates.
The company expects full year 2010 net sales to increase 12 to 14 percent and to generate operating margin of approximately 7 percent.
The board of directors declared a quarterly dividend of $0.18 per share, payable on May 27, 2010 to shareholders of record on May 13, 2010.
The company's cash and short-term investments at March 31, 2010 totaled $415.8 million with no long-term debt.
PORTLAND, Ore., April 22, 2010 (GLOBE NEWSWIRE) -- Columbia Sportswear Company (Nasdaq:COLM - News), a leading innovator in the active outdoor apparel and footwear industries, today announced net sales of $300.4 million for the quarter ended March 31, 2010, an increase of 10 percent compared to net sales of $272.0 million for the same period of 2009, with 3 percentage points of that increase resulting from changes in foreign currency exchange rates.
First quarter net income totaled $9.2 million, or $0.27 per diluted share, compared with net income of $6.9 million, or $0.20 per diluted share, for the same period of 2009.
Tim Boyle, Columbia's president and chief executive officer, commented, "Our first quarter results were driven by an 11 percent sales increase in the U.S., resulting primarily from our expanded direct-to-consumer operations. We also benefited from continued growth in our Latin America/Asia Pacific (LAAP) region and renewed growth in Canada. We are encouraged by this early momentum against a backdrop of improved consumer spending and favorable spring weather and, when combined with a 19 percent increase in our fall wholesale backlog, expect to generate record sales in 2010."
Fall 2010 Wholesale Backlog
As of March 31, 2010, fall wholesale backlog was $725.3 million, 19 percent higher than fall 2009 wholesale backlog of $608.0 million, including a 3 percentage point positive effect from changes in foreign currency exchange rates.
Mr. Boyle commented, "Our strong fall wholesale backlog includes double-digit growth across each of our major brands, each product category and each region. We are encouraged that key retail partners have embraced the launch of our Omni-Heat(TM) warmth technologies under the Columbia brand and are also responding to accelerating consumer demand for our Sorel brand. Fall backlogs for our Mountain Hardwear and Montrail brands also showed healthy growth. Our focus now turns to managing the timely production and delivery of these strong fall orders and driving consumer demand for each of our major brands through effective marketing in close partnership with our retail customers."
The 19 percent increase in fall 2010 wholesale backlog consisted of a mid-teens percentage point increase in apparel orders and a mid-forty percentage point increase in footwear orders. U.S. wholesale backlog was up mid-teens on a percentage basis. Canada wholesale backlog increased mid-thirty percent, including a mid-twenty percentage point benefit from changes in foreign currency exchange rates. The Europe, Middle-East & Africa (EMEA) region wholesale backlog increased mid-teens on a percentage basis, including a low single-digit percentage benefit from exchange rates. The LAAP region wholesale backlog increased mid-twenty percent, including a mid-single digit percentage point benefit from exchange rates. Columbia and Mountain Hardwear brand wholesale backlogs each increased mid-teens, while Sorel backlog increased low-sixties on a percentage basis.
Consolidated wholesale backlog, which includes both global spring and fall orders at March 31, 2010, was $872.1 million, 21 percent higher than 2009 consolidated wholesale backlog of $721.6 million, including a 3 percentage point benefit from changes in foreign currency exchange rates.
First Quarter 2010 Results
The 10 percent increase in first quarter 2010 sales compared with the first quarter of 2009 was driven by 11 percent growth in the U.S. to $173.2 million; 22 percent growth in the LAAP region to $56.1 million, including an 8 percentage point benefit from changes in foreign currency exchange rates; and 22 percent growth in Canada to $24.2 million, including an 18 percentage point benefit from changes in exchange rates. These increases were partially offset by a 6 percent decline in EMEA region sales to $46.9 million, including a 4 percentage point benefit from changes in exchange rates. (See "Geographical Net Sales" table below.)
Compared with the first quarter of 2009, first quarter 2010 outerwear sales increased 14 percent to $87.6 million, sportswear sales increased 6 percent to $146.4 million, footwear sales increased 15 percent to $46.1 million and accessories and equipment sales increased 19 percent to $20.3 million. (See "Categorical Net Sales" table below.)
Columbia brand sales totaled $267.7 million in the first quarter of 2010, an 11 percent increase compared with the first quarter of 2009. Mountain Hardwear brand sales increased 10 percent to $25.6 million. Sales of Sorel, Montrail and Pacific Trail brand products were insignificant during the first quarter of both years. (See "Brand Net Sales" table below.)
The company ended the first quarter of 2010 with $415.8 million in cash and short-term investments, compared with $299.8 million at March 31, 2009. Inventories were essentially unchanged at $222.7 million at March 31, 2010, compared to $223.7 million at March 31, 2009.
2010 Financial Outlook
The current economic environment, which involves high unemployment rates in many of our key markets and restricted credit markets for consumers and retailers, among other challenges, increases the unpredictability of retailer and consumer demand. In addition, the company's annual financial performance is heavily reliant on second-half sales volumes, limiting the visibility and predictability of future results. All projections related to anticipated future results are forward-looking in nature and are based on backlog and forecasts, which may change, perhaps significantly.
The company expects full year 2010 net sales to increase between 12 to 14 percent compared with 2009, based primarily on the 19 percent increase in Fall 2010 order backlog, incremental direct-to-consumer sales, actual first quarter results, and the estimated effect of changes in foreign currency exchange rates.
2010 gross margins are expected to increase approximately 100 basis points compared to 2009 gross margins of 42.1 percent, due to a higher proportion of full price sales in our wholesale business, an increased proportion of direct-to-consumer sales, and more favorable foreign currency hedge rates, partially offset by a higher proportion of sales to international distributors and increased costs to expedite production and delivery to customers of the greater-than-planned Fall orders.
Selling, general and administrative expenses are expected to increase approximately 100 basis points as a percentage of sales due to a combination of several factors, including the effect of the company's retail expansion, reinstatement of personnel and benefit programs that were curtailed or postponed in 2009, incremental costs related to IT infrastructure initiatives in preparation for a new multi-year ERP implementation, increased marketing investments to support the global launch of the company's Fall 2010 products, transitional costs associated with internalizing the sales organizations in North America and Europe, and the translation effect of foreign currencies.
As a result, full year 2010 operating margin is expected to approximate full year 2009 operating margin of approximately 7 percent. The company currently expects a full-year income tax rate of approximately 28 percent.
The company expects a high-teen percentage increase in second quarter 2010 sales compared with the second quarter of 2009, driven by incremental direct-to-consumer and U.S. wholesale sales and a higher volume of international distributor shipments in the quarter. The second quarter is the company's lowest volume quarter of the year, which amplifies the effect on income of changes in the timing of shipments and the incremental fixed cost structure of the company's operations. Consequently, the company expects to incur a higher operating loss in the second quarter of 2010 compared to the second quarter of 2009.
Dividend and Share Repurchase Program
The board of directors approved a dividend of $0.18 per share, payable on May 27, 2010 to shareholders of record on May 13, 2010.
During the first quarter of 2010, the company repurchased approximately 89,500 shares of common stock at an aggregate purchase price of $3.8 million. Through March 31, 2010, the company has repurchased a total of approximately 9.0 million shares at an aggregate purchase price of $411.2 million since the inception of the stock repurchase program in 2004 and approximately $88.8 million remains under the current repurchase authorization. The repurchase program does not obligate the Company to acquire any specific number of shares or to acquire shares over any specified period of time.
The Company will host a conference call on Thursday, April 22, 2010 at 5:00 p.m. Eastern. To participate, please dial 800-851-3059 in the United States, Conference ID #67701142. The call will also be webcast live on the investor information section of the Company's website at www.columbia.com, where it will remain available until July 22, 2010.
About Columbia Sportswear
Columbia Sportswear Company is a global leader in the design, sourcing, marketing and distribution of active outdoor apparel, footwear, accessories and equipment. Founded in 1938 in Portland, Oregon, Columbia products are sold in more than 100 countries and have earned an international reputation for innovation, quality and performance. Columbia products feature innovative technologies and designs that protect outdoor enthusiasts from the elements, increase comfort, and make outdoor activities more enjoyable. In addition to the Columbia brand, Columbia Sportswear Company also owns outdoor brands Mountain Hardwear(R), Sorel(R), Montrail(R), and Pacific Trail(R). To learn more, please visit the company's websites at www.columbia.com, www.mountainhardwear.com, www.sorel.com, and www.montrail.com.