Columbia logs solid Q1 but cautious on year

US: Columbia logs solid Q1 but cautious about year

By just-style.com | 27 April 2007

Columbia Sportswear Co enjoyed double-digit gains in sales and profits during the first quarter, but investors were drawn to its guarded view of full-year results.

Reporting figures late Thursday (26 April), the Portland, Oregon-based outerwear and sportswear maker logged net income of US$26.1m, or $0.71 a diluted share, during the three months ended 31 March.

That was 34% above the mark of $19.5m, or $0.52, registered during the first quarter of 2006, and the EPS figure was $0.12 above consensus estimates.

Sales rose 11.3%, to $289.6m from $260.2m, in the year-ago period and rose 9.6% in constant currency. By geographic market, US sales were up 7.7% to $155.5m, European sales increased 12.7% to $54.1m and Canadian sales dropped 2.3% to $25.8m. Other international sales shot up 30.9% to $54.2m.

Sportswear sales were up 15% to $163.1m, outerwear sales up 8.3% to $59.8m and footwear sales up 4.3% to $52.9m. Other categories, including accessories, had a sales increase of 10.4% to $13.8m.

"Our record first-quarter results reflect the continued strong demand for our sportswear category," said Tim Boyle, president and chief executive officer of the firm.

"Sportswear sales increased in all direct and distributor markets globally, led by continued strong sportswear sales growth domestically. The strong net sales growth, combined with expanding gross and operating margins, drove exceptional growth in net earnings for the first quarter."

Gross profit for the quarter was 43.7% of sales, up from 42.9% in the year-ago quarter.

Although Columbia expects diluted EPS of $0.18 in the second quarter, above the current consensus estimate of $0.15, Boyle projected full-year EPS of $3.65, below analysts' expectations of $3.72, and full-year revenues of about $1.35bn, versus the earlier consensus estimate of $1.41bn.

By Arnold J Karr.

Sectors: Apparel, Finance, Manufacturing

Companies: Columbia Sportswear