US: Columbia Sportswear net income falls to $6.9m
Columbia Sportswear Company saw its first quarter net income tumble to US$6.9m, from $19.9m for the same period of 2008, due in part to weaker international sales.
The active outdoor apparel and footwear seller announced net sales of $272.0m for the quarter ended 31 March 2009, a decrease of 9%, with 5 percentage points of that decline resulting from changes in foreign currency exchange rates.
The first quarter sales decrease consisted of a 24% decline in the Europe, Middle-East & Africa region to $49.8m, a 26% decline in Canada to $19.8m and a 6% decline in the Latin America & Asia Pacific region to $46.1m.
First quarter 2009 US net sales of $156.3m were essentially equal to net sales in the first quarter of 2008.
The company added that first quarter 2009 sportswear net sales decreased 14% and footwear net sales decreased 22%, but these decreases were partially offset by a 10% increase in outerwear net sales.
Columbia ended the first quarter with $299.8m in cash and short-term investments, compared with $278.1m at 31 March 2008.
Inventories declined 6% compared with last year, and were 13% lower than at 31 December 2008.
Tim Boyle, Columbia's president and chief executive officer, said: "We managed our business well during the first quarter, against a very challenging retail environment in the US, Europe and Canada, and the headwinds created by a stronger US dollar.
"First quarter 2009 operating expenses were lower than the first quarter of 2008, reflecting reduced selling expenses resulting from lower sales volumes and the effect of the cost control initiatives that we began implementing during 2008, including our decision to slow the pace of our branded retail store expansion and adjust our marketing investments in response to reduced 2009 revenue expectations."
The company's fall 2009 wholesale backlog was $608.0m, 15% lower than fall 2008 wholesale backlog of $714.4m, the company added.
Boyle said: "Our fall wholesale backlog reflects, in part, the weak global retail environment during the first quarter, coupled with the financial and credit market challenges that have led many of our customers to continue reducing their planned inventory levels for the remainder of 2009."
The company expects full year 2009 operating margin is expected to decline approximately 300 to 350 basis points from 2008, which included a $24.7m.
It expects a low- to mid-twenty percent decline in second quarter 2009 net sales compared with the second quarter of 2008, due to an anticipated shift into the third quarter of a larger portion of fall 2009 shipments to international distributors, Columbia added. Consequently, the company expects to incur a significantly higher operating loss in the second quarter of 2009 compared to last year's second quarter, it said.
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