US: Columbia Sportswear Q1 hit by restructuring charges
- First-quarter net profit declined 69.5% to $3.9m
- Sales were flat at $333.1m
Columbia Sportswear yesterday (26 April) recorded a decline in first-quarter profit, hit by restructuring charges and muted sales due to warmer weather and continued economic weakness in Europe.
Over the three months to 31 March, net income dropped 69.5% to US$3.9m - weighed down by $2.8m in restructuring charges. Sales were flat on the same period of the prior year at $333.1m.
"As expected, our first quarter results and 2012 outlook reflect muted sales growth due to the lingering effects of the warm winter globally and continued economic weakness across Europe," said president and CEO Tim Boyle.
"During the quarter, we implemented difficult but necessary cost containment measures designed to maintain our profitability while we work to liquidate excess inventory levels.
"These near-term challenges deepen our long-term resolve to continue to elevate each of our brands and strengthen their year-round presence in the marketplace. With Omni-Heat firmly established as a leading warmth technology, our innovation pipeline for 2013 features new visible cooling technologies that will be offered in both our Columbia and Mountain Hardwear brands."
The company is forecasting full-year sales growth of up to 1% in 2012, with higher direct-to-consumer sales in the US, Korea and Japan, and increased wholesale sales in its Japan and international distributor businesses, largely offset by lower wholesale sales in Europe, Canada and the US.
Gross margin is expected to contract 30-50 basis points due to an inventory liquidation strategy involving a higher proportion of promotional and close-out sales at lower gross margins and higher input costs. Operating margin is expected to be comparable to 2011 at 8.1%
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