Columbia Sportswear slid to a loss of US$1.8m in its second quarter, afflicted by "economic headwinds" in the US and European markets.

The US company recorded net sales of $213.1m in the period ended 30 June, down 3% on last year. The net loss of $1.8m compared to a profit of $10m 12 months ago.

Columbia said the lower than expected sales "amplified the effect" of planned increases in marketing and retail expansion investment.

US net sales plummeted 18% to $95.6m, but this was partially offset by 13% revenue growth in Europe, the Middle East and Africa (EMEA), 20% growth in Latin America and Asia Pacific, and 18% growth in Canada.

Columbia's sportswear sales were down 7%, while outerwear revenues were up 5% and accessories and equipment recorded a 12% increase. Footwear sales were static.

"Our second quarter sales reflect, in part, the economic headwinds we are facing in the US and our EMEA-direct markets, which resulted in lower net sales than we anticipated," said Tim Boyle, Columbia president and CEO.

The company now expects 2008 net sales to fall 3%, thanks to continued weakness in the US and EMEA-direct markets, partially offset by expanded US retail operations. Diluted EPS is forecast at $2.60-2.70.

Net sales in the third quarter are expected to fall 4% on last year, with diluted EPS about $1.44, compared to $1.72 last year.

"We believe that our reduced revenue forecast for the remainder of the year appropriately factors in what we currently know and what we currently sense about the market, but we've also learned in the past 90 days how quickly things can change," said Boyle.

"Despite these challenges, we remain committed to using our strong balance sheet and cashflow during this economic cycle to invest in strategic initiatives that we believe will position our brands for global growth."