“Second quarter financial results reflect a dynamic environment, with varying trends across our global omnichannel business. During the quarter, we experienced continued strength across many international markets, including China, while the US environment proved more challenging. Our inventory reduction plan is on track, and we are positioned to reduce year-end inventory by over 200 million US dollars, compared to last year”, commented Chairman, President and Chief Executive Officer Tim Boyle.

Second Quarter Results

In the second quarter of the current fiscal year, Columbia Sportswear's net sales grew by 7% (or 9% on a constant currency basis), reaching 620.9 million US dollars, on a comparable basis to the same period of fiscal 2022.

The company noted that this result reflects, on the one hand, growth in the EMEA* (75% year-over-year) and LAAP** (28% year-over-year) regions, “primarily driven by earlier Fall 2023 distributor shipments and increased China sales”; on the other hand, it accounts for the declines in Canada (by 21% year-over-year) and the US (by 3% year-over-year) regions, “which were primarily driven by a lower portion of Spring 2023 orders shipped in the second quarter compared to the same period in 2022”.

Columbia Sportswear's gross margin widened by 140 basis points in the second quarter of 2023 to 50.6%, as compared to 49.2% in a similar period of the previous year, mainly due to “lower inbound freight costs and, to a lesser degree, changes in inventory provisions, partially offset by increased clearance and promotional activity”.

In the three months to the 30^th of June, the company's net income totalled 8.4 million US dollars, or 0.14 US dollars per diluted share, growing by 17% from the 7.2 million US dollars, or 0.11 US dollars per diluted share, recorded in the second quarter of last year.

First Half Results

At the end of June, Columbia Sportswear's net sales were up by 8% (10% on a constant currency basis), amounting to 1.44 billion US dollars, on a comparable basis to the same period of 2022. Moreover, its first half gross margin stood flat at 49.5% from a similar period of the prior year.

In the first semester of 2023, the company's net income declined by 26% to 54.6 million US dollars, or 0.88 US dollars per diluted share, as compared to a net income of 74.0 million US dollars, or 1.16 US dollars per diluted share registered in the first six months of the previous year.

Full Year Outlook

“Based on year-to-date performance and the trends we are seeing across the business, we are taking a more conservative approach to planning the balance of the year. As we navigate near-term uncertainty, we are focused on taking actions to manage expenses and seeking opportunities to drive growth”, added Tim Boyle.

Columbia Sportswear is expecting its full year net sales to increase in the range of 2.0% to 3.5% (prior guidance: 3% to 6%) over 2022, reaching between 3.53 billion US dollars to 3.59 billion US dollars (prior guidance: 3.57 billion US dollars to 3.67 billion US dollars).

Furthermore, its net income should now amount between 272 million US dollars to 288 million US dollars (prior guidance: 322 million US dollars to 336 million US dollars), resulting in diluted earnings per share of 4.40 US dollars to 4.65 US dollars (prior guidance: 5.15 US dollars to 5.40 US dollars).