Columbia Sportswear withdraws 2025 forecast despite positive Q1
In Q1 Columbia Sportswear's net sales climbed by 1% to $778.45m from $769.98m in the same period the previous year.
This growth was attributed to an uptick in wholesale net sales, spurred by an increase in orders for the Spring '25 collection.
The sales upturn was predominantly propelled by performance in the Latin America, Asia Pacific (LAAP), and Europe, Middle East and Africa (EMEA) markets. However, this was somewhat counterbalanced by a downturn in the Canadian and US markets, notes the company.
Columbia Sportswear chairman, president and CEO Tim Boyle stated: 'I'm encouraged by our first quarter results, with net sales and earnings exceeding our guidance range. We generated healthy growth in nearly all our international markets, including double-digit percent growth in the LAAP region and high-single-digit percent constant currency growth in the EMEA region.'
Columbia Sportswear key metrics for Q1 FY25
In Q1 FY25, Columbia Sportswear's net income remained relatively unchanged at $42.25m or $0.75 per diluted share.
Operating income saw a 4% increase to $46.51m compared to $44.68m in Q1 FY24, representing 5.8% of net sales at that time.
Gross profit of the company ascended to $396.06m in Q1 FY25 from $389.56m in Q1 FY24 and gross margin widened by 30 basis points to 50.9% of net sales from 50.6% for the corresponding period in 2024.
This margin expansion is credited to a combination of factors including reduced outbound shipping expenses, improved closeout margins, and favourable costs for spring 2025 products inputs; these were partially negated by less advantageous FX hedging rates.
Selling, general, and administrative (SG&A) expenses increased slightly to $354.47m or 45.5% of net sales from $349.27m or 45.4% of net sales for the same period in the prior year. Notable changes within SG&A were heightened direct-to-consumer (DTC) and demand creation expenses which were offset by decreased supply chain costs.
Inventories experienced a 3% increase to $623.7m in Q1 FY25.
Columbia Sportwear's outlook
During the earnings call, Boyle said: 'Given the heightened uncertainty regarding tariff rates and the impact this will have on product costs and consumer demand, we are withdrawing our full year 2025 outlook.'
He outlined the company's strategy for the remainder of the year. Before the tariff increases, the company was positioned to meet its full-year financial goals.
For the second quarter, Columbia expects net sales to increase between 1% and 5% compared to the previous year, aligning with the net sales forecast for the first half that was shared in February, he noted.
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