Columbia Sportswear Company Reports Third Quarter and First Nine Months 2023 Financial Results; Updates Full Year 2023 Financial Outlook.
Third Quarter 2023 Highlights
* Net sales increased 3 percent (3 percent constant-currency) to
* Operating income decreased 7 percent to
* Diluted earnings per share decreased 6 percent to
* Exited the quarter with
Full Year 2023 Financial Outlook
* The following forward-looking statements reflect our expectations as of
* Net sales of
* Operating income of
* Diluted earnings per share of
Chairman, President and Chief Executive Officer
'As we finish the year and look forward to 2024, economic and geopolitical uncertainty is high. We know there will be challenges, particularly in the first half of next year. In this environment, we are focused on what we can control, delivering exceptional value and innovation to consumers, while diligently managing expenses. Our strong balance sheet and operating discipline will enable us to navigate near-term headwinds and position us to emerge in a stronger position.
'I'm confident in our team, our strategies, and our ability to achieve the significant long-term growth opportunities we see across the business. The strength of our diversified global business model and balance sheet enables us to continue investing in our strategic priorities to:
accelerate profitable growth;
create iconic products that are differentiated, functional and innovative;
drive brand engagement through increased, focused demand creation investments;
enhance consumer experiences by investing in capabilities to delight and retain consumers;
amplify marketplace excellence, with digitally-led, omni-channel, global distribution; and
empower talent that is driven by our core values, through a diverse and inclusive workforce.'
CFO's Commentary and Financial Review Presentation Available Online
For a detailed review of the Company's third quarter 2023 financial results, please refer to the CFO Commentary and Financial Review presentation furnished to the
Third Quarter 2023 Financial Results
(All comparisons are between third quarter 2023 and third quarter 2022, unless otherwise noted.)
Net sales increased 3 percent (3 percent constant-currency) to
Gross margin expanded 70 basis points to 48.7 percent of net sales from 48.0 percent of net sales for the comparable period in 2022. Gross margin expansion primarily reflects lower inbound freight costs and favorable channel mix, which more than offset the impact of inventory reduction efforts across our wholesale and DTC businesses.
SG&A expenses increased 10 percent to
Operating income decreased 7 percent to
Interest income, net of
Income tax expense of
Net income decreased 7 percent to
First Nine Months 2023 Financial Results
(All comparisons are between the first nine months 2023 and the first nine months 2022, unless otherwise noted.)
Net sales increased 6 percent (7 percent constant-currency) to
Gross margin expanded 30 basis points to 49.2 percent of sales compared to 48.9 percent of net sales for the comparable period in 2022.
SG&A expenses increased 12 percent to
Operating income decreased 17 percent to
Interest income, net was
Income tax expense of
Net income decreased 15 percent to
Balance Sheet as of
Cash, cash equivalents and short-term investments totaled
The Company had no borrowings as of
Inventories decreased 16 percent to
Cash Flow for the Nine Months Ended
Net cash provided by operating activities was
Capital expenditures totaled
Share Repurchases for the Nine Months Ended
The Company repurchased 1,841,845 shares of common stock for an aggregate of
At
Quarterly Cash Dividend
The Board of Directors approved a regular quarterly cash dividend of
Full Year 2023 Financial Outlook
(Additional financial outlook details can be found in the CFO Commentary and Financial Review presentation.)
The Company's Full Year 2023 Financial Outlook, Fourth Quarter 2023 Financial Outlook, and Preliminary 2024 Commentary are each forward-looking in nature, and the following forward-looking statements reflect our expectations as of
Net sales are expected to increase 0.5 to 2.0 percent (prior 2.0 to 3.5 percent), resulting in net sales of
Gross margin is expected to expand approximately 40 basis points (unchanged) to approximately 49.8 percent of net sales (unchanged) from 49.4 percent of net sales in 2022.
SG&A expenses, as a percent of net sales, are expected to be 40.2 to 40.6 percent (prior 40.1 to 40.5 percent), compared to SG&A expense as a percent of net sales of 37.7 percent in 2022.
Operating income is expected to be
Interest income, net is expected to be approximately
Effective income tax rate is expected to be approximately 23.0 percent (prior 24.5 percent).
Net income is expected to be
Foreign Currency
Foreign currency translation is anticipated to reduce 2023 net sales growth by approximately 60 basis points (prior 30 basis points).
Foreign currency is expected to have an approximately
Balance Sheet and Cash Flows
Operating cash flow is expected to be approximately
Capital expenditures are planned to be in the range of
Fourth Quarter 2023 Financial Outlook
Net sales are expected to be
Operating income is expected to be
Diluted earnings per share is expected to be
Preliminary Full Year 2024 Commentary
The Company is providing limited commentary regarding early planning efforts for 2024.
Spring 2024 will be a challenging season for our business. The combination of consumer and category headwinds, retailer cautiousness, and our transition to product designed without perfluoroalkyl and polyfluoroalkyl substances (PFAS) will impact the first half of the year. Our Spring 2024 orderbook reflects these challenges and as a result, we are forecasting a low-double-digit percent decline in wholesale net sales in first half 2024. We expect this wholesale net sales decline will be partially offset by continued growth in our global DTC businesses, resulting in total net sales declining a mid-single-digit percent in first half 2024.
We believe that generating full year net sales growth with modest operating margin expansion is achievable. Generating full year 2024 sales growth will be dependent upon several factors including, but not limited to, retailer and consumer sentiment, economic conditions, geopolitical tensions, and our transition to product designed without PFAS.
Conference Call
The Company will hold its third quarter 2023 conference call at
Fourth Quarter 2023 Reporting Date
Supplemental Financial Information
Since
The non-GAAP financial measures should be viewed in addition to, and not in lieu of or superior to, our financial measures calculated in accordance with GAAP. The Company provides a reconciliation of non-GAAP measures to the most directly comparable financial measure calculated in accordance with GAAP. See the 'Reconciliation of GAAP to Non-GAAP Financial Measures' table included herein. The non-GAAP financial measures presented may not be comparable to similarly titled measures reported by other companies.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of the federal securities laws, including statements regarding the Company's expectations, anticipations or beliefs about the Company's ability to realize growth opportunities and manage expenses, financial position, marketing strategies, inventory, full year 2023 net sales, gross margin, SG&A expenses, operating income, net interest income, effective income tax rate, net income, diluted earnings per share, weighted average diluted shares outstanding, foreign currency translation, cash flows, and capital expenditures, and fourth quarter 2023 net sales, operating income, and diluted earnings per share, and full year 2024 net sales and operating margin. Forward-looking statements often use words such as 'will,' 'anticipate,' 'estimate,' 'expect,' 'should,' 'may' and other words and terms of similar meaning or reference future dates. The Company's expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis; however, each forward-looking statement involves a number of risks and uncertainties, including those set forth in this document, those described in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading 'Risk Factors,' and those that have been or may be described in other reports filed by the Company, including reports on Form 8-K. Potential risks and uncertainties include those relating to economic conditions, including inflationary pressures; supply chain expenses; marketplace inventories; changes in consumer behavior and confidence; as well as geopolitical tensions. The Company does not undertake any duty to update any of the forward-looking statements after the date of this document to conform them to actual results or to reflect changes in events, circumstances or its expectations. New factors emerge from time to time and it is not possible for the Company to predict or assess the effects of all such factors or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.
About
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https://investor.columbia.com/news-events/press-releases/detail/353/columbia-sportswear-company-reports-third-quarter-and-first
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Vice President of Investor Relations and Strategic Planning
(503) 985-4112
aburns@columbia.com
Source:
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