Columbia Sportswear Co. continued to stumble during the first quarter, as backlogs built up and the strong U.S. dollar took a bite out of international sales.
The company reported a 65 percent drop in profit to $6.9 million, or 20 cents a diluted share, for the quarter ended March 31, 2009, versus $19.9 million, or 56 cents, during the same quarter last year.
Sales dipped 9 percent to $272 million, from $297 million in the first quarter of 2008, with the biggest decline, 24 percent, in Europe. The Portland, Ore.-based company’s footwear revenues fell 22 percent to $40 million, while its sportswear sales decreased 14 percent to $138 million.
“It’s already quite clear that 2009 is not going to be remembered as a great year for Columbia Sportswear from our financial standpoint,” Tim Boyle, Columbia’s president and CEO, said during a conference call. “But it’s our intention that 2009 will be remembered as a year in which our strong financial position allowed us to continue investing in strategies that will help set us in the path toward renewed growth and profitability.”
Columbia also reported a 15 percent drop in the company’s fall wholesale backlog, which it attributed to a weak global retail environment, as well as challenges within the financial and credit market. As a result of the backlog reduction, Columbia now estimates 2009 wholesale net sales to decline by a percentage in the mid-teens, while its second-quarter revenues are estimated to decline by the low- to mid-20s.
“The overall mode of retailers globally is one of extreme caution,” said Boyle, in reference to the decrease in future orders. “In historical periods, we would have been more aggressive about carrying large inventory in the event of those orders, but we are taking a much more cautious approach this year than we ever have.”