Innovation is the key to Columbia Sportswear Co.’s third-quarter profit increase.
The Portland, Ore.-based outdoor apparel and footwear firm said its third-quarter net income rose 11 percent to $52.2 million, or $1.53 per share, compared with $46.9 million, or $1.38, in the same period a year ago.
Net sales for the period ended Sept. 30 were $504 million, up 16 percent from $434.5 million a year ago.
Revenue from accessories and equipment saw the largest increase, rising 31 percent to $29.1 million. This was followed by net sales of footwear and sportswear, which both rose 18 percent to hit $82.8 million and $168.2 million, respectively.
“We achieved quarterly sales of more than $500 million for the first time in the company’s 72-year history, highlighted by the global launch of our innovative Omni-Heat warmth technologies,” said Tim Boyle, Columbia’s president and CEO.
“The sell-through on Omni-Heat has been better than gratifying,” added Boyle on a conference call with analysts. “Where we have complete visibility [in] our own stores, it’s been spectacular. But we don’t know in a period of economic uncertainty and weather uncertainty how our retailers will react. We have almost no carryover of Omni-Heat. We have planned to sell that out, and it looks like that will in fact occur.”
Global wholesale futures orders for spring increased 12 percent to hit $394.2 million, while consolidated wholesale backlog, which also includes fall orders, was 13 percent higher at $667.4 million.
“Given the significant infrastructure build-out and permanence of many selling, general and administrative costs, Columbia has effectively become a sales growth story,” said Sterne Agee analyst Sam Poser in a research note. “The long-term sales story is ultimately tied to penetration of specialty/outdoor accounts, which in turn depends on the success of Omni-Heat launch.”
Columbia ended the quarter with cash and cash equivalents of $173.9 million, down 10 percent from $192.9 million a year ago.
The company revised its full-year 2010 outlook, forecasting net sales to increase 17 percent to 18 percent, for earnings per share of $2.00 to $2.15.