Portland, Ore.-based Columbia Sportswear Co. raised its guidance after posting earnings that beat Wall Street’s forecasts for the second quarter, ended June 30, 2015. Net sales were also up double-digit percentages although the firm also experienced a net loss for the quarter. That loss, however, was not nearly as large as predicted by the Street.
Net Income: Net loss for Q2 totaled $6.5 million, compared with a net loss of $6.3 million in the second quarter of 2014.
EPS: Diluted loss per share remained flat-year-over year at 9 cents.
Net Revenue: Net sales increased 17 percent year-over-year, or 21 percent constant-dollar, to a $380.2 million from $324.2 million.
Hit, Miss or Beat: Columbia beat Wall Streets estimates for both revenues and EPS. Analysts polled by Yahoo Finance had predicted diluted loss per share of 23 cents and revenues of $345.8 million.
Executive Insights: “Strong sell-through of Spring 2015 products in North America and Europe drove demand in the second quarter and is fueling encouraging Spring 2016 wholesale advance orders … We enter the fall season with robust momentum in North America behind our Columbia, Sorel and Prana brands. In addition, we are gaining traction with the Columbia brand in Europe, despite slow economic growth in that region. As planned, with earlier receipt of fall season inventory, we are very well positioned to deliver against our strong fall advance order book. Together, these factors give us confidence in our expectations to deliver mid-teen constant-dollar net sales growth, operating margin of approximately 10.3 percent, and better than expected earnings growth in 2015.” –Tim Boyle, Columbia’s CEO, in a release.
Looking Ahead: Columbia raised its 2015 financial guidance. The company expects low double-digit percentage 2015 net sales growth, mid-teen percentage constant-dollar growth, compared to 2014 net sales of $2.1 billion.
It expects fiscal year 2015 gross margins to improve by approximately 50 basis points, and selling, general and administrative expenses to increase at a rate slightly lower than anticipated sales growth, generating approximately 30 basis points of operating expense leverage.
The company anticipates high-teen percentage growth in operating income, generating operating margin of approximately 10.3 percent, compared with operating income of $198.8 million and operating margin of 9.5 percent in 2014; an effective tax rate of approximately 28.0 percent; and net income after non-controlling interest of approximately $160 million to $168 million, or approximately $2.25 to $2.35 per diluted share, an increase of approximately 17 percent to 22 percent compared with net income of $137.2 million, or $1.94 per diluted share, in 2014.