Columbia Sportswear just beat earnings expectations for the first quarter, largely driven by its Sorel brand.
The Portland, Ore.-based company on Thursday reported a net income growth of 20% to $66.8 million in Q1, with diluted earnings per share of $1.03. This beat expectations of analysts surveyed by Yahoo Finance that predicted earnings of $0.86. Net sales increased 22% to $761.5 million, compared to Q1 of 2021.
Sales at Sorel jumped 37% to $63.6 million, driven by a strong mix in wholesale and DTC channels. In a call with investors, Columbia CEO Tim Boyle said that the brand’s new sneaker styles and wedges “contributed to phenomenal demand and brand heat.” As such, Columbia plans to invest more deeply in product and demand creation to help Sorel become a $1 billion brand.
Most of Sorel’s product — around 70% — is designed for women, Boyle said. And while winter merchandise did well throughout Q1, most of the growth is being led by sneakers and wedges.
“The opportunity globally to increase the revenue on Sorel is going to be led by the sneaker and the fashion styles,” Boyle said. “The future will be a much higher women’s component and much more sneaker and fashion footwear.”
In sneakers, Sorel’s Kinetic Impact lace style was the top selling style on Sorel.com. The brand’s success in the wedge category was largely driven by the Out ‘N About collection, as consumer habits changed to involve more time spent outside in social settings.
Sorel also launched an apparel and footwear collaboration with prAna, another one of Columbia’s brands, which included sneakers and sandals styles. In January, Sorel entered the adaptive footwear market, reimagining three of its best-selling styles for Zappos Adaptive, the online shoe retailer’s platform for adaptive fashion items.
However, Sorel is not immune to supply chain problems plaguing the industry, especially as it related to inventory. Boyle noted that there are fewer factories with the capabilities to create Sorel’s unique style of wedges, compared with sneaker factories, which are more common. As a result, the company is looking to build out its production relationships with Asian partners throughout 2023 to make sure it is in a good inventory position.
Columbia branded footwear is also showing encouraging results. Including Sorel, Columbia brought in a collective $195.6 million in footwear sales revenue in Q1. For fiscal year 2022, Columbia expects footwear growth in the mid-20% range across Columbia footwear and Sorel.