Columbia Sportswear Company’s (COLM) fourth-quarter 2013 earnings went up 15.2% to $1.21 from $1.15 per share in the year-ago quarter, backed by strong sales. Quarterly earnings also surpassed the Zacks Consensus Estimate of 89 cents per share by an outstanding 98.6%.
Net sales of this leading apparel and footwear designer increased 6% to $533.1 million, driven by strong direct-to-consumer sales and continuous efforts to effectively streamline the wholesale segment worldwide. However, results were partly offset due to lower-than-expected sales in North American wholesale and direct-to-consumer businesses due to mild weather in Dec 2013.
Net sales came ahead of the Zacks Consensus Estimate of $497 million, backed by higher-than-expected demand for the company’s new ‘Fall 2014’ apparel stocks.
Gross profit increased 14.8% to $237.7 million due to higher top line. Gross margin inflated 330 basis points to 44.6% during the quarter. Operating income increased 2.1% to $76.9 million as higher sales were partly offset by higher selling, general and administrative expenses and lower licensing income.
Compared to the year-ago quarter, net sales in the U.S. increased 12% to $307.9 million in the reported quarter backed by successful product launches of new apparel lines. In the Europe/Middle East/Africa region, net sales went up 11% to $68.6 million.
Currency headwinds lowered net sales by 11% to $118.1 million in the Latin America and Asia Pacific segments. Net sales increased 16% to $38.5 million in Canada during the quarter.
For fiscal 2013, earnings per share declined 5.1% to $2.78 from $2.93 in the year-ago quarter due to higher income tax expense. Quarterly earnings, however, surpassed the Zacks Consensus Estimate of $2.67 by 4.1%.
Net sales remained almost flat at $1.7 billion as strong direct-to-consumer sales and continuous efforts to effectively streamline its wholesale segment worldwide were offset by bad weather and lowered consumer spending during the holiday season. Sales growth was also offset by negative currency effect. Net sales came ahead of the Zacks Consensus Estimate of $1.64 billion.
Taking its cue from the better-than-expected results, the company announced a 12% hike in dividend to 28 cents a share to be paid on Mar 18, 2014 to stakeholders of record as of Mar 7, 2014.
The company issued fiscal 2014 outlook during the conference call. Columbia Sportswear’s net sales for fiscal 2014 are expected to grow 15% to 17% compared to fiscal 2013. More than half of that growth is expected to be contributed by the new China joint venture and the remainder by the company’s global direct-to-consumer and wholesale businesses.
Compared to the prior year, management envisions its full-year operating income to grow in high-teens.
The Zacks Consensus Estimate for earnings is pegged at $3.22 for fiscal 2014.
Other Stocks to Consider
Columbia Sportswear carries a Zacks Rank #2 (Buy). Some other stocks in the textile apparel sector that warrant a look include Hanesbrands Inc. (HBI), Joe’s Jeans Inc. (JOEZ) and Michael Kors Holdings Ltd. (KORS). All these stocks carry a Zacks Rank #1 (Strong Buy).