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Columbia Sportswear Company is seeing some green shoots.
The Portland, Ore.-based outdoors brand reported that its e-commerce business as well as its wholesale orders for this year are on track to fuel a recovery in 2021.
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On Thursday, Columbia reported operating income for the fourth quarter, ended Dec. 31, 2020, decreased 11 percent to $123.7 million, or 13.5 percent of net sales, from $138.6 million, or 14.5 percent of net sales, for the comparable period in 2019. Net sales decreased 4 percent to $915.7 million from $954.9 million for the year-ago period.
Chairman, president and chief executive officer Tim Boyle said these “better-than-expected” results were bolstered by a 41 percent jump in e-commerce sales in the quarter, which now represent 23 percent of the company’s total sales. But while he’s hopeful that the future will be bright, he’s also cautious.
“As we begin 2021, there is continued uncertainty and business risks surrounding the ongoing pandemic, including the timing and effectiveness of global efforts to contain the spread of COVID-19,” Boyle added. “With that said, I’m encouraged by our e-commerce growth as well as wholesale orders for the spring and fall 2021 seasons, which we anticipate fueling our continued recovery in 2021.”
The company is projecting net sales growth in the high teens or low 20 percent range for the first half.
Boyle pointed to the $790 million and no borrowings on its balance sheet as other positive signs as Columbia continues to invest in building brand awareness and sales through enhancing consumer experience and digital capabilities in all channels and regions; expanding and improving its global direct-to-consumer operations, and continuing to invest in its organization.
In the fourth quarter, most of the company’s owned retail stores remained open although government-mandated closures in Canada and Europe impacted the overall performance of the fleet. And overall traffic trends so far this year remain “well below prior-year levels,” it said, particularly those in tourist-dependent locations.
The company also warned that due to supply chain and logistical challenges presented by the pandemic, spring 2021 receipts and deliveries to wholesale customers, as well as to its own e-commerce site, will be delayed.
For the full year, operating income decreased 65 percent to $137 million, or 5.5 percent of net sales, from $395 million, or 13 percent of net sales, in 2019. Sales decreased 18 percent to $2.5 billion from $3 billion in 2019.
Looking ahead, Columbia is projecting net sales for 2021 to increase 18-20 percent to $2.95 billion to $3 billion due primarily to “notable strength” in fall orders, anticipated continued e-commerce growth and a recovery of brick-and-mortar traffic and sales. Operating income for 2021 is expected to be $320 million to $346 million, and net income is projected to be $250 million to $270 million or diluted earnings per share of $3.75 to $4.05.