Columbia Sportswear Company reports first quarter 2022 financial results

Columbia Sportswear Company, a leading innovator in outdoor, active and everyday lifestyle apparel, footwear, accessories and equipment products, has announced first quarter 2022 financial results for the period ended March 31, 2022.

Chairman, President and Chief Executive Officer Tim Boyle said: “Our strong financial performance in the first quarter, including 22 per cent net sales and 23 per cent diluted earnings per share growth, validates our strategies and demonstrates that our brands are resonating with consumers. Business momentum was broad based, with growth across all brands, channels and geographies. SOREL led the charge with 37 per cent year-over-year growth, despite supply challenges, highlighting phenomenal demand for the brand’s year-round styles. We are confident in our ability to realize the tangible growth opportunities that we have ahead, and this confidence is reflected in our repurchase of over $200 million in common stock during the quarter.

“Based on an encouraging start to 2022 and lower share count, we are increasing our full year earnings and diluted earnings per share outlook and reiterating our net sales outlook despite removing future sales to our Russian-based distributor for the balance of the year.

“Our profitable growth trajectory, fortress balance sheet and global team of dedicated employees provide a foundation of strength from which we will continue to invest in our strategic priorities to:

  • drive brand awareness and sales growth through increased, focused demand creation investments;
  • enhance consumer experience and digital capabilities in all our channels and geographies;
  • expand and improve global direct-to-consumer operations with supporting processes and systems; and
  • invest in our people and optimize our organization across our portfolio of brands.”

CFO’s Commentary and Financial Review Presentation Available Online

For a detailed review of the Company’s first quarter 2022 financial results, please refer to the CFO Commentary and Financial Review presentation furnished to the Securities and Exchange Commission (the “SEC”) on a Current Report on Form 8-K and published on the Investor Relations section of the Company’s website at

First Quarter 2022 Financial Results

(All comparisons are between first quarter 2022 and first quarter 2021, unless otherwise noted.)

Net sales increased 22 percent to $761.5 million from $625.6 million for the comparable period in 2021. The increase in net sales primarily reflects strong consumer demand and shipments of higher Spring 2022 orders, with growth across all brands, channels and geographies.

Gross margin contracted 170 basis points to 49.7 per cent of net sales from 51.4 per cent of net sales for the comparable period in 2021. Gross margin contraction was primarily driven by higher inbound freight costs, unfavourable year-over-year changes in inventory provisions, unfavourable regional sales mix, and lower wholesale product margins, partially offset by higher direct-to-consumer (“DTC”) product margins.

SG&A expenses increased 18 per cent to $299.1 million, or 39.3 per cent of net sales, from $254.4 million, or 40.7 per cent of net sales, for the comparable period in 2021. SG&A expense growth primarily reflects expenses to support the growth of the business and investments to drive our brand-led consumer-focused strategies. The increase in SG&A expenses includes higher demand creation, global retail and personnel expenses, and unfavourable year-over-year changes in bad debt provisions compared to first quarter 2021.

Operating income increased 19 per cent to $83.7 million, or 11.0 per cent of net sales, compared to operating income of $70.5 million, or 11.3 percent of net sales, for the comparable period in 2021.

Income tax expense of $17.3 million resulted in an effective income tax rate of 20.5 percent, compared to a $14.6 million expense, or an effective tax rate of 20.7 percent, for the comparable period in 2021.

Net income increased 20 percent to $66.8 million, or $1.03 per diluted share, compared to net income of $55.9 million, or $0.84 per diluted share, for the comparable period in 2021.

Balance Sheet as of March 31, 2022

Cash, cash equivalents and short-term investments totalled $610.3 million, compared to $874.6 million as of March 31, 2021.

The Company had no borrowings as of March 31, 2022 or 2021.

Inventories increased 36 percent to $714.4 million, compared to $525.7 million as of March 31, 2021. Inventory at quarter-end primarily consisted of current and future season product. Aged inventories represent a manageable portion of our total inventory mix.

Cash Flow for the Three Months Ended March 31, 2022

Net cash used in operating activities was $33.8 million, compared to net cash provided by operating activities of $110.9 million for the same period in 2021.

Capital expenditures totalled $12.9 million, compared to $3.9 million for the same period in 2021.

Share Repurchases for the Three Months Ended March 31, 2022

The Company repurchased 2,328,623 shares of common stock for an aggregate of $217.3 million, or an average price per share of $93.32.

At March 31, 2022, $99.0 million remained available under our stock repurchase authorization. On April 22, 2022, the Board of Directors authorized a $500 million increase to the Company’s share repurchase authorization, which does not obligate the Company to acquire any specific number of shares or to acquire shares over any specified period of time.

Quarterly Cash Dividend

The Board of Directors approved a regular quarterly cash dividend of $0.30 per share, payable on June 2, 2022 to shareholders of record on May 19, 2022.

Full Year 2022 Financial Outlook

The Company’s 2022 Financial Outlook is forward-looking in nature, and the following forward-looking statements reflect our expectations as of April 28, 2022 and are subject to significant risks and business uncertainties, including those factors described under “Forward-Looking Statements” below. These risks and uncertainties limit our ability to accurately forecast results. This outlook reflects our estimates as of April 28, 2022 regarding the impact of the COVID-19 pandemic on our operations; economic conditions, including inflationary pressures; supply chain disruptions, constraints and expenses; labour shortages; changes in consumer behaviour and confidence; as well as geopolitical tensions. However, it is not possible to determine the ultimate impact on future operations, or whether other currently unanticipated direct or indirect consequences of the COVID-19 pandemic, geopolitical tensions or the supply chain are reasonably likely to materially affect our operations. This outlook and commentary assumes no meaningful deterioration of current supply chain conditions, market conditions, geopolitical tensions or the ongoing COVID-19 pandemic. Projections are predicated on normal seasonal weather globally.

Net sales are expected to increase 16 to 18 percent (unchanged) to $3.63 to $3.69 billion (unchanged) from $3.13 billion in 2021. We have paused taking any new orders from our Russia-based distributor and removed any future sales to it from this outlook. This equates to an approximate two per cent headwind to full year 2022 consolidated net sales.

Gross margin is expected to contract approximately 130 basis points (prior approximately 160 bps contraction) to approximately 50.3 per cent (prior approximately 50 percent) of net sales from 51.6 per cent of net sales in 2021.

SG&A expenses are expected to increase at a slightly slower rate than net sales growth. SG&A expense as a percent of net sales is expected to be 37.3 to 37.7 per cent (prior 37.2 to 37.5 per cent), compared to SG&A expenses as a percent of net sales of 37.8 percent in 2021. Demand creation as a percent of net sales is anticipated to be 6.0 percent in 2022, compared to 5.9 percent in 2021.

Operating income is expected to be $477 to $502 million (prior $472 to $498 million), resulting in operating margin of 13.2 to 13.6 per cent (prior 13.0 to 13.5 per cent), compared to operating margin of 14.4 per cent in 2021.

Effective income tax rate is expected to be approximately 24.0 to 24.5 percent (unchanged). The effective income tax rate may be affected by unanticipated impacts from changes in international, federal or state tax policies, changes in the Company’s geographic mix of pre-tax income, other discrete events, as well as differences from our estimate of the tax benefits associated with employee equity awards and our estimate of the tax impact of various tax initiatives.

Net income is expected to be $363 to $382 million (prior $359 to $379 million), resulting in diluted earnings per share of $5.70 to $6.00 (prior $5.50 to $5.80). This diluted earnings per share range is based on estimated weighted average diluted shares outstanding of 63.6 million.

Foreign Currency

  • Foreign currency translation is anticipated to reduce 2022 net sales growth by approximately 120 basis points.
  • Foreign currency is expected to have essentially no impact on earnings as unfavourable foreign currency translation impacts are anticipated to be offset by foreign currency transactional effects from hedging of production.

Balance Sheet and Cash Flows

Operating cash flow is expected to be at least $170 million.

Capital expenditures are planned to be between $80 to $100 million.

First Half 2022 Financial Commentary

  • Net sales growth of low-teens per cent (prior high-teens to low-20 percent), compared to first half 2021. The revision to our first half 2022 net sales outlook is primarily due to the removal of future sales to our Russia-based distributor and the financial impact of recent mandatory quarantines in China, related to the continued COVID-19 outbreak in that region.
  • Gross margin is anticipated to contract approximately 200 basis points (prior over 300 basis points) compared to first half 2021.
  • SG&A expenses are anticipated to grow faster than net sales growth, resulting in modest SG&A deleverage (prior was modest leverage).
  • Diluted earnings per share of $0.93 to $1.13 (prior $0.90 to $1.10).

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