Columbia Sportswear sees 'challenging' year ahead, as retailers slow to fill orders
By Claudia Assis
Retailers are placing orders 'cautiously, and economic and geopolitical uncertainty remains high'
Columbia Sportswear Co.'s stock dropped more than 10% in the extended session Thursday after the apparel maker called for a "challenging" year ahead as retailers remain cautious about placing orders and a warm U.S. winter has hampered sales.
Columbia's (COLM) fourth-quarter sales fell 9% to $1.06 billion, which compared with FactSet consensus for $1.08 billion. The company also missed profit expectations for the quarter.
The maker of outdoor apparel, footwear and other products said that retailers "are placing orders cautiously, and economic and geopolitical uncertainty remains high."
"Looking ahead, we expect 2024 to be a challenging year," Chief Executive Tim Boyle said in a statement.
To mitigate a decline in profits, the company is embarking on a "multi-year profit improvement program" targeting $125 million to $150 million in annual savings by 2026, he said.
On the plus side, the company was able to chip away at its excess inventory and its balance sheet "remains strong," Boyle said. Cash and short-term investments total $765 million with no borrowings at year's end, the company said.
Columbia earned $93.3 million, or $1.55 a share, in the fourth quarter, compared with $125.7 million, or $2.02 a share, in the year-ago period. Analysts polled by FactSet expected the company to report earnings of $1.96 a share.
Columbia guided for a 4% to 2% sales drop for the year, which would result in net sales of $3.35 billion to $3.42 billion, compared to $3.49 billion in 2023. The analysts surveyed by FactSet expect 2024 net sales of $3.5 billion.
It called for per-share earnings between $3.45 and $3.85, which compares with FactSet consensus of $4.51 a share.
Shares of Columbia have fallen nearly 16% in the past 12 months, which contrasts with gains of around 20% for the S&P 500 index SPX in the same period.
-Claudia Assis
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02-01-24 1703ET
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