What Drove Columbia Sportswear’s 3Q17 Top Line?



Columbia Sportswear’s 3Q17 top line grows 0.2%

Columbia Sportswear (COLM), which reported its 3Q17 results on October 26, posted a 0.2% YoY (year-over-year) increase in sales to $747.0 million.

The company beat Wall Street’s expectation of a 1.3% YoY sales decline to $736.0 million. Growth during the quarter was supported by strong performance in the international markets and the America D2C (direct-to-consumer) channel.

Tim Boyle, CEO of COLM, noted, “We’re pleased to report better than expected third quarter results, including continued strong sales growth in our European wholesale and U.S. direct-to-consumer businesses, as well as growth in each of our international regions.

“While our U.S. business adapts to ongoing structural changes, our improved profitability outside the U.S. illustrates the strength of our global business model.”

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Discussing the 3Q17 top line

The LAAP (Latin America/Asia–Pacific) region, which accounted for 16.5% of the company’s 3Q17 sales, recorded a 9.0% YoY (11.0% in constant currency) increase to $123.0 million. This growth was driven by higher sales to LAAP distributors and improvement in its China and Korea business.

The EMEA region recorded robust 20.0% growth (15.0% in constant currency) to $87.5 million. This growth was backed by an ~20.0% rise in its European wholesale and D2C businesses, as well as a low double-digit rate increase in its EMEA distributor revenues. Its Canada sales also improved 8.0% YoY to $81.0 million.

However, the United States, which is Columbia Sportswear’s largest geography and accounted for 61.0% of its 3Q17 sales, reported a 5.9% decline in business during the quarter. This decrease was a result of a 12.0% fall in wholesale sales, which offset the low double-digit growth in D2C sales entirely.

Nevertheless, the majority of the US wholesale business decline was attributable to the timing shift in wholesale deliveries. After normalizing for the timing shift, US sales would have remained flat.

ETF investors seeking to add exposure to COLM can consider the iShares Morningstar Small-Cap Growth ETF (JKK), which invests ~0.3% of its portfolio in the company.

Please read the next part to learn about COLM’s 3Q17 profitability and margins.


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