Columbia Sportswear exceeded 1Q18 top-line expectations
Columbia Sportswear (COLM), which reported its 1Q18 results on April 26, posted a 12% YoY (year-over-year) increase in sales to $607.3 million. On a non-GAAP (generally accepted accounting principles) basis, sales increased 10% YoY to $599 million. The company outdid Wall Street’s expectations of a 7% YoY increase in sales to $582 million.
Growth during the quarter was driven by strong performances in the international as well as domestic markets.
“We are pleased to report better than expected first quarter net sales and profitability led by strength in our direct-to-consumer (‘DTC’) businesses, growth in our wholesale businesses, including a return to growth in U.S. wholesale, and the favorable effect of strengthening foreign currencies relative to the U.S. dollar,” said Tim Boyle, president and CEO of Columbia Sportswear.
Discussing key growth drivers for the quarter
The company’s US business, which accounted for 60% of its 1Q18 top line, recorded a 9% YoY increase during the quarter. Driving this growth was a high-teens growth in the DTC (direct-to-consumer) business and a low-single-digit growth in the wholesale business. The company has seen a weakness in its US wholesale business for quite some time.
Its international business continued to show strong momentum, recording a 12% YoY growth (4% in constant currency). Europe, the Middle East, and Africa recorded the highest growth rate of 30%, followed by Canada at 11.4% and Latin America and Asia Pacific at 11.2%.
Not only did COLM perform well in all geographies, but it came in strong in all channels. Wholesale, which accounted for 55% of COLM’s 1Q18 sales, recorded a 5% YoY increase during the quarter. However, the show-stopper was, as usual, its DTC business, which recorded a 23% increase in 1Q18 sales.
In the next part of this series, we’ll look at COLM’s 1Q18 profitability and margins.