Strong sales growth
Columbia Sportswear’s (COLM) net sales increased 7.8% to $654.61 million in the first quarter driven by a 28.2% rise in the sales of the Sorel brand and an 8.5% rise in the sales of the Columbia brand partially offset by sales declines of 2.6% and 11.1% in the prAna and Mountain Hardware brands, respectively. The prAna brand was hit by a decline in North American wholesale net sales, while Mountain Hardware’s sales were adversely affected by the lower liquidation of excess inventory compared to the first quarter of 2018.
Columbia Sportswear’s first-quarter sales surpassed analysts’ forecast of $646.66 million. The company’s sales rose 10% on a constant currency basis in the first quarter.
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Strong domestic sales outlook
Columbia Sportswear’s sales in the US market increased 13.6% to $412.2 million in the first quarter driven by mid-teens percentage growth in the DTC (direct-to-consumer) business and a low-double-digit rise in the wholesale business. The company’s DTC sales in the United States were driven by strong store sales and a mid-20% increase in e-commerce sales. Its wholesale business in the US benefited from rises in the shipments of advance spring 2019 products and the impact of favorable winter weather on the sales of seasonal products.
Following the release of its first-quarter earnings results, the company expects its 2019 net sales to rise in the range of 6.5%–8.5% to $2.98 billion–$3.04 billion. Earlier, Columbia had projected 2019 sales growth in the range of 6.0%–8.0%.
Columbia Sportswear expects its US net sales to rise in the low double digits in 2019 driven by low-double-digit growth in its wholesale and DTC businesses.
Outlook for international markets
In the first quarter, Columbia Sportswear’s international sales increased 3% on a constant currency basis driven by higher sales in Japan, Korea, and Europe-direct and at its international distributors partially offset by lower wholesale sales in China and Canada. Sales in its LAAP (Latin America and Asia-Pacific) market grew 1.0% on a reported basis, while sales in its EMEA (Europe, the Middle East, and Africa) and Canada markets fell 0.7% and 7.1%, respectively.
Columbia Sportswear expects low-single-digit growth in its EMEA and LAAP sales, while it expects its sales in Canada to rise in the mid-single-digit percentage in 2019.