Recap of previous performance
Columbia Sportswear (COLM) has surpassed analysts’ sales expectations for eight consecutive quarters. In the fourth quarter of 2018, the company’s sales grew by an impressive 18.2% on a reported basis to $917.6 million. Excluding the impact of a revenue accounting standard, the company’s comparable sales grew 16% to $899.3 million. Columbia Sportswear’s fourth-quarter sales came in quite ahead of analysts’ expectation of $844.8 million. The company’s sales were driven by growth across its DTC (direct-to-consumer) and wholesale businesses and strong growth in the US market.
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Overall, Columbia Sportswear’s sales grew 13.6% to $2.8 billion in the full-year 2018. The growth in comparable sales was 12%. The company’s top-line growth in 2018 was driven by a 21.7% rise in DTC sales to $1.2 billion and 8.3% growth in its wholesale business to $1.6 billion. The DTC business accounted for 42% of overall sales in 2018 compared to 40% in 2017, reflecting robust growth in sales driven by continued investments.
Columbia Sportswear’s US sales increased 13.7% to $1.7 billion in 2018 driven by high-teens growth in DTC sales and a high-single-digit rise in wholesale channel sales. Columbia Sportswear’s international net sales rose 13.5% to $1.1 billion and accounted for 38% of overall sales in 2018 mainly due to the strength in the Columbia brand.
Analysts expect Columbia Sportswear’s sales to rise 6.5% to $646.8 million in the first quarter of 2019. Peer Skechers (SKX) reported a 2.1% rise in its first-quarter sales to $1.28 billion driven by strength in its international business. Based on the guidance issued in February, Columbia Sportswear expects mid-single-digit percent net sales growth in the first quarter.
For full-year 2019, analysts expect Columbia Sportswear sales to increase 7.5% on a reported basis to $3.0 billion. Columbia Sportswear expects its full-year 2019 sales to grow by 6.0% to 8.0% to $2.97 billion to $3.03 billion.
The company’s continued focus on its DTC business is expected to drive the top-line growth in 2019.