Dive Brief:
- Columbia Sportswear saw net sales of $770 million in Q1, a 6% year-over-year decrease, according to an earnings report last week.
- Each of its brands saw sales decrease in the quarter, with the exception of Mountain Hardwear, which reported a 17% sales jump. The company’s namesake brand saw sales fall 6%, Sorel fell 24% and prAna fell 4%.
- During its previous earnings call in February, Columbia warned that the coming fiscal year would be a challenge, and it estimated that it would see revenue fall between 2% and 4% for the full year. It reaffirmed that outlook on Thursday.
Dive Insight:
Tim Boyle, chairman, president and CEO of Columbia, said in the Q1 release that 2024 “started out broadly in line with our expectations.”
The company exited the quarter, which ended March 31, with inventory levels down 37%, which Boyle said had been one of the company’s top priorities.
The results come as Columbia is implementing what Boyle called “growth acceleration strategies” across its portfolio. 2023 was a year of executive changes for the sportswear company, which included adding new presidents at Sorel and prAna, two of the brands it is working to reposition.
In August, Columbia hired Tricia Shumavon as the new president of prAna. That same month, Columbia hired a new senior vice president of its global distribution network and rehired Woody Blackford as chief product officer, who spent 14 years at Columbia before moving to Canada Goose. Cory Long was named the new president of its Sorel brand in November.
On a call with investors, Boyle said the company was on track to reach its previously announced goal of generating $125 million to $150 million in savings by 2026, and he said this included between $75 million and $90 million in cost savings this year.
“We are eliminating expenses associated with carrying excess inventory and driving cost efficiencies throughout our supply chain,” Boyle said.
Geographically, net sales fell everywhere except the combined Latin America and Asia Pacific region, which grew 2%. Jim Swanson, executive vice president and CFO, said on the call that the company anticipates its U.S. business to be down mid single-digit percentage for the full year.
The company’s wholesale results declined 14%, while DTC grew 3%. Swanson said wholesale will still be down in the second half of the year, but “that’s more than by and large or partially offset” by the DTC business.
