Dive Brief:
- Columbia Sportswear Company’s Q4 net sales decreased 9% year over year to $1.06 billion, per a Thursday earnings report.
- Net sales for fiscal 2023 increased 1% to $3.48 billion, in line with the company’s revised Q3 guidance projecting full-year net sales growth of between $3.48 billion to $3.53 billion, but down from its previous Q2 estimate of $3.53 billion to $3.59 billion.
- Looking ahead to 2024, Columbia projects net sales of between $3.35 billion and $3.42 billion, representing a decline of between 2% and 4% compared to 2023.
Dive Insight:
Columbia expects 2024 to be a challenging year, Tim Boyle, chairman, president, and CEO said in the release.
“Retailers are placing orders cautiously, and economic and geopolitical uncertainty remains high,” Boyle said. “We are working diligently to maximize sales in this environment, while optimizing our product, brand marketing and marketplace strategies to accelerate growth in 2025 and beyond.”
The company plans to counteract marketplace conditions by implementing “a multi-year profit improvement program” that could result in annual savings of between $125 million and $150 by 2026,” Boyle said.
Columbia reported a year-over-year Q4 operating income drop of 27% to $113.1 million, or 10.7% of net sales, which included a $25 million impairment charge related to its prAna brand. In summer 2023, the company named Tricia Shumavon president of prAna, which executives said in the Q2 call was part of a plan to reposition the brand for future growth.
For fiscal 2023, company operating income dipped 21% year over year to $310.3 million, which accounted for 8.9% of its net sales, per Thursday’s report.
An inventory reduction plan contributed to “operating cash flow generation of over $600 million for the year," said Boyle, who added that the Columbia brand “generated healthy growth outside of the U.S., led by China and Europe-direct markets.” However, Boyle said that the company “navigated a difficult U.S. marketplace and a warm winter, both of which impacted our fourth quarter performance.”
In addition to its namesake brand and prAna, Columbia owns Mountain Hard Wear and Sorel. The Columbia brand represents the company’s largest property and reported $2.94 billion in net sales for 2023 compared to $2.86 billion in 2022. PrAna dipped to $113.6 million in 2023 from $143.1 million in 2022, and Mountain Hard Wear dropped to $101.8 million in 2023 from $109.5 in 2022. Sorel net sales were $336.7 in 2023 versus $347.3 in 2022.
Cory Long was named president of the Sorel brand in November, and stepped into the role in December 2023. He succeeded Mark Nenow, who left in June to focus on his health.
