The gross margin expanded 150 basis points to 50.2 per cent of net sales from 48.7 per cent of net sales for the comparable period in 2023. Gross margin expansion primarily reflects lower inbound freight costs and favourable channel and region net sales mix, partially offset by unfavourable FX hedging rates.
SG&A expenses were $361.2 million, or 38.8 per cent of net sales, compared to $351.6 million, or 35.7 per cent of net sales, for the comparable period in 2023.
The operating income was $112.5 million, or 12.1 per cent of net sales, compared to operating income of $134.6 million, or 13.7 per cent of net sales, for the comparable period in 2023.
The net income was $90.2 million, or $1.56 per diluted share, compared to net income of $103.5 million, or $1.70 per diluted share, for the comparable period in 2023.
Financial results for the first nine months (9M) of 2024
The net sales of the company decreased 6 per cent (6 per cent constant-currency) to $2,272.0 million from $2,427.2 million in 9M 2023. Gross margin expanded 60 basis points to 49.8 per cent of net sales from 49.2 per cent of net sales in comparison to the same period in 2023.
SG&A expenses were $1,013.3 million, or 44.6 per cent of net sales, compared to $1,011.5 million, or 41.7 per cent of net sales, for the same period in 2023. The operating income was $133.4 million, or 5.9 per cent of net sales, compared to operating income of $197.2 million, or 8.1 per cent of net sales, for the 9M period in 2023.
The net income was $120.7 million, or $2.04 per diluted share, compared to net income of $158.1 million, or $2.56 per diluted share, for the same period in 2023.
2024 Financial Outlook
Columbia Sportswear Company anticipates a 3.0 to 5.0 per cent decline in net sales (previously estimated at 2.0 to 4.0 per cent), translating to $3.31 to $3.38 billion, down from $3.49 billion in 2023. The gross margin is projected to rise by 40 to 90 basis points (previously 40 to 60 basis points) to 50.0 to 50.5 per cent, up from 49.6 per cent in 2023. SG&A expenses are expected to be 42.8 to 43.0 per cent of net sales (previously 42.4 to 43.0 per cent), compared to 40.6 per cent in 2023.
Operating income is projected at $257 to $284 million (previously $256 to $288 million), resulting in an unchanged operating margin of 7.7 to 8.4 per cent, compared to 8.9 per cent in 2023. Net interest income is expected to be about $30 million (previously $28 million). The effective income tax rate is projected to remain at 24.0 to 25.0 per cent.
Net income is anticipated to range from $217 to $238 million (previously $215 to $239 million), with diluted earnings per share between $3.70 to $4.05 (previously $3.65 to $4.05), based on an estimated 58.7 million weighted average diluted shares outstanding (previously 59.3 million).
Chairman, president and chief executive officer (CEO) Tim Boyle commented: “Third quarter results reflect ongoing strength in most international markets, offset by continued softness in North America. While warm weather has curbed early season demand for fall 2024 cold weather product, I’m excited about the differentiated innovations we are offering consumers, including omni-heat infinity and omni-heat arctic, as well as the lightweight comfort provided by our omni-max footwear platform.
“In recent months, the Columbia brand embarked on accelerate, a growth strategy intended to elevate the brand and attract younger and more active consumers. This multi-year strategy will be centred around several consumer-centric shifts across our brand, product and marketplace strategies. I’m confident the accelerate growth strategy will enable brand-right profitable growth and I’m eager to see it come to life in the seasons ahead.”
Fibre2Fashion News Desk (SG)