In Q1 FY 2024, prominent US-based brand, Columbia Sportswear Company experienced a 6 per cent decline in net sales to $770 million as against $820.6 million registered in the same period last year. This decline was primarily driven by the brand’s reduced wholesale net sales in the US and Canada, influenced by cautious retail behavior, a challenging competitive environment, and subdued consumer demand.

Despite the decrease in sales, the brand’s gross margin rose by 190 basis points to 50.6 per cent of sales, up from 48.7 per cent in the first quarter of FY23. This increase indicates stronger profitability per unit sold, counterbalancing the overall drop in revenue.

Operating expenses remained relatively stable, with selling, general, and administrative (SG&A) expenses slightly increasing to $349.3 million, or 45.4 per cent of net sales, compared to $347.4 million, or 42.3 per cent of net sales in the previous year. This adjustment reflects a proportional increase due to the lower sales volume.

The brand’s operating income declined by 21 per cent to $44.7 million, representing 5.8 per cent of net sales, down from 6.9 per cent in the corresponding period last year. This decline in operating income mirrors the challenges encountered in maintaining sales volumes and managing operational costs.

The brand's net income decreased by 8 per cent to $42.3 million, or $0.71 per diluted share, compared to $46.2 million, or $0.74 per diluted share, in the first quarter of FY23.

Inventory exiting the quarter was down 37 per cent Y-oY, and the brand’s Profit Improvement Plan is on track to achieve savings targets. Based on year-to-date results, Columbia Sportswear is reiterating its net sales outlook while modestly increasing diluted EPS range, states Tim Boyle, Chairman, President, and CEO.