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Columbia Sportswear: Q2 net loss widens to 0.17 dollar per share

Columbia Sportswear Company announced second-quarter net sales of 398.9 million dollars, a 3 percent increase compared with the second quarter of 2016. Net loss totalled 11.5 million dollars or 0.17 dollar per share compared to second quarter 2016 net loss of 8.2 million dollars or 0.12 dollar per share. For the first six months of 2017, the company’s net sales grew 28.8 million dollars or 3 percent (4 percent constant-currency), to 942.7 million dollars, while net income increased 4 percent, to 24.5 million dollars or 0.35 dollar per diluted share compared to 23.6 million dollars or 0.33 dollar per diluted share.

Commenting on the results, President and CEO Tim Boyle said in a press release: "We delivered solid first half financial results featuring growth from three of our four brands and all four geographic regions. We have embarked on ‘Project Connect’ from a position of strength, including a current outlook that anticipates sales and earnings growth and a fortress balance sheet with more than 600 million dollars in cash and no long-term debt."

Financial highlights of the second quarter

Second quarter consolidated net sales increased 3 percent, driven by 4 percent net sales growth in the US to 238.2 million dollars, consisting of mid-teen percentage growth in direct-to-consumer net sales, partially offset by a high-single-digit percentage decline in wholesale net sales; 14 percent net sales growth in the EMEA region (16 percent constant-currency), to 67.3 million dollars, including growth in net sales to EMEA distributors and in the company's Europe-direct business; and 2 percent net sales growth in Canada (5 percent constant-currency), to 13.9 million dollars.

The sales growth, the company said, was partially offset by a 9 percent net sales decline in the LAAP region (8 percent constant-currency), to 79.5 million dollars, primarily due to lower net sales in China and Korea.

Global Columbia brand net sales increased 2 percent (3 percent constant-currency) to 340.5 million dollars, while Global Sorel brand net sales increased 71 percent (74 percent constant-currency) to 6 million dollars. Global prAna brand net sales increased 9 percent to 35 million dollars and Global Mountain Hardwear brand net sales decreased 5 percent to 16.1 million dollars.

Global apparel, accessories and equipment net sales increased 3 percent to 329.7 million dollars, while global footwear net sales increased 3 percent (4 percent constant-currency) to 69.2 million dollars.

Second quarter loss from operations totalled 17.3 million dollars, or (4.4) percent of net sales compared to 11.8 million dollars or 3 percent of net sales, for the same period in 2016. Second quarter net loss totalled 11.5 million dollars or 0.17 dollar per share compared with second quarter 2016 net loss of 8.2 million dollars or 0.12 dollar per share.

The board of directors authorized a regular quarterly cash dividend of 0.18 dollar per share, payable on August 31, 2017 to shareholders of record on August 17, 2017.

Columbia Sportswear updates FY17 outlook

The company currently expects 2017 net sales growth of approximately 3 percent compared with 2016 net sales of 2.38 billion dollars, including less than 1 percentage point negative effect from changes in foreign currency exchange rates. The company's US direct-to-consumer channel is expected to account for a majority of the projected full year 2017 global net sales increase.

The company expects gross margins to improve by approximately 30 basis points and operating income to increase approximately 3 percent, to between 256 million dollars and 265 million dollars, resulting in anticipated 2017 operating margin of approximately 10.8 percent. Net income after non-controlling interest is expected to increase up to 4 percent to between approximately 193 million dollars and 200 million dollars, or approximately 2.74 dollars to 2.84 dollars per diluted share.

Picture:Columbia website