NEWS
COLUMBIA SPORTSWEAR'S MOMENTUM GROWS IN Q4 Capping off a comeback year, Columbia Sportswear reported revenues surged 27.6% in the fourth quarter to $457.3 million. Earnings rose 13.4% to $26.2 million, or 77 cents a share. The 19.2% full-year revenue gain to a record $1.48 billion followed three straight years of declines. In the quarter, double digit growth was achieved in every product category, every region and in each of its three major brands. The growth primarily reflected the previously-announced increase in Fall 2010 advance orders, combined with a timing shift of shipments due to delayed production. Also supporting the growth were earlier shipments of Spring 2011 advance orders to international distributors and U.S. wholesale customers made possible by more timely Spring 2011 production. Stronger than expected global direct-to-consumer sales, partly benefiting from favorable fall weather, contributed over 40% of the growth in the quarter. On a conference call, Tim Boyle, president and CEO, attributed
the gains to a renewed emphasis on product innovation, enhanced styling, improved retail presentation, and integrated marketing. "I believe we have more innovative products across our brand portfolio than at any time in the company's history," said Boyle. "We intend to keep fueling our product engines and delivering innovations that benefit outdoor consumers and challenge our competitors to keep up." Sales of the Columbia brand grew 22.2% to $365.0 million with a significant portion of the growth coming from its direct-to-consumer channel. Omni‐Heat products produced "superior sell-through in every channel in key markets globally." Sorel's sales jumped 74.1% to $50.5 million, including a 4 percentage point negative effect from changes in currency exchange rates. Mountain Hardwear's sales advanced 37.7% to $39.8 million, including a 1 percentage point benefit from currency exchange rates. The fourth quarter comparison for both Sorel and Mountain Hardwear were impacted by a timing shift of shipments of Fall 2010 advance orders into the fourth quarter due to delayed production.
UNDER ARMOUR BREAKS BILLION DOLLAR BARRIER FOR 2010 Under Armour, Inc. made history in 2010, breaking the billion dollar mark for the first time in the company's history as it continues develop its product lines and build its endorsement portfolio. Total sales for the year ended Dec. 31 were $1.1 billion, up nearly a quarter from sales of $856.4 million in fiscal 2009. The company’s bottom line improved by about half to $68.5 million, or $1.34 per diluted share, from $46.8 million, or 92 cents per share, in the year ago period. For the fourth quarter ended Dec. 31, total revenues increased 36% to $301.2 million from $222.2 million in the year ago quarter. Growth came from strength in all major categories, including apparel, which improved 32.2% to $254.0 million from $192.1 million a year ago. Management said growth was driven by “sustained momentum” across the Men’s, Women’s and Youth businesses. Footwear, which benefitted from the aforementioned fall basketball launch and growth in baseball cleats, more than doubled to $21.9 million from $8.7 million a year ago while Accessories jumped 28.0% to $14.8 million from $11.5 million a year ago. The licensing business, which represents about 3% of overall business, increased 6.3% to $10.5 million. Direct-to-consumer sales, which represented about 33% of total net revenues, jumped 56%. Net income increased to $22.9 million in the fourth quarter of 2010 compared with $15.2 million in the prior year's period. Perhaps the most noteworthy news is the company’s launch of its first cotton line, originally hinted at more than a year ago during a conference call with analysts. Under Armour is diving into the cotton business headfirst with its February shipment of Under Armour Charged Cotton, a “technology-based” product the company said takes “standard cotton fabric and infuse(s) it with performance material.” 4
SGB WEEKLY l JAN 31, 2011
CALLAWAY TURNS IN A DISAPPOINTING Q4 Callaway turned in a disappointing fourth quarter as the Carlasbad, CA-based golf manufacturer reported net sales of $185.5 million, essentially flat with a year-ago period that was still in the midst of a stagnant golf market. The company recorded a net loss of $32.3 million, or 54 cents per diluted share, for the quarter, compared with a loss of $15.6 million, or 29 cents per diluted share, in the prior-year period. The near-doubling of last year’s net loss was attributed largely to charges (7 cents per share) related to the company’s struggling Top-Flite brand along with charges related to global operation investments (7 cents per share), including the company relocating its Carlsbad, CA club assembly operation and a portion of its Chicopee, MA operation to a new facility in Monterey, Mexico. Gross margins for the quarter were 29.9% of sales, down 140 basis points from 31.3% in Q4 2009. Management said Top-Flite, a value-oriented golf ball brand sold primarily through big box retailers and mass market retailers like Walmart, has ceded sales to premiumbranded balls over the last two years. For the year, Callaway’s top line edged up 1.8% to $967.7 million from $950.8 million a year ago. The company reported a net loss of $18.8 million, or 46 cents per share, compared to a net loss of $15.3 million, or 33 cents per share, in the year-ago period.