On October 26, 2023, Columbia Sportswear Co (COLM, Financial) announced its third quarter and first nine months 2023 financial results. The company reported a 3% increase in net sales for Q3 2023, reaching $985.7 million, compared to Q3 2022. However, the operating income decreased by 7% to $134.6 million, compared to the same period last year.
Financial Performance
Despite the increase in net sales, Columbia Sportswear Co (COLM, Financial) saw a decrease in operating income and diluted earnings per share. The operating income for Q3 2023 was $134.6 million, a 7% decrease from Q3 2022. Similarly, diluted earnings per share decreased by 6% to $1.70, compared to $1.80 in Q3 2022.
Company's Financial Position
The company exited Q3 2023 with $214.8 million in cash, cash equivalents, and short-term investments, and no borrowings. This strong financial position allows the company to navigate near-term headwinds and emerge in a stronger position, according to the CEO, Tim Boyle.
CEO's Commentary
“Third quarter performance was led by international-direct markets, with Canada, Europe-direct and China all delivering over 20 percent year-over-year growth in constant currency. In the U.S., the marketplace remains challenging, but we are making meaningful progress on our inventory reduction plan, with inventory exiting the quarter down 16 percent year-over-year. As we enter our peak selling season, we have numerous activations across our brand portfolio to engage consumers and drive sales, including product collaborations, pop-up shops and continued momentum in Columbia’s Omni-Heat Infinity collection.“
Financial Outlook
For the full year 2023, the company expects net sales to be between $3.48 to $3.53 billion, representing a net sales growth of 0.5 to 2.0 percent compared to 2022. The operating income is expected to be between $343 to $363 million, representing an operating margin of 9.8 to 10.3 percent. Diluted earnings per share are expected to be between $4.45 to $4.70.
Balance Sheet and Cash Flow
As of September 30, 2023, the company had cash, cash equivalents, and short-term investments totaling $214.8 million, compared to $160.2 million as of September 30, 2022. The company had no borrowings as of September 30, 2023, compared to borrowings of $4.4 million as of September 30, 2022. Inventories decreased 16 percent to $885.2 million, compared to $1,056.9 million as of September 30, 2022.
Net cash provided by operating activities was $22.2 million, compared to net cash used in operating activities of $328.1 million for the same period in 2022. Capital expenditures totaled $41.4 million, compared to $42.5 million for the same period in 2022.
Explore the complete 8-K earnings release (here) from Columbia Sportswear Co for further details.
