Added: Nilda Downie - Date: 30.12.2021 13:41 - Views: 32716 - Clicks: 7692
Chairman, President and Chief Executive Officer Tim Boyle commented, "Our record financial performance clearly reflects the powerful fundamental recovery that is underway in our business. Second quarter exceeded our expectations, driven by better than planned performance in our U. We eclipsed pre-pandemic first half financialmarking an important milestone in our recovery. It is clear that our brand portfolio is resonating with consumers and we are well positioned to benefit from current consumer and outdoor trends.
We are raising our full year financial outlook for despite ongoing pandemic-related supply chain disruptions and higher ocean freight costs. We are committed to driving sustainable and profitable long-term growth and investing in our strategic priorities to:. ET today. Analysts and investors are encouraged to review this commentary prior to participating in our conference call. The Company's top priority throughout this pandemic remains to protect the health and safety of our employees, their families, our customers and our communities.
While there were isolated temporary store closures resulting from local regulations or safety concerns, the majority of the Company's owned stores remained open throughout second quarter In recent months, ocean freight costs have ificantly exceeded our expectations and limited upside to our full year financial outlook.
Rising COVID cases in sourcing countries across southeast Asia could further disrupt product availability and deliveries. Additionally, port congestion and logistics constraints continue to impact the timing of inventory receipts and deliveries. All comparisons are between second quarter and second quarterunless otherwise noted. Net sales growth primarily reflects a strong fundamental recovery in the U.
Gross margin expanded basis points to Gross margin expansion was primarily driven by decreased inventory reserve provisions relative to elevated levels in second quarter and, to a lesser degree, lower DTC promotional levels and favorable wholesale product margins, partially offset by unfavorable channel sales mix. The second quarter income tax benefit was primarily driven by a non-recurring decrease in accrued foreign withholding taxes.
The reduction in inventory was driven by increased sales combined with delayed Fall inventory receipts due to ongoing supply chain disruptions. Inventory at quarter-end primarily consisted of current and future season product. Aged inventories represent a manageable portion of our total inventory mix and excess inventory decreased ificantly compared to the same period in These risks and uncertainties limit our ability to accurately forecast.
This outlook reflects our estimates as of August 2, regarding the impact on our operations of the COVID pandemic, economic conditions, supply chain disruptions, constraints and expenses, and changes in consumer behavior and confidence, as well as geopolitical tensions.
However, it is not possible to determine the ultimate impact on our operations foror whether other currently unanticipated direct or indirect consequences of the pandemic are reasonably likely to materially affect our operations. This outlook assumes no meaningful deterioration of current supply chain or market conditions related to the ongoing pandemic. Projections are predicated on normal seasonal weather globally. Net sales are expected to increase Gross margin is expected to improve 95 to basis points prior to basis points to Ocean freight rates have increased dramatically over the past 60 days, exceeding estimates included in the prior financial outlook.
The updated financial outlook reflects the impact of current and estimated future freight rates. Demand creation as a percent of net sales is anticipated to be 6. Effective income tax rate is expected to be approximately The effective income tax rate may be affected by unanticipated impacts from changes in international, federal or state tax policies, changes in the Company's geographic mix of pre-tax income, other discrete events, as well as differences from our estimate of the tax benefits associated with employee equity awards and our estimate of the tax impact of various tax initiatives.
The reduction in planned capital expenditures is primarily due to a shift in timing related to certain capital projects. The Company expects low percent year-over-year net sales growth in second half The timing of Fall inventory receipts and wholesale shipments can have a ificant impact on quarterly financial performance. Based on current forecasted product delivery dates, the Company anticipates that both third and fourth quarter year-over-year net sales growth will be in the low percent range.
The Company will hold its second quarter conference call at p. Dial to participate. Columbia Sportswear Company plans to report third quarter financial on Thursday, October 28, at approximately p. Since Columbia Sportswear Company is a global company, the comparability of its operating reported in United States dollars is affected by foreign currency exchange rate fluctuations because the underlying currencies in which it transacts change in value over time compared to the United States dollar.
To supplement financial information reported in accordance with GAAP, the Company discloses constant-currency net sales information, which is a non-GAAP financial measure, to provide a framework to assess how the business performed excluding the effects of changes in the exchange rates used to translate net sales generated in foreign currencies into United States dollars. The Company calculates constant-currency net sales by translating net sales in foreign currencies for the current period into United States dollars at the average exchange rates that were in effect during the comparable period of the prior year.
Management believes that this non-GAAP financial measure reflects an additional and useful way of viewing an aspect of our operations that, when viewed in conjunction with our GAAPprovides a more comprehensive understanding of our business and operations. In particular, investors may find the non-GAAP financial measure useful by reviewing our net sales without the volatility in foreign currency exchange rates.
This non-GAAP financial measure also facilitates management's internal comparisons to our historical net sales and comparisons to competitors' net sales. The non-GAAP financial measures should be viewed in addition to, and not in lieu of or superior to, our financial measures calculated in accordance with GAAP. The non-GAAP financial measures presented may not be comparable to similarly titled measures reported by other companies. Forward-looking statements often use words such as "will," "anticipate," "estimate," "expect," "should," "may" and other words and terms of similar meaning or reference future dates.
The Company's expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis; however, each forward-looking statement involves a of risks and uncertainties, including those set forth in this document, those described in the Company's Annual Report on Form K and Quarterly Reports on Form Q under the heading "Risk Factors," and those that have been or may be described in other reports filed by the Company, including reports on Form 8-K. Potential risks and uncertainties include those relating to the impact of the COVID pandemic on our operations, which is highly dependent on numerous factors that we may not be able to predict or control, including: the duration and scope of the COVID pandemic, including any recurrence due to variants; actions that may be taken to contain the pandemic or to treat its impact, including lock-downs and the speed of the vaccination roll-out; economic slowdowns that have and may continue to result from the pandemic; workforce staffing and productivity; our ability to continue operations in affected areas; supply chain disruptions, constraints and expenses; and consumer demand and spending patterns, as well as the effects on suppliers, creditors, and wholesale customers, all of which are uncertain.
The Company cautions that forward-looking statements are inherently less reliable than historical information. The Company does not undertake any duty to update any of the forward-looking statements after the date of this document to conform them to actual or to reflect changes in events, circumstances or its expectations. New factors emerge from time to time and it is not possible for the Company to predict or assess the effects of all such factors or the extent to which any factor, or combination of factors, may cause to differ materially from those contained in any forward-looking statement.
Columbia Sportswear Company connects active people with their passions through its portfolio of well-known brands, making it a global leader in outdoor, active and everyday lifestyle apparel, footwear, accessories, and equipment products. Founded in in Portland, Oregon, the Company's brands are sold in approximately 90 countries. To learn more, please visit the Company's websites at www. Adjustments to reconcile net income to net cash provided by used in operating activities:. Loss on disposal or impairment of property, plant and equipment, and right-of-use assets.
Proceeds from issuance of common stock related to stock-based compensation. Supplemental disclosures of non-cash investing and financing activities :. View source version on businesswire. Press Releases. Related Documents Audio. June 30. Current Assets:.
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