Columbia Sportswear, an outdoor apparel and footwear company headquartered in Portland, Oregon, has announced a significant decline of 47% in its third-quarter earnings. In response to this decline, the company has made several changes to its leadership team to align with its renewed focus on its digital business.

For the third quarter, which ended on September 30, 2020, Columbia reported a net income decrease to $62.8 million, or $0.94 per diluted share, compared to $119.3 million, or $1.75 per diluted share, in the same period the previous year. Net sales also saw a decline of 23% to $701.1 million, down from $906.8 million in the previous year’s period. However, despite these disappointing figures, Columbia experienced a 55% year-over-year rise in quarterly net sales through its e-commerce channel, showcasing the potential for growth in the digital sector.

To support the development of its digital business, Columbia successfully implemented a new e-commerce platform in North America during the quarter. Columbia’s Chairman, President, and CEO, Tim Boyle, expressed satisfaction with the third-quarter results and anticipates further improvements in the fourth quarter and beyond into 2021.

Year to date, Columbia’s net sales have amounted to $1.59 billion, a decline of 24% from the previous year’s $2.09 billion. Net income for the period fell by 94% to $12.3 million, or $0.18 per diluted share, compared to $216.5 million, or $3.15 per diluted share, last year. Looking ahead, Columbia projects a decline of 8% to 11% in net sales, ranging from $850 million to $880 million, in the fourth quarter compared to the same period in the prior year. Diluted earnings per share are expected to range from $1.07 to $1.32.

Despite the challenges posed by the COVID-19 pandemic, Columbia remains optimistic about future growth. The increased interest in outdoor activities during the pandemic and promising sell-through trends in the U.S. wholesale channel have provided some positive outlook. Additionally, Columbia’s spring order book and expectations for growth in its direct-to-consumer business suggest net sales growth in the high-teens percentage range for the first half of 2021.

Moving forward, Columbia is placing a strong emphasis on developing its omni-channel business and enhancing its digital capabilities. To support these efforts, the company is implementing several changes to its management team. This includes promoting EMEA Matthieu Schegg to SVP for e-commerce, VP and general manager for EMEA, and SVP for Asia direct Peter Rauch, who will report directly to EVP and Americas general manager Franco Fogliato, transitioning to EVP for global omni-channel.

Additionally, Columbia is introducing the role of chief digital information officer to replace the chief information officer position, who will also report directly to Fogliato. The company is also in the process of hiring a chief marketing officer to enhance its marketing and social engagement in the digital marketplace.

Alongside these changes, EVP and chief operating officer Thomas B. Cusick will transition to a part-time role focusing on IT and supply chain initiatives in February 2021 before retiring later in the year. Lisa A. Kulok, SVP for global supply chain operations and manufacturing, will assume the role of EVP and chief supply chain officer, and Jim A. Swanson, SVP and CFO, will be promoted to EVP and CFO. Lastly, Brent Beeson, VP for apparel manufacturing, will transition to SVP for manufacturing.

Columbia Sportswear remains positive about its future and is dedicated to driving global brand awareness and enhancing its digital services. Through these leadership changes, the company aims to accelerate sustainable growth and believes these adjustments will make it stronger in the future.

Useful links:
1. Columbia Sportswear Official Website
2. What is E-commerce?