Columbia Sportswear says ‘escalating’ freight costs, port congestions are curbing its upside

Columbia Sportswear says ‘escalating’ freight costs, port congestions are curbing its upside

Columbia Sportswear Co. late Monday swung to a quarterly profit and raised its full-year 2021 outlook, but the retailer said “escalating” ocean-freight prices and ongoing port congestions limited the good news for the year.

Columbia
COLM,
+1.80%

said it earned $40.6 million, or 61 cents a share, in the second quarter, contrasting with a loss of $51 million, or 77 cents a share, in the year-ago period.

Sales rose 79% to $566.4 million, the company said. The stock rallied more than 7% in the extended session, after ending the regular trading day up 1.8%.

Analysts polled by FactSet expected Columbia to report a GAAP loss of 9 cents a share on sales of $503 million in the quarter.

The quarterly performance “clearly reflects the powerful fundamental recovery that is underway in our business,” Chief Executive Officer Tim Boyle said in a statement.

The results exceeded the company’s expectations thanks to better-than-planned performances in the U.S. wholesale and the direct-to-consumer, brick-and-mortar businesses, he said. The company is “well positioned to benefit from current consumer and outdoor trends,” Boyle said

The company guided for net sales between $3.13 billion and $3.16 billion for the year, representing sales growth between 25% and 26.5% compared with 2020.

Headwinds include store traffic that is still below pre-pandemic levels and, in recent months, ocean-freight prices that have “significantly exceeded our expectations” and limited the upside in the full-year outlook, Columbia said.

In a slideshow accompanying results, the company said demand for ocean-going ships and containers “is far outstripping available capacity,” and starting in June “escalating” ocean-freight rates limited the upside to the company’s 2021 outlook.

Moreover, port congestions and logistics snags continue to impact inventories, and rising COVID-19 cases in sourcing countries in Southeast Asia “could further disrupt product availability and deliveries,” the company said.

Columbia had $820.9 million in cash and equivalents as of June, compared with $475.8 million in June 2020. It had no borrowings, compared to short-term borrowings of $2.8 million the previous year.

Shares of Columbia have gained 16% so far this year, compared with gains of 17% for the S&P 500 index
SPX,
-0.18%
.

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