Columbia Buying Boot Maker

The company beats fourth-quarter targets but guides lower for the first quarter.
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Columbia Sportswear (COLM) - Get Report posted a strong fourth quarter and bought hiking cobbler Montrail for $15 million plus debt assumption.

The Portland, Ore., maker of parkas and boots made $37 million, or 97 cents a share, compared with the year-ago $39 million, or 97 cents a share. Sales rose to $314 million from $302 million a year earlier. Wall Street was looking for an 83-cent profit on sales of $305 million.

"Fourth quarter sales were driven by the continued strength of our footwear and sportswear product categories," said CEO Tim Boyle. "Outerwear sales were down in the quarter, but not to the degree initially expected, due to healthy outerwear re-orders from U.S. retail customers late in the quarter. Favorable weather conditions across much of the U.S., Europe and Japan enhanced retail customers re-orders and sell-through of our weather-sensitive outerwear and footwear, generating strong margins and generally clean inventory levels at retail during the quarter. We are encouraged by the strong current season retail customer sell- through rates and margins and the potential impact that may have on fall 2006 orders for our compelling outerwear product offering."

But the company also guided lower for the first quarter, saying it expects 1% revenue growth from a year ago and a 25% profit decline. Analysts were looking for 4% sales growth and a smaller profit decline.

"This guidance does not include projected first quarter financial performance for Montrail," Boyle said. "We expect Montrail to be neutral to first quarter earnings and slightly dilutive to earnings for the full year. As a reminder, spring product sales account for a relatively small percentage of our overall business; the bulk of our revenues and profits historically come in the second half of the year. It is difficult for us to gauge revenue and profitability levels for the full year 2006 until we have more visibility into the fall 2006 season. In keeping with our standard practice, we will announce our fall 2006 backlog and give guidance for the full year in our first quarter 2006 earnings release. Please note that these projections are forward-looking in nature and are based on backlog and forecasts, which may change, perhaps significantly."