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Columbia Report Full Year Sales Up 25% in 2021 Compared to 2020

Columbia Reports Record Fourth Quarter and Full Year 2021 Financial Results and Provides Full Year 2022 Financial Outlook.

Fourth Quarter 2021 Financial Results

Net sales increased 23 percent to $1,129.7 million from $915.6 million for the comparable period in 2020. The increase in net sales primarily reflects strong consumer demand, which fueled direct-to-consumer (“DTC”) growth and higher Fall 2021 wholesale shipments, as we anniversary prior year pandemic disruptions.

Gross margin expanded 160 basis points to 52.2 percent of net sales from 50.6 percent of net sales for the comparable period in 2020. Gross margin expansion was primarily driven by lower DTC promotional levels, strong retail sell-through performance resulting in higher wholesale product margins, and favorable channel sales mix, partially offset by higher inbound freight costs and year-over-year changes in inventory provision activity.

SG&A expenses increased 12 percent to $384.0 million, or 34.0 percent of net sales, from $343.3 million, or 37.5 percent of net sales, for the comparable period in 2020. The increase in SG&A expenses primarily reflects expenses to support the growth of the business including higher global retail, demand creation, incentive compensation and personnel expenses, partially offset by lower retail impairments and store closure charges compared to fourth quarter 2020, and the non-recurrence of a prAna trademark impairment.

Operating income increased 71 percent to $211.6 million, or 18.7 percent of net sales, compared to operating income of $123.7 million, or 13.5 percent of net sales, for the comparable period in 2020.

Full Year 2021 Financial Results

Net sales increased 25 percent to $3,126.4 million from $2,501.6 million for the comparable period in 2020.

Gross margin expanded 270 basis points to 51.6 percent of net sales from 48.9 percent of net sales for the comparable period in 2020.

SG&A expenses increased 7 percent to $1,180.3 million, or 37.8 percent of net sales, compared to $1,098.9 million, or 43.9 percent of net sales, for the same period in 2020.

Operating income increased 229 percent to $450.5 million, or 14.4 percent of net sales, compared to operating income of $137.0 million, or 5.5 percent of net sales, for the comparable period in 2020.

Full Year 2022 Financial Outlook

Net sales are expected to increase 16 to 18 percent to $3.63 to $3.69 billion from $3.13 billion in 2021.

Gross margin is expected to contract approximately 160 basis points to approximately 50 percent of net sales from 51.6 percent of net sales in 2021.

SG&A expenses are expected to increase at a slightly slower rate than net sales growth. SG&A expense as a percent of net sales is expected to be 37.2 to 37.5 percent, compared to SG&A expenses as a percent of net sales of 37.8 percent in 2021. Demand creation as a percent of net sales is anticipated to be 6.0 percent in 2022, compared to 5.9 percent in 2021.

Operating income is expected to be $472 to $498 million, resulting in operating margin of 13.0 to 13.5 percent, compared to operating margin of 14.4 percent in 2021.

First Half 2022 Financial Commentary

Net sales growth of high-teens to low-20 percent, compared to first half 2021.
Gross margin is anticipated to contract over 300 basis points compared to first half 2021.
SG&A expenses are anticipated to grow slower than net sales growth, resulting in modest SG&A leverage.

Chairman, President and Chief Executive Officer Tim Boyle commented, “Fourth quarter and full year financial results were exceptional. Record financial performance reflects the strength of our brands and the tremendous efforts and resilience of our employees globally. In the quarter, robust consumer demand led to results that far exceeded our financial outlook driven by DTC outperformance and a highly favorable full price selling environment, which benefited gross margin. Throughout the season, our Fall 2021 sell-through rates have been outstanding, including the successful global launch of Omni-Heat Infinity.

“As we begin 2022, we are acutely focused on unlocking the growth opportunities we see across the business while mitigating supply chain and inflationary pressures. Our powerful brand portfolio is well positioned to connect active people with their passions and capitalize on the popularity of outdoor activities. Our 2022 outlook calls for 16 to 18 percent net sales growth, on top of 25 percent growth in 2021.

“I am confident we have the right strategies in place to drive profitable growth, and we are committed to investing in our strategic priorities to:

drive brand awareness and sales growth through increased, focused demand creation investments;
enhance consumer experience and digital capabilities in all our channels and geographies;
expand and improve global direct-to-consumer operations with supporting processes and systems; and
invest in our people and optimize our organization across our portfolio of brands.”

COVID-19 and Supply Chain Updates
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 fourth quarter 2021. Overall brick & mortar store traffic trends remain below pre-pandemic levels. Supply chain constraints continue to impact operations, resulting in delayed receipt and delivery of products for our Fall 2021 and Spring 2022 seasons. Demand for ocean vessels and containers continues to far outstrip available capacity, resulting in significant year-over-year increases in ocean freight costs.