Columbia Vows Continued Focus on Footwear
Despite a 9 percent constant-currency decline in first-quarter footwear sales to $116.0 million, Columbia Sportswear senior management says the segment will remain an important focus for the remainder of FY20. Columbia intends to support its footwear product engine and key product launches for the Sorel and Columbia brands for the remainder of the fiscal year. In FY19, Columbia Sportswear reported a 15 percent increase in annual footwear sales to $709.8 million, with the gain primarily driven by U.S. wholesale and direct-to-consumer sales. U.S. footwear sales, accounting for both Sorel and Columbia brand sales, rose 29 percent last fiscal year to $380.5 million.
U.S. net sales declined 9 percent in the first quarter, with the steepest decline in March, as stores closed due to the COVID-19 pandemic. Elsewhere, DTC net sales were down in the mid-teens, driven by a high-20s percent drop in brick-and-mortar net sales that was partially offset by a low-double-digit percent increase in e-commerce net sales.
Through the first weeks of April, Columbia experienced more than 60 percent year-over-year growth in e-commerce revenues; witnessed healthy growth from the online businesses of its wholesale partners; and realized “exceptional growth” from the Sorel brand. With the first wave of U.S. store re-openings expected this month, Columbia has “received and anticipates significant Spring and Fall 2020 sales order cancellations.” To that end, the company has “significantly curtailed” Fall 2020 inventory purchases and will prioritize matching inventory supply with projected demand. Additionally, some Fall 2020 orders may be fulfilled late due to supply chain disruptions caused by temporary raw material and finished goods supplier closures in Asia related to the global pandemic.