Columbia Sportswear sales take 13% coronavirus hit
Portland, Oregon-based outdoor apparel and sportswear maker Columbia Sportswear Company announced on Thursday that its first-quarter sales fell 13% year over year due to the impact of the coronavirus pandemic.
For the first quarter ended March 31, 2020, the company’s net sales totaled $568.2 million, down from $654.6 million in the comparable period in the previous year.
Quarterly net income was $0.2 million, or $0.00 per diluted share, down 100% from $74.2 million, or $1.07 per diluted share, in the prior-year period.
“First quarter results largely reflect the impact of the Covid-19 pandemic, which escalated throughout the quarter as the global effort to contain the pandemic unfolded,” said Columbia chairman, president and CEO Tim Boyle in a release.
“As consumers look to make every dollar they spend count within this challenging economic environment, we believe the Columbia brand’s differentiated innovation and exceptional value are as important as ever,” he added.
In order to deal with the problems presented by the current health situation, Columbia has implemented a number of measures to enhance financial liquidity and preserve capital. These initiatives include the expansion of the company’s domestic credit facility, the suspension of its quarterly dividend and share repurchases and the reduction of planned capital expenditures, with capital outflows expected to decrease by at least $130 million in 2020.
The company has also introduced cost containment measures, such as compensation adjustments, employee furloughs, the reduction of demand creation speed and the minimization of discretionary expenditures, all of which is expected to result in a $100 million decrease in 2020 operating expenses.
Columbia withdrew its annual guidance earlier this year in response to the Covid-19 pandemic and did not provide any further financial outlook on Thursday.
Nonetheless, the company pointed out that the second quarter is historically its lowest sales volume period, a fact which, combined with the disruptions being caused by the ongoing health crisis, has led Columbia to predict a “significant decline” in net sales and an operating loss for Q2.
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