These are tough times in the sporting goods retail sector and that spells trouble for companies like Columbia Sportswear Co.
The Portland company on Thursday announced its third quarter sales declined 3 percent from the same period last year in part because of the bankruptcies of multiple key retailers.
Columbia’s quarterly sales hit $745.7 million in the three months ended Sept. 30, down from the $767.6 million in the same period a year ago. Profits also were down from a year ago. Columbia earned $83.6 million, or $1.18 per diluted share. In the same time period last year, the company made $91.1 million, $1.28 per diluted share.
Those earnings did narrowly beat analysts’ projections.
It wasn’t just retailer troubles that led to the sales decline. Tim Boyle, Columbia chief executive, ticked off the factors. “Weak consumer traffic at retail, the lingering effects of the bankruptcies, a glut of competitive product at discount, and more warm weather.”
The Sports Authority and the Vestis Retail Group, parent of Sports Chalet and two other chains, both filed for bankruptcy last spring. In the typical Chapter 11 scenario, a buyer would emerge to acquire the failed company or at least buy its stronger stores and inventory. But no one was interested enough to even enter a bid for Sports Authority or Sports Chalet, said Andrew Burns, an analyst with D.A. Davidson.
Nearly 200 stores were shuttered permanently.
Given the troubles among retailers, Columbia, like many of its peers, is emphasizing direct-to-consumer sales, both through their e-commerce websites and an expanding network of company stores.
Direct-to-consumer sales now account for 38 percent of Columbia’s global revenue, company officials said. Direct-to-consumer sales jumped more than 15 percent in the quarter in North America and nearly 30 percent in Europe, Columbia said.
By its fourth quarter, Columbia expects direct-to-consumer to account for nearly 50 percent of its U.S. sales, said Ron Parham, Columbia’s senior director of investor relations and corporate communications.
The company revised its year earnings outlook downward by 5 cents a share.
Boyle vowed to stand by his remaining retail partners. “We’ve had strong relationships with some of these great retailers for 40 years,” he said. “We’re going to work together to get through these tough times.”
