While we were away at Summer Market: The North Face, Columbia, Black Diamond and more report earnings
It was a mixed bag of earnings for outdoor brands in the second quarter of 2013.
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The North Face, Vans 2Q sales up, Timberland down
Despite a decline in domestic wholesale sales, The North Face reported its revenue up 5 percent in the second quarter 2013 on higher international and direct-to-consumer sales.
Parent VF Outdoor President Steve Rendle said the decline in wholesale orders was due to “seasonal lower demand and retailer caution,” but a 15 percent rise in the direct-to-consumer channel at the same time, also likely contributed as more consumers shop directly from the brand online.
Strong sales by the Vans brand continued to illustrate gains in the action sports market for VF, as sales rose 15 percent in the second quarter. Timberland, on the other hand, saw its sales decline 3 percent during the quarter, largely due to declining sales in Europe.
In total, VF Outdoor, which also includes brands like JanSport, Eagle Creek and SmartWool, rose 6 percent to $1.1 billion, with an operating profit of about $100 million — up from $82 million a year ago. The outdoor group outperformed VF’s overall combined diversified apparel holdings, including jeanswear, imagewear and sportswear. As a whole the VF Corp. (NYSE:VF) reported revenue up 4 percent to $2.2 billion. Quarterly net income, while positive at $138 million, slipped from $155 million a year ago.
Columbia sales decline on weaker international sales
Columbia Sportswear Co., (Nasdaq:COLM) parent to its namesake brand, Mountain Hardwear and Sorel, reported second-quarter 2013 sales down 3 percent to $280 million, but unlike its competitor above, saw stronger domestic sales and weaker international sales.
U.S. sales rose 6 percent, versus a 3 percent decline in sales Latin America and Asia and a 24 percent decline in Europe. Globally by brand, Columbia sales fell 3 percent to $252.5 million; Mountain Hardwear sales fell 5 percent to $22.5 million; and Sorel sales came in even at $2.9 million.
Officials don’t see much daylight ahead, predicting a 6.5 percent sales decline for the third quarter 2013, and an overall 2.5 percent sales decline for the full year 2013.
Black Diamond sales up, but expectations decline
Black Diamond Inc. (Nasdaq:BDE) reported a 22 percent increase in sales to $38.9 million for the second quarter 2013, largely due to its POC Sports and Pieps acquisitions, but officials lowered expectations for the full-year 2013 as losses widened.
The company, which owns and operates the Black Diamond, Gregory, POC and Pieps brands, reported a quarterly net loss of 2.3 million, versus a net loss of $1.9 million a year ago.
The losses largely reflect the company’s investments in its acquisitions and its apparel line, which will debut in fall 2013. Black Diamond ended the quarter with just $2.1 million in cash leftover with $36.8 million in debt, although it retains about $21.6 million available in a line of credit.
“The industry was not without its challenges during the first half of 2013, largely due to an extreme, unseasonably cool, wet spring both in North America and especially in Europe,” said Black Diamond Inc. CEO Peter Metcalf. “Following two consecutive challenging winter seasons, industry purchasing trends are continuing to evolve toward a model that we believe is intentionally shifting more inventory risk to manufacturers and distributors, and we are adjusting our strategy to reflect these dynamics.”
Black Diamond revised its full-year 2013 guidance, saying it now expects its total sales to range between $205 million and $210 million, compared to previous projections of between $216 million and $221 million.
Arc’teryx, Salomon continue to carry torch for Amer
Amer Sports, parent to Salomon, Arc’teryx and Atomic, reported its Winter and Outdoor Group revenue up 12 percent to EUR 168.7 million ($224.5 million) in the second quarter thanks to strong footwear and apparel sales, despite a slight decline in winter equipment.
Apparel sales, largely from Salomon and Arc’teryx grew 18 percent to EUR 30 million ($39.9 million), while footwear sales, largely from Salomon, increased 16 percent to EUR 65.5 million ($87.2 million).
Sales were strongest in the Americas, up 18 percent, and in Europe, up 14 percent, but weaker in Asia, down 5 percent.
Overall, Amer Sports, which also includes sports and fitness brands, reported a 7 percent increase in second-quarter 2013 sales to EUR 377.2 million ($502 million).
Cool spring dampens Jarden’s outdoor sales
Jarden Corp., (NYSE:JAH) parent to Marmot, K2, Coleman, ExOfficio and other industry brands reported its outdoor sales down less than 1 percent to $741.1 million in the second quarter 2013.
Officials said sales slowed in the early half the spring/summer as cooler weather prevailed, but picked up after Memorial Day as temperatures warmed back up.
Overall for Jarden, which also has a portfolio of consumer brands, second-quarter sales rose 3.9 percent to $1.76 billion.
“That’s where diversification comes into play,” Jarden CEO Ian Ashken said during the company’s conference call. “The Consumer Solutions businesses are really picking up, [whereas] if you look back a couple of years ago, Outdoor Solutions was the one that was trending ahead and Consumer Solutions was on the slower side.”
Jetboil acquisition fuel gains at Johnson Outdoors
Johnson Outdoors (Nasdaq:JOUT), parent to Eureka, Old Town Canoes and Necky Kayaks, reported a 3.5 percent increase to $129.8 million in revenue for its fiscal third quarter 2013. Quarterly profit rose to $13.7 million versus $9 million a year ago.
The gains in the company’s outdoor group — up 21 percent to $14.8 million — were largely due to its acquisition of Jetboil late last year. Without the Jetboil addition (which brought in $3.5 million for the quarter), sales for the outdoor group would have fallen 7.4 percent, as tent sales declined, officials said.
Johnson’s watercraft sales dropped — down 14 percent to $19 million — due to a cooler start to spring and the closure of its European business. On the bright side, Johnson’s largest segment of marine electronics was up nearly 5 percent to $73.6 million.