Columbia Sportswear are speeding up, as they went beyond financial analysts’ forecast. Two “factors” have been mostly driving such growth. The former is strategic: the supply chain the company relies on is less and less depending on China. Consequently, they may optimize costs, while being less affected by trade war effects. In other words, Columbia’s business soars while reducing Chinese influence. The latter applies to production, as Sorel brand has been increasingly booming.
In the third financial quarter, Columbia Sportswear Company’s sales went up by +14%, that is, 906.8 million US dollars. They have gone, therefore, far beyond business analysts’ forecast, which amounted to 883.15 million dollars. Likewise, profits have been rising, as they reached 119.3 million dollars, that is, +19%. In the first nine months of the year, net sales have been increasing by 11%, as they reached 2.087 billion dollars. Net profits went up by +40% (216.5 million dollars). Sorel brand, which improved its own financial performance by 17%, has been driving such success.
The supply chain
While speaking to CNBC, Tim Boyle, Columbia Sportswear chief executive officer, emphasized that the decision to move their supply chain proved rewarding. “Some supply countries meet our needs better than China. In the last few years, we moved away not because we do not like China, but simply because we spotted some more profitable opportunities elsewhere”. Columbia currently manufacture in 12 countries: yet, in 2018, over 60% of their manufacturing, footwear most of all, was made in Vietnam and China.
Although Boyle did not mention the trade war between the USA and China as the primary reason for their relocation, he talked about the issue anyway. He specifically hinted at Sorel brand, whose “highly technical” models are still manufactured by Chinese suppliers. Yet, “we are paying additional duties imposed on such commodities: this is bad for worldwide buyers, in particular for the US ones. We are free traders. I wish we would have the opportunity to sell more goods at more competitive prices”. While making public their financial statements, Columbia also announced the passing of Gert Boyle, 95, who was the mother of the current chief executive officer. In the company, they used to call her “One Tough Mother”: she had been leading Columbia’s development for fifty years. She was currently the president.
Pictures taken from sorel.com