Earnings Results: Columbia Sportswear says ‘escalating’ freight costs, port congestions are curbing its upside

Sales rose 79% to $566.4 million, the company said. The stock rallied more than 7% in the extended session, after ending the regular trading day up 1.8%.

Analysts polled by FactSet expected Columbia to report a GAAP loss of 9 cents a share on sales of $503 million in the quarter.

The quarterly performance “clearly reflects the powerful fundamental recovery that is underway in our business,” Chief Executive Officer Tim Boyle said in a statement.

The results exceeded the company’s expectations thanks to better-than-planned performances in the U.S. wholesale and the direct-to-consumer, brick-and-mortar businesses, he said. The company is “well positioned to benefit from current consumer and outdoor trends,” Boyle said

The company guided for net sales between $3.13 billion and $3.16 billion for the year, representing sales growth between 25% and 26.5% compared with 2020.

Headwinds include store traffic that is still below pre-pandemic levels and, in recent months, ocean-freight prices that have “significantly exceeded our expectations” and limited the upside in the full-year outlook, Columbia said.

In a slideshow accompanying results, the company said demand for ocean-going ships and containers “is far outstripping available capacity,” and starting in June “escalating” ocean-freight rates limited the upside to the company’s 2021 outlook.

Moreover, port congestions and logistics snags continue to impact inventories, and rising COVID-19 cases in sourcing countries in Southeast Asia “could further disrupt product availability and deliveries,” the company said.

Columbia had $820.9 million in cash and equivalents as of June, compared with $475.8 million in June 2020. It had no borrowings, compared to short-term borrowings of $2.8 million the previous year.

Shares of Columbia have gained 16% so far this year, compared with gains of 17% for the S&P 500 index
SPX,
-0.18%.