Columbia Sportswear 2009 Annual Report Download - page 32

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Annual Report, including Item 1 of Part I and Items 6 and 6A of Part II, contains forward-looking
statements. Forward-looking statements include any statements related to our expectations regarding future
performance or market position, including any statements regarding anticipated sales across markets, distribution
channels and product categories, access to raw materials and factory capacity, financing and working capital
requirements and resources and our exposure to market risk associated with interest rates and foreign currency
exchange rates.
These forward-looking statements, and others we make from time to time, are subject to a number of risks
and uncertainties. Many factors may cause actual results to differ materially from those projected in forward-
looking statements, including the risks described above in Item 1A, Risk Factors. We do not undertake any duty
to either update forward-looking statements after the date they are made or conform them to actual results or to
changes in circumstances or expectations.
Our Business
As one of the largest outdoor apparel and footwear companies in the world, we design, develop, market and
distribute active outdoor apparel, footwear, accessories and equipment under the Columbia, Mountain Hardwear,
Sorel, Montrail, and Pacific Trail brands. Our products are sold through a mix of wholesale distribution channels,
independent distributors, our own retail channels and licensees.
The popularity of outdoor activities and changing design trends affect consumer desire for our products.
Therefore, we seek to anticipate and respond to trends and shifts in consumer preferences by adjusting the mix of
available product offerings, developing new products with innovative performance features and designs, and by
creating persuasive and memorable marketing communications to drive consumer awareness and demand.
Failure to anticipate or respond to consumer needs and preferences in a timely and adequate manner could have a
material adverse effect on our sales and profitability.
Business Environment
Like other branded consumer product companies, our business is heavily dependent upon discretionary
consumer spending patterns. Our net sales volumes have been negatively affected by the volatility of the global
economy and its impact on consumer purchasing behavior, and retailers’ behavior related to advance orders,
replenishment orders, order cancellations and seasonal reorders. Consequences of the economic environment
during the past 18 months include tightening of credit for some of our wholesale customers and consumers and a
significant slowing of retail sales. This has resulted in, and could continue to result in, liquidations and
reorganization of several of our wholesale customers and a more cautious approach by many of our wholesale
customers when placing advance orders for seasonal products. It also affects decisions regarding reducing,
delaying delivery of, or cancelling advance orders prior to shipment. In addition, the effects of foreign currency
exchange rates may amplify any revenue declines if the U.S. dollar strengthens compared to local currencies in
our direct markets, as we have experienced in some markets.
We believe that we have appropriately factored our historical experiences, incremental sales from our new
retail stores and e-commerce platform, and the estimated effect of changes in foreign currency exchange rates
into our outlook for fiscal year 2010. However, unfavorable and unprecedented global economic conditions have
increased the uncertainty of our planning and forecasts. In this challenging economic environment, we are also
mindful of our reliance on the overall financial health of our wholesale customers and their ability to continue to
access credit markets to fund their inventory purchases and day-to-day operations.
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