Columbia Sportswear 2013 Annual Report Download - page 33

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continued popularity of outdoor activities as part of an active lifestyle in key markets. Volatile economic environments in
key markets, seasonal weather patterns and inflationary or volatile input costs reduce the predictability of our business.
Business Outlook
The global business climate continues to present us with a great deal of uncertainty, making it difficult to predict future
results. Factors that could significantly affect our full year 2014 outlook include:
• Unseasonable weather conditions or other unforeseen factors affecting consumer demand and the resulting effect
on order cancellations, sales returns, customer accommodations, reorders, direct-to-consumer sales and
suppressed demand in subsequent seasons;
• Changes in mix and volume of full price sales in contrast with closeout product sales and promotional sales
activity;
• Costs and business interruption risks related to our supply chain and information technology infrastructure
investments and projects, including our multi-year global ERP system implementation;
• Our ability to effectively manage operating costs;
• Continued political and economic uncertainty, which is creating headwinds in key global markets, particularly
Europe as it relates to our EMEA direct business where we have ongoing efforts to revitalize the Columbia brand,
and in South America with respect to import restrictions and currency constraints in key distributor markets;
• The rate of new store expansion and performance of our existing stores and e-commerce sites in our global
direct-to-consumer operations;
• Changes in consumer spending activity; and
• Fluctuating currency exchange rates.
These factors and others may have a material effect on our financial condition, results of operations, or cash flows,
particularly with respect to quarterly comparisons.
We expect 2014 profitability to be affected by the following major factors:
• incremental sales, operating costs and profits from our new China joint venture;
• continued growth and increased investment in our global direct-to-consumer businesses;
• renewed growth in our wholesale businesses beginning in the second half of 2014;
• increased demand creation costs; and
• incremental depreciation expense and post go-live support costs related to our United States ERP implementation
beginning in the second quarter of the year.
Consistent with the historical seasonality of the business, we anticipate 2014 profitability to be heavily concentrated
in the second half of the year.
We continue to expect to complete implementation of our new ERP system in the United States in April 2014 which,
when combined with the fully functioning ERP system in our Canadian operation, will bring our North American wholesale
business and the majority of our global supply chain operations onto the new platform. The timing of the implementation
is scheduled to occur after our spring shipping window and prior to our larger fall wholesale and direct-to-consumer season.
We remain focused on driving sustainable, profitable sales growth by providing innovative products at accessible
prices, transforming our global supply chain, including information technology, managing inventory, and nurturing stronger
emotional connections with consumers through compelling marketing communications.
Results of Operations