Columbia Sportswear 2014 Annual Report Download - page 2

We strengthened our brands, reignited sales growth in North America and
Europe, made signicant progress on major operational technology projects,
expanded our brand portfolio, established a joint venture in China, and
strengthened our management team, all of which helped fuel improved
nancial performance.
Consolidated net sales surpassed $2.1 billion, an increase of $416 million, or
25 percent, representing our fastest growth rate in more than a decade and
the largest single-year volume growth in the company’s history.
Operating prots increased 51 percent and net income increased 45 percent,
to $137 million, or $1.94 per diluted share, compared with $94 million, or
$1.36 per diluted share in 2013.
We ended the year with $441 million in cash and short-term investments, even
after investing $189 million to expand our brand portfolio with the purchase
the prAna brand, and returning nearly $55 million to shareholders during
the year in the form of dividends (which increased 27 percent) and share
repurchases. We are proud of the company’s many achievements during 2014.
Dear Fellow Shareholders:
2014 WAS AN
OUTSTANDING
YEAR FOR COLUMBIA
SPORTSWEAR COMPANY
GLOBAL SALES OF
SOREL GREW 29%
GLOBAL COLUMBIA BRAND
SALES GREW $337 MILLION,
OR 24% PRANA JOINED OUR
PORTFOLIO OF BRANDS
ON MAY 30, 2014
Our agship Columbia brand succeeds when it delivers common-sense
innovations, trend-right styling, inspiring marketing messages and accessible
prices, and uses its broad product offering to create differentiated product
assortments for each of the diverse channels where our consumers shop.
In 2014, global Columbia brand sales grew $337 million, or 24 percent, to $1.8
billion, including increases of more than 20 percent in apparel & accessories
and 45 percent in footwear. While a majority of that growth came from North
America and Europe, our new joint venture in China also added $161 million
in sales and contributed $0.11 to full year earnings per share.
Columbia was the rst large U.S. outdoor brand to enter the Chinese market
more than a decade ago through an exclusive distribution arrangement with
Swire Resources Ltd. Having established Columbia as a leading, premium
outdoor brand in China while serving as our distributor, Swire is now serving as
a valuable joint venture partner as we continue to pursue what we believe is a
market still in early stages of development.
We see many attractive attributes in prAna that make it a great addition to our
brand family:
• A rapidly growing, protable business,
• An active lifestyle brand with a clear position in the market appealing to
socially-conscious consumers of both genders,
• A designer of high-quality apparel and accessories emphasizing sustainable
materials and processes,
• A seasonally balanced business with sales spread evenly over the year,
• Opportunities to leverage Columbia’s economies of scale and sophistication
to improve sourcing and supply chain operations, and
• Signicant room for continued expansion in North American markets and
virtually untapped international opportunities to pursue together.
Global sales of SOREL grew 29 percent in 2014 to a record $166 million.
We continued to evolve the SOREL brand beyond its cold weather core,
rmly establishing it as a brand for fashion-forward women who want great
footwear styling and performance in all climates. We are committed to
reducing SOREL’s dependence on cold-weather styles, while continuing to
grow SOREL’s heritage cold-weather franchise. As we succeed in interpreting
SOREL’s brand DNA into product assortments that span all seasons, we
will create substantial opportunities to penetrate markets outside of North
America. Today, those markets account for only 25 percent of SOREL’s global
sales. SOREL’s current momentum and untapped markets give us condence
that it will post another record year in 2015 and that it has signicant growth
opportunities ahead.