Columbia Sportswear Company outlined its strategic priorities and growth strategies, and introduced three-year financial targets at a meeting with investors and analysts at its headquarters in Portland, Ore., on Thursday.
“From our IPO in 1998 to 2021, Columbia Sportswear Company delivered a 9 percent net sales compound average growth rate (CAGR), 11 percent diluted earnings per share CAGR and a 13 percent annual total shareholder return,” said Tim Boyle, chairman, president and CEO of the multi-brand operator in outdoor, active and lifestyle products including apparel, footwear, accessories and equipment. “Today, we are providing multi-year financial targets that demonstrate our confidence in our ability to accelerate growth opportunities over the next three years and beyond.”
“Our three-year plan outlines our balanced, broad-based growth that will be amplified by three key accelerators: footwear, international expansion and digital sales growth,” Boyle added. “Columbia, with its differentiated innovation and value proposition, will add over $700 million in net sales by 2025. Sorel is expected to be our fastest growing brand, generating a 20 to 22 percent three-year CAGR, fueled by its year-round product offering and brand momentum. We anticipate delivering operating margin improvement over this time period, while investing in several areas, including demand creation and digital and supply chain capabilities.”
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Boyle said the company is focused on strategic priorities to accelerate profitable growth by unlocking the full potential of its brand portfolio, and creating products that are differentiated, functional and innovative.
The company also aims to drive brand engagement through increased, focused demand creation investments to grow brand awareness and build brand affinity; enhance consumer experiences by investing in capabilities to delight and retain consumers and better serve our wholesale partners, and amplify marketplace excellence with a digitally led, omnichannel global distribution strategy that clearly reflects the quality and value of its products, and empower talent that is driven by our core values, through a diverse and inclusive workforce.
The plan is expected to achieve financial objectives for the period beginning Jan. 1, 2023, through Dec. 31, 2025, that include net sales that are expected to grow at a three-year CAGR of 9 percent to 11 percent, compared to the midpoint of its 2022 financial outlook, reaching $4.5 billion to $4.7 billion in 2025. Operating margin is expected to expand to approximately 14 percent of net sales in 2025.
Diluted earnings per share (EPS) is seen growing at a three-year CAGR of 12 percent to 15 percent compared to the midpoint of 2022, reaching $7.35 to $7.95 in 2025. The company is targeting an annual total shareholder return (TSR) of 13 percent to 17 percent, inclusive of net sales growth, margin expansion, dividends and share repurchases.
Columbia Sportswear also reaffirmed its full year 2022 net sales outlook of $3.44 billion to $3.50 billion, representing net sales growth of 10 percent to 12 percent compared to 2021, and full year 2022 diluted EPS outlook of $5.00 to $5.40.
“Given the confidence we have in the collective strength of our brands and our ability to execute our strategic priorities, we are setting a 13 to 17 percent total annual shareholder return target over the three-year time period spanning 2023-2025,” chief financial officer Jim Swanson said. “We’re poised to accelerate profitable growth with broad-based momentum across our portfolio and geographies, and further amplified with a focus on footwear, international and digital sales growth.”