Columbia Sportswear Company (NASDAQ:COLM) has posted second-quarter 2010 results with a net loss per share of 31 cents, lower than the Zacks Consensus Estimate of a loss of 42 cents. However, the loss was 2 cents more than the prior year quarter loss of 29 cents.

However, Columbia registered a 24% increase in total sales to $221.8 million over $179.2 million in the prior year quarter driven by a strong U.S. wholesale business fueled by more reorders and fewer cancellations coupled with better-than-expected sales from retail stores, which resulted in double-digit growth in all the product categories. 

Geographically, almost all regions reported an increase in sales with a 27% growth in the U.S. to $123.7 million, 30% growth in the Latin America/Asia Pacific (LAAP) region to $51.8 million, and a 15% growth in the Europe, Middle East and Africa (EMEA) region to $38.6 million. However, Canada lagged with a 3% decline to $7.7 million.

Categorically, sportswear sales jumped 24% to $121.9 million, with outerwear sales increasing 24% to $43.4 million, accessories and equipment sales growing 45% to $17.8 million and footwear sales improving 16% to $38.7 million. 

As for brands, Columbia and Mountain Hardwear sales emerged as the strongest, with total sales increases of 23% and 39% to $199.4 million and $18.3 million, respectively.  Sales of Sorel, Montrail and Pacific Trail were insignificant during the relevant quarters in both 2009 and 2010.

Cost of sales increased 19.1% in the quarter to $124.9 million, offset by sales increase that helped grow gross profit in the quarter. Gross profit improved 30.4% to $96.9 million compared with $74.3 million in the prior-year quarter.

Cash and cash equivalents at the end of the quarter came in at $346.6 million while stockholders’ equity was $980.8 million. Columbia declared a dividend of 18 cents per share payable on August 26, 2010 to shareholders of record on August 12, 2010.

Outlook

Management stated that the current sluggish economic environment with a high rate of unemployment and poor credit market for both the retailers and consumers may dampen demand.

For the third quarter of fiscal 2010, Columbia expects sales to increase by a mid-teen percentage compared with the third quarter of fiscal 2009, mostly the result of higher advance seasonal orders and strong direct-to-consumer sales. Operating margin is expected to decrease approximately 200 basis points year over year.

Columbia expects net sales to increase 14% to 16% in fiscal 2010 compared with 2009. A higher proportion of full price sales in the wholesale business, more direct-to-consumer sales, better foreign currency hedge rates and increased costs to expedite production and delivery of fall orders to customers should expand fiscal 2010 gross margins by 75 basis points. Operating margin for the year is expected to be in line with the 2009 margin of approximately 7%.

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