Columbia(US:COLM)2025-02-27 21:11Financial Performance - In 2024, net sales decreased by 3% to $3,368,582 compared to $3,487,203 in 2023[205] - Gross profit for 2024 was $1,691,085, down from $1,729,932 in 2023, reflecting a gross margin of approximately 50.2%[295] - Operating income decreased to $270,741 in 2024 from $310,284 in 2023, representing a decline of 12.7%[295] - Net income for 2024 was $223,273, a decrease of 11.2% from $251,400 in 2023[295] - Earnings per share (EPS) for 2024 were $3.83, down from $4.11 in 2023, indicating a decline of 6.8%[295] - Comprehensive income for 2024 was $205,887, a decrease from $236,201 in 2023[297] - Total current assets decreased slightly to $2,008,582 in 2024 from $2,014,685 in 2023[292] - Total liabilities increased to $1,195,226 in 2024, up from $1,000,403 in 2023, marking a rise of 19.5%[292] Cost Management - The Profit Improvement Program achieved approximately $90 million in cost savings in 2024, net of severance costs[188] - The company aims to exceed its goal of $125 to $150 million in annualized savings by 2026[189] - SG&A expenses increased by $27,593 or 2% to $1,443,906, with SG&A as a percentage of net sales rising to 42.9% from 40.6%[210] - Unallocated corporate expenses decreased by $7.5 million to $314.3 million in 2024 from $321.8 million in 2023[225] Sales and Revenue Breakdown - Direct-to-consumer net sales increased by 1% to $1,634,224 in 2024, while wholesale net sales decreased by 7%[206] - U.S. net sales decreased by $173.2 million or 8%, primarily due to lower wholesale business sales and a challenging competitive environment[220] - LAAP segment net sales increased by $41.0 million or 8% (11% constant-currency), driven by strong demand in China and Japan[222] - EMEA segment net sales increased by $42.5 million or 9% (8% constant-currency), primarily from the Europe-direct business[223] - Canada segment net sales decreased by $28.9 million or 11% (10% constant-currency), driven by lower wholesale business sales[224] Cash Flow and Investments - Net cash provided by operating activities decreased to $491.0 million in 2024 from $636.3 million in 2023, a change of $145.3 million[227] - Net cash provided by investing activities was $87.3 million in 2024, a significant recovery from $461.8 million used in 2023[228] - Net cash used in financing activities increased to $386.2 million in 2024 from $254.8 million in 2023, primarily due to stock repurchases of $317.8 million and dividend payments of $69.7 million[229] - As of December 31, 2024, cash and cash equivalents were $531.9 million, up from $350.3 million in 2023, while short-term investments decreased to $283.6 million from $414.2 million[230] Inventory Management - Inventory levels decreased by 7% in 2024, supporting an expected expansion of gross margin in 2025[196] - The inventory balance decreased to $690.5 million as of December 31, 2024, from $746.3 million in 2023, driven by lower inventory buys and effective liquidation strategies[237] - Provisions for excess, close-out, and slow-moving inventory reduced gross inventory by $20.4 million in 2024, down from $23.3 million in 2023[247] Shareholder Returns - The company aims to return at least 40% of free cash flow to shareholders through dividends and share repurchases while considering opportunistic mergers and acquisitions[241] - The total cash dividends paid were $69,732 for 2024, compared to $73,440 in 2023, indicating a decrease of about 5.5%[303] - The company repurchased common stock amounting to $317,756 in 2024, which is a significant increase from $184,022 in 2023[303] Tax and Compliance - Income tax expense slightly increased to $74,914, with an effective tax rate of 25.1%, up from 22.9% in 2023[214] - The effective income tax rate for 2024 was reported at 25.1%, an increase from 22.9% in 2023[378] - The company maintained effective internal control over financial reporting as of December 31, 2024, based on established criteria[284] Future Outlook - The company expects less than 3% of finished products imported into the U.S. in 2025 will be manufactured in China[191] - Planned capital expenditures for 2025 are estimated to be between $60 million and $80 million, focusing on direct-to-consumer operations and digital capabilities[238] - The company plans to open a small number of branded stores in high-traffic shopping malls to elevate brand positioning[194] Brand Strategy - The Columbia brand ACCELERATE Growth Strategy targets a younger consumer demographic and aims to enhance brand perception[183] - DTC net sales increased, driven by growth in brick-and-mortar business, while e-commerce sales declined due to a challenging environment and increased competition[207]