22 Sep Columbia Sportswear Sets Three-Year Growth Targets
Columbia Sportswear Company introduced its three-year financial targets aimed for a 9 percent to 11 percent organic sales growth and 12 percent to 15 percent EPS growth on a compound annual growth rate (CAGR) basis from 2022 to 2025. The targets were announced ahead of its first Investor Day, scheduled for September 22, at its headquarters in Portland, OR.
Columbia also reaffirmed its full-year 2022 net sales and diluted earnings per share financial outlook.
Chairman, President and CEO Tim Boyle said, “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. 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 3-year plan outlines our balanced, broad-based growth that will be amplified by three key accelerators—footwear, international expansion and digital sales growth. 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 3-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.
“We are focused on our strategic priorities to:
- Accelerate Profitable Growth by unlocking the full potential of our brand portfolio;
- Create Iconic Products that are differentiated, functional and innovative;
- 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;
- Amplify Marketplace Excellence with a digitally-led, omnichannel global distribution strategy that clearly reflects the quality and value of our products, wherever consumers choose to shop; and
- Empower Talent that is driven by our core values, through a diverse and inclusive workforce.”
3-Year Financial Targets
“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 2023/25,” said CFO Jim Swanson. “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.”
Execution of the company’s plan is expected to achieve the following financial objectives for the period beginning January 1, 2023, through December 31, 2025:
- Net sales 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 are expected to grow 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.
Full Year 2022
Financial Outlook Update
The company is reaffirming its full-year 2022 net sales outlook of $3.44 to $3.50 billion, representing net sales growth of 10-to-12 percent compared to 2021 and full-year 2022 diluted earnings per share outlook of $5.00 to $5.40.
In addition to the Columbia brand, Columbia Sportswear Company also owns Mountain Hardwear, Sorel and Prana brands.