Recently, outerwear-apparel and footwear firm Columbia Sportswear
The Columbia biz
Columbia is known primarily for outerwear apparel such as jackets, parkas, and vests used for outdoor activities including skiing, snowboarding, hiking, fishing, and hunting. This category accounted for just less than 40% of total sales in fiscal 2006, which was just slightly below its overall sportswear sales for the "serious outdoorsman and the more casual wearer." Footwear constitutes the third major category, and Boyle sees "enormous" opportunity in this group -- more on that later.
In terms of brands, the namesake Columbia brand is "by far the biggest of our revenues," according to Boyle, and it's supplemented by Montrail, Mountain Hardware, Titanium, Sorel winter footwear, and the recently acquired Pacific Trail, which Boyle also sees as having significant potential in the outerwear category. Today, Columbia sells its products to more than 13,000 retailers throughout the world, with 40% of sales now taking place overseas.
So what makes Columbia tick? Many investors consider the company a mini-Nike
Boyle frequently cited an intense focus on infrastructure, including an information-technology system that he said is "fairly sophisticated for an apparel company." Infrastructure investment has been the primary use of capital over the past several years at Columbia, and it believes it now has the systems in place to grow capacity without major additional spending.
After Columbia's formal remarks, an analyst asked how it plans to meet its goals of double-digit sales growth and grow profitability going forward. Boyle again talked about improving logistical efficiencies and keeping tight inventory controls. For instance, the company has a "conservative inventory model where we take significant orders in advance" -- a process that echoes Nike's future-orders system and helps shed light on sales trends for at least the near future.
Boyle also sees significant potential in footwear, which he said has been underperforming and inhibiting his personal goal of high-teens sales growth over the long term. He suggested that footwear is "poised to improve" as winter sales continue to do well, especially the Sorel brand, but he needs help during the other seasons as Columbia looks to increase volumes to enhance gross margins in the product category.
Other growth avenues include apparel and footwear sales in Europe, while department-store sales are "a fairly significant part of our business and growing," as Columbia has solid relationships with Kohl's
The Foolish bottom line
The competitive environment remains intense, with Dick's Sporting Goods
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Fool contributor Ryan Fuhrmann is long shares of Nike but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.