Columbia Sportswear Company (Nasdaq: COLM), a global leader in the active outdoor apparel and footwear industries, today announced record net sales of $217.3 million for the fourth quarter ended December 31, 2002, an increase of 1.4% over net sales of $214.3 million for the same period of 2001. The Company reported net income for the fourth quarter of $29.1 million, a 20.2% increase over net income of $24.2 million for the same period of 2001. Earnings per share for the fourth quarter of 2002 were $0.72 (diluted), on 40.3 million weighted average shares, compared to earnings per share of $0.61 (diluted) for the fourth quarter of 2001 on 39.9 million weighted average shares.
Compared to the fourth quarter of 2001, the Company's Domestic sales for the period decreased by 4.5% to $145.8 million, Canadian sales increased by 3.3% to $24.9 million, European sales increased by 16.1% to $23.1 million, and Other International sales increased 33.5% to reach $23.5 million for the fourth quarter of 2002. When measured in constant dollar terms, the Company's European sales grew by 6.4% for the fourth quarter of 2002. Growth in consolidated sales for the period was driven by the Company's sportswear business, which grew 20.4% during the period, but was offset by soft Columbia branded footwear sales which declined 19.5%. The decline in Columbia brand footwear sales for the period was the result of warm weather in the U.S. during the 2001 winter coupled with a lack of fresh product for the season, both of which negatively impacted fall 2002 preseason footwear orders as previously discussed by the Company.
Net income growth for the period was primarily the result of (1) increased sales volumes, (2) improvement in gross margin for the period to 47.2% compared to 45.8% for the fourth quarter of 2001, (3) continued improvement in operating efficiencies which resulted in a decrease in sales, general and administrative (SG&A) expenses to 25.9% of sales compared to 26.9% of sales for the fourth quarter of 2001, and (4) interest income of $316,000 compared to interest expense of approximately $825,000 for the fourth quarter of 2001.
For fiscal year 2002, the Company reported record net sales of $816.3 million, an increase of 4.7% over net sales of $779.6 million for 2001. The Company reported net income for 2002 of $102.5 million, an increase of 15.4% compared to the Company's net income of $88.8 million for 2001. Earnings per share for 2002 were $2.56 (diluted), on 40.1 million weighted average shares outstanding for the period, compared to earnings per share of $2.23 (diluted) on 39.8 million weighted average shares outstanding for 2001.
The increase in net sales for 2002 is attributable to growth in the Company's key merchandise categories as well as relative strength in each of the Company's key geographic markets. Specifically, compared to 2001, outerwear sales were up 4.8% to $422.5 million, sportswear sales increased 5.3% to $245.2 million, footwear sales increased 1.3% to $110.0 million, and accessory sales increased 10.9% to $38.6 million. Within the Company's footwear category, Columbia brand footwear sales decreased by 4.5% to $87.9 million for the period, and Sorel brand footwear sales grew 33.1% to $22.1 million. Geographically, compared to 2001, the Company's Domestic sales grew by 1.1% to $557.5 million, Canadian sales increased by 6.6% to $86.7 million, European sales increased by 16.5% to $95.9 million and the Other International sales increased 17.8% to reach $76.2 million. When measured in constant dollar terms, the Company's European sales grew by 12.3% for the full year 2002.
Net income growth for 2002 was due primarily to (1) increased sales volumes, (2) gross margin improvement in the U.S. and European markets, (3) continued improvements in operating efficiencies generally which resulted in a decrease in SG&A expenses as a percentage of sales for 2002 to 26.3% from 26.8% for 2001, (4) interest income of approximately $354,000 compared to interest expense of $2.6 million for the full year 2001, and (5) a reduction in the Company's effective tax rate to 37.5% compared to an effective tax rate of 39.0% for the full year 2001.
Tim Boyle, Columbia's president and chief executive officer commented, ''I am certainly pleased by our performance during the fourth quarter and the full year of 2002. Our steadfast approach to tight inventory management and effective cost controls has allowed us to achieve healthy gains in sales and net income, even in the face of a continuing difficult retail environment. I believe we have addressed product specific and creative process issues in the Columbia brand footwear offering through personnel changes that were enacted late in 2001. With exciting new product flowing into the stores for the upcoming spring season in all categories, including footwear, and favorable product reviews for our fall 2003 product offerings generally, I remain optimistic about the future of Columbia's business. We are committed to our key growth strategies, which include increasing the productivity of our customers, an emphasis on growing the business internationally, further developing our sportswear and footwear businesses, and further expanding retail distribution into department stores and specialty footwear retailers. I am confident that these strategic initiatives will help us to drive future growth.''
Boyle continued, ''In keeping with our standard practice, we will announce our fall 2003 backlog in our first quarter earnings release on April 24th, 2003. For the first quarter of 2003, we are maintaining our prior revenue growth guidance of between 13 and 15% and our net income growth guidance of between 14 and 16% when compared to the first quarter of 2002. For the second quarter of 2003, we currently anticipate revenue growth of between 13 and 15% and net income growth of between 6 and 9% when compared to the second quarter of 2002.
It is difficult for us to gauge revenue and profitability levels for the full year 2003 until we gain more visibility into the fall 2003 season. That said, it is our current belief that revenue growth of between 5 and 7% is achievable for the full year 2003 when compared to 2002. Based on this anticipated revenue growth, and despite some additional distribution center related fixed costs that will be fully weighted for 2003, we believe that earnings growth for 2003 of up to 2% is achievable..
Please keep in mind that Columbia's business is always subject to risks and uncertainties: we are always mindful of extenuating circumstances that could have an adverse impact on our business, including potential military action overseas, a very difficult economic environment globally, and a particularly weak economy in the U.S., which may adversely affect sales and profit margins and cause us to fall short of our current goals. Also, note that these projections are forward-looking in nature, and are based on backlog and forecasts, which may change, perhaps significantly.''