"2013 was a year of significant strategic accomplishments, including the launch of Black Diamond apparel, the establishment of our own distribution business in Japan, as well as the integration of POC and PIEPS," said Peter Metcalf, president and CEO of Black Diamond. "Our 24 percent sales growth in the fourth quarter was broad-based, as we experienced healthy double-digit growth across all of our brands, categories and major geographies."
For the year ended Dec. 31, 2013, Black Diamond expects to report sales of approximately $203.0 million, up 15 percent from $175.9 million in 2012.
"We achieved record fourth quarter, second half and full year sales in 2013 and believe Black Diamond is very well positioned to continue our multi-year track record of double-digit organic sales growth,” said Metcalf. “We believe we exited 2013 with our healthiest inventory levels in several years and our early spring 2014 bookings are strong. Our lineup of new products for 2014 is robust, highlighted by the spring launch of POC's road bike collection, continued expansion of apparel and our new Jetforce avalanche technology, which we plan to make available this fall across each of the Black Diamond, POC and PIEPS brands."
Recall curbs gross margin gains
Gross margin in the fourth quarter of 2013 is expected to be around 38.0 percent compared to 36.3 percent in the year-ago quarter. Although gross margin was up, several factors negatively impacted gross margin in the fourth quarter of 2013. These included unfavorable production and shipping variances, discontinued merchandise and inventory adjustments associated with older, discontinued winter seasonal product.
Gross margin for the full year of 2013 is expected to be around 38.2 percent, or flat with 2012. Gross profit in 2013 included a $1.5 million charge in the third quarter for a PIEPS product recall, of which $1.1 million was non-cash and included 100 percent of existing inventory. Excluding this charge, adjusted gross margin is estimated to be approximately 38.9 percent in 2013.
There were certain factors that negatively impacted gross margin during 2013. These included production variances and inventory adjustments associated with product season changes, as well as the impact from discontinued merchandise.
"We expect 2014 to be driven by double-digit sales growth across all brands, with improved margins and accelerating profitability," continued Metcalf. "Inherent in these expectations is the fact that Black Diamond apparel and POC each represent our most significant opportunities for compounded, multi-channel growth. At this time, we see no need to access the capital markets to fund our growth.
However, we have begun to explore strategic alternatives to monetize the value of untapped markets for our Gregory Mountain Products business. We have also retained an executive search firm to find a senior leadership candidate that will augment our capabilities in brand and general management, specifically in apparel, retail and e-commerce."
Management will provide complete fourth quarter and full year 2013 results in a press release and conference call, which will be announced at a later date.
2014 outlook
Black Diamond expects fiscal year 2014 sales to range between $235 million to $240 million, which would represent an increase of approximately 16 percent to 18 percent from the expected 2013 sales. The Company also expects gross margin in fiscal year 2014 to range between 39.5 percent and 40.5 percent.
By press release
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