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Shares of Columbia Sportswear Company (COLM - Snapshot Report) rose more than 5% since it reported its first quarter 2014 results on Apr 29. This leading apparel and footwear designer reported strong first quarter 2014 results wherein both earnings and sales beat expectations and raised the outlook for fiscal 2014.

First quarter earnings of 63 cents increased a significant 80% from the year-ago adjusted earnings of 35 cents backed by strong sales. Quarterly earnings also surpassed the Zacks Consensus Estimate of 32 cents per share by 96.9%.

Net sales of this retailer increased 22% to $424.1 million and came ahead of the Zacks Consensus Estimate of $398 million, driven by strong demand for Columbia and Sorel brands, especially across U.S. wholesale and direct-to-consumer channels, and the successful launch of the China joint venture. The company also witnessed solid demand for its Fall 2014 products in many key markets globally. However, results were partly offset due to unfavorable currency fluctuations.

Gross margin inflated 28.6% to $197 million during the quarter, owing to higher sales. Operating income increased significantly to $35.5 million as higher sales were partly offset by higher selling, general and administrative expenses and lower licensing income.

Segment Detail on Regional Basis

U.S.: Despite currency headwinds, first quarter U.S. net sales increased 20% as severe cold weather increased consumer demand for cold-weather footwear and apparel, thus resulting in increased consumer traffic and strong conversion rates.

Canada: Net sales in Canada increased 13%, owing to prolonged cold weather driving strong wholesale re-orders and enabling direct-to-consumer business. However, sales were impacted by unfavorable currency impact.

Latin America/Asia Pacific (LAAP): The company witnessed net sales growth of 41% in the region, coming from sales at the company’s new China joint venture, which offset currency headwinds.

Europe/Middle East/Africa (EMEA): Sales in this region declined 4% but were benefited by changes in foreign currency exchange rates.

Other Financial Update

During the quarter, the company’s board authorized a quarterly dividend of 28 cents a share to be paid on May 29, 2014 to shareholders of record as of May 15, 2014.

Columbia Sportswear also announced its plan to acquire prAna Lifestyle Apparel Brand for $190 million. The acquisition is expected to be complete in the second quarter of 2014 and expected to be accretive in fiscal year 2015. PrAna is a lifestyle brand and will complement the Columbia’s existing portfolio of authentic, active outdoor brands, which include Columbia, Mountain Hardwear, Sorel and Montrail.

Outlook

Following better-than-expected first quarter results, the company has raised its fiscal 2014 outlook. Columbia Sportswear’s net sales for 2014 are now expected to grow 16% to 18% compared with 2013 levels, as against the previous expectation of 15% to 17% growth. Net sales growth expectation for 2014 excludes the impact of the pending prAna acquisition. However, more than half of that growth is expected to come from the new China joint venture and the remainder from the company’s global direct-to-consumer and wholesale businesses.

Compared to the prior year, management envisions its full-year operating income to grow 25%, which results in operating margin of approximately 8.25%, higher than the prior forecast of 8%.

The company also continues to expect North American direct-to-consumer sales to grow at a double-digit rate in 2014. It also plans to open an additional 17 stores comprising 11 outlets, 6 Columbia-branded stores and 2 Sorel pop-up stores in order to help manage excess inventories more profitably while protecting brand integrity in the wholesale channels.

The Zacks Consensus Estimate for earnings is pegged at $3.40 for 2014.

Other Stocks to Consider

Columbia Sportswear carries a Zacks Rank #1 (Strong Buy). Other stocks in the textile apparel sector that warrant a look include Hanesbrands Inc. (HBI - Analyst Report) and V.F. Corp. (VFC - Analyst Report), both with a Zacks Rank #2 (Buy). Another retailer Bon-Ton Stores, Inc. (BONT) is also worth considering, carrying a Zacks Rank #1.

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