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Columbia Sportswear (COLM) Up on Q1 Earnings Beat, Raised View
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Columbia Sportswear Company (COLM - Free Report) posted first-quarter 2024 results, wherein both the top and bottom lines declined year over year due to a tough operating landscape in the United States and sluggish overall demand. However, both metrics came ahead of the respective Zacks Consensus Estimate. Management raised its bottom-line view for 2024 while keeping the sales guidance unchanged.
Shares of this Zacks Rank #3 (Hold) company jumped 10.1% in the after-market trading session on Apr 25.
The company is on track with strategies to accelerate brand growth across the portfolio. With the onset of warmer weather, consumers are being offered the latest cooling products and technologies, such as Columbia's Omni-Shade Broad Spectrum Air Flow and the company’s newest footwear system, Omni-MAX.
Quarter in Detail
This designer, marketer and distributor of outdoor and active lifestyle apparel, footwear and accessories posted quarterly earnings of 71 cents per share, which declined 4% year over year. However, the bottom line surpassed the Zacks Consensus Estimate of 35 cents.
Columbia Sportswear Company Price, Consensus and EPS Surprise
Net sales declined 6% to approximately $770 million while beating the consensus mark of $744 million. Net sales also declined 6% at constant currency or cc. The sales decline resulted from reduced wholesale net sales (in the United States and Canada). This stemmed from retailer cautiousness, a tough competitive landscape and sluggish overall consumer demand.
The gross margin increased 190 basis points (bps) to 50.6%, mainly caused by reduced inbound freight costs and a better channel and regional mix, somewhat offset by the company’s inventory curtailment efforts in the direct-to-consumer (DTC) brick and mortar businesses. We had expected the gross margin to expand 90 bps to 49.6%.
SG&A expenses were nearly flat at $349.3 million. As a percentage of sales, the same expanded 310 bps to 45.4%. Elevated DTC expenses were partly countered by reduced variable demand creation expenses and a decline in supply-chain costs. Our model suggested a 1% rise in SG&A expenses to $350.8 million.
Columbia Sportswear’s operating income came in at $44.7 million, down 21% year over year. The operating margin contracted 110 basis points to 5.8%.
Channels & Regional Segments
In the United States, net sales tumbled 8% to $474.4 million. Net sales fell 4% to $104.5 million in the EMEA. LAAP net sales grew 2% to $138.7 million. In Canada, net sales dropped 10% to $52.4 million.
During the quarter, DTC sales went up 3% to $379.1 million. Wholesale channel sales went down by 14% to $390.9 million.
Sales by Product Category & Brand
Net sales in the Apparel, Accessories and Equipment category dropped 2% to $619 million, while the same for Footwear fell 20% to $151 million.
Columbia, SOREL and prAna brands registered a sales decline of 6%, 24% and 4%, respectively. Sales for the Mountain Hardwear brand jumped 17%.
Other Financial Updates
Columbia Sportswear ended the quarter with cash, cash equivalents and short-term investments of $787.7 million and shareholders’ equity of $1,909.4 million. The company had no borrowings on its balance sheet as of Mar 31, 2024.
During the quarter, Columbia Sportswear’s cash provided by operating activities was $106.8 million, and capital expenditures were $14.8 million.
For 2024, COLM expects operating cash flow of at least $350 million. Capital expenditures are envisioned in the band of $60-$80 million.
During the quarter, the company repurchased 631,468 shares for $50.2 million. On Mar 31, 2024, Columbia Sportswear had $295.2 million available under its share buyback authorization. Management announced a quarterly cash dividend of 30 cents per share, which is payable on May 30, 2024 to shareholders of record as of May 16.
Guidance
For 2024, Columbia Sportswear expects net sales to decline 4-2% to the $3.35-$3.42 billion band. The company expects foreign currency translation to lower net sales growth by roughly 20 bps in 2024.
Management expects the gross margin to expand 80-120 bps to roughly 50.4-50.8%. As a percentage of net sales, SG&A expenses are anticipated in the range of 43-43.4%, up from the 40.6% reported in 2023. For the full-year 2024, the operating income is expected in the band of $259-$291 million. The operating margin is expected in the range of 7.7-8.5%. In 2023, COLM reported an operating margin of 8.9%.
Management now envisions EPS in the range of $3.65-$4.05 in 2024 compared with the previously guided range of $3.45-$3.85. Columbia Sportswear expects foreign currency translation to lower the EPS by nearly 4 cents.
For the second quarter of 2024, COLM anticipates a net sales decline of 10-7% to the $557-$576 range. The company expects to deliver an operating loss of $42-$27 million in the quarter. Finally, management envisions delivering a loss of 46-26 cents per share in the second quarter compared to earnings of 14 cents reported in the year-ago period.
Shares of COLM have declined 9.8% in the past year compared with the industry’s drop of 3.7%.
The Zacks Consensus Estimate for American Eagle’s current financial-year sales and earnings suggests growth of 3.3% and 12.5%, respectively, from the year-ago period. AEO has a trailing four-quarter earnings surprise of 22.7%, on average.
Duluth Holdings, which offers casual wear, workwear, outdoor apparel and accessories, currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for DLTH’s current financial-year bottom line suggests growth of 75% from the year-ago reported figure. The consensus mark for Duluth Holdings’ current fiscal year earnings has improved from a loss of 15 cents to a loss of 7 cents per share over the past 60 days.
Gildan Activewear, which offers various apparel products, currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for GIL’s current financial-year revenues and EPS suggests growth of around 2% and 14.4%, respectively, from the year-ago reported figure. Gildan Activewear delivered a positive earnings surprise of 4.2% in the last reported quarter.
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Columbia Sportswear (COLM) Up on Q1 Earnings Beat, Raised View
Columbia Sportswear Company (COLM - Free Report) posted first-quarter 2024 results, wherein both the top and bottom lines declined year over year due to a tough operating landscape in the United States and sluggish overall demand. However, both metrics came ahead of the respective Zacks Consensus Estimate. Management raised its bottom-line view for 2024 while keeping the sales guidance unchanged.
Shares of this Zacks Rank #3 (Hold) company jumped 10.1% in the after-market trading session on Apr 25.
The company is on track with strategies to accelerate brand growth across the portfolio. With the onset of warmer weather, consumers are being offered the latest cooling products and technologies, such as Columbia's Omni-Shade Broad Spectrum Air Flow and the company’s newest footwear system, Omni-MAX.
Quarter in Detail
This designer, marketer and distributor of outdoor and active lifestyle apparel, footwear and accessories posted quarterly earnings of 71 cents per share, which declined 4% year over year. However, the bottom line surpassed the Zacks Consensus Estimate of 35 cents.
Columbia Sportswear Company Price, Consensus and EPS Surprise
Columbia Sportswear Company price-consensus-eps-surprise-chart | Columbia Sportswear Company Quote
Net sales declined 6% to approximately $770 million while beating the consensus mark of $744 million. Net sales also declined 6% at constant currency or cc. The sales decline resulted from reduced wholesale net sales (in the United States and Canada). This stemmed from retailer cautiousness, a tough competitive landscape and sluggish overall consumer demand.
The gross margin increased 190 basis points (bps) to 50.6%, mainly caused by reduced inbound freight costs and a better channel and regional mix, somewhat offset by the company’s inventory curtailment efforts in the direct-to-consumer (DTC) brick and mortar businesses. We had expected the gross margin to expand 90 bps to 49.6%.
SG&A expenses were nearly flat at $349.3 million. As a percentage of sales, the same expanded 310 bps to 45.4%. Elevated DTC expenses were partly countered by reduced variable demand creation expenses and a decline in supply-chain costs. Our model suggested a 1% rise in SG&A expenses to $350.8 million.
Columbia Sportswear’s operating income came in at $44.7 million, down 21% year over year. The operating margin contracted 110 basis points to 5.8%.
Channels & Regional Segments
In the United States, net sales tumbled 8% to $474.4 million. Net sales fell 4% to $104.5 million in the EMEA. LAAP net sales grew 2% to $138.7 million. In Canada, net sales dropped 10% to $52.4 million.
During the quarter, DTC sales went up 3% to $379.1 million. Wholesale channel sales went down by 14% to $390.9 million.
Sales by Product Category & Brand
Net sales in the Apparel, Accessories and Equipment category dropped 2% to $619 million, while the same for Footwear fell 20% to $151 million.
Columbia, SOREL and prAna brands registered a sales decline of 6%, 24% and 4%, respectively. Sales for the Mountain Hardwear brand jumped 17%.
Other Financial Updates
Columbia Sportswear ended the quarter with cash, cash equivalents and short-term investments of $787.7 million and shareholders’ equity of $1,909.4 million. The company had no borrowings on its balance sheet as of Mar 31, 2024.
During the quarter, Columbia Sportswear’s cash provided by operating activities was $106.8 million, and capital expenditures were $14.8 million.
For 2024, COLM expects operating cash flow of at least $350 million. Capital expenditures are envisioned in the band of $60-$80 million.
During the quarter, the company repurchased 631,468 shares for $50.2 million. On Mar 31, 2024, Columbia Sportswear had $295.2 million available under its share buyback authorization. Management announced a quarterly cash dividend of 30 cents per share, which is payable on May 30, 2024 to shareholders of record as of May 16.
Guidance
For 2024, Columbia Sportswear expects net sales to decline 4-2% to the $3.35-$3.42 billion band. The company expects foreign currency translation to lower net sales growth by roughly 20 bps in 2024.
Management expects the gross margin to expand 80-120 bps to roughly 50.4-50.8%. As a percentage of net sales, SG&A expenses are anticipated in the range of 43-43.4%, up from the 40.6% reported in 2023. For the full-year 2024, the operating income is expected in the band of $259-$291 million. The operating margin is expected in the range of 7.7-8.5%. In 2023, COLM reported an operating margin of 8.9%.
Management now envisions EPS in the range of $3.65-$4.05 in 2024 compared with the previously guided range of $3.45-$3.85. Columbia Sportswear expects foreign currency translation to lower the EPS by nearly 4 cents.
For the second quarter of 2024, COLM anticipates a net sales decline of 10-7% to the $557-$576 range. The company expects to deliver an operating loss of $42-$27 million in the quarter. Finally, management envisions delivering a loss of 46-26 cents per share in the second quarter compared to earnings of 14 cents reported in the year-ago period.
Shares of COLM have declined 9.8% in the past year compared with the industry’s drop of 3.7%.
Take a Look at These Solid Picks
Three better-ranked stocks include American Eagle Outfitters (AEO - Free Report) , Duluth Holdings (DLTH - Free Report) and Gildan Activewear (GIL - Free Report) .
American Eagle, which operates as a multi-brand specialty retailer, sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for American Eagle’s current financial-year sales and earnings suggests growth of 3.3% and 12.5%, respectively, from the year-ago period. AEO has a trailing four-quarter earnings surprise of 22.7%, on average.
Duluth Holdings, which offers casual wear, workwear, outdoor apparel and accessories, currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for DLTH’s current financial-year bottom line suggests growth of 75% from the year-ago reported figure. The consensus mark for Duluth Holdings’ current fiscal year earnings has improved from a loss of 15 cents to a loss of 7 cents per share over the past 60 days.
Gildan Activewear, which offers various apparel products, currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for GIL’s current financial-year revenues and EPS suggests growth of around 2% and 14.4%, respectively, from the year-ago reported figure. Gildan Activewear delivered a positive earnings surprise of 4.2% in the last reported quarter.