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Columbia Sportswear (COLM) Q3 Earnings Beat, Sales Miss
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Columbia Sportswear Company (COLM - Free Report) reported mixed third-quarter 2016 numbers, with earnings beating the Zacks Consensus Estimate while revenues missed the same.
The company recorded earnings per share of $1.18 which outpaced the Zacks Consensus Estimate by a penny but declined 7.8% from the prior-year quarter.
Quarterly results were adversely impacted by the timing shift shipments of U.S. wholesale advance orders from the third quarter into the final quarter of 2016 and bankruptcies of certain wholesale customers.
Revenues and Operating Profits
Quarterly revenues dropped 3% to $745.7 million owing to lower sales in the U.S. and Canada. The decrease was partially offset by an improvement in Latin America, Asia Pacific (LAAP), and Europe, Middle East and Africa (EMEA) regions. Also, net sales came in below the Zacks Consensus Estimate of $766.6 million.
Cost of sales fell 2.7% to $400 million. Gross profit decreased 3% to $345.7 million. However, gross margin remained flat at 46.4%. The company reported net operating profit of $123.6 million, down from $132.3 million in the year-ago quarter.
Regional Segments
U.S.: Net sales fell 6% to $484.8 million, due to weaker sales in wholesale channels, partly compensated by mid-teen percentage growth in the direct-to-consumer channels.
Canada: Net sales dropped 3% (down 3% at constant dollar) to $75.2 million.
LAAP: Net sales grew 3% (up 1% at constant dollar) to $112.7 million, due to sales growth in Japan and China, partly compensated by lower sales in Korea.
EMEA: Net sales increased 8% (surged 8% at constant dollar) to $73.0 million, backed by an improvement in the company’s Europe-direct business, partly offset by lower sales to EMEA distributors.
Category Segments
Global Apparel, Accessories & Equipment segment’s net sales tumbled 4% (down 4% at constant dollar) to $574.1 million. Footwear net sales remained flat at $171.6 million.
Brands
Columbia brand’s net sales decreased 4% year over year to $587.3 million. SOREL brand’s net sales rose 2% (up 1% at constant dollar) to $87.6 million. Sales of Mountain Hardwear plunged 12% (down 13% in constant currency) to $30.5 million. Net sales at the prAna brand surged 11% to $38.1 million.
Other Financial Updates
Columbia Sportswear ended the quarter with cash and short-term investments of $219.7 million compared with $174 million in the year-ago period.
Management approved a 6% quarterly dividend hike to 18 cents per share, payable on Dec 1, 2016, to shareholders on record as of Nov 17.
2016 Guidance
Columbia Sportswear updated its 2016 guidance. Management anticipates 2016 net sales growth of 4% compared to 2015 levels. Currency is expected to affect sales by less than 1%.
The company estimates its gross margin for 2016 to improve by 10 basis points and selling, general and administrative costs to rise at a rate marginally above the expected sales growth. Also, tax rate is estimated to be 25%.
Operating profit is likely to increase 4% in the band of $250–$259 million.. Net income (after non-controlling interest) is expected to advance up to 8% in the range of $180–$187.5 million, compared with net income of $174.3 million guided earlier.
Earnings per share for 2016 are projected in the band of $2.55–$2.65. The company reported earnings of $2.45 in 2015. Currency is expected to adversely impact earnings by 26 cents per share due to a strong U.S. dollar.
Zacks Rank
Currently, Columbia Sportswear has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Duluth Holdings Inc. (DLTH - Free Report) , Michael Kors Holdings Limited and Tailored Brands, Inc. , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Duluth Holdings, with a long-term earnings growth rate of 25%, has surged nearly 84% year to date.
Michael Kors Holdings, with a long-term earnings growth rate of 10.3%, has gained roughly 24.5% in the past one year.
Tailored Brands, with a long-term earnings growth rate of 17.5%, has jumped nearly 16% year to date.
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Columbia Sportswear (COLM) Q3 Earnings Beat, Sales Miss
Columbia Sportswear Company (COLM - Free Report) reported mixed third-quarter 2016 numbers, with earnings beating the Zacks Consensus Estimate while revenues missed the same.
The company recorded earnings per share of $1.18 which outpaced the Zacks Consensus Estimate by a penny but declined 7.8% from the prior-year quarter.
COLUMBIA SPORTS Price, Consensus and EPS Surprise
COLUMBIA SPORTS Price, Consensus and EPS Surprise | COLUMBIA SPORTS Quote
Quarterly results were adversely impacted by the timing shift shipments of U.S. wholesale advance orders from the third quarter into the final quarter of 2016 and bankruptcies of certain wholesale customers.
Revenues and Operating Profits
Quarterly revenues dropped 3% to $745.7 million owing to lower sales in the U.S. and Canada. The decrease was partially offset by an improvement in Latin America, Asia Pacific (LAAP), and Europe, Middle East and Africa (EMEA) regions. Also, net sales came in below the Zacks Consensus Estimate of $766.6 million.
Cost of sales fell 2.7% to $400 million. Gross profit decreased 3% to $345.7 million. However, gross margin remained flat at 46.4%. The company reported net operating profit of $123.6 million, down from $132.3 million in the year-ago quarter.
Regional Segments
U.S.: Net sales fell 6% to $484.8 million, due to weaker sales in wholesale channels, partly compensated by mid-teen percentage growth in the direct-to-consumer channels.
Canada: Net sales dropped 3% (down 3% at constant dollar) to $75.2 million.
LAAP: Net sales grew 3% (up 1% at constant dollar) to $112.7 million, due to sales growth in Japan and China, partly compensated by lower sales in Korea.
EMEA: Net sales increased 8% (surged 8% at constant dollar) to $73.0 million, backed by an improvement in the company’s Europe-direct business, partly offset by lower sales to EMEA distributors.
Category Segments
Global Apparel, Accessories & Equipment segment’s net sales tumbled 4% (down 4% at constant dollar) to $574.1 million. Footwear net sales remained flat at $171.6 million.
Brands
Columbia brand’s net sales decreased 4% year over year to $587.3 million. SOREL brand’s net sales rose 2% (up 1% at constant dollar) to $87.6 million. Sales of Mountain Hardwear plunged 12% (down 13% in constant currency) to $30.5 million. Net sales at the prAna brand surged 11% to $38.1 million.
Other Financial Updates
Columbia Sportswear ended the quarter with cash and short-term investments of $219.7 million compared with $174 million in the year-ago period.
Management approved a 6% quarterly dividend hike to 18 cents per share, payable on Dec 1, 2016, to shareholders on record as of Nov 17.
2016 Guidance
Columbia Sportswear updated its 2016 guidance. Management anticipates 2016 net sales growth of 4% compared to 2015 levels. Currency is expected to affect sales by less than 1%.
The company estimates its gross margin for 2016 to improve by 10 basis points and selling, general and administrative costs to rise at a rate marginally above the expected sales growth. Also, tax rate is estimated to be 25%.
Operating profit is likely to increase 4% in the band of $250–$259 million.. Net income (after non-controlling interest) is expected to advance up to 8% in the range of $180–$187.5 million, compared with net income of $174.3 million guided earlier.
Earnings per share for 2016 are projected in the band of $2.55–$2.65. The company reported earnings of $2.45 in 2015. Currency is expected to adversely impact earnings by 26 cents per share due to a strong U.S. dollar.
Zacks Rank
Currently, Columbia Sportswear has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Duluth Holdings Inc. (DLTH - Free Report) , Michael Kors Holdings Limited and Tailored Brands, Inc. , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Duluth Holdings, with a long-term earnings growth rate of 25%, has surged nearly 84% year to date.
Michael Kors Holdings, with a long-term earnings growth rate of 10.3%, has gained roughly 24.5% in the past one year.
Tailored Brands, with a long-term earnings growth rate of 17.5%, has jumped nearly 16% year to date.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>