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Columbia Sportswear (COLM) Q4 Earnings Beat, Sales Miss
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Shares of Columbia Sportswear Company (COLM - Free Report) declined 1% after the company reported mixed fourth-quarter 2016 numbers, with earnings beating the Zacks Consensus Estimate while revenues missed the same.
The company recorded earnings per share of $1.20 which outpaced the Zacks Consensus Estimate of $1.10 by 9.1%. Further, earnings surpassed year-ago results by 33.3%. Profits surged backed by higher sales and gross margins during the quarter.
Revenues and Operating Profits
Quarterly revenues gained 3% to $717.4 million owing to higher sales in almost all the geographic regions. Sales gained 2% in constant currency during the quarter. However, net sales came in below the Zacks Consensus Estimate of $755.1 million.
Columbia Sportswear Company Price, Consensus and EPS Surprise
Cost of sales fell 7% to $379.8 million. Gross profit gained 6.5% to $337.6 million driven by higher revenues and lower cost of sales. Gross margin inflated 180 basis points (bps) to 47.1%. The company reported net operating profit of $100.4 million, up 22% from the year-ago quarter due to lower selling, general and administrative expenses.
Regional Segments
U.S.: Net sales gained 2% to $455.4 million, reflecting growth from the Columbia brand.
Latin America/Asia Pacific (LAAP): Net sales inched up 1% (down 3% at constant dollar) to $151.9 million on the back of net sales growth in Japan and China.
Canada: Net sales grew 3% (up 1% at constant dollar) to $112.7 million.
Europe/Middle East/Africa (EMEA): Net sales increased 20% (increased 8% at constant dollar) to $70.1 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 net sales increased 4% to $535.8 million, and Footwear net sales decreased 1% (2% constant-currency) to $181.6 million.
Brands
Columbia brand’s net sales increased 4 percent to $552.3 million. Global SOREL brand net sales decreased 1% (2% constant-currency) to $103.8 million. Global prAna brand net sales increased 2% to $28.2 million, and global Mountain Hardwear brand net sales slumped 11% (12% on constant-currency basis) to $31.3 million.
Other Financial Updates
Columbia Sportswear ended the quarter with cash and short-term investments of $551.4 million compared with $219.7 million in the year-ago period.
Long-term debt amounted to $42.6 million compared with $40.7 million in the previous quarter.
Full Year 2016 Results
Earnings per share of $2.72 outpaced the Zacks Consensus Estimate of $2.62 by 9.1%. Earnings also surpassed year-ago results by 11%. Quarterly revenues gained 2% to $2.3 billion. Sales gained 2% in constant currency during the quarter. Further, net sales came in below the Zacks Consensus Estimate of $2.42 billion.
Guidance
Columbia Sportswear issued 2017 guidance. Management anticipates 2017 net sales growth of 4% compared with 2016 levels. Net sales are weighted more heavily toward the Fall season. Currency is expected to affect sales by less than 1%.
The company anticipates gross margin for 2016 to improve by 25 bps and selling, general and administrative costs to rise at a rate marginally above the expected sales growth. Moreover, tax rate is estimated to be 25%.
Operating profit is likely to increase 5% in the band of $260–$270 million. Earnings per share for 2017 are projected in the band of $2.72–$2.82, flat to up 3.6% from 2016 level.
Bottom Line
Currency headwinds, soft sales in the U.S. and Canada along with a lackluster performance of the Columbia brand are plaguing the company at the moment.
Shares of the company have showcased a decline of 3.1% in the last three months, underperforming the Zacks categorized Consumer Discretionary sector which has witnessed a gain of 6.6%.
Currently, Columbia Sportswear has a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader consumer discretionary sector are Adidas AG Inc. (ADDYY - Free Report) , Rocky brands Inc. (RCKY - Free Report) and Francesca’s Holdings Corporation .
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>
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Columbia Sportswear (COLM) Q4 Earnings Beat, Sales Miss
Shares of Columbia Sportswear Company (COLM - Free Report) declined 1% after the company reported mixed fourth-quarter 2016 numbers, with earnings beating the Zacks Consensus Estimate while revenues missed the same.
The company recorded earnings per share of $1.20 which outpaced the Zacks Consensus Estimate of $1.10 by 9.1%. Further, earnings surpassed year-ago results by 33.3%. Profits surged backed by higher sales and gross margins during the quarter.
Revenues and Operating Profits
Quarterly revenues gained 3% to $717.4 million owing to higher sales in almost all the geographic regions. Sales gained 2% in constant currency during the quarter. However, net sales came in below the Zacks Consensus Estimate of $755.1 million.
Columbia Sportswear Company Price, Consensus and EPS Surprise
Columbia Sportswear Company Price, Consensus and EPS Surprise | Columbia Sportswear Company Quote
Cost of sales fell 7% to $379.8 million. Gross profit gained 6.5% to $337.6 million driven by higher revenues and lower cost of sales. Gross margin inflated 180 basis points (bps) to 47.1%. The company reported net operating profit of $100.4 million, up 22% from the year-ago quarter due to lower selling, general and administrative expenses.
Regional Segments
U.S.: Net sales gained 2% to $455.4 million, reflecting growth from the Columbia brand.
Latin America/Asia Pacific (LAAP): Net sales inched up 1% (down 3% at constant dollar) to $151.9 million on the back of net sales growth in Japan and China.
Canada: Net sales grew 3% (up 1% at constant dollar) to $112.7 million.
Europe/Middle East/Africa (EMEA): Net sales increased 20% (increased 8% at constant dollar) to $70.1 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 net sales increased 4% to $535.8 million, and Footwear net sales decreased 1% (2% constant-currency) to $181.6 million.
Brands
Columbia brand’s net sales increased 4 percent to $552.3 million. Global SOREL brand net sales decreased 1% (2% constant-currency) to $103.8 million. Global prAna brand net sales increased 2% to $28.2 million, and global Mountain Hardwear brand net sales slumped 11% (12% on constant-currency basis) to $31.3 million.
Other Financial Updates
Columbia Sportswear ended the quarter with cash and short-term investments of $551.4 million compared with $219.7 million in the year-ago period.
Long-term debt amounted to $42.6 million compared with $40.7 million in the previous quarter.
Full Year 2016 Results
Earnings per share of $2.72 outpaced the Zacks Consensus Estimate of $2.62 by 9.1%. Earnings also surpassed year-ago results by 11%. Quarterly revenues gained 2% to $2.3 billion. Sales gained 2% in constant currency during the quarter. Further, net sales came in below the Zacks Consensus Estimate of $2.42 billion.
Guidance
Columbia Sportswear issued 2017 guidance. Management anticipates 2017 net sales growth of 4% compared with 2016 levels. Net sales are weighted more heavily toward the Fall season. Currency is expected to affect sales by less than 1%.
The company anticipates gross margin for 2016 to improve by 25 bps and selling, general and administrative costs to rise at a rate marginally above the expected sales growth. Moreover, tax rate is estimated to be 25%.
Operating profit is likely to increase 5% in the band of $260–$270 million.
Earnings per share for 2017 are projected in the band of $2.72–$2.82, flat to up 3.6% from 2016 level.
Bottom Line
Currency headwinds, soft sales in the U.S. and Canada along with a lackluster performance of the Columbia brand are plaguing the company at the moment.
Shares of the company have showcased a decline of 3.1% in the last three months, underperforming the Zacks categorized Consumer Discretionary sector which has witnessed a gain of 6.6%.
Currently, Columbia Sportswear has a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader consumer discretionary sector are Adidas AG Inc. (ADDYY - Free Report) , Rocky brands Inc. (RCKY - Free Report) and Francesca’s Holdings Corporation .
All these stocks carry a Zacks Rank #2 (Buy) and has an expected earnings growth of 17.5% and 13.8% and 19.5%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>