Columbia Sportswear Company (COLM Quick QuoteCOLM - Free Report) is progressing well with its Project CONNECT program, which is likely to drive sales and earnings growth, alongside strengthening the company’s financial position. 

 

The project was announced last year with the intention of enhancing the company’s performance by working on its four core strategies. First, the company remains focused on driving brand awareness and boosting sales growth in both wholesale and direct-to-consumer channels, by concentrating on  creating demand. 

 

Second, management plans to enrich customers’ experience and digital operations. Further, Project CONNECT will help Columbia Sportswear improve and solidify global direct-to-consumer networks. Finally, the core strategies include making customer-centric investments and optimizing organization. 

 

 

This operating model assessment project focuses on connecting consumers, wholesale customers and international distributors with its manufacturing partners and employees around the globe. Markedly, Project CONNECT is expected to enhance revenues, capture cost of sales efficiencies, improve marketing efforts and lower SG&A costs. Additionally, the company remains optimistic about generating substantial financial value from this project in the near future. Incidentally, management earlier stated that it expects to have a strong balance sheet with cash of more than $600 million and no long-term debt.   

 

Apart from Project CONNECT, the company is actively pursuing other strategic initiatives as well. 

 

 

Columbia Sportswear’s innovative marketing techniques will further strengthen its presence in the apparel industry. The company’s prAna brand is seeing an increasing female customer base, besides successfully meeting its sustainability targets. The company intends to expand its SOREL men’s business and expects continued growth from the brand, post its upgrade. These branding strategies helped its Global Columbia, Global prAna and Global SOREL brands report growth of 13% to $508.8 million, 13% to $30.8 million and 9% to $42.3 million, respectively, during first-quarter 2018. 

 

 

Columbia has a solid international presence, which enables it to seek new opportunities and enhance profitability. The company’s advancement in the EMEA region has been impressive, lately. Management is on track to exploit further opportunities in this region. Although the company has significant potential in a variety of markets, we believe the largest opportunity lies in China, given the region’s strength in digital wholesale and e-commerce channels. 

 

The aforementioned factors have helped Columbia Sportswear put up a robust performance in the past. Notably, earnings and sales have surpassed the Zacks Consensus Estimate for more than a year now, while gross margin has been witnessing year-over-year growth for the past few quarters. Owing to this splendid surprise history, shares of Columbia Sportswear, sporting a Zacks Rank #2 (Buy), have rallied 60.9% in a year, outperforming the industry’s rise of 46.7%.

 

 

 

Without a doubt, Project CONNECT and the other growth drivers are likely to help the company keep its stellar show on. This is also evident from management’s raised top- and bottom-line views for 2018.

 

 

Delta Apparel Inc. (DLA Quick QuoteDLA - Free Report) , with a long-term earnings growth rate of 15%, carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

 

G-III Apparel Group Ltd. (GIII Quick QuoteGIII - Free Report) , with a long-term earnings growth rate of 15%, carries a Zacks Rank #1.

 

Lululemon athletica inc. (LULU Quick QuoteLULU - Free Report) , with a long-term earnings growth rate of 13.4%, carries a Zacks Rank #1.

 

 

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