We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Columbia Sportswear Up 56% in a Year, DTC not the Only Driver
Read MoreHide Full Article
Columbia Sportswear Company (COLM - Free Report) has been gaining from a sturdy top-line performance, backed by robust performance across most market regions and product categories. In this connection, the company’s direct-to-consumer and wholesale businesses have been performing well. Further, the company expects Project CONNECT to strengthen financial position. These upsides have aided this renowned apparel and accessories company’s shares to surge 56.2% in the past year compared with the industry’s 39.3% rally.
That said, let’s take a closer look at the factors aiding this Zacks Rank #1 (Strong Buy) company’s bull run.
Strength in DTC Business
Columbia Sportswear’s second-quarter 2018 results marked its sixth straight quarter of top-line beat. The bottom line delivered positive surprise for 22 quarters in a row. Management was impressed with better-than-expected quarterly performance, wherein direct-to-consumer (DTC) and wholesale businesses depicted steady growth. In this respect, the company is focused on driving brand awareness and boosting sales growth in the wholesale and direct-to-consumer channels, mainly though the creation of demand.
Notably, the company’s DTC business constituted 40% of the company’s total revenues in 2017, wherein sales from this channel increased at a high single-digit rate year over year. Encouragingly, management expects DTC revenue growth to outpace the wholesale channel in 2018. Courtesy of strength in the DTC business and enhanced wholesale business, the U.S. business witnessed growth of 13% in the first half of 2018. Within the DTC business, the brick-and-mortar and e-commerce businesses were strong and surpassed the company’s expectations in the first half.
Project CONNECT & More Factors Aiding Growth
Apart from bolstering wholesale and DTC channels, the company also focuses on enriching customers’ experience through improved digital operations and solidifying global direct-to-consumer networks. Moreover, the company undertakes brand-enhancing and unique-marketing initiatives that further strengthen presence in the apparel industry. In the past year, Columbia Sportswear’s brand team installed and renovated more than 300 shop-in-shops in key partner store locations. In fact, well-planned strategies have been boosting growth in the Global Columbia, Global prAna and Global SOREL brands.
To top these, Columbia Sportswear is progressing well with the Project CONNECT program, which is likely to drive sales and earnings growth, along with strengthening the company’s financial position. Markedly, the program is expected to enhance revenues, capture cost of sales efficiencies, improve marketing efforts and lower SG&A costs. The company is well on track with the program and expects to reap benefits from this program in 2018, with anticipated gains in 2019 and beyond.
Wrapping Up
Columbia Sportswear’s strategies for maintaining top-line growth combined with cost minimization efforts are likely to offset cost hurdles. In fact, solid growth endeavors and expectation of a strong second half encouraged management to raise outlook for 2018. All said we continue to expect that the stock will remain a lucrative pick for investors.
Looking for Consumer Discretionary Stocks? Check These
lululemon athletica inc. (LULU - Free Report) , sporting a Zacks Rank #1, came up with an average positive earnings surprise of 19.2% in the trailing four quarters. It has a long-term earnings growth rate of 17.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ralph Lauren Corporation (RL - Free Report) flaunting a Zacks Rank #1, has a solid earnings surprise history. The company has a long-term earnings growth rate of 9.6%.
Michael Kors Holdings Limited , sporting a Zacks Rank #1, delivered an average positive earnings surprise of 35.7% in the trailing four quarters. The company has a long-term earnings growth rate of 6.8%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Columbia Sportswear Up 56% in a Year, DTC not the Only Driver
Columbia Sportswear Company (COLM - Free Report) has been gaining from a sturdy top-line performance, backed by robust performance across most market regions and product categories. In this connection, the company’s direct-to-consumer and wholesale businesses have been performing well. Further, the company expects Project CONNECT to strengthen financial position. These upsides have aided this renowned apparel and accessories company’s shares to surge 56.2% in the past year compared with the industry’s 39.3% rally.
That said, let’s take a closer look at the factors aiding this Zacks Rank #1 (Strong Buy) company’s bull run.
Strength in DTC Business
Columbia Sportswear’s second-quarter 2018 results marked its sixth straight quarter of top-line beat. The bottom line delivered positive surprise for 22 quarters in a row. Management was impressed with better-than-expected quarterly performance, wherein direct-to-consumer (DTC) and wholesale businesses depicted steady growth. In this respect, the company is focused on driving brand awareness and boosting sales growth in the wholesale and direct-to-consumer channels, mainly though the creation of demand.
Notably, the company’s DTC business constituted 40% of the company’s total revenues in 2017, wherein sales from this channel increased at a high single-digit rate year over year. Encouragingly, management expects DTC revenue growth to outpace the wholesale channel in 2018. Courtesy of strength in the DTC business and enhanced wholesale business, the U.S. business witnessed growth of 13% in the first half of 2018. Within the DTC business, the brick-and-mortar and e-commerce businesses were strong and surpassed the company’s expectations in the first half.
Project CONNECT & More Factors Aiding Growth
Apart from bolstering wholesale and DTC channels, the company also focuses on enriching customers’ experience through improved digital operations and solidifying global direct-to-consumer networks. Moreover, the company undertakes brand-enhancing and unique-marketing initiatives that further strengthen presence in the apparel industry. In the past year, Columbia Sportswear’s brand team installed and renovated more than 300 shop-in-shops in key partner store locations. In fact, well-planned strategies have been boosting growth in the Global Columbia, Global prAna and Global SOREL brands.
To top these, Columbia Sportswear is progressing well with the Project CONNECT program, which is likely to drive sales and earnings growth, along with strengthening the company’s financial position. Markedly, the program is expected to enhance revenues, capture cost of sales efficiencies, improve marketing efforts and lower SG&A costs. The company is well on track with the program and expects to reap benefits from this program in 2018, with anticipated gains in 2019 and beyond.
Wrapping Up
Columbia Sportswear’s strategies for maintaining top-line growth combined with cost minimization efforts are likely to offset cost hurdles. In fact, solid growth endeavors and expectation of a strong second half encouraged management to raise outlook for 2018. All said we continue to expect that the stock will remain a lucrative pick for investors.
Looking for Consumer Discretionary Stocks? Check These
lululemon athletica inc. (LULU - Free Report) , sporting a Zacks Rank #1, came up with an average positive earnings surprise of 19.2% in the trailing four quarters. It has a long-term earnings growth rate of 17.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ralph Lauren Corporation (RL - Free Report) flaunting a Zacks Rank #1, has a solid earnings surprise history. The company has a long-term earnings growth rate of 9.6%.
Michael Kors Holdings Limited , sporting a Zacks Rank #1, delivered an average positive earnings surprise of 35.7% in the trailing four quarters. The company has a long-term earnings growth rate of 6.8%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>