Columbia Sportswear Company (COLM - Free Report) appears troubled, with its shares down 14.5% in a year compared with the industry’s decline of 9.4%. The company has been bearing the brunt of soft consumer demand due to a difficult operating landscape.
Additionally, management expects 2024 to be a difficult year, with retailers placing orders cautiously and elevated economic and geopolitical uncertainty. Columbia Sportswear has also been seeing elevated SG&A expenses for a while now.
The Zacks Consensus Estimate for 2024 earnings per share has decreased by 4.6% to $3.70 over the past 60 days. This indicates a 15.7% decline from the figure reported in the year-ago period. The consensus mark for sales also suggests a 2.5% year-over-year decrease.
COLM Continues to Face Hurdles
Columbia Sportswear continued navigating a tough operating landscape in the United States, which, along with the warm winter, affected fourth-quarter 2023 results. During the quarter, net sales declined 9% to approximately $1,060 million and missed the consensus mark of $1,081 million. Sales decreased across all channels, categories and brands. The company battled decelerating consumer demand and traffic throughout 2023.
Additionally, SG&A costs, as a percentage of sales, have been increasing year over year for a while now. In the fourth quarter of 2023, SG&A expenses, as a percentage of sales, expanded 360 bps to 38.2% due to elevated direct-to-consumer (DTC) expenses. Management expects SG&A expenses to increase in 2024 due to escalated DTC incentive compensation and enterprise technology expenses, partly countered by cost-curtailment actions and reduced supply-chain costs. As a percentage of net sales, SG&A expenses are anticipated in the range of 43.2-43.5% in 2024, up from the 40.6% reported in 2023.
This Zacks Rank #4 (Sell) company expects the net sales decline to lead to an operating margin contraction in 2024 despite the company’s cost-containment efforts. For 2024, Columbia Sportswear expects net sales to decline 4-2% to the $3.35-$3.42 billion band. Management envisions EPS in the range of $3.45-$3.85 in 2024, suggesting a decline of 16-6% from the $4.09 reported in 2023. For 2024, the operating margin is expected in the range of 7.6-8.4%, which implies a contraction of 130-50 basis points from 2023.
For the first half of 2024, management expects net sales to decline 9-6% to the $1,310-$1,352 million band. The EPS is envisioned in the band of 1-26 cents for the first half of 2024 compared with 88 cents reported in the same year-ago period.
For the first quarter of 2024, COLM anticipates a net sales decline of 11-8% to the $730-$753 range. Finally, management envisions first-quarter EPS of 30-45 cents compared with 74 cents reported in the year-ago period. For the first quarter of 2024, the operating margin is expected to be 2.2-3.8%, down from the 6.9% reported in the first quarter of 2023.
Wrapping Up
In its fourth-quarter 2023 earnings release, Columbia Sportswear stated that to enhance operational efficiency and protect profits, it is implementing a multi-year profit improvement program, which targets annual savings of $125-$150 million by 2026. The company’s brand-enhancing and marketing initiatives also bode well. However, the abovementioned hurdles keep the near-term outlook subdued.
3 Solid Picks
Abercrombie & Fitch (ANF - Free Report) , a specialty retailer, currently sports a Zacks Rank #1 (Strong Buy). ANF has a trailing four-quarter average earnings surprise of 715.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales and earnings implies growth of 5.6% and 19.1%, respectively, from the year-ago reported figure.
Ralph Lauren (RL - Free Report) , which designs, markets and distributes lifestyle products, currently carries a Zacks Rank #2 (Buy). RL has a trailing four-quarter earnings surprise of 18.7%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current fiscal-year sales and earnings indicates growth of 2.7% and 22.7%, respectively, from the year-ago reported number.
Gildan Activewear (GIL - Free Report) , which manufactures and sells various apparel products, currently carries a Zacks Rank #2. GIL delivered consecutive earnings surprises in the last three quarters.
The Zacks Consensus Estimate for Gildan Activewear’s current fiscal-year sales and earnings suggests growth of 1.7% and 14.4%, respectively, from the year-ago reported numbers.
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Columbia Sportswear Company (COLM - Free Report) appears troubled, with its shares down 14.5% in a year compared with the industry’s decline of 9.4%. The company has been bearing the brunt of soft consumer demand due to a difficult operating landscape.
Additionally, management expects 2024 to be a difficult year, with retailers placing orders cautiously and elevated economic and geopolitical uncertainty. Columbia Sportswear has also been seeing elevated SG&A expenses for a while now.
The Zacks Consensus Estimate for 2024 earnings per share has decreased by 4.6% to $3.70 over the past 60 days. This indicates a 15.7% decline from the figure reported in the year-ago period. The consensus mark for sales also suggests a 2.5% year-over-year decrease.
COLM Continues to Face Hurdles
Columbia Sportswear continued navigating a tough operating landscape in the United States, which, along with the warm winter, affected fourth-quarter 2023 results. During the quarter, net sales declined 9% to approximately $1,060 million and missed the consensus mark of $1,081 million. Sales decreased across all channels, categories and brands. The company battled decelerating consumer demand and traffic throughout 2023.
Additionally, SG&A costs, as a percentage of sales, have been increasing year over year for a while now. In the fourth quarter of 2023, SG&A expenses, as a percentage of sales, expanded 360 bps to 38.2% due to elevated direct-to-consumer (DTC) expenses. Management expects SG&A expenses to increase in 2024 due to escalated DTC incentive compensation and enterprise technology expenses, partly countered by cost-curtailment actions and reduced supply-chain costs. As a percentage of net sales, SG&A expenses are anticipated in the range of 43.2-43.5% in 2024, up from the 40.6% reported in 2023.
This Zacks Rank #4 (Sell) company expects the net sales decline to lead to an operating margin contraction in 2024 despite the company’s cost-containment efforts. For 2024, Columbia Sportswear expects net sales to decline 4-2% to the $3.35-$3.42 billion band. Management envisions EPS in the range of $3.45-$3.85 in 2024, suggesting a decline of 16-6% from the $4.09 reported in 2023. For 2024, the operating margin is expected in the range of 7.6-8.4%, which implies a contraction of 130-50 basis points from 2023.
For the first half of 2024, management expects net sales to decline 9-6% to the $1,310-$1,352 million band. The EPS is envisioned in the band of 1-26 cents for the first half of 2024 compared with 88 cents reported in the same year-ago period.
For the first quarter of 2024, COLM anticipates a net sales decline of 11-8% to the $730-$753 range. Finally, management envisions first-quarter EPS of 30-45 cents compared with 74 cents reported in the year-ago period. For the first quarter of 2024, the operating margin is expected to be 2.2-3.8%, down from the 6.9% reported in the first quarter of 2023.
Wrapping Up
In its fourth-quarter 2023 earnings release, Columbia Sportswear stated that to enhance operational efficiency and protect profits, it is implementing a multi-year profit improvement program, which targets annual savings of $125-$150 million by 2026. The company’s brand-enhancing and marketing initiatives also bode well. However, the abovementioned hurdles keep the near-term outlook subdued.
3 Solid Picks
Abercrombie & Fitch (ANF - Free Report) , a specialty retailer, currently sports a Zacks Rank #1 (Strong Buy). ANF has a trailing four-quarter average earnings surprise of 715.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current fiscal-year sales and earnings implies growth of 5.6% and 19.1%, respectively, from the year-ago reported figure.
Ralph Lauren (RL - Free Report) , which designs, markets and distributes lifestyle products, currently carries a Zacks Rank #2 (Buy). RL has a trailing four-quarter earnings surprise of 18.7%, on average.
The Zacks Consensus Estimate for Ralph Lauren’s current fiscal-year sales and earnings indicates growth of 2.7% and 22.7%, respectively, from the year-ago reported number.
Gildan Activewear (GIL - Free Report) , which manufactures and sells various apparel products, currently carries a Zacks Rank #2. GIL delivered consecutive earnings surprises in the last three quarters.
The Zacks Consensus Estimate for Gildan Activewear’s current fiscal-year sales and earnings suggests growth of 1.7% and 14.4%, respectively, from the year-ago reported numbers.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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