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Columbia Sportswear (COLM - Free Report) is a Zacks Rank #5 (Strong Sell) that designs, sources, markets, and distributes outdoor, active, and everyday lifestyle apparel, footwear, accessories, and equipment. The company provides apparel, accessories, and equipment for mountaineering, climbing, skiing, and snowboarding, trail, and camp enthusiasts.
The stock has not been kind to investors, down 20% on the year. As it trades near 2023 lows, it looks like more pain might be ahead after poor guidance and falling estimates.
About the Company
Columbia is headquartered in Portland, OR.The company was founded in 1938 and employs over 9,000 people.
The company offers products under four well-established brands – Columbia, Sorel, Mountain Hardwear and prAna. The company sells its products through the company-owned network of branded and outlet retail stores, brand-specific e-commerce sites, and concession-based arrangements with third-parties at branded outlet and shop-in-shop retail locations, as well as through independently operated specialty outdoor and sporting goods stores, sporting goods chains, department store chains, internet retailers, and international distributors.
Columbia is valued at $4 billion and has a Forward PE of 15. COLM holds Zacks Style Scores of “C” in Growth, “D” in Value, but “D” in Momentum. The stock pays a dividend of 1.7%.
Q2 Earnings
When Columbia reported earnings back in early August the headline looked great, with a 600% earnings beat. Q2 Revenue also beat, but the company cut guidance in a big way.
The company sees Q3 at $1.60-1.70 v the $1.95 expected and sees net sales below expectations. Columbia also cut FY23 to a range of $4.40-4.65 v the $5.23 expected. Operating margins are seen lower and the company cut capex.
Management said that because of trends they are seeing across the business, they are taking a conservative approach for the year. They are looking to manage expenses and looking for opportunities to drive growth.
Despite the spin, analysts had to cut estimates because of the guide lower.
Estimates
Over the last 60 days, estimates have dropped from $1.95 to $1.68 for the current quarter. The 14% move lower is not as bad as the next quarter, which has dropped 19%.
Looking longer term, analysts have lowered estimates by 12% for the current year and 8% for next year.
Technical Take
Looking at the chart there is not much to like. The stock is trading below all its major moving averages and almost 30% off 2023 highs.
There will likely be support in the mid $60s, but if that fails the COVID lows at $55 is the next stop.
Summary
Columbia has clearly lost steam over the last couple of months and the short term does not look great fundamentally. The chart is confirming that story as the stock trades at 2023 lows.
For those interested in the sector, a better option might be GIII Apparel Group (GIII - Free Report) . The stock is a Zacks Rank #1 (Strong Buy) and is trading near 2023 highs.
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Bear of the Day: Columbia Sportswear (COLM)
Columbia Sportswear (COLM - Free Report) is a Zacks Rank #5 (Strong Sell) that designs, sources, markets, and distributes outdoor, active, and everyday lifestyle apparel, footwear, accessories, and equipment. The company provides apparel, accessories, and equipment for mountaineering, climbing, skiing, and snowboarding, trail, and camp enthusiasts.
The stock has not been kind to investors, down 20% on the year. As it trades near 2023 lows, it looks like more pain might be ahead after poor guidance and falling estimates.
About the Company
Columbia is headquartered in Portland, OR.The company was founded in 1938 and employs over 9,000 people.
The company offers products under four well-established brands – Columbia, Sorel, Mountain Hardwear and prAna. The company sells its products through the company-owned network of branded and outlet retail stores, brand-specific e-commerce sites, and concession-based arrangements with third-parties at branded outlet and shop-in-shop retail locations, as well as through independently operated specialty outdoor and sporting goods stores, sporting goods chains, department store chains, internet retailers, and international distributors.
Columbia is valued at $4 billion and has a Forward PE of 15. COLM holds Zacks Style Scores of “C” in Growth, “D” in Value, but “D” in Momentum. The stock pays a dividend of 1.7%.
Q2 Earnings
When Columbia reported earnings back in early August the headline looked great, with a 600% earnings beat. Q2 Revenue also beat, but the company cut guidance in a big way.
The company sees Q3 at $1.60-1.70 v the $1.95 expected and sees net sales below expectations. Columbia also cut FY23 to a range of $4.40-4.65 v the $5.23 expected. Operating margins are seen lower and the company cut capex.
Management said that because of trends they are seeing across the business, they are taking a conservative approach for the year. They are looking to manage expenses and looking for opportunities to drive growth.
Despite the spin, analysts had to cut estimates because of the guide lower.
Estimates
Over the last 60 days, estimates have dropped from $1.95 to $1.68 for the current quarter. The 14% move lower is not as bad as the next quarter, which has dropped 19%.
Looking longer term, analysts have lowered estimates by 12% for the current year and 8% for next year.
Technical Take
Looking at the chart there is not much to like. The stock is trading below all its major moving averages and almost 30% off 2023 highs.
There will likely be support in the mid $60s, but if that fails the COVID lows at $55 is the next stop.
Summary
Columbia has clearly lost steam over the last couple of months and the short term does not look great fundamentally. The chart is confirming that story as the stock trades at 2023 lows.
For those interested in the sector, a better option might be GIII Apparel Group (GIII - Free Report) . The stock is a Zacks Rank #1 (Strong Buy) and is trading near 2023 highs.