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Bear Of The Day: Columbia Sportswear (COLM)

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Columbia Sportswear (COLM - Free Report) is a Zacks Rank #5 (Strong Sell) after missing earnings on February 6.  We will take a look at the report and then what at least one analyst had to say about the stock. This is the Bear of the Day.

Description

Headquartered in Portland, OR, Columbia Sportswear Company engages in the sourcing, marketing and distribution of outdoor and active lifestyle apparel, footwear, accessories and equipment in the U.S. and internationally.

The company offers products under four well-established brands – Columbia, Sorel, Mountain Hardwear and prAna. Amongst other brands, The OutDry and The Pacific Trail are worth mentioning.

The high quality products manufactured by the company under different banners makes them ideal for a range of sporting activities.

Before The Report

Pivotal Research Group came out two days before the report and lowered their target on COLM to $110 from $117.  In the report the anlayst suggested that he modeled in the high end of guidance and maybe a little upside given a history of recent beats.  At the same time he called for second half outlook to come in as channel inventory was a primary concern.

So a little good and bad in that report... and then the quarter came.

Earnings Report

On 2/16/20 COLM reported EPS of $1.58 and that was 8 cents below the Wall Street Consensus.  Revenues came in at $954M and beat the expectation of $949M.

Guidance called for FY20 EPS of $4.75-$4.90 when the consensus was looking for $5.09.

Following The Report

Pivotal downgraded COLM after the report and took their target down to $101 from $110.  The analyst called the print "mixed" and he noted how the company might have been a little aggressive with inventory in November.

But really, who could blame them?  I mean it was snowing hard on Halloween in Chicago so there was good reason to increase inventory.  The problem was a much warmer than expected November and early December.

COLM reports again on April 30, so investors might be well served to wait and see how inventory looks at that point.

Estimates

COLM has seen its earnings estimates fall following the recent miss.  The current quarter slipped from $1.13 to $0.86 over the last 30 days.

The full year number has moced from $5.13 to $4.83 over the same time period.

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