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5 Reasons Why You Should Buy Columbia Sportswear Now

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Low gas prices, an improving job scenario and increasing consumer confidence have helped the consumer discretionary sector make a strong start to fiscal 2016. Moreover, in spite of being a cautious shopper, consumers have reduced their debts and have started to spend more, which is proving beneficial for these companies.

Within the consumer discretionary sector, the athleisure category has been gaining steam lately, mainly because of the rising popularity of casual clothing at work. The sportswear-meets-street wear blend, which is in vogue now, has driven these stocks.

While we gear up for another earnings season, let's take a look at one intriguing stock Columbia Sportswear Company (COLM - Free Report) in the athleisure space, which can prove to be an excellent investment pick.

5 Bullish Factors for Columbia Sportswear

Rank and Estimates: Columbia Sportswear is a Zacks Rank #2 (Buy) stock and has been witnessing slight upward estimate revision over the past 60 days.

Results and Outlook: Columbia Sportswear kicked off 2016 with better-than-expected sales and profits. The company’s first-quarter earnings beat the Zacks Consensus Estimate by 28.9%. Earnings also surged 20% year over year. Revenues increased 10% to $525.1 million backed by higher sales in the U.S. and the Eastern Europe.

Moreover, higher sales in the U.S. as well as strong performance of the Sorel and Columbia brands helped the company maintain its business momentum. The company also expects mid-single-digit growth in sales during fiscal 2016. The company raised its earnings guidance during the first-quarter conference call.

Sponsorship: Columbia Sportswear was selected as the official outdoor apparel partner of England's Manchester United soccer club in Jan 2016. Manchester United, being the most popular sports franchise in the world, enhanced the company’s brand awareness in Europe and Asia, in addition to North and South America. Further, the company has decided to sponsor the U.S., Canadian, Russian and Belarus freestyle ski teams in International Ski Federation's Freestyle World Cup Series during fiscal 2015.

The company also signed an agreement with ten PGA athletes who will wear and promote the brand’s recently launched Columbia Golf line. They will compete in Columbia’s Golf collection of performance apparel and outerwear on the 2016 PGA tour. Such initiatives help the company boost its top line and maintain market share.

Brand Leadership:  Columbia Sportswear is a leading player in the active wear and foot wear market in the U.S. The company commands a portfolio of well-recognized flagship brands, including Columbia, prAna and Sorel, which reinforce its well-established position in the industry.

Product Nature: Sale of apparel, accessories, equipment and footwear is primarily based on replenishment and not on fashion. This ensures consistency and fewer markdowns since it is an essential commodity and does not conform much to the changing fashion trends. Moreover, in case of basic apparels, people usually return to the brand they use which ensures a group of loyal customers.

Other Key Picks

Other favorably ranked retail stocks include Coach Inc. , Hanesbrands Inc. (HBI - Free Report) and Perry Ellis International Inc. , all of which carry a Zacks Rank #2.

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