Columbia Sportswear: Zacks’ Bull of the Day Play

Columbia Sportswear Company (COLMSnapshot Report) is riding the wave of growth in active apparel and footwear. This Zacks Rank #1 (Strong Buy) recently raised full year guidance as it enters the fall season with “robust momentum.”

Columbia sells its active lifestyle apparel, footwear, accessories and equipment in 100 countries. In addition to the Columbia brand, which was founded in 1938 in Portland, Oregon, it owns Mountain Hardwear, Sorel, prAna, Montrail and OutDry brands.

Columbia Beats for the 10th Straight Quarter

On July 30, Columbia reported its fiscal second quarter results and beat the Zacks Consensus Estimate by 13 cents.

The second quarter is historically the slowest quarter of the year for the company yet net sales still rose 17% to $380.2 million.

Strong sell-through of the spring merchandise in North America and Europe drove demand in the second quarter. That’s also encouraging spring 2016 wholesale advance orders.

The company is bullish on the upcoming fall season. It is seeing momentum in North America in its Columbia, Sorel and prAna brands. The Columbia brand is also gaining traction in Europe.

Raised Fiscal 2015 Guidance

Given the improved prospects in the first half of the year and building momentum, Columbia raised full year guidance to mid-teen constant-dollar net sales growth.

It also raised its earnings guidance range to $2.25 to $2.35.

As a result, the analysts all raised their 2015 estimates, pushing up the Zacks Consensus Estimate to $2.34, up from the previous guidance of $2.22. That’s at the high end of the company’s guidance range.

That is earnings growth of 14.7%.

Analysts are also bullish about 2016 as 5 estimates moved higher for next year after the solid earnings report. The 2016 Zacks Consensus Estimate jumped to $2.60 from $2.52 in the last week. That is further earnings growth of 11.3%.

Shares at New Multi-Year Highs

Investors liked what they heard in the second quarter and jumped into the shares after the earnings report, pushing them up to a 2-year high.

Shares aren’t cheap. They are trading with a forward P/E of 32. That is well above the average of the S&P 500 of 18.

But you’re buying the strong growth.

For investors looking for a retailer in the hot athletic apparel market, Columbia is certainly one to keep on the short list.

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Tracey Ryniec is the Value Stock Strategist for She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.


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