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Columbia Sportswear Up 33% in a Year: More Growth in Store?
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Backed by growth in Europe and North America, strong distributor business across the globe and efficient initiatives, Columbia Sportswear Company (COLM - Free Report) has been able to consolidate position in investor’s good books. Evidently, shares of this renowned outdoor and active lifestyle apparel and accessories company have surged close to 33.5% over the past year, surpassing the industry’s rally of 23%.
Let’s now take a look into the aspects behind the spectacular growth and see if the company can add new feathers to its cap.
Solid Results Raises Optimism
Columbia Sportswear posted solid fourth-quarter 2017 results, with the top and the bottom line improving year over year and beating the Zacks Consensus Estimate. Notably, this marked the company’s 20th and fourth straight quarter of earnings and sales beat, respectively. The results were backed by enhanced margins along with strong sales across all regions and most brands.
The company is particularly encouraged with its 2017 Europe-direct show, which delivered double-digit currency-neutral sales growth for the third consecutive year. Columbia Sportswear witnessed continued operating margin growth. Moreover, the company’s results in the United States were impressive as strong DTC business compensated for the softness in wholesale business.
Additionally, Columbia Sportswear delivered record net sales, operating income and gross margin in 2017, making management optimistic about another year of top- and bottom-line growth.
Considering these factors and focus on strategic initiatives, management issued a favorable outlook for 2018, with net sales projected in the range of 5.5-7.5%. Net sale are expected to be backed by broad-based regional strength and improved performance across most brands. Also, full-year effective tax rate is expected to be lower, at nearly 22%, courtesy of benefits from tax reforms. That said, adjusted earnings per share for 2018 are projected in the band of $3.17-$3.27.
Project CONNECT: A Vital Growth Initiative
Concurrent with the objectives of enhancing revenues, capture cost of sales efficiencies, improve marketing process and lower SG&A costs, Columbia Sportswear started a new operating model assessment initiative — Project CONNECT — in 2017. During 2017, the company concluded the operational assessment phase of Project Connect.
This included a change in operating model, executive organization structure and rights to support an organization led by brands and consumers. The initiative is likely to benefit the company’s direct-to-consumer and wholesale channels in the forthcoming periods.
Other Performance Catalysts
Columbia Sportswear undertakes brand-enhancing and unique marketing initiatives that strengthen presence in the apparel industry. In the past year, Columbia Sportswear’s brand team installed and renovated more than 300 shop-in-shops in key partner store locations. The company’s prAna brand is also attracting an expanding base of female consumers. Further, the company expects continued growth from its SOREL brand through constant upgradation and effective management strategies.
With such initiatives rolled up in its sleeves, we expect this Zacks Rank #2 (Buy) company to achieve greater highs in the upcoming periods and continue impressing investors.
G-III Apparel came up with an average positive earnings surprise of 6.1% in the trailing four quarters. It has a long-term earnings growth rate of 15%.
Ralph Lauren Corporation pulled off an average positive earnings surprise of 10.4% in the trailing four quarters. Also, it has a long-term earnings growth rate of 10.2%.
Delta Apparel delivered an average positive earnings surprise of 53.5% in the trailing four quarters. It has a long-term earnings growth rate of 15%.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Columbia Sportswear Up 33% in a Year: More Growth in Store?
Backed by growth in Europe and North America, strong distributor business across the globe and efficient initiatives, Columbia Sportswear Company (COLM - Free Report) has been able to consolidate position in investor’s good books. Evidently, shares of this renowned outdoor and active lifestyle apparel and accessories company have surged close to 33.5% over the past year, surpassing the industry’s rally of 23%.
Let’s now take a look into the aspects behind the spectacular growth and see if the company can add new feathers to its cap.
Solid Results Raises Optimism
Columbia Sportswear posted solid fourth-quarter 2017 results, with the top and the bottom line improving year over year and beating the Zacks Consensus Estimate. Notably, this marked the company’s 20th and fourth straight quarter of earnings and sales beat, respectively. The results were backed by enhanced margins along with strong sales across all regions and most brands.
The company is particularly encouraged with its 2017 Europe-direct show, which delivered double-digit currency-neutral sales growth for the third consecutive year. Columbia Sportswear witnessed continued operating margin growth. Moreover, the company’s results in the United States were impressive as strong DTC business compensated for the softness in wholesale business.
Additionally, Columbia Sportswear delivered record net sales, operating income and gross margin in 2017, making management optimistic about another year of top- and bottom-line growth.
Considering these factors and focus on strategic initiatives, management issued a favorable outlook for 2018, with net sales projected in the range of 5.5-7.5%. Net sale are expected to be backed by broad-based regional strength and improved performance across most brands. Also, full-year effective tax rate is expected to be lower, at nearly 22%, courtesy of benefits from tax reforms. That said, adjusted earnings per share for 2018 are projected in the band of $3.17-$3.27.
Project CONNECT: A Vital Growth Initiative
Concurrent with the objectives of enhancing revenues, capture cost of sales efficiencies, improve marketing process and lower SG&A costs, Columbia Sportswear started a new operating model assessment initiative — Project CONNECT — in 2017. During 2017, the company concluded the operational assessment phase of Project Connect.
This included a change in operating model, executive organization structure and rights to support an organization led by brands and consumers. The initiative is likely to benefit the company’s direct-to-consumer and wholesale channels in the forthcoming periods.
Other Performance Catalysts
Columbia Sportswear undertakes brand-enhancing and unique marketing initiatives that strengthen presence in the apparel industry. In the past year, Columbia Sportswear’s brand team installed and renovated more than 300 shop-in-shops in key partner store locations. The company’s prAna brand is also attracting an expanding base of female consumers. Further, the company expects continued growth from its SOREL brand through constant upgradation and effective management strategies.
With such initiatives rolled up in its sleeves, we expect this Zacks Rank #2 (Buy) company to achieve greater highs in the upcoming periods and continue impressing investors.
Greedy for Textile-Apparel Stocks? Check These
Investors interested in the same sector may also consider investing in companies such as G-III Apparel Group, Ltd. (GIII - Free Report) , Ralph Lauren Corp. (RL - Free Report) and Delta Apparel, Inc. , all carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
G-III Apparel came up with an average positive earnings surprise of 6.1% in the trailing four quarters. It has a long-term earnings growth rate of 15%.
Ralph Lauren Corporation pulled off an average positive earnings surprise of 10.4% in the trailing four quarters. Also, it has a long-term earnings growth rate of 10.2%.
Delta Apparel delivered an average positive earnings surprise of 53.5% in the trailing four quarters. It has a long-term earnings growth rate of 15%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>