We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Project CONNECT to Aid Columbia Sportswear's (COLM) Top Line
Read MoreHide Full Article
Columbia Sportswear Company (COLM - Free Report) is progressing well with its Project CONNECT program, which is likely to drive sales and earnings growth, alongside strengthening the company’s financial position.
The project was announced last year with the intention of enhancing the company’s performance by working on its four core strategies. First, the company remains focused on driving brand awareness and boosting sales growth in both wholesale and direct-to-consumer channels, by concentrating on creating demand.
Second, management plans to enrich customers’ experience and digital operations. Further, Project CONNECT will help Columbia Sportswear improve and solidify global direct-to-consumer networks. Finally, the core strategies include making customer-centric investments and optimizing organization.
Perks of Project CONNECT
This operating model assessment project focuses on connecting consumers, wholesale customers and international distributors with its manufacturing partners and employees around the globe. Markedly, Project CONNECT is expected to enhance revenues, capture cost of sales efficiencies, improve marketing efforts and lower SG&A costs. Additionally, the company remains optimistic about generating substantial financial value from this project in the near future. Incidentally, management earlier stated that it expects to have a strong balance sheet with cash of more than $600 million and no long-term debt.
Apart from Project CONNECT, the company is actively pursuing other strategic initiatives as well.
Branding Initiatives Boost Growth
Columbia Sportswear’s innovative marketing techniques will further strengthen its presence in the apparel industry. The company’s prAna brand is seeing an increasing female customer base, besides successfully meeting its sustainability targets. The company intends to expand its SOREL men’s business and expects continued growth from the brand, post its upgrade. These branding strategies helped its Global Columbia, Global prAna and Global SOREL brands report growth of 13% to $508.8 million, 13% to $30.8 million and 9% to $42.3 million, respectively, during first-quarter 2018.
Focus on International Expansion
Columbia has a solid international presence, which enables it to seek new opportunities and enhance profitability. The company’s advancement in the EMEA region has been impressive, lately. Management is on track to exploit further opportunities in this region. Although the company has significant potential in a variety of markets, we believe the largest opportunity lies in China, given the region’s strength in digital wholesale and e-commerce channels.
The aforementioned factors have helped Columbia Sportswear put up a robust performance in the past. Notably, earnings and sales have surpassed the Zacks Consensus Estimate for more than a year now, while gross margin has been witnessing year-over-year growth for the past few quarters. Owing to this splendid surprise history, shares of Columbia Sportswear, sporting a Zacks Rank #2 (Buy), have rallied 60.9% in a year, outperforming the industry’s rise of 46.7%.
Without a doubt, Project CONNECT and the other growth drivers are likely to help the company keep its stellar show on. This is also evident from management’s raised top- and bottom-line views for 2018.
G-III Apparel Group Ltd. (GIII - Free Report) , with a long-term earnings growth rate of 15%, carries a Zacks Rank #1.
Lululemon athletica inc. (LULU - Free Report) , with a long-term earnings growth rate of 13.4%, carries a Zacks Rank #1.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Image: Bigstock
Project CONNECT to Aid Columbia Sportswear's (COLM) Top Line