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4 Reasons Why Columbia Sportswear is Set to Grow Further
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Columbia Sportswear Company (COLM - Free Report) has long been on investors’ radar, courtesy of its robust past record that was retained in the second-quarter of 2018. A solid first half and key growth strategies also led to a raised top and bottom-line outlook for 2018.
That said, let’s take a look at the factors that are likely to keep driving Columbia Sportswear, which has rallied 18.1% over the past six months, outpacing the industry’s growth of 16.3%.
Project CONNECT on Track
Columbia Sportswear 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. The Project CONNECT focuses on connecting consumers, wholesale customers and international distributors with its manufacturing partners and employees around the globe. Markedly, the program 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. The company expects to reap benefits from the program this year, with further gains expected in 2019 and beyond.
Direct-to-Consumer Business — A Major Driver
Columbia Sportswear remains committed toward expanding and enhancing its global direct-to-consumer (DTC) business through accelerated investments. Notably, this constituted 40% of the company’s total revenues in 2017, wherein DTC sales increased at a high single-digit rate year over year. Courtesy of strength in the DTC business and enhanced wholesale business, Columbia Sportswear’s U.S. business witnessed growth of 13% in the first half of 2018. Within the DTC business, both the brick-and-mortar and e-commerce businesses were strong and surpassed the company’s expectations in the first half.
Solid International Presence
Columbia Sportswear has a solid international presence, which provides the company with a solid business foundation and enables it seek new opportunities to enhance profitability. In fact, the company’s advancement in the EMEA region has been impressive lately, especially due to Europe-direct business and greater sales to EMEA distributors. Sales from the international markets remained strong in the second quarter, while it was up 9% in the first half of 2018. Results were backed by strength in Europe-direct, Japan and China businesses. 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. Like Columbia Sportswear, textile-apparel players like Guess? (GES - Free Report) , lululemon (LULU - Free Report) and PVH Corp. (PVH - Free Report) are also gaining from their extensive international operations.
Q2 Retains Robust Record, View Up on Key Strategies
The aforementioned factors along with impressive brand enhancing efforts helped Columbia Sportswear retain its splendid record in the second quarter, wherein both top and the bottom lines improved year over year and came ahead of the Zacks Consensus Estimate. While top line marked its sixth straight quarter of beat, the bottom line has delivered positive surprise for 22 quarters in a row now. Management remains impressed with its better-than-expected quarterly performance, wherein direct-to-consumer and wholesale businesses depicted steady growth.
Going ahead, the company plans to continue executing on its four key strategies. First, Columbia Sportswear 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, Columbia Sportswear intends to improve and solidify global direct-to-consumer networks. Finally, the core strategies include making customer-centric investments and optimizing organization. These factors and expectations of a strong second half encouraged management to raised its outlook for 2018.
Net sales growth is now expected in the range of 9-10.5% year over year compared with the prior view of 8-10%. Adjusted earnings per share for 2018 is now projected in a band of $3.37-$3.47 compared with the prior outlook of $3.27-$3.37. Clearly, Columbia Sportswear is set to keep its spectacular show on.
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4 Reasons Why Columbia Sportswear is Set to Grow Further
Columbia Sportswear Company (COLM - Free Report) has long been on investors’ radar, courtesy of its robust past record that was retained in the second-quarter of 2018. A solid first half and key growth strategies also led to a raised top and bottom-line outlook for 2018.
That said, let’s take a look at the factors that are likely to keep driving Columbia Sportswear, which has rallied 18.1% over the past six months, outpacing the industry’s growth of 16.3%.
Project CONNECT on Track
Columbia Sportswear 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. The Project CONNECT focuses on connecting consumers, wholesale customers and international distributors with its manufacturing partners and employees around the globe. Markedly, the program 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. The company expects to reap benefits from the program this year, with further gains expected in 2019 and beyond.
Direct-to-Consumer Business — A Major Driver
Columbia Sportswear remains committed toward expanding and enhancing its global direct-to-consumer (DTC) business through accelerated investments. Notably, this constituted 40% of the company’s total revenues in 2017, wherein DTC sales increased at a high single-digit rate year over year. Courtesy of strength in the DTC business and enhanced wholesale business, Columbia Sportswear’s U.S. business witnessed growth of 13% in the first half of 2018. Within the DTC business, both the brick-and-mortar and e-commerce businesses were strong and surpassed the company’s expectations in the first half.
Solid International Presence
Columbia Sportswear has a solid international presence, which provides the company with a solid business foundation and enables it seek new opportunities to enhance profitability. In fact, the company’s advancement in the EMEA region has been impressive lately, especially due to Europe-direct business and greater sales to EMEA distributors. Sales from the international markets remained strong in the second quarter, while it was up 9% in the first half of 2018. Results were backed by strength in Europe-direct, Japan and China businesses. 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. Like Columbia Sportswear, textile-apparel players like Guess? (GES - Free Report) , lululemon (LULU - Free Report) and PVH Corp. (PVH - Free Report) are also gaining from their extensive international operations.
Q2 Retains Robust Record, View Up on Key Strategies
The aforementioned factors along with impressive brand enhancing efforts helped Columbia Sportswear retain its splendid record in the second quarter, wherein both top and the bottom lines improved year over year and came ahead of the Zacks Consensus Estimate. While top line marked its sixth straight quarter of beat, the bottom line has delivered positive surprise for 22 quarters in a row now. Management remains impressed with its better-than-expected quarterly performance, wherein direct-to-consumer and wholesale businesses depicted steady growth.
Going ahead, the company plans to continue executing on its four key strategies. First, Columbia Sportswear 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, Columbia Sportswear intends to improve and solidify global direct-to-consumer networks. Finally, the core strategies include making customer-centric investments and optimizing organization. These factors and expectations of a strong second half encouraged management to raised its outlook for 2018.
Net sales growth is now expected in the range of 9-10.5% year over year compared with the prior view of 8-10%. Adjusted earnings per share for 2018 is now projected in a band of $3.37-$3.47 compared with the prior outlook of $3.27-$3.37. Clearly, Columbia Sportswear is set to keep its spectacular show on.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>