Breaking News
0

Columbia Sportswear Gains Despite Prevailing Headwinds

By Zacks Investment ResearchStock MarketsJun 26, 2017 10:49PM ET
www.investing.com/analysis/columbia-sportswear-gains-despite-prevailing-headwinds-200197822
Columbia Sportswear Gains Despite Prevailing Headwinds
By Zacks Investment Research   |  Jun 26, 2017 10:49PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Columbia Sportswear Company’s (NASDAQ:COLM) strategic initiatives, along with a VGM Score of ‘A’ and expected long-term earnings growth rate of 9.3% make it look attractive, despite prevailing headwinds. Notably, the company’s earnings have outpaced the Zacks Consensus Estimate for 17 straight quarters, with a trailing four-quarter average of 16.9%.

Shares of this Zacks Rank #3 (Hold) have rallied 4.6% in the past one month and has outperformed the Consumer Discretionary sector, which occupies a top 25% (4 out of 16) as well as the S&P 500 index. Meanwhile, the sector has gained 1.3%, while the index improved 0.8%.



Driving Factors

Columbia Sportswear is a leading player in active wear and footwear markets in the U.S. and commands a portfolio of well-recognized brands. Also, management undertakes brand-enhancing initiatives that further strengthen its presence in the apparel industry. Additionally, the company makes strategic joint ventures and acquisitions in order to expand its market share. Evidently, Columbia Sportswear has entered into several sponsorship and Licensing Agreement in 2016 that has helped boost its market share.

Moreover, the company’s recent launch of in-house European, Columbia and SOREL brands’ eCommerce businesses in ten countries remains encouraging. This transition is anticipated to help drive a superior brand connection and consumer experience, grow sales with an expanded product offering, while leveraging existing physical distribution infrastructure.

Meanwhile, Columbia Sportswear has a solid international presence and has the largest opportunity in China, where it commenced a joint venture with Swire Resources (distributor in China) in Jan 2014. To this end, the company is focused on improving the productivity of its distribution channels in China.

Hurdles Still to Cross

We note that Columbia Sportswear has been facing challenges in the U.S. region, especially in its U.S. wholesale front. This, coupled with tough geopolitical conditions in Korea is hampering the overall sales growth of the company. Further, Columbia and prAna brands are suffering setbacks in Korea as there is a general shift of consumer preference away from outdoor sector in the region. In fact, its sales have missed the consensus mark in three of the last six quarters.

In addition, higher excise duties may put pressure on margin and, in turn, mar the overall profitability. Moreover, currency headwind remains a major concern for the company and is expected to impact negatively in fiscal 2017.

Bottom Line

We expect that the company may efficiently offset these headwinds by its robust strategies.

Meanwhile, investors can count on better-ranked stocks in the same industry that include Cherokee Inc. (NASDAQ:CHKE) , G-III Apparel Group, Ltd. (NASDAQ:GIII) and Gildan Activewear Inc. (TO:GIL) .

Cherokee has a long-term earnings growth rate of 15% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

G-III Apparel, a Zacks Rank #1 stock, has a long-term earnings growth rate of 15%. Also, the stock was up 26.4% in the past three months.

Gildan Activewear has a Zacks Rank #2 (Buy) and a long-term earnings growth rate of 12.3%. Also, the stock has delivered an average earnings beat of 4.4% in the last four quarters.

Sell These Stocks. Now.

Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.

See today's Zacks "Strong Sells" absolutely free >>.



Columbia Sportswear Company (COLM): Free Stock Analysis Report

G-III Apparel Group, LTD. (GIII): Free Stock Analysis Report

Gildan Activewear, Inc. (GIL): Free Stock Analysis Report

Cherokee Inc. (CHKE): Free Stock Analysis Report

Original post

Zacks Investment Research
Columbia Sportswear Gains Despite Prevailing Headwinds
 
Columbia Sportswear Gains Despite Prevailing Headwinds

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email