Active outdoor apparel and footwear retailer
Columbia Sportswear Company
) fourth quarter preliminary results came in lower than prior
expectations. Weak holiday sales in North America led to the
The company believes that its net sales in the fourth quarter
will range between $499.0 million and $503.0 million. The revised
net sales outlook is 5% lower than the year-ago sales of $526.1
million, contrary to prior estimates of a 1.5% increase from the
year ago level. The company attributed the downward revision to
mild winter weather, customer caution and lower traffic that
impacted direct-to-consumer sales, as well as weakness at
wholesale customers in the U.S.
The operating margin is expected to be 9.4% to 10.3% compared
with the previously-announced outlook of 10.6% to 11.1%. The
gross margin is anticipated to contract 120 to 130 basis points
from 42.5% reported last year. The company had previously
expected the gross margin to contract by only 50 to 75 basis
points year on year. The reduced margin outlook is because of
higher-than-expected promotional spending during the holiday
Selling, general and administrative (SG&A) expenses as a
percentage of net sales is expected to range from 31.5% to 32.3%,
lower than the previously announced outlook of 32.0% to 32.5% of
sales, as cost discipline continued.
The company also suffered some losses recently due to yet
another recall of battery packs used in its electrically heated
jackets. Columbia Sportswear believes that the defective
batteries were sold at nine U.S. retail stores, affecting 33
jackets across several states.
In the third quarter, the company's earnings had dropped 5.0%
y/y to $1.88 a share. Net sales in the Apparel, Accessories and
Equipment category fell 2% from the year-ago level.
Currently, Columbia Sportswear carries a Zacks Rank #3 (Hold).
It competes with
), which carry a Zacks Rank #2 (Buy).
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