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Columbia Sportswear: 2Q16 Results and Quarterly Dividend

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Price movement

Columbia Sportswear (COLM) fell by 5.3% to close at $57.25 per share during the fourth week of July 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -5.3%, 0.97%, and 18.1%, respectively, as of July 29. COLM is trading 4.3% below its 20-day moving average, 0.08% below its 50-day moving average, and 4.8% above its 200-day moving average.

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Related ETF and peers

The Guggenheim Mid-Cap Core ETF (CZA) invests 0.46% of its holdings in Columbia Sportswear. The ETF tracks the Zacks Mid-Cap Core Index, a proprietary selected portfolio of 100 mid-cap stocks that seeks to outperform pure market-cap indexes. The YTD price movement of CZA was 10.0% on July 29.

The market caps of Columbia Sportswear’s competitors are as follows:

  • Nike (NKE) — $93.9 billion
  • Under Armour (UA) — $16.0 billion
  • Skechers USA (SKX) — $4.9 billion

Performance of Columbia Sportswear in 2Q16

Columbia Sportswear reported 2Q16 net sales of $388.7 million, a rise of 2.2% from the net sales of $380.2 million in 2Q15. Sales of the Columbia and prAna brands rose by 2.6% and 23.4%, respectively, and sales of SOREL and Mountain Hardwear fell by 18.6% and 19.8%, respectively, between 2Q15 and 2Q16. The company’s gross profit margin rose by 2.6% in 2Q16.

Its net income and EPS (earnings per share) fell to -$8.2 million and -$0.12, respectively, in 2Q16, compared with -$6.5 million and -$0.09, respectively, in 2Q15.

COLM’s cash and cash equivalents and inventories rose by 12.1% and 12.5%, respectively, between 2Q15 and 2Q16. Its current ratio rose to 3.3x, and its debt-to-equity ratio fell to 0.33x in 2Q16, compared with 3.2x and 0.35x, respectively, in 2Q15.

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Declares dividend

Columbia Sportswear Company has declared a regular quarterly dividend of $0.17 per share on its common stock. The dividend will be paid on September 1, 2016, to shareholders of record on August 18, 2016.

Projections

The company has made the following projections for fiscal 2016:

  • net sales growth in the mid-single-digits, which includes the negative effect of ~1% from changes in currency exchange rates
  • operating income in the range of $254 million to $263 million.
  • net income in the range of ~$184 million o $191 million.
  • EPS (earnings per share) in the range of ~$2.60 to $2.70, which includes the unfavorable impact of -$0.26 from the strong US dollar
  • the tax rate of ~25%

In the next part, we’ll discuss AptarGroup.

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