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Discussing Columbia Sportswear’s 3Q17 Bottom Line

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Discussing COLM’s 3Q17 bottom line

For 3Q17, Columbia Sportswear (COLM) recorded 5.9% YoY (year-over-year) growth in its earnings per share (or EPS). Its EPS stood at $1.25 compared to average analyst expectations of $1.15. Its bottom-line growth was driven by strong top-line growth, a higher gross margin, and a lower tax rate.

Its 3Q17 gross margin improved 36 basis points to 46.7% of sales. Its operating margin was, however, down 13 basis points to 16.4% of sales due to Project CONNECT costs. However, the operating margin improved 20 basis points through the first nine months of 2017.

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Looking forward

COLM’s management expects an improvement of 20 basis points in its fiscal 2017 gross margin to 46.9% of sales. Its SG&A[1. selling, general, and administrative] expenses could increase 5.4% while its operating margin is projected to reach ~10.3% for the full year, including $15.0 million of costs related to Project CONNECT. Its net income is expected to be $183.0 million–$190.0 million, or $2.60–$2.70 per diluted share.

Tim Boyle, president and CEO of Columbia Sportswear, noted, “We are also pleased to reiterate our full year 2017 financial outlook, which now incorporates the anticipated costs of Project CONNECT.

“In addition, based upon advance orders for Spring 2018 we are optimistic that we will continue to generate global growth, including a return to growth in our U.S. wholesale business in the first half of 2018.”

ETF investors seeking to add exposure to COLM can consider the iShares Morningstar Small-Cap Growth ETF (JKK), which invests ~0.3% of its portfolio in the company.

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