uploads///COLM Valuation

A Look at Columbia Sportswear’s Valuation after Its Q1 Results

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Apr. 30 2019, Published 12:34 p.m. ET

Valuation after first-quarter results

Columbia Sportswear’s (COLM) 12-month forward PE multiple fell 5.3% to 21.7x on April 26. The apparel and footwear company reported its first-quarter earnings results after the markets closed on April 25. Its adjusted EPS rose 39% to $1.07 in the quarter on sales growth of 7.8%. Its results exceeded analysts’ expectations.

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Peer comparison

Columbia Sportswear’s forward PE multiple is currently higher than that of Skechers (SKX) but lower than those of Nike (NKE), Under Armour (UAA), and Lululemon (LULU). On April 26, Nike, Under Armour, Skechers, and Lululemon were trading at 12-month forward PE multiples of 29.6x, 59.2x, 14.7x, and 37.0x, respectively.

Do analysts foresee continued strength?

Analysts expect Columbia Sportswear’s sales to rise 9.0% to $3.0 billion and its adjusted EPS to rise 12.5% to $4.51 in 2019. Columbia Sportswear’s upgraded guidance indicates 10%–13% growth in its 2019 EPS to $4.40–$4.55. This guidance reflects the benefits of the company’s full ownership of what was previously its joint venture in China and became its wholly-owned subsidiary in January. Higher expenses associated with strategic initiatives are expected to be a drag on the company’s profitability this year.

Columbia Sportswear is investing in expanding and improving its direct-to-consumer business, enhancing its digital capabilities, and driving brand awareness.

Analysts expect the adjusted EPS of Nike, Under Armour, Skechers, and Lululemon to rise 6.3%, 25.9%, 6.3%, and 20.3%, respectively, in their current years.

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