Impressive first-quarter results
Columbia Sportswear (COLM) stock was up 2.4% in after-market trading hours on April 25 in reaction to strong first-quarter results and an upgraded outlook for 2019. However, the stock was down 3.4% as of 1:46 PM today. The company reported its first-quarter results after financial markets closed on April 25.
Columbia Sportswear’s sales grew 7.8% to $654.61 million and exceeded analysts’ forecast of $646.66 million. The company’s top-line growth was driven by strong growth in its Sorel and Columbia brands.
In terms of regional performance, Columbia Sportswear’s US sales grew 13.6%, driven by mid-teens–percentage growth in DTC (direct-to-consumer) sales and low double-digit growth in the wholesale business.
Currency headwinds hurt the company’s international sales. On a constant-currency basis, Columbia Sportswear’s international sales grew 3% in the first quarter, led by growth across Japan, Europe-direct, Korea, and international distributors. However, sales were lower in China and Canada.
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Rival Skechers (SKX) generated 2.1% growth in its first-quarter sales to $1.28 billion due to the performance of its international business. Unlike Columbia Sportswear, which performed well in the domestic market, Skechers’ domestic sales declined 6.3% as a result of weak domestic wholesale business.
Columbia Sportswear’s first-quarter adjusted EPS grew 39% on a year-over-year basis to $1.07, beating analysts’ estimate of $0.83. Higher sales and an increase in net interest income drove bottom-line growth. The company’s gross margin increased by 210 basis points to 51.4%.
Columbia Sportswear raised its outlook for 2019 after strong performance in the first quarter. The company expects its 2019 net sales in the range of $2.98 billion–$3.04 billion compared to its previous expectation of $2.97 billion–$3.03 billion. The company expects foreign currency headwinds to hurt its 2019 net sales growth by 70 basis points.
Columbia Sportswear expects its EPS in the range of $4.40–$4.55, compared to the previous outlook of $4.30–$4.45.