Will Columbia Sportswear Surpass Q1 Sales Expectations?



Recap of previous performance

Columbia Sportswear (COLM) has surpassed analysts’ sales expectations for eight consecutive quarters. In the fourth quarter of 2018, the company’s sales grew by an impressive 18.2% on a reported basis to $917.6 million. Excluding the impact of a revenue accounting standard, the company’s comparable sales grew 16% to $899.3 million. Columbia Sportswear’s fourth-quarter sales came in quite ahead of analysts’ expectation of $844.8 million. The company’s sales were driven by growth across its DTC (direct-to-consumer) and wholesale businesses and strong growth in the US market.

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Overall, Columbia Sportswear’s sales grew 13.6% to $2.8 billion in the full-year 2018. The growth in comparable sales was 12%. The company’s top-line growth in 2018 was driven by a 21.7% rise in DTC sales to $1.2 billion and 8.3% growth in its wholesale business to $1.6 billion. The DTC business accounted for 42% of overall sales in 2018 compared to 40% in 2017, reflecting robust growth in sales driven by continued investments.

Columbia Sportswear’s US sales increased 13.7% to $1.7 billion in 2018 driven by high-teens growth in DTC sales and a high-single-digit rise in wholesale channel sales. Columbia Sportswear’s international net sales rose 13.5% to $1.1 billion and accounted for 38% of overall sales in 2018 mainly due to the strength in the Columbia brand.

Sales expectations

Analysts expect Columbia Sportswear’s sales to rise 6.5% to $646.8 million in the first quarter of 2019. Peer Skechers (SKX) reported a 2.1% rise in its first-quarter sales to $1.28 billion driven by strength in its international business. Based on the guidance issued in February, Columbia Sportswear expects mid-single-digit percent net sales growth in the first quarter.

For full-year 2019, analysts expect Columbia Sportswear sales to increase 7.5% on a reported basis to $3.0 billion. Columbia Sportswear expects its full-year 2019 sales to grow by 6.0% to 8.0% to $2.97 billion to $3.03 billion.

The company’s continued focus on its DTC business is expected to drive the top-line growth in 2019.


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