Columbia Sportswear (COLM) Readies for Q3 Earnings: What Awaits?
Columbia Sportswear Company COLM is likely to register top-line growth when it reports third-quarter 2023 earnings on Oct 26. The Zacks Consensus Estimate for revenues is pegged at $999.8 million, suggesting a rise of 4.7% from the prior-year quarter’s reported figure.
The consensus mark for quarterly earnings has remained unchanged in the past 30 days at $1.68 per share. However, this indicates a decline of 6.7% from the year-ago quarter’s reported figure. COLM has a trailing four-quarter earnings surprise of 149.5%, on average.
Factors to Note
Columbia Sportswear’s brand-enhancing and unique marketing initiatives have been strengthening its presence in the apparel industry. The company has been undertaking demand-creation investments, which have been driving brand awareness and aiding sales.
Columbia Sportswear Company Price, Consensus and EPS Surprise
Columbia Sportswear Company price-consensus-eps-surprise-chart | Columbia Sportswear Company Quote
Further, COLM has been committed to enhancing consumers’ experience and its digital capacity in all networks and regions. It has also been exploring growth opportunities in the direct-to-consumer (DTC) business and improving support processes. These upsides are likely to have aided performance in the quarter under review.
In the second quarter of 2023, overall DTC sales jumped 5% to $292.6 million. U.S. DTC net sales rose in the low single digits. Within the DTC channel, brick-and-mortar sales increased in the mid-single digits due to sales from the new stores opened last year and higher sales from temporary outlet stores. DTC e-commerce has been benefiting from increased online shopping. Our model suggests year-over-year DTC net sales growth of 17.4% in the third quarter.
COLM is likely to have benefited from strength in the EMEA & LAAP regions, as seen in the second quarter. Second-quarter sales growth was backed by strength in these regions, which were mainly backed by earlier Fall 2023 distributor shipments and increased sales in China. Management expects China to remain one of its fastest-growing markets in 2023, with encouraging store traffic and robust e-commerce performance. This bodes well for the quarter under review.
However, Columbia Sportswear has been seeing higher SG&A costs for a while now. In the second quarter of 2023, the company’s SG&A expenses escalated by 11% to $312.5 million, attributed to elevated costs related to the supply chain, DTC and technology.
In the third quarter of 2023, management expects the operating income to come in the range of $132-$138 million, with the operating margin expected to be 13.2-13.6%. This suggests a decline from the operating margin of 15.2% reported in the third quarter of 2022. We expect the operating margin to contract 160 basis points to 13.6% in the third quarter.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Columbia Sportswear this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Columbia Sportswear carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Here are three companies worth considering as our model shows that these have the correct combination to beat on earnings this time:
Church & Dwight Co. CHD has an Earnings ESP of +5.00% and a Zacks Rank #1. The company is slated to witness top-line growth when it reports third-quarter 2023 results. The Zacks Consensus Estimate for CHD’s quarterly revenues is pegged at $1.43 billion, which suggests growth of 8.5% from the figure reported in the prior-year quarter. Pls add the Zacks Rank 1 promo link.
Although the Zacks Consensus Estimate for Church & Dwight’s quarterly earnings has moved up by a penny over the last seven days to 68 cents per share, it suggests a decline of 10.5% from the year-ago quarter’s reported number. CHD has delivered an earnings surprise of 12.1%, on average, in the trailing four quarters.
The Boston Beer Company SAM currently has an Earnings ESP of +0.71% and a Zacks Rank #3. The company is likely to register bottom-line growth when it reports third-quarter 2023 numbers. The Zacks Consensus Estimate for The Boston Beer Company’s quarterly earnings per share of $4.25 suggests an increase of 11.3% from the year-ago quarter’s levels.
SAM has a trailing four-quarter negative earnings surprise of 74.9%, on average. The Zacks Consensus Estimate for The Boston Beer Company’s quarterly revenues is pegged at $592.9 million, indicating a drop of 0.6% from the figure reported in the prior-year quarter.
Colgate-Palmolive Company CL currently has an Earnings ESP of +0.37% and a Zacks Rank of 3. The company is likely to register increases in the top and bottom lines when it reports third-quarter 2023 results. The Zacks Consensus Estimate for Colgate-Palmolive’s quarterly revenues is pegged at $4.8 billion, suggesting growth of 8.3% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for quarterly earnings has remained unchanged in the past 30 days at 80 cents per share, which indicates 8.1% growth from the year-ago quarter's reported number. CL delivered an earnings surprise of 1.7%, on average, in the trailing four quarters.
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Columbia Sportswear Company (COLM) : Free Stock Analysis Report
Colgate-Palmolive Company (CL) : Free Stock Analysis Report
Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report
The Boston Beer Company, Inc. (SAM) : Free Stock Analysis Report
