Columbia Sportswear Company COLM is likely to report a decline in both top and bottom lines when it reports second-quarter 2020 numbers on Jul 30, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $306.8 million, indicating a slump of 41.7% from the prior-year reported figure.
The Zacks Consensus Estimate for second-quarter loss has narrowed by a couple of cents in the past seven days to a loss of 88 cents. This suggests a considerable deterioration from earnings of 23 cents reported in the year-ago period. In the last reported quarter, the company delivered a negative earnings surprise, though its earnings outpaced the consensus mark in the preceding three quarters.
Notably, this outdoor and active lifestyle apparel, footwear, equipment and accessories provider has a significant trailing four-quarter earnings surprise, on average.
Columbia Sportswear Company Price and EPS Surprise
Columbia Sportswear Company price-eps-surprise | Columbia Sportswear Company Quote
Key Factors to Note
Like most apparel companies, Columbia Sportswear resorted to temporary store closures amid the pandemic-led restrictions. In its first-quarter earnings release, management said that as of Apr 30, 2020, most of the stores had reopened in China and Korea, though many of them are operational for limited hours. Retail traffic is improving in these regions but still well below the pre-coronavirus level. Incidentally, management expects second-quarter net sales and operating loss to have been significantly marred by the pandemic. The company expects sales and margins to have been adversely impacted by elevated promotions to clear off excess inventory.
Also, the company notified that it had been battling supply-chain disruptions, primarily due to temporary raw material and finished goods supplier shutdowns in Asia. Apart from this, Columbia Sportswear has been grappling with high SG&A expenses. Nonetheless, the company is on track with its Experience First initiative or the X1 initiative, which is aimed at enhancing e-commerce operations to keep pace with the evolving consumer environment. Notably, the company’s e-commerce platform has been largely operational during the pandemic, except for some distribution centers. In April, the company’s U.S. e-commerce business surged 60% year over year.
What the Zacks Model Unveils
Our proven model does not predict an earnings beat for Columbia Sportswear this time around. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Columbia Sportswear currently has a Zacks Rank #3 and an Earnings ESP of -24.39%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combinations
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.
Hanesbrands HBI has an Earnings ESP of +120.00% and a Zacks Rank #3.
Spectrum Brands SPB has an Earnings ESP of +4.85% and a Zacks Rank #3.
Funko FNKO has an Earnings ESP of +10.96% and a Zacks Rank #3.
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Columbia Sportswear Company (COLM) : Free Stock Analysis Report
Hanesbrands Inc. (HBI) : Free Stock Analysis Report
Spectrum Brands Holdings Inc. (SPB) : Free Stock Analysis Report
Funko, Inc. (FNKO) : Free Stock Analysis Report
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