Columbia Sportswear (COLM) Q1 Earnings: What's In The Cards?

Columbia Sportswear Company (NASDAQ:COLM) is slated to report first-quarter 2017 results on Apr 27. The question lingering in investors’ minds is whether this leading distributor of outdoor and active lifestyle apparel, footwear, accessories and equipment, will be able to maintain its positive earnings streak in the to-be-reported quarter. Notably, its earnings have outpaced the Zacks Consensus Estimate in 16 straight quarters now, with a trailing four-quarter average of 16.3%.

Let’s delve deeper how things are shaping up for this announcement.

What Does the Zacks Model Unveil?

Our proven model does not conclusively show that Columbia Sportswear is likely to beat earnings estimates this quarter. This is because a stock needs to have both a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP for this to happen. You may uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Columbia Sportswear has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 42 cents. Although the company’s Zacks Rank #3 increases the predictive power of ESP, we need a positive Earnings ESP in order to be confident about an earnings surprise.

Which Way are Estimates Treading?

Let’s look at the estimate revisions in order to get a clear picture of what analysts are thinking about the company right before earnings release. The Zacks Consensus Estimate for the first quarter and 2017 has been stable over the last seven days. In fact, the current Zacks Consensus Estimate of 42 cents and $2.80 for the first quarter and 2017 reflects a year-over-year growth of 7.7% and 2.9%, respectively.

Moreover, analysts polled by Zacks expect revenues of $535.8 million for the said quarter, up 2% from the year-ago quarter. Also, revenues for 2017 are projected to grow 4.1% to $2.48 billion.

Factors at Play

While Columbia Sportswear boasts a robust earnings history, it remains susceptible to the macroeconomic challenges in some of its key markets like the Europe/Middle East/Africa (EMEA) and the Latin America/Asia Pacific (LAAP) regions, especially in Korea and Russia. Further, the company is witnessing sluggish performance in Canada since past two quarters. These have weighed upon the company’s sales performance, which have missed the Zacks Consensus Estimate in the last three quarters of 2016, by an average of 2.7%.

In addition, currency headwind remains a concern for the company and is expected to hurt results in 2017. Also, higher excise duties may pressure margin, moving ahead.

Nevertheless, Columbia Sportswear is armed with a robust brand portfolio that caters to a wide range of customers. Further, its brand enhancing initiatives in the form of product innovation and marketing campaigns seem to be encouraging. Additionally, the company enhances its footprint through strategic joint ventures and acquisitions.

Resultantly, these initiatives reflect well in the company’s share price. Its shares gained 6.2% in the past three months against the Zacks categorized Textile – Apparel Manufacturing industry, which has declined 7.7%. Also, its shares outpaced the broader Consumer Discretionary sector’s rise of 4.1% over the same time frame.

We note that the Consumer Discretionary sector is currently placed at bottom 44% of the Zacks Classified sectors (9 out of 16). Per the latest Earnings Preview, the earnings growth for the sector looks decent. While total earnings for the Consumer Discretionary sector are estimated to rise 3.6%, revenues are projected to improve 11.3%.

Stocks Poised to Beat Earnings Estimates

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:

AMC Networks Inc. (NASDAQ:AMCX) has an Earnings ESP of +1.02% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Carter's, Inc. (NYSE:CRI) has an Earnings ESP of +1.21% and a Zacks Rank #3.

Viacom, Inc. (NASDAQ:VIAB) has an Earnings ESP of +3.39% and a Zacks Rank #3.

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