Columbia Sportswear (COLM) Q4 Earnings: Is A Beat In Store?

Columbia Sportswear Company (NASDAQ:COLM) is slated to report fourth-quarter 2017 results on Feb 8, after the closing bell.

The question lingering in investors’ minds is, whether this active lifestyle apparel and footwear marketer and distributor will be able to maintain its positive earnings surprise streak in the to-be-reported quarter. Notably, the company’s earnings have outpaced the Zacks Consensus Estimate for 19 straight quarters now, with a trailing four-quarter average of 14.3%.

Let’s see how things are shaping up prior to the earnings announcement.

How are Estimates Shaping Up?

The Zacks Consensus Estimate of $1.11 for the fourth quarter has been stable over the last 30 days. The estimate reflects a year-over-year decline of 7.5% from $1.20 recorded in the prior-year quarter.

Analysts polled by Zacks expect revenues of $761.7 million for the impending quarter, up 6.2% from the year-ago quarter. In addition, analysts expect net sales from the United States, Europe/Middle East/Africa (EMEA) and Canada to be $497 million, $74 million and $41.6 million, up 9.2%, 5.6% and 4%, respectively, year over year. However, the estimate for net sales from the Latin America/Asia Pacific (LAAP) region is expected to decline marginally by 0.6% to $151 million in the fourth quarter.

Furthermore, the Zacks Consensus Estimate for net sales from the Columbia, SOREL, prAna and Mountain Hardwear brands are pegged at $580 million, $104 million, $31.9 million and $29.1 million, respectively. These estimates reflect 5%, 0.2% and 13.1% year-over-year growth in net sales for the Columbia, SOREL and prAna brands. On the flip side, the consensus estimate for the Mountain Hardwear brand reflects a decline of nearly 7% year over year.

Factors Influencing 4Q17

Columbia Sportswear has been gaining from its sturdy performance at the European wholesale and U.S. direct-to-consumer businesses. Impressively, sales improved across all international regions in the last reported quarter. Also, the company remains on track with its Project CONNECT initiative, which is likely to boost revenues, capture efficiencies, improve the marketing process and lower SG&A costs. In fact, this initiative is anticipated to benefit the company’s direct-to-consumer and wholesale channels.

Meanwhile, we believe the largest opportunity lies in China, given the region’s strength in digital wholesale and e-commerce channels. Alongside, the company’s prAna brand is also attracting an expanding base of female consumers in addition to male consumers.

Further, management anticipates continued growth from its SOREL brand through constant upgradation and effective management strategies. Markedly, athletic and outdoor apparel sub-segment has been depicting growth owing to higher demand of athletic wear as a result of increased athletic activities.

While the company is facing challenges in the United States, especially on the wholesale front, we expect it to continue benefiting from the robust direct-to-consumer business in the region.

What Does the Zacks Model Say?

Our proven model shows that Columbia Sportswear is likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

Columbia Sportswear has an Earnings ESP of +0.90% as the Most Accurate estimate of $1.12 is pegged higher than the Zacks Consensus Estimate of $1.11. Also, the company’s Zacks Rank #3 increases the predictive power of ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With Favorable Combinations

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

G-III Apparel Group, Ltd. (NASDAQ:GIII) has an Earnings ESP of +14.29% and a Zacks Rank of 2.

PVH Corp. (NYSE:PVH) has an Earnings ESP of +1.37% and a Zacks Rank #3.

Urban Outfitters, Inc. (NASDAQ:URBN) has an Earnings ESP of +0.14% and a Zacks Rank of 3.

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