Columbia Sportswear Gears Up for Q3 Earnings: Factors to Watch

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Columbia Sportswear Company COLM is gearing up to unveil its third-quarter 2024 earnings on Oct. 30, after market close. Investors are closely monitoring for insights into its performance.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $946.6 million, which indicates nearly 4% decline from the year-ago period.

The consensus mark for the bottom line has deteriorated a penny in the past seven days to $1.36. This indicates a 20% decline from the year-ago quarter’s earnings of $1.70 per share. COLM has a trailing four-quarter earnings surprise of 33.1%, on average.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Columbia Sportswear Company Price, Consensus and EPS Surprise

Columbia Sportswear Company Price, Consensus and EPS Surprise
Columbia Sportswear Company Price, Consensus and EPS Surprise

Columbia Sportswear Company price-consensus-eps-surprise-chart | Columbia Sportswear Company Quote

Key Factors to Observe for COLM's Q3 Earnings

Columbia Sportswear has been contending with a challenging U.S. market, marked by softened consumer demand and more conservative retail orders. However, the company has been seeing stronger performance internationally, especially in China and its Europe-direct business. For the third quarter of 2024, COLM anticipates a net sales decline of 3-6% to the $927-$959 million range.

SG&A expenses, as a percentage of sales, have been rising consistently year over year, with the second quarter of 2024 seeing a 280 basis points (bps) increase, reaching 53.1% of sales. This increase was primarily driven by elevated direct-to-consumer expenses. The persistence of these headwinds is a concern. Our model suggests SG&A expenses, as a percentage of sales to increase 320 bps to 38.9% in the third quarter. 

COLM expects to deliver an operating income in the band of $94-$107 million, with an operating margin of 10.1-11.2% in the third quarter. Management envisions the bottom line in the range of $1.27-$1.43. 

COLM has been benefiting from its focus on strategic priorities to drive profitable growth by creating iconic products that stand out for its functionality and innovation. The company enhances brand engagement through targeted demand creation and increased investments while improving consumer experiences. COLM has also been strengthening its marketplace presence with a digitally-led, omnichannel and global strategy. 

Columbia Sportswear has been progressing in its multi-year Profit Improvement Program, aimed at boosting operational efficiency and safeguarding profits. The company also focuses on reducing costs tied to excess inventory and implementing targeted expense cuts across the business. Gains from these upsides are likely to have contributed in the quarter to be reported.