Why Columbia Sportswear (COLM) Is Up Today

NEW YORK (TheStreet) -- Columbia Sportswear (COLM) gained 7% to $84.16 Wednesday after the company announced quarterly results that greatly surpassed analyst estimates.

For the fourth quarter Columbia posted earnings of $1.21 a share, beating analyst estimates of 92 cents a share by 29 cents. Revenue increased by 6% from the year-ago period to $533 million. Analysts expected revenue of $497 million for the quarter.

In a press release CEO Tim Boyle said the company is seeing "strong sales momentum." Boyle also noted that "wholesale customers are exhibiting a greater appetite" for the company's new fall 2014 line.

Must read: New Lifetime High For Columbia Sportswear Company (COLM)

TheStreet Ratings team rates COLUMBIA SPORTSWEAR CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate COLUMBIA SPORTSWEAR CO (COLM) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, COLM's share price has jumped by 48.13%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, COLM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • COLM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.52, which clearly demonstrates the ability to cover short-term cash needs.
  • 45.25% is the gross profit margin for COLUMBIA SPORTSWEAR CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.28% is above that of the industry average.
  • Net operating cash flow has increased to -$111.98 million or 13.37% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -26.98%.
  • COLM, with its decline in revenue, underperformed when compared the industry average of 16.6%. Since the same quarter one year prior, revenues slightly dropped by 3.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: COLM Ratings Report

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