Columbia Sportswear (COLM) Q2 Earnings Coming Up: Things to Note

Core Viewpoint - Columbia Sportswear Company (COLM) is expected to report a decline in both revenue and earnings for the second quarter of 2024, with revenues estimated at $573.4 million, reflecting a 7.7% decrease year-over-year [1]. Financial Performance - The consensus estimate for COLM's earnings has worsened to a loss of 31 cents per share, down from a profit of 14 cents in the same quarter last year [1]. - The company anticipates a net sales decline of 10-7%, projecting revenues in the range of $557-$576 million for the second quarter [2]. - An operating loss is expected to be between $42 million and $27 million, with a projected loss per share ranging from 46 to 26 cents [3]. Market Conditions - Columbia Sportswear is facing a challenging operating environment in North America, with sluggish demand and inflationary pressures impacting consumer spending on soft goods [2]. - The traditional outdoor category, particularly footwear, is experiencing weak trends, leading retailers to adopt a cautious approach to future orders [2]. Cost Structure - Selling, General and Administrative (SG&A) costs as a percentage of sales have been increasing, with a notable rise of 310 basis points to 45.4% in the first quarter of 2024 due to high direct-to-consumer expenses [2]. - Projections indicate that SG&A expenses will further increase by 410 basis points to 54.4% in the second quarter [2]. Strategic Initiatives - Despite the challenges, Columbia Sportswear is benefiting from brand-enhancing marketing initiatives and efforts to improve operational efficiency through a multi-year profit improvement program [3]. Earnings Prediction Model - The Zacks model indicates that Columbia Sportswear is unlikely to achieve an earnings beat this quarter, with a Zacks Rank of 3 and an Earnings ESP of -8.20% [4].