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Columbia Sportswear (COLM) Highlights 3-Year Financial Goals

Columbia Sportswear Company COLM is focusing on its strategic priorities alongside offering its three-year financial goals. The outdoor, active and everyday lifestyle apparel, footwear, accessories and equipment company's multi-year financial goals reflect its confidence in accelerated growth opportunities in the next three years and beyond.

The company’s three-year plan aims at balanced growth, which is likely to be buoyed by footwear, digital sales advancement and international expansion. The company intends to add net sales of more than $700 million by 2025.

Management expects SOREL to be its fastest-growing brand, with a CAGR of 20-22%, backed by robust product offerings and brand momentum. Columbia Sportswear expects to generate operating margin growth by 2025.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Strategic Priorities & 3-Year Financial Goals

The company’s strategic priorities are noteworthy. These include speeding up growth by unlocking its brand portfolio’s full potential, coming up with innovative and iconic products and enriching consumers’ experience. COLM also focuses on empowering brand engagement through demand-creating and brand-oriented investments, strengthening talent and solidifying marketplace excellence through a digitally controlled, omnichannel global distribution plan.

The company’s abovementioned plan is likely to help it achieve its financial goals from Jan 1, 2023, to Dec 31, 2025. These include net sales growth at a three-year CAGR of 9-11% compared with the midpoint of the company’s 2022 guidance. Net sales are likely to reach the $4.5-$4.7 billion band in 2025.

Moving on, management anticipates the operating margin to be nearly 14% of net sales in 2025. It envisions diluted earnings per share (EPS) to increase at a three-year CAGR of 12-15% compared with the midpoint of the company’s 2022 guidance. The metric is likely to reach the $7.35-$7.95 range in 2025.

Finally, Columbia Sportswear expects the annual Total Shareholder Return of 13-17%, which includes net sales advancement, margin growth, dividends and share repurchases.

Columbia Sportswear reiterated its guidance for full-year 2022. For the year, it expects net sales to grow 10-12% to the $3.44-$3.50 billion band. Management envisions EPS in the range of $5.00-$5.40.  

All said, we believe that this Zacks Rank #3 (Hold) company remains well-placed for growth.

Shares of the company have declined 11.3% in the past three months compared with the industry’s drop of 5.8%.

Consumer Discretionary Stocks Worth a Look

Some better-ranked stocks are BJ's Wholesale Club BJ, lululemon athletica LULU and Hyatt Hotels H.

BJ's Wholesale, which operates warehouse clubs, currently sports a Zacks Rank #1 (Strong Buy). BJ has a trailing four-quarter earnings surprise of 16.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BJ's Wholesale’s current financial-year sales suggests growth of around 15% from the year-ago reported number.

lululemon, which designs, distributes and retails athletic apparel and accessories, carries a Zacks Rank #2 (Buy) at present. lululemon has a trailing four-quarter earnings surprise of 10.4%, on average.
 
The Zacks Consensus Estimate for LULU’s current financial-year sales suggests growth of 26.6% from the year-ago period’s reported figure.

Hyatt, which operates as a hospitality company, currently carries a Zacks Rank #2. H has a trailing four-quarter earnings surprise of 798.8%, on average.

The Zacks Consensus Estimate for Hyatt’s current financial-year sales suggests growth of 89.1% from the corresponding year-ago reported figure.


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Hyatt Hotels Corporation (H) : Free Stock Analysis Report
 
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