PORTLAND, Ore. - Columbia Sportswear Company (NASDAQ:COLM) experienced a 3% decline in stock price following the release of its second-quarter financial results, which revealed a better-than-expected EPS but a cautious outlook for the third quarter.
The company reported a Q2 EPS of -$0.20, surpassing analyst estimates by $0.14. However, revenue for the quarter was $570.2 million, only marginally above the consensus estimate of $569.11 million.
The outdoor apparel innovator's results also showed a YoY decrease in net sales by 8%, down from $620.9 million in the second quarter of 2023. Gross margin contracted to 47.9% of net sales compared to 50.6% the previous year, reflecting the company's efforts to stimulate demand and manage inventory amid a challenging retail environment in the U.S.
CEO Tim Boyle commented on the results, stating, "Second quarter results were generally in line with expectations. We are working to maximize sales in a challenging U.S. marketplace." He also highlighted the company's initiatives to reduce inventory and control expenses through its Profit Improvement Program.
Looking ahead, Columbia Sportswear's guidance for the third quarter of 2024 anticipates an EPS range of $1.27 to $1.43, which falls below the analyst consensus of $1.59. Revenue projections for Q3 are set between $927 million and $959 million, also under the expected $963.3 million.
For the full year 2024, the company expects an EPS of $3.65 to $4.05 and revenue between $3.35 billion and $3.42 billion, both aligning closely with consensus estimates of $3.88 EPS and $3.39 billion in revenue.
Despite the soft outlook for the upcoming quarter, Boyle remains optimistic about the company's long-term prospects, citing a strong order book for Fall 2024 and indications of wholesale growth in the first half of 2025.
He also emphasized the strategic advantage of the company's solid balance sheet, with over $710 million in cash and short-term investments and no debt.
The company's financial health is further evidenced by its ability to return value to shareholders through a quarterly cash dividend of $0.30 per share and a stock repurchase program, with $234.6 million remaining under its current authorization.
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