Bear of the Day: Columbia Sportswear (COLM)

Columbia Sportswear (COLM) is a Zacks Rank #5 (Strong Sell) that is a global leader in outdoor and active lifestyle apparel, footwear, accessories, and equipment.The stock traded sideways for most of 2024, but has recently seen a downward trajectory. As the stock approaches the COVID lows, investors are wondering if there is any reason to be long the stock when so many other names are heading higher.About the CompanyFounded in 1938 and headquartered in Portland, Oregon, the company designs and markets high-quality products for hiking, trail running, snow sports, fishing, hunting, and other outdoor activities. Its offerings span multiple trusted brands including Columbia, Sorel, Mountain Hardwear, and prAna.The stock holds Zacks Style Scores of “A” in Growth but “C” in Value. The company has a market cap of $3.3B and pays a 2% dividend.Q1 EarningsColumbia delivered a modest 10% Q1 beat, reporting EPS of $0.75 versus $0.68 expected. Revenue came in at $778.5 million versus the $760 million estimate.While that may seem like a solid start, the underlying message was far more cautious. The company withdrew its full-year 2025 guidance, citing "unprecedented" U.S. trade policy uncertainty and escalating tariffs that are expected to create up to $45 million in incremental costs in the second half.Q2 guidance was also soft, with projected revenue of $575–600 million falling short of the $603 million consensus. Gross and operating margins showed only marginal improvement, and U.S. sales slipped 1%, with notable weakness in direct-to-consumer and e-commerce channels.Columbia faces rising input costs, soft domestic demand, and shifting retailer behavior. While management touts a strong balance sheet and long-term plans to regain operating leverage, investors are left with more questions than answers in the near term.Earnings Estimates FallingAnalysts are being cautious as well, dropping their earnings estimates for every time frame.Since earnings, the current quarter has seen numbers drop from -$0.14 to -$0.28. For next quarter they have fallen from $1.61 to $1.41.For the current year, we have seen a 14% drop, with numbers moving from $4.10 to $3.52. Next year estimates have fallen 18%, going from $4.58 to $3.74.Price targets are dropping as well, with one notable analyst at Barclay taking their target to $62 from $64.Technical TakeAfter COVID, Columbia made all-time highs just under $115. However, since then it has been a slow and steady move lower, with some bumps higher in between.Zooming out, the stock is approaching the COVID lows under $52. While there is still some room to get down there, investors should be aware that there is risk down to that level if the fundamental story does not turn around.The stock has not cleared the 50-day MA since March. This level is currently at $63.50, while the 200-day MA is way up at $77.In SummaryColumbia Sportswear is struggling to find its footing in a market that continues to reward growth, clarity, and momentum. With deteriorating fundamentals, falling earnings estimates, and a management team pulling full-year guidance, confidence in the near-term outlook is understandably low.For those interested in the outdoor/sportswear space, a better option might be Duluth Holdings (DLTH). The stock is a Zacks Rank #2 (Buy) that is seeing earnings estimates turn higher.       Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Columbia Sportswear Company (COLM): Free Stock Analysis Report Duluth Holdings Inc. (DLTH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks