• Sun. Jul 21st, 2024

Earnings Miss: Columbia Sportswear Company Missed EPS By 9.4% And Analysts Are Revising Their Forecasts

Columbia Sportswear Company (NASDAQ:COLM) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of US$3.5b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$4.09, missing estimates by 9.4%. Earnings are an important time for investors, as they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Columbia Sportswear

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NasdaqGS:COLM Earnings and Revenue Growth February 4th 2024

Taking into account the latest results, the eleven analysts covering Columbia Sportswear provided consensus estimates of US$3.41b revenue in 2024, which would reflect a perceptible 2.2% decline over the past 12 months. Statutory earnings per share are forecast to descend 10% to US$3.72 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$3.51b and earnings per share (EPS) of US$4.60 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the US$73.23 price target, showing that the analysts don’t think the changes have a meaningful impact on its intrinsic value. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Columbia Sportswear at US$90.00 per share, while the most bearish prices it at US$59.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Columbia Sportswear shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.2% by the end of 2024. This indicates a significant reduction from annual growth of 5.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.1% per year. It’s pretty clear that Columbia Sportswear’s revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Columbia Sportswear. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$73.23, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn’t be too quick to come to a conclusion on Columbia Sportswear. Long-term earnings power is much more important than next year’s profits. We have forecasts for Columbia Sportswear going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Columbia Sportswear’s Board and CEO remuneration and experience, and whether company insiders have been buying stock.

Valuation is complex, but we’re helping make it simple.

Find out whether Columbia Sportswear is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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