COLM: Post Q Follow Up

As usual, a noisy quarter from COLM, but what was unusual is that the company beat – big (i.e. 20%). While my team nailed the trends in underlying business (and KM nailed the stock), I definitely ‘missed the beat’ in translating it to the model. I expected a ‘guide down that won’t matter’, which I think we got. But my math tells me that the consensus is likely to come out too low.

The biggest negative is that the Spring backlog is down 11% and management’s tone was very guarded. But as outlined in my earlier post, we’re seeing retail sales pick up in dollars, units, and average price. Maybe reorders are not coming in at a robust rate, but it is not because the market is flooded with product and is being heavily discounted. We’re seeing quite the opposite. Not bad given that Columbia is gaining share in 4Q.

Even with the stock presumably trading up meaningfully tomorrow, I think we have better margin visibility with COLM than others in the group. The SG&A evolution is key here, as the company is finally at a spending level that will help ignite some top line growth.

It’s been a long time since I said this, but I kinda like this story. I think that COLM maintains its trajectory in the quadrant chart below for at least a couple quarters. See my two earlier posts for more color on my thinking on this name.