COLM: 2H Margin Pop?

Columbia Sportswear cut headcount today according to SportsOneSource (I've found them to be fairly accurate on nuggets like this). While I don't make it a practice of commenting on news stories like this, I have to point out a few important themes.

1) Based on my sources, the report appears true, and seems to be above and beyond any cost reduction efforts the company noted on its recent conference call.

2) This is literally days after K-Swiss instituted layoffs in its salesforce.

3) Kind of ironic that US companies are laying off, while workers in Vietnam are striking because recent 14% wage hikes are not enough! So the people making the product are refusing to work, and the people designing and selling the product are being fired. That's matching up supply and demand the hard way. How can this be a positive trend??

4) SG&A trends for COLM have been trending up in recent quarters due to investments in new brand initiatives (see Exhibit below, courtest of FactSet). That's a solid move - especially given the fact that sales have been struggling to find a bottom. COLM is 2 quarters away from much easier year-year margin compares. With cost cuts hitting in full in the 3rd quarter, could this thing be setting itself up for a margin pop in 2H even without a rebound in sales? At 5x EBITDA and 12x EPS this probably matters...

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more