VSolumbia Sportswear (COLM) made quarterly profit of $ 1.52 per share, beating Zacks’ consensus estimate of $ 1.31 per share. This compares to a profit of $ 0.94 per share a year ago. These figures are corrected for non-recurring items.
This quarterly report represents a surprise earnings of 16.03%. A quarter ago, this outdoor equipment maker was expected to post a loss of $ 0.12 per share when it actually made a profit of $ 0.61, offering a surprise by 608.33%.
In the past four quarters, the company has beaten consensus EPS estimates four times.
Columbia Sportswear, which is part of the Zacks Textile – Apparel industry, reported revenue of $ 804.71 million for the quarter ended September 2021, missing Zacks’ consensus estimate by 7.29%. This compares to a year ago revenue of $ 701.09 million. The company has exceeded consensus revenue estimates three times in the past four quarters.
The sustainability of the immediate stock price movement based on recently released numbers and future earnings expectations will depend primarily on management feedback on the profit call.
Columbia Sportswear shares have added about 14.1% year-to-date against the S&P 500’s 21.2% gain.
What’s next for Columbia Sportswear?
While Columbia Sportswear has underperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the title?
There are no easy answers to this key question, but a reliable metric that can help investors solve this problem is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter (s), but also how those expectations have changed in recent times.
Empirical research shows a strong correlation between short-term stock market movements and trends in earnings estimate revisions. Investors can follow these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Prior to this earnings release, the trend in revised estimates for Columbia Sportswear was unfavorable. While the magnitude and direction of estimate revisions may change as a result of the company’s just released earnings report, the current status translates into a Zacks # 4 (sell) rank for the stock. Thus, stocks are expected to underperform the market in the near future. You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.
It will be interesting to see how the estimates for the next quarters and the current year evolve in the days to come. The current consensus estimate of EPS is $ 1.87 on $ 1.11 billion in revenue for the coming quarter and $ 4.59 on $ 3.17 billion in revenue for the current fiscal year.
Investors should be aware that the outlook for the sector can also have a significant impact on the performance of the stock. In terms of Zacks industry ranking, Textile – Apparel is currently in the top 9% of the 250+ Zacks industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.
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