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Columbia Sportswear stock slips on profit miss, inventory overhang

Columbia Sportswear Company COLM stock dipped on Friday as elevated inventories overshadowed strong revenue guidance.

For the fourth quarter, $2.02 in GAAP EPS came up $0.27 short of analyst estimates, while revenue of $1.17B came in $10M above expectations. Inventories increased 59% from the prior year quarter to $1.03B.

“I believe this financial performance could have been even higher, absent supply chain constraints which severely delayed inventory availability throughout the year,” CEO Tim Boyle commented. “We are entering 2023 in a position of strength, with strong consumer demand for our innovative products. With the early receipt of Spring merchandise, we are well positioned for timely deliveries, and have strategies in place to profitably and efficiently reduce inventory levels.”

The elevated inventories are expected to press on first quarter gross margin, which is due to decline year over year. SG&A expenses are also expected to advance at a faster pace than net sales growth, resulting in SG&A deleverage. Diluted earnings per share is expected to be between $0.75 to $0.90 in the first half of 2023, significantly below analyst expectations. The Street had anticipated $0.84 in adjusted EPS for just the first quarter.

Shares of Columbia Sportswear COLM fell 3.69% on Friday.

Dig into the details of the quarter.