Columbia Sportswear (NASDAQ:COLM) is inching back closer to its YTD highs near $100, as shares have seen a decent 66% rise from the March low. Yet, the winter season could be an interesting one for Columbia as coronavirus potentially impacts winter (ski/snow) vacation volumes in the Midwest/West, and an above-average forecast could spark more outdoors activity in the Northeast, South and Southwest. Columbia does drive some revenues from cold-weather gear, which could be impacted by warmer-than-normal forecasts, should those hold, but could see other segments show residual strength.
As is the case with most other retailers, Columbia witnessed sales mix shift to e-commerce, as physical locations were closed during the pandemic. Sales decreased 40% YoY in the prior quarter, offset by strong 72% YoY growth in e-commerce channels. However, nearly all stores globally were open as of July 30, yet the company does expect sales volume to remain lower for the rest of the year, although Q2 should have seen the largest decline.
Margins only deteriorated slightly, down 200 bp for Q2 and 280 bp for 1H (to 47.2% from 50.0%), suggesting that the sharp sales decline is the primary cause of losses, not accelerating or extra costs related to the pandemic.
However, geographic issues related to the pandemic remain - EMEA derives 17-18% of revenues, and is still witnessing rising coronavirus cases, which could continue to impact sales if restrictions are reinstated (Holland, for example, has seen a huge surge recently). LAAP (Latin America and Asia Pacific) could continue to see strengths in Korea offset by weakness in Japan, while China's recovery should bode well, and constant currency impacts could just be marginal.
Weather conditions could also impact sales, with a warmer-than-average winter forecast for much of the Atlantic seaboard, Southeast and over to the Southwest. While these are forecasts, and subject to
