Columbia Sportswear Co (NASDAQ: COLM)

Sector: Consumer Cyclical Industry: Apparel Manufacturing CIK: 0001050797
Market Cap 3.12 Bn
P/B 1.88
P/E 16.69
P/S 0.91
ROIC (Qtr) 7.81
Div Yield % 2.72
Rev 1y % (Qtr) 1.25
Total Debt (Qtr) 480.31 Mn
Debt/Equity (Qtr) 0.29

About

Columbia Sportswear Company, also known as COLM, is a prominent player in the outdoor, active, and lifestyle products industry. Established in 1938 in Portland, Oregon, the company has grown to become a trusted name in the realm of outdoor apparel. Columbia Sportswear operates through four distinct brands: Columbia, SOREL, Mountain Hardwear, and prAna, each catering to a diverse range of consumers, from hardcore outdoor enthusiasts to everyday athletes. The product portfolio includes apparel, footwear, accessories, and equipment, all designed with...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 234.21M provides robust 0.49x coverage of total debt 480.31M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 228.83M provide 2.77x coverage of short-term debt 82.69M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 2.64B provides 5.49x coverage of total debt 480.31M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 169.49M exceeds capital expenditure of 64.72M by 2.62x, indicating strong organic growth funding capability.
  • Retained earnings of 1.72B provide full 4.33x coverage of long-term debt 397.62M, indicating strong internal capital position.

Bear case

  • With cash reserves of 228.83M against inventory of 800.35M, the 0.29 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 234.21M provides thin coverage of dividend payments of (66.33M) with a -3.53 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating earnings of 249.11M show weak coverage of depreciation charges of 139.37M, with a 1.79 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 139.37M relative to operating cash flow of 234.21M, which is 0.60x suggests significant maintenance capital requirements affecting free cash flow.
  • Operating cash flow of 234.21M is outpaced by equity issuance of (251.15M) (-0.93 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Apparel Manufacturing
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 RL Ralph Lauren Corp 21.81 Bn 25.53 2.88 2.85 Bn
2 GIL Gildan Activewear Inc. 9.45 Bn 19.89 2.81 1.87 Bn
3 LEVI Levi Strauss & Co 8.22 Bn 13.64 1.29 2.29 Bn
4 VFC V F Corp 7.10 Bn 78.61 0.74 5.79 Bn
5 KTB Kontoor Brands, Inc. 3.40 Bn 15.62 1.20 1.50 Bn
6 PVH Pvh Corp. /De/ 3.39 Bn 9.96 0.38 4.26 Bn
7 COLM Columbia Sportswear Co 3.12 Bn 16.69 0.91 0.48 Bn
8 ZGN Ermenegildo Zegna N.V. 2.55 Bn 43.66 1.13 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.17 1.01
EV to Cash from Ops. EV/CFO 13.53 8.80
EV to Debt EV to Debt 6.60 4.30
EV to EBIT EV/EBIT 12.72 -5.31
EV to EBITDA EV/EBITDA 8.63 -69.89
EV to Free Cash Flow [EV/FCF] EV/FCF 18.70 15.55
EV to Market Cap EV to Market Cap 1.02 1.81
EV to Revenue EV/Rev 0.93 1.14
Price to Book Value [P/B] P/B 1.88 1.78
Price to Earnings [P/E] P/E 16.69 14.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.81 -1.16
Dividend Payout Ratio % Div Payout % (Qtr) 36.40 -3.95
Dividend per Basic Share Div per Share (Qtr) 1.20 0.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 38.61 20.82
Interest Coverage Int. cover (Qtr) 0.00 26.98
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -17.69 -10.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -25.38 10.71
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 2.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -12.82 -88.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -3.24 11.99
EBIT Growth (1y) % EBIT 1y % (Qtr) -10.50 -49.71
EBT Growth (1y) % EBT 1y % (Qtr) -10.50 -181.63
EPS Growth (1y) % EPS 1y % (Qtr) -8.59 -218.58
FCF Growth (1y) % FCF 1y % (Qtr) -64.87 -29.63
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.53 6.94
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.26 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.22 0.15
Cash Ratio Cash Ratio (Qtr) 0.39 0.28
Current Ratio Curr Ratio (Qtr) 2.95 1.99
Debt to Equity Ratio Debt/Equity (Qtr) 0.29 -1.63
Interest Cover Ratio Int Coverage (Qtr) 0.00 26.98
Times Interest Earned Times Interest Earned (Qtr) 0.00 26.98
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.30 -6.73
EBIT Margin % EBIT Margin % (Qtr) 7.28 -10.67
EBT Margin % EBT Margin % (Qtr) 7.28 -17.44
Gross Margin % Gross Margin % (Qtr) 50.40 49.34
Net Profit Margin % Net Margin % (Qtr) 5.50 -18.93