The trend of Columbia Sportswear's ROCE is not promising. Despite the company's reinvestment for long-term growth, the returns have been decreasing. The market does not seem optimistic about these trends strengthening in the near future.
UBS analysts predict a 7% drop in FY24 EPS and a 9% decrease for FY25-FY26 due to weaker wholesale orders and direct-to-consumer slowdown. They warn of potential downside risk to Columbia's FY24 outlook if demand doesn't pick up in 2H24, leading to weaker sales and more aggressive downsizing.
Despite a drop in EPS, investor confidence remains. However, the company's 5-year performance led to a 1.2% annual loss for shareholders. The company's future growth is uncertain with warning signs for investors.
Goh Choon Keat :