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.
Positive growth outlook is already factored into Columbia Sportswear's current share value. Yet, potential influences like company's financial health aren't considered. It might not be the best time to buy the stock, check other factors like balance sheet strength for future price dips.
Columbia Sportswear's ability to reinvest with good returns and their stability over the past five years could benefit long-term investors. The stock's past decline may present opportunities for discerning investors.
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