Susquehanna Downgrades Columbia Sportswear (COLM) to Negative
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Susquehanna downgrades Columbia Sportswear Company (Nasdaq: COLM) from Neutral to Negative with a $23 price target, citing worse than expected FY09 outlook and inflated valuation.
The firm said, "We are downgrading COLM to Negative from Neutral given a significantly worse than expected FY09 outlook and the resulting expensive valuation level. The company reported 1Q EPS of $0.20, well above our and the Street consensus estimate of $0.07. However, management also issued initial FY09 guidance calling for significant sales declines (down low double-digits), and operating margin contraction (ex-items) of ~500 bps to the ~5.5-6.0% range. A -15% decrease in fall backlogs (-11% currency neutral) and continued retail expansion and marketing investments should lead to significant sales and margin pressure through at least the end of FY09. With retailers unwilling to commit open-to-buy dollars to the brand, we believe it will likely take positive sell-through momentum to change this trend, which could take several seasons."
For more analyst ratings on Columbia Sportswear click here.
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