Overheard On Wall Street: Columbia Sportswear & Asics

Overheard On Wall Street: Columbia Sportswear
The Asics men's GT-2000 2 for spring '15.
Courtesy Photo

Earnings releases and stock market volatility have kept market watchers on their toes this week. With oil prices, European market woes and interest rate chatter weighing on investors — leading them to ditch stocks in favor of gold and bonds — there has been a lot to keep up with.

In case you’ve been immersed in everything else happening on The Street, here are a couple of buzz items you may have missed.

Columbia Sportswear Co.

The Portland, Ore.-based sportswear company is receiving much praise after pulling off a Q4 that was far better than market watchers had expected.

Despite concerns over weather — many expected the company’s seasonal products to be hit by warmer winter temperatures — Columbia Sportswear saw its net income rise 14 percent to $63.4 million and its revenues gain 3 percent (or 7 percent on a constant-currency neutral basis) to $699.4 million.

“[Columbia Sportswear’s] diversification into a less weather-sensitive company, combined with a growing direct-to-consumer business (aided by e-commerce), improved ERP system and an owned outlet network have helped contribute to over 250 basis points in [operating profit margin] improvement over the past five years,” Citi Research analyst Kate McShane wrote. “The markets may stay choppy but [Q4] results further reinforce our belief that Columbia is headed in the right direction.”

Asics Corp.

Asics reported its annual earnings on Friday. The company said its net sales rose 21 percent year-over-year to 428.5 billion yen, or $3.77 billion. Net income, however, declined 54 percent to 10.2 billion yen, or $90.2 million. Diluted income per share was 50.88 yen, or 45 cents.

By region, the company said sales in the Americas rose 14 percent but, on a currency neutral basis, it was an increase of just 0.6 percent. Despite the “steady” sales of running shoes and “strong” sales of Asics Tiger shoes and tennis shoes in North America, a weakening Brazilian real against the U.S. dollar negatively impacted numbers, according to Asics.

Rising purchasing costs due to the weaker Brazilian currency and increased SG&A expenses also drove down income in the Americas, causing an 86.3 percent decrease in net income year-over-year.

(Currency conversions based on current exchange rates).