Columbia Sportswear Analyst Downgrades Retailer On Supply Chain Woes

Columbia Sportswear Company’s COLM growing footwear business has outsized exposure to delays in wholesale shipments in the first half of 2022 due to global supply chain constraints, according to BofA Securities.

The Columbia Sportswear Analyst: Alexander Perry downgraded Columbia Sportswear from Buy to Neutral and lowered the price target from $137 to $108.

The Columbia Sportswear Takeaways: A significant portion of Columbia Sportswear’s contract manufacturing takes place in Vietnam, and factory closures here could have a meaningful impact on shipments in the first half of 2022, especially since the company is “already limited by production capacity,” Perry said in the downgrade note.

BofA expects Columbia Sportswear to continue facing gross margin pressure through 2022 due to higher ocean freight costs, the analyst said. 

He also projected a slowdown in spending on athletic footwear and apparel, “with QTD spending (thru 9/25) declining 4% vs. a +44% increase in 2Q21.

“However, we believe near-term risks are partially offset but longer term channel fill opportunities as Nike NKE and Under Armour UAA consolidate wholesale distribution in N. America.” 

COLM Price Action: Shares of Columbia Sportswear were trading down by 2.21% at $96 Tuesday morning.

Photo courtesy of Columbia Sportswear.