What Happened:
Shares of outerwear manufacturer Columbia Sportswear (NASDAQ:COLM) jumped 10.6% in the pre-market session after the company reported a "beat and raise" quarter. First-quarter results blew past analysts 'EPS expectations, and revenue also came in ahead of consensus estimates. However, near-term sales demand is likely to be pressured as the company called out a challenging market in North America due to inflation. Looking ahead, full-year EPS guidance was raised and is above Wall Street's estimates, adding to the positivity of the print.
To demonstrate the resolve towards improving its bottom-line via its profit improvement program, management noted the business is on track to deliver between $125 million and $150 million in savings by 2026, including $75 million to $90 million in cost savings this year.
Some of these savings will likely be channelled towards returning value to shareholders, as demonstrated by the announcement of a regular quarterly cash dividend of $0.30 per share, payable on May 30, 2024, to shareholders of record on May 16, 2024.
Overall, this quarter's results still seemed fairly positive, and shareholders should feel optimistic. After the initial pop the shares cooled down to $80.59, up 2% from previous close.
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What is the market telling us:
Columbia Sportswear's shares are not very volatile than the market average and over the last year have had only one move greater than 5%. Moves this big are very rare for Columbia Sportswear and that is indicating to us that this news had a significant impact on the market's perception of the business.
Columbia Sportswear is up 1.6% since the beginning of the year, and at $80.59 per share it is trading close to its 52-week high of $87.60 from April 2023. Investors who bought $1,000 worth of Columbia Sportswear's shares 5 years ago would now be looking at an investment worth $795.93.
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