Columbia Sportswear Company (COLM) saw its stock decline by 5.7% on February 5, 2025, closing at $80.97, down from the previous day's close of $85.86. The stock opened at $79.00 and fluctuated between a low of $78.88 and a high of $82.47, with trading volume surging to 1,624,587 shares, significantly above the average daily volume of 449,949. The downturn followed the release of the company's Q4 2024 results and fiscal year 2025 guidance, which failed to meet market expectations. Despite a 3% increase in Q4 revenue to $1.10 billion, full-year sales fell by 3%, and operating income dropped by 13% to $270.7 million. The company's guidance for 2025 projected modest sales growth of 1% to 3%, which did not alleviate investor concerns about its growth prospects.
The market's reaction was further influenced by analysts' skepticism regarding Columbia's ability to drive organic revenue growth, given its increased marketing spend and lack of product innovation. The company's 20x P/E ratio was deemed too high for a low-growth, moderate-margin apparel company, leading to a 'Hold' rating from analysts. Despite Columbia's efforts to enhance profitability through cost savings and its ACCELERATE Growth Strategy, the overall outlook remains mixed, contributing to the stock's decline.