VF Corp (VFC), Columbia Sportswear Company (COLM): Finding Disappointment in the Great Outdoors

Columbia Sportswear Company (NASDAQ:COLM) is another outdoor-gear maker, though it manages a much smaller margin on its products. The company’s sales rose a mere 5% last quarter, with operating margin hitting just 6%. While the growth prospects aren’t great — management expects a drop in annual sales this year — Columbia Sportswear Company (NASDAQ:COLM) still takes a chunk of the market, with total sales of $1.7 billion last year.

Under Armour Inc (NYSE:UA) is the bigger competitor, though its product overlap is smaller than Columbia Sportswear Company (NASDAQ:COLM)’s. Still, if I were a VF investor, I’d be more concerned about the impact of Under Armour Inc (NYSE:UA). The company continues to expand its lineup, recently adding more womenswear and footwear. That’s helped the company get to the $1.8 billion in annual revenue that it earned last year. That was a 25% increase from the year before, and with a 23% increase already in the first quarter this year, Under Armour Inc (NYSE:UA) could quickly move in on VF’s territory.

While I like the portfolio that VF has assembled, I’m worried that the five-year pace is going to be unsustainable. I like the company’s long-term prospects, but with so much competition, especially in the outdoor space, I’d be worried about too much being hung on the 2017 goal. For now, I’m going to be cautiously optimistic, but not completely swayed.

The article Finding Disappointment in the Great Outdoors originally appeared on Fool.com is written by Andrew Marder.

Fool contributor Andrew Marder has no position in any stocks mentioned. The Motley Fool recommends Under Armour. The Motley Fool owns shares of Under Armour.

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