Columbia Sportswear Company (COLM), Under Armour Inc (UA), VF Corp (VFC): A Tough Competitor Means Cold Cash for You

According to the Farmers Almanac, a colder than usual winter they call  “The Days of Shivery” is upon us. This is great news for outerwear companies, as warmer winters hit sales.

One tough mother
Outerwear company Columbia Sportswear Company (NASDAQ:COLM) is one to check out now. A family business, the company is run by CEO Tim Boyle, but his mother and Chairman of the Board, Gert Boyle, has powered the company since 1970. Her driving motto was, “Early to bed, early to rise, work like hell, and advertise.” Gert Boyle starred in the company’s iconic “One Tough Mother” advertising campaigns.

Gert Boyle headshot

(source Columbia Sportswear Investor Relations)

Columbia Sportswear Company (NASDAQ:COLM) owns five brands: Columbia Sportswear Company (NASDAQ:COLM), Sorel, Mountain Hardwear, Outdry, and Montrail selling in 100 countries with a recently signed agreement with Chogori India Retail Ltd in India.  A joint venture commencing in China with Swire Resources Ltd. brings 80 direct-to-consumer branded stores to China alone.

Columbia Sportswear Company (NASDAQ:COLM) had a dismal second quarter; net sales were down 3% year over year, and management guided for operating margin contraction of 300 or more basis points and a 6.5% drop in net sales. But this company is a survivor and pays you a 1.50% dividend to wait for cold weather.

Gert almost sold the business for $1,400 in 1970,but since built it into a company with a $2.2 billion market cap and 2012 net sales of $1.67 billion. The Boyles run a debt-free tight ship with cash and short-term investments of $430.6 million, up from $228.5 million year over year, adding up to $12.51 in cash-per-share.

One tough competitor
Columbia Sportswear Company (NASDAQ:COLM)’s main competition is VF Corp (NYSE:VFC)which obtains 17% of its revenue from The North Face, its main outdoor apparel brand. According to Bloomberg, The North Face has lost its standing with serious outdoor enthusiasts.

VF Corp (NYSE:VFC) has a big market cap of $21 billion. VF Corp (NYSE:VFC)’s trailing P/E at 19.00 is similar to Columbia Sportswear Company (NASDAQ:COLM), but the stock offers a slightly higher yield at 1.80%. Other apparel brands provide 83% of V.F. Corporation’s revenue, like its nine brands of outdoors-wear and its fashion brands of Nautica, Wrangler, and more.

VF Corp (NYSE:VFC) has a larger fashion component bringing more risk of consumer fickleness, especially for expensive brands like 7 For All Mankind.

VF Corp (NYSE:VFC) has debt, not unmanageable, but it can’t be as nimble as a debt-free family business (66% insider ownership at Columbia compared to 22% at V.F. Corporation).