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Tickers in this Article: COLM, TGT, WMT, NKE, TBL
Columbia Sportswear (Nasdaq:COLM) released unimpressive third quarter numbers that showed sales down about 4% from the comparable period last year. In addition, its EPS number came in at $1.69, down 3 cents from the same period last year. However, closer inspection revealed some positive aspects to the story.

Beats And Raises The Bar
Columbia Sportswear handily beat Street expectations, which were at $1.41 per share. Further, its sales numbers slightly exceeded the expectations of analysts. More interesting is the fact that the company offered a pretty upbeat outlook for the year. According to the earnings release, "based on earnings per share through September 30, 2008, the company raised its guidance for 2008 diluted earnings per share to between approximately $2.80 and $2.90." In an economic environment where few companies are raising earnings guidance, the fact that Columbia Sportswear has done so is a good sign of health for the company. Its increased earnings guidance could be a draw for retail and institutional investors who are bailing out of seriously underperforming investments. In addition, Columbia's boosted EPS (up from the $2.60 to $2.70 per share it offered with its second quarter results in July) and its willingness to release guidance information so early in the quarter signal signs of confidence. (To learn more about retail stocks, read Analyzing Retail Stocks.)

Buyback A Good Sign
Columbia Sportswear spent nearly $35 million to buy back about 902,000 shares during the quarter ended September 30, 2008. With the economy sluggish and competition stiff, Columbia's decision to spend its money on a buyback indicates that the board has faith in the value of the company's stock, which does pay a dividend.

Risks
Columbia Sportswear could face risks from competition, weather and the economy. Although Columbia manufactures effective and stylish jackets and outerwear, it faces stiff competition from formidable players like Nike (NYSE:NKE) and Timberland (NYSE:TBL). Next, Columbia's sales could be affected negatively by an unseasonably warm winter. However, an unusually cold winter could have the opposite effect and boost Columbia's sales. Finally, tough economic times could force some winter coat shoppers to hunt for bargains at places like Target (NYSE:TGT) or Wal-Mart (NYSE:WMT).

Bottom Line
Columbia's third quarter numbers, after deeper inspection, look impressive and its outlook for the year appears encouraging. However, competition, weather and the economy could affect any positive projected outcomes.

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