03:20 PM EDT, 07/17/2024 (MT Newswires) -- Columbia Sportswear ( COLM ) is expected to report a Q2 loss below expectations due to steeper year-over-year sales decline and higher gross margin contraction, UBS said in a report sent Wednesday.

The investment firm is projecting a Q2 loss of $0.43 per share, compared with consensus forecast of $0.34, as sales likely contracted 10.6% from a year earlier to $555 million, due to underlying weak outdoor demand. However, UBS expects little stock movement after Q2 results as the market already anticipates a weak report.

"Our work indicates Columbia's US [direct-to-consumer] business remains under pressure and the outdoor industry continues experiencing higher promotions [year over year]," UBS said.

The brokerage expects the company to lower its full-year 2024 EPS outlook by 15 cents 20 cents. UBS lowered its full-year 2024 EPS forecast to $3.65 from $3.70, below consensus estimate of $3.88.

The company had projected diluted Q2 loss per share of $0.46 to $0.26, compared with EPS of $0.14 a year earlier. UBS is looking at a Q2 gross margin contraction of 210 basis points from a year earlier to 48.5%.

UBS reiterated its sell rating and a $60 price target for the company.

Price: 80.66, Change: +1.13, Percent Change: +1.42