Even though winter was over, investors in Columbia Sportswear (NASDAQ:COLM) were feeling a cold shiver last April when the company said it expected net income to decline significantly for the second quarter and by 8% to 12% for the year, compelling market participants to push the stock 18% lower. Most of this loss has been recovered, since investors seem to have taken a more long-term outlook for the company. A look at the inner workings at play here tells a bit of the story.

To provide a bit of background, the company is projecting a decline in net income for the fourth straight quarter -- 25% lower than last year's first quarter. But the response to this news was a 6% jump on Friday, probably because the company's guidance has significantly exceeded analysts' expectations, as was the case this past quarter. The idea is that the same factors that created the not-as-bad-as-we-thought report -- favorable weather conditions and advance spring orders -- will most likely have the opposite effect in the first quarter.

But moving forward, why would long-term investors be so interested in a company with declining earnings? In my estimation, it's not quite so difficult. The company's long-term goals, such as international growth and increasing the diversity of the product lines, should offer a focused solution to its current problems.

A notable case is when the company announced the acquisition of Montrail, which provides footwear for high-performance trail running and hiking. In this case, the shoe most definitely fits -- and not just metaphorically. Montrail's products are known for their performance and fit characteristics, which consumers are willing to pay extra for. This provides entry into the higher-end market, making a nice complement to the Sorel and Columbia brands. It also falls in line with efforts to expand footwear and non-winter products. However, it will take time to integrate any value-added features into the other footwear product lines, and its small size means it may take years to have an impact on the bottom line.

Perhaps relevant, decreasing dependence on any one product line or geographic region has been an oft-repeated mantra. And things don't look so bad according to the outlook. Sportswear brought in more revenues than outwear for the first time, and international sales are now 42% of total sales.

A closer look into international component parts reveals that European sales growth is starting to slow a bit, which may be one of the reasons for the recently announced joint branding effort with Nissan Europe SAS. However, other international sales, which include Japan and Korea, grew 27% for the full year and may more than make up for any softness in European sales.

Management is well aware of a number of other problems that may continue to put pressure on earnings and is quite candid when it comes to discussing the issues that need to be addressed. But I wouldn't expect anything less from a family-owned business that's non-dilutive, has a clean balance sheet, and has proven itself to be shareholder-friendly over the long term. These are all characteristics that piqued Tom Gardner's interest. As such, it's not much of a surprise that it's part of the cadre of Motley Fool Hidden Gems recommendations. For my part, I'd suggest we keep our eyes looking forward.

For other sporty fashions, check out this further Foolishness:

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Fool contributor John Bluis does not own any shares of Columbia. The Fool has a disclosure policy.