Columbia Sportswear Q1 Earnings Call Highlights

Key Points

• Columbia beat first-quarter guidance with net sales roughly flat at $779 million as international sales rose 16% (now >40% of sales) while U.S. sales fell about 10%, and gross margin dipped to 50.7% largely from incremental tariff costs partly offset by price increases and expense discipline.
• The company kept its full-year net sales outlook of 1%–3% growth and raised profitability targets—gross margin 50.3%–50.5%, operating margin 6.7%–7.5%, and diluted EPS $3.55–$4.00—citing better-than-expected results and accelerated buybacks.
• Tariff and geopolitical headwinds remain a risk: management now expects an approximate 200 basis point unmitigated tariff hit to full-year gross margin (vs. prior ~300 bps), has paid about $80 million in IEEPA tariffs and is pursuing refunds, and says Middle East disruption has so far had limited impact.

Columbia Sportswear NASDAQ: COLM reported first-quarter results that exceeded its quarterly guidance, supported by early spring 2026 wholesale shipments, stronger-than-expected demand in Europe and the U.S., and “disciplined expense management,” according to Chairman and CEO Tim Boyle.

Net sales were roughly flat year-over-year at $779 million. The company’s international business—now representing “over 40%” of sales—grew 16% year-over-year, while U.S. net sales declined 10%, a decrease Boyle said was “largely anticipated” due to lower advanced spring 2026 wholesale orders and a deliberate reduction in supply of certain winter products.

Quarterly performance and regional trends

Boyle said both wholesale and direct-to-consumer (DTC) sales were flat versus the prior year, while gross margin contracted 20 basis points to 50.7%. He attributed the gross margin pressure to “310 basis points in incremental unmitigated tariff costs,” partially offset by mitigation actions including “targeted price increases.” SG&A expenses increased nearly 1%, reflecting higher DTC expenses partially offset by lower enterprise technology and supply chain personnel expenses tied to cost reduction actions taken last year.

In the U.S., Boyle said the 10% decline reflected a lower spring 2026 order book, constrained winter supply, and cleaner inventories that reduced clearance activity. He said U.S. wholesale was down “low teens%,” while U.S. DTC net sales declined “high single-digit%.” Within DTC, brick-and-mortar was down “mid-single-digit%” and e-commerce was down “low teens%,” which Boyle said was driven by winter product shortages and lower conversion of consumer traffic.

Internationally, management highlighted broad-based strength:

• EMEA: Net sales increased “low 20%,” with Europe direct net sales up “high teens%” supported by strong DTC and healthy wholesale sales, partly due to earlier spring 2026 shipments. Distributor business increased “low 30%.”
• LAAP: Net sales increased 3%, while LAAP distributor markets posted “low double-digit % growth.”
• China: Net sales increased “mid-single digit %,” driven by wholesale growth and earlier shipment timing. CFO Jim Swanson said China DTC “was down a little bit” in the quarter, but management still expects “double-digit % growth” in China for the full year.
• Japan: Net sales declined “mid-single digit %,” reflecting softer international tourism and later shipment of spring 2026 wholesale orders.
• Korea: Net sales increased “high single digit %,” with growth across all channels.
• Canada: Net sales increased “low single digits,” driven by DTC brick-and-mortar productivity and strong winter sell-through.

Swanson provided additional color on the quarter’s upside versus expectations, saying revenue beat by around $20 million, with roughly half related to a timing shift. “The majority of that was European-based,” he said, with “a little bit from a U.S. perspective.”

Brand highlights and marketing activity

By brand, Boyle said Columbia net sales increased 1%, as international growth more than offset expected U.S. declines.

Among emerging brands, management said SOREL net sales decreased 12% due to reduced winter supply and lower closeout sales, though Boyle pointed to improved trends with spring 2026 styles and “healthy growth in sneakers.” prAna net sales decreased 5% due to wholesale declines, partly offset by growth in inline DTC channels; Boyle said prAna e-commerce grew “low teens %,” which he tied partly to a shift in social media strategy that improved new customer acquisition and retention metrics. Mountain Hardwear net sales were flat, with early-quarter winter weakness offset by spring momentum, particularly in e-commerce, while U.S. wholesale grew “low single digit %,” led by specialty retail and digital partners.

On marketing and brand visibility, Boyle cited several campaigns and events he said were contributing to momentum, including Olympic exposure for Columbia-branded kits, the “Nature Calls” activation around the big game in Santa Clara, and awards recognition for the company’s “Engineered for Whatever” campaign. Boyle also pointed to product awards, including The New York Times Wirecutter listing of the women’s Arcadia II jacket and men’s Watertight II jacket as best everyday rain jackets.

Order book and ACCELERATE strategy progress

Boyle said the company is seeing signs of growing momentum in the U.S., including an increased fall 2026 order book, which he said should enable wholesale to return to growth in the second half. He said the order book is showing strength in women’s and footwear, along with “outsized growth” in premium platforms such as Titanium product and Omni-Heat Arctic, and “meaningfully scaling” of the new MTR fleece.

He also said the Amaze and ROC lines—major fall 2025 launches—will continue to scale, with orders “up more than 2x versus the prior year,” and noted Amaze will be featured in “triple the number of Dick’s Sporting Goods location[s]” this fall compared to last year. In response to analyst questions, Boyle said the company plans to broaden the Amaze franchise beyond current categories, including expansion into rain and fleece for fall 2026.

Swanson said the fall 2026 wholesale order book for the U.S. ended “more into that mid-single-digit % range,” healthier than earlier expectations. On pricing, Swanson said targeted U.S. price increases for spring 2026 and fall 2026 lines have been “a high single-digit % increase,” and he characterized realized elasticity as “more or less where we would have anticipated it being.”

Tariffs, Middle East risks, and updated outlook

Boyle said the operating environment remains “highly dynamic,” pointing to tariffs and the conflict in the Middle East. He said that after a U.S. Supreme Court tariff ruling in late February, the U.S. administration implemented a 10% universal tariff under Section 122 set to expire in July. Boyle said the company now expects an approximate 200 basis point unmitigated tariff headwind to full-year gross margin, compared with the prior assumption of roughly 300 basis points.

Boyle also said the court’s ruling required the refund of IEEPA tariffs already paid. He said the company had paid about $80 million in IEEPA tariffs, with about $55 million recognized through cost of sales and the remainder included in inventory. He said Columbia has submitted refund claims and intends to “pursue every avenue” to secure refunds, but has not recognized any refund benefit in financial statements or guidance.

Regarding the Middle East conflict, Boyle said it has already triggered cancellations and forecast reductions in certain distributor markets. Swanson said those impacts have been “relatively insignificant” to the full-year outlook so far, and added that distributor revenue from Gulf states countries is “in the low single-digit % range” of total business. Management cited potential future risks including higher energy prices, inflationary pressure on consumers, potential increases in product input costs beginning in spring 2027, and supply chain disruptions that could increase freight and logistics costs or drive late-arriving inventory.

Despite the uncertainty, the company maintained its full-year net sales growth outlook of 1% to 3%. It updated profitability assumptions and raised certain guidance metrics:

• Gross margin: 50.3% to 50.5%, described as down 20 basis points to flat versus the prior year.
• SG&A: 43.6% to 44.2% of net sales.
• Operating margin: raised to 6.7% to 7.5%.
• Diluted EPS: $3.55 to $4.00, reflecting stronger gross margin assumptions and the impact of accelerated share repurchases in Q1.

For the second quarter, Swanson said the company expects sales ranging from down 1% to up 1% year-over-year and forecast a loss per share of $0.46 to $0.37, citing slight SG&A deleverage and an anticipated gross margin decline.

Boyle also highlighted capital returns and balance sheet strength, noting $150 million in share repurchases during the quarter that retired 2.5 million shares. He said Columbia ended the quarter with $535 million in cash and short-term investments and no debt.

About Columbia Sportswear NASDAQ: COLM

Columbia Sportswear Company develops, sources, markets and distributes a wide range of outdoor apparel, footwear and accessories designed for activities such as hiking, skiing, snowboarding and trail running. Its product portfolio includes weatherproof jackets and pants featuring proprietary technologies like Omni-Tech® waterproofing and Omni-Heat® thermal reflective lining, as well as activewear, footwear, hats, gloves and accessories under the Columbia® brand and complementary brands.

Founded in 1938 as the Columbia Hat Company in Portland, Oregon, the company initially focused on headwear before expanding into outerwear in the 1970s with the introduction of the Bugaboo® interchange jacket.

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