Columbia Sportswear Q3 Earnings Call Highlights

Key Points

• Third-quarter results exceeded expectations: Net sales rose 2% year over year to $963 million, while diluted EPS increased to $1.66. Results benefited from earlier wholesale shipments, improved U.S. direct-to-consumer trends and international growth.
• International markets and direct-to-consumer sales led performance: Sales outside the U.S. and Canada grew 9%, while global direct-to-consumer sales increased 5%, including 9% e-commerce growth. Fleece, footwear and women’s products were key areas of momentum.
• Columbia raised its full-year outlook: The company now expects 2026 sales growth of 2% to 3% and reported EPS of $4.65 to $4.90. Management also cited an improving early-2027 wholesale order book, while warning that tariffs, input costs, pricing and promotions remain uncertainties.

Columbia Sportswear NASDAQ: COLM reported third-quarter 2026 results that exceeded its prior revenue and earnings expectations, aided by earlier-than-anticipated wholesale shipments, improved U.S. direct-to-consumer trends and continued international growth.

Net sales increased 2% year over year to $963 million. Reported diluted earnings per share rose to $1.66 from $0.95 in the prior-year quarter, although the year-ago period included $29 million of one-time impairment charges. Operating margin was 11.4%, while reported gross margin declined 20 basis points to 49.8%.

Chairman and Chief Executive Officer Tim Boyle said revenue upside was primarily driven by a portion of delayed fall 2026 wholesale orders shipping earlier than expected. Higher full-price realization and lower U.S. direct-to-consumer freight costs also supported profitability, while selling, general and administrative expenses declined 1% from a year earlier.

International Growth Offset U.S. Wholesale Timing Effects

International markets continued to lead the company’s growth. Sales outside the U.S. and Canada, which represent about 35% of global net sales, increased 9% year over year. The company said U.S. sales declined 1%, primarily because of supply-chain-related delays that shifted the timing of wholesale shipments.

Direct-to-consumer sales increased 5% globally, including 9% growth in e-commerce and 4% growth in brick-and-mortar stores. U.S. e-commerce grew at a mid-single-digit rate, with high-single-digit growth for the Columbia brand. Boyle said the company saw reduced promotional activity online as it seeks to position e-commerce as a more full-price channel.

“Over the past two quarters, growth of new consumers has accelerated, and the third quarter represented the strongest growth in new consumers since 2023,” Boyle said. He added that a greater share of e-commerce sales came from the company’s target “dynamic, active, and professional elite” consumer groups.

By geography, EMEA sales rose 7%, with Europe direct-to-consumer sales increasing at a double-digit rate despite unfavorable weather and a difficult macroeconomic environment. LAAP sales rose 10%, including low-teens growth in China, low-double-digit growth in Japan and high-teens growth in Korea. Canada sales were relatively flat, as wholesale shipment delays offset direct-to-consumer growth.

Fleece, Footwear and Women’s Products Highlighted

Management pointed to momentum in fleece, footwear and women’s products as signs that its “accelerate” growth strategy is gaining traction. Boyle cited demand for the Helvetia fleece, which was refreshed with new colors and prints, as well as the newer MTR fleece. The company’s Helvetia promotion, which offered fleece to consumers who faxed the company, generated more than 8,000 faxes, according to Boyle.

The company also said its Amaze Puff outerwear collection remained among its top sellers and largest growth drivers for fall 2026. Other products cited included Amaze Sweats, the redesigned men’s ROC Pant, the women’s Sienna Hill Jacket and products within the PFG fishing category.

Columbia brand footwear sales rose at a mid-single-digit rate in the quarter, led by more premium styles featuring Omni-MAX technology. Tim Boyle said footwear growth in the spring/summer 2027 order book exceeded apparel growth.

At the brand level, Columbia sales increased 3%, reflecting high-single-digit direct-to-consumer growth and relatively flat wholesale revenue. SOREL sales rose 2%, helped by wholesale orders. prAna sales declined 1%, which management attributed largely to later arrival of fall inventory affecting e-commerce. Mountain Hardwear sales declined 17%, reflecting lower fall wholesale orders and closeout sales, though the company cited growth in U.S. wholesale full-price outerwear.

Columbia also announced that Peter Rauch became president of Mountain Hardwear. Rauch previously served as general manager of the Columbia Brand’s North America region. Former Mountain Hardwear President Troy Sicotte will remain with the brand as global vice president of sales.

Margins, Inventory and Outlook

Reported gross margin was affected by a 50-basis-point headwind from accommodations provided to factory partners, net of tariff refunds recognized during the quarter. Excluding that effect, underlying gross margin expanded 30 basis points, primarily due to lower direct-to-consumer freight costs.

SG&A expense declined due to lower corporate overhead and disciplined spending, as well as a shift of some planned marketing spending into the fourth quarter. Inventory rose 11% in dollar terms and 10% in units, primarily because of higher in-transit inventory from delayed fall receipts. The company exited the quarter with $230 million in cash and short-term investments and no debt.

For the fourth quarter, Columbia forecast sales growth of 3.5% to 7% and earnings per share of $1.85 to $2.10. The company raised its full-year outlook to sales growth of 2% to 3% and reported EPS of $4.65 to $4.90.

• Full-year reported gross margin is expected to be 52.1% to 52.3%.
• Full-year SG&A is expected to represent 43.8% to 44% of sales.
• Reported operating margin is projected at 8.7% to 9.1%.

Chief Financial Officer Jim Swanson said the company expects approximately $30 million of wholesale shipment timing to shift between the third and fourth quarters, affecting each quarter’s sales growth by roughly 2.5 to 3 percentage points. He also said the company expects fourth-quarter direct-to-consumer trends to remain broadly in line with third-quarter performance, with e-commerce planned to grow at a low-double-digit rate.

Early 2027 Order Book Improves

Looking ahead, management said it expects mid-single-digit wholesale growth in both the U.S. and globally during the first half of 2027. Swanson said the spring 2027 wholesale order book improved from low- to mid-single-digit growth at the prior earnings call to a forecast for mid-single-digit first-half wholesale growth.

Management said the outlook includes low- to mid-single-digit growth in U.S. wholesale and continued international growth that is expected to outpace the domestic business. However, Swanson said the company remains in its planning process and cited uncertainty around potential tariffs, product input costs, pricing and promotional activity as factors affecting its 2027 outlook.

About Columbia Sportswear (NASDAQ:COLM)

Columbia Sportswear Company is an outdoor and active lifestyle apparel, footwear, accessories and equipment company headquartered in Portland, Oregon. Founded in 1938 as the Columbia Hat Company, the business has grown into a global outdoor brand focused on products designed for activities such as hiking, skiing, fishing, camping and everyday outdoor use.

The company markets products under the Columbia, Sorel, Mountain Hardwear and prAna brands. Its offerings include jackets, shirts, pants, base layers, footwear, hats, gloves, backpacks and other outdoor accessories.

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