Columbia Sportswear Company (COLM) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales declined 8% year-over-year to $570.2M, mainly due to lower U.S. wholesale sales amid soft consumer demand and retailer caution, partially offset by strong international growth, especially in China and Europe.

• Q2 net loss was $11.8M (diluted EPS $(0.20)), compared to net income of $8.4M (EPS $0.14) in Q2 2023.

• Inventory was reduced by 29% year-over-year to $823.6M, and the Profit Improvement Program is on track for $75–$90M in 2024 cost savings, with a multi-year target of $125–$150M by 2026.

• Operating cash flow for the first half was $108.9M, with a full-year target of over $350M; cash and short-term investments totaled $711.1M with no debt.

• The company maintains a strong balance sheet and continues disciplined capital allocation, including $110.7M in share repurchases and a $0.30/share dividend.

Financial highlights

• Q2 2024 net sales: $570.2M (down 8% year-over-year); Q2 gross margin: 47.9% (down 270 bps); Q2 operating margin: -4.2% (down from 1.0%); Q2 SG&A: 53.1% of net sales.

• Net loss for Q2 2024 was $11.8M; YTD net income was $30.6M (down from $54.6M prior year).

• SG&A expenses decreased 3% year-over-year but rose as a percent of sales.

• Free cash flow for the first six months was $81.1M, up from $(13.1)M in 2023.

• U.S. net sales declined 15%, driven by a 20% drop in U.S. wholesale.

Outlook and guidance

• Full-year 2024 net sales expected at $3.35–$3.42B, a 4%–2% decline; gross margin forecast at 50.0%–50.2% (up 40–60 bps); operating margin at 7.7%–8.4%; diluted EPS guidance at $3.65–$4.05.

• Q3 2024 net sales expected at $927–$959M (down 6%–3% YoY); diluted EPS $1.27–$1.43.

• Operating cash flow for 2024 projected at over $350M; capex planned at $60M–$80M.

• Early Spring 2025 order book suggests a return to wholesale growth, especially in North America.

• Management expects continued softness in U.S. consumer demand and a challenging DTC environment through 2024.