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 ($0.14 EPS) in Q2 2023.

• Inventory was reduced by 29% year-over-year to $823.6M, and cash and short-term investments totaled $711.1M with no debt at quarter-end.

• The Profit Improvement Program is on track to deliver $75–$90M in 2024 cost savings, with a multi-year target of $125–$150M annualized savings by 2026.

• Operating cash flow for the first half was $108.9M, with a full-year target of over $350M.

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%).

• SG&A expenses decreased 3% year-over-year but rose as a percent of sales to 53.1%.

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

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

• Q2 effective tax rate was 21.6%, impacted by non-recurring stock compensation expense.

Outlook and guidance

• Full-year 2024 net sales expected at $3.35–$3.42B, a 4%–2% decline; diluted EPS guidance unchanged at $3.65–$4.05.

• Gross margin for 2024 expected to expand 40–60 bps to 50.0%–50.2%; SG&A as a percent of sales to rise to 42%–43%; operating margin projected at 7.7%–8.4%.

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

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

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