Columbia Sportswear Company (COLM) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales declined 5% year-over-year to $931.8 million, mainly due to softness in North America, partially offset by strong growth in international markets, especially China, Japan, and Europe.

• Gross margin expanded 150 basis points to 50.2%, exceeding expectations due to lower inbound freight costs, favorable international performance, and reduced promotions in the U.S.

• Operating income fell 16% to $112.5 million (12.1% margin), and diluted EPS was $1.56, both down year-over-year but above guidance due to disciplined expense management and gross margin gains.

• The ACCELERATE Growth Strategy was launched to target younger, more active consumers and elevate brand perception, with a multi-year profit improvement program underway targeting $90 million in 2024 cost savings and $125–$150 million annually by 2026.

• Ended the quarter with $373.9 million in cash and no debt; board approved a $600 million share repurchase authorization, with $231 million repurchased year-to-date.

Financial highlights

• Q3 net sales: $931.8 million, down 5% year-over-year; global wholesale down 9%, DTC up 2% (brick-and-mortar up 7%, e-commerce down 12%).

• U.S. net sales fell 10%, Canada down 21%, LAAP up 17–18%, EMEA up 10%; China up low 20%, Japan double-digit %, Korea mid-single-digit %.

• Columbia brand sales flat; Mountain Hardwear up 2%, prAna down 7%, SOREL down 39%; apparel/accessories/equipment up 1%, footwear down 23%.

• Net income for Q3 2024 was $90.2 million, down 13% year-over-year.

• Inventory decreased 10% year-over-year to $798.2 million.

Outlook and guidance

• 2024 net sales outlook reduced to a 3%–5% decline ($3.31–$3.38 billion); gross margin expected to expand 40–90 bps to 50.0–50.5%; operating margin 7.7%–8.4%.

• Diluted EPS guidance raised to $3.70–$4.05.

• Q4 2024 net sales expected between $1.04–$1.11 billion, with operating margin of 11.8–13.6%.

• H1 2025 wholesale net sales forecasted to grow mid-single digits across all regions and key brands.

• Profit improvement program on track for ~$90 million in 2024 cost savings, ramping up to $125–$150 million annually by 2026.