Columbia Sportswear Company (COLM) Q4 2025 earnings summary

Executive summary

• Q4 2025 net sales declined 2% year-over-year to $1,070M, mainly due to U.S. weakness, while full-year net sales increased 1% to $3.4 billion, with international growth offsetting U.S. headwinds.

• Gross margin expanded 50 bps to 51.6% in Q4, driven by healthier inventory and less clearance activity, despite $20M in incremental U.S. tariffs.

• Operating income and diluted EPS declined year-over-year, with Q4 operating income down 15% to $116.7M and diluted EPS at $1.73, impacted by $29M in impairment charges.

• The Columbia Accelerate Growth Strategy, new product launches, and marketing campaigns like "Engineered for Whatever" are resonating with younger consumers and driving brand momentum.

• Ended 2025 with $791 million in cash and no debt.

Financial highlights

• Full year 2025 net sales rose 1% to $3,397M, with gross margin up 30 bps to 50.5% and operating margin down 190 bps to 6.1%.

• Q4 net sales were $1.1 billion, with a 7% decline in wholesale partially offset by a 1% increase in DTC sales.

• SG&A expenses increased 3% in Q4, mainly from higher DTC and non-recurring profit improvement program costs.

• Free cash flow for 2025 was $217M, down from $431M in 2024.

• Share repurchases totaled $201M and quarterly dividend declared at $0.30/share.

Outlook and guidance

• 2026 net sales expected to grow 1–3% to $3.43–$3.50 billion, with a slight FX tailwind.

• Operating margin projected at 6.2–6.9%, with diluted EPS of $3.20–$3.65, including a $0.10 FX benefit.

• Gross margin expected to contract to 49.8–50.0% due to incremental tariffs, with mitigation efforts underway.

• Q1 2026 sales anticipated to decline 2.5–4%, with EPS of $0.29–$0.37.

• U.S. wholesale expected to return to growth in the second half of 2026; international growth to outpace U.S.