Press release·02/27/2025 23:16:24

Overview of Columbia Sportswear’s Financial Performance

Columbia Sportswear Company is a global leader in designing, developing, marketing, and distributing outdoor, active and lifestyle products. The company operates four main brands - Columbia, SOREL, Mountain Hardwear, and prAna - across apparel, accessories, equipment, and footwear product categories. Columbia Sportswear sells its products in over 110 countries and operates in four geographic segments: U.S., Latin America Asia Pacific (LAAP), Europe Middle East Africa (EMEA), and Canada.

In 2024, Columbia Sportswear’s global net sales decreased 3% to $3.37 billion compared to 2023. This was primarily driven by lower wholesale net sales in the U.S. and Canada, partially offset by strength in international markets. Wholesale net sales declined due to lower Spring and Fall 2024 orders from retailers, as well as a challenging competitive environment. However, the company’s direct-to-consumer (DTC) net sales increased 1% year-over-year, reflecting growth in brick-and-mortar stores partially offset by declines in e-commerce.

Revenue and Profit Trends

Columbia Sportswear’s gross profit margin expanded to 50.2% in 2024 from 49.6% in 2023. This was primarily driven by favorable inbound freight costs and a favorable shift in regional and channel sales mix, partially offset by higher clearance and promotional activity.

However, the company’s selling, general and administrative (SG&A) expenses increased 2% to $1.44 billion, or 42.9% of net sales, in 2024 compared to 40.6% in 2023. This was mainly due to higher omni-channel expenses, including costs for new DTC stores and temporary clearance locations, as well as higher incentive compensation. These increases were partially offset by lower supply chain expenses and decreased demand creation spending.

As a result, Columbia Sportswear’s operating income declined 13% to $270.7 million, or 8.0% of net sales, in 2024 compared to $310.3 million, or 8.9% of net sales, in 2023. The company’s net income also decreased 11% to $223.3 million, or $3.82 per diluted share, in 2024 versus $251.4 million, or $4.09 per diluted share, in 2023.

Segment Performance

Looking at Columbia Sportswear’s performance by geographic segment:

• U.S.: Net sales decreased 8% and operating income declined 17.2% of net sales, driven by lower wholesale and e-commerce sales, partially offset by growth in DTC brick-and-mortar.
• LAAP: Net sales increased 8% (11% constant-currency) and operating income grew to 13.7% of net sales, fueled by strong demand in China, Japan, and the distributor business.
• EMEA: Net sales rose 9% (8% constant-currency) and operating income was 20.2% of net sales, reflecting robust DTC performance partially offset by modest wholesale growth.
• Canada: Net sales fell 11% (10% constant-currency) and operating income declined to 21.0% of net sales, due to lower wholesale and e-commerce sales.

The company’s unallocated corporate expenses decreased 2.3% to $314.3 million in 2024.

Strengths and Weaknesses

Some of Columbia Sportswear’s key strengths include:

• Strong global brand portfolio with leading market positions in outdoor, active, and lifestyle apparel and footwear
• Diversified geographic and channel sales mix, with over 40% of net sales coming from international markets
• Solid DTC business, which accounts for nearly half of total net sales
• Healthy gross margins and operating cash flow generation

However, the company also faces some challenges:

• Heightened geopolitical risks and evolving regulatory environment, particularly around tariffs, that could impact sourcing and sales
• Increased competition in the U.S. outdoor and active apparel market as new brands enter and existing brands shift strategies
• Softness in the U.S. and Canadian markets, driven by retailer cautiousness and a difficult competitive landscape
• Rising SG&A expenses, particularly related to omni-channel investments, that have outpaced revenue growth

Outlook and Strategic Priorities

Looking ahead, Columbia Sportswear is focused on executing its ACCELERATE Growth Strategy for the Columbia brand, which aims to elevate the brand and target a younger, more active consumer. Key elements of this strategy include:

• Stewardship of existing consumer segments while attracting new younger and active consumers
• Elevating consumer perception of the Columbia brand
• Creating more consumer-centric product offerings
• Enhancing the brand’s positioning in the U.S. marketplace
• Delivering integrated full-funnel marketing

In addition, the company is continuing its multi-year Profit Improvement Program to drive cost savings and operational efficiencies. In 2024, this program delivered $90 million in realized cost savings, and Columbia Sportswear is now expanding the review of its cost structure to exceed its previous goal of $125-$150 million in annualized savings by 2026.

Overall, while Columbia Sportswear faces some near-term headwinds, particularly in its U.S. and Canadian markets, the company’s diversified global footprint, strong brand portfolio, and strategic initiatives provide a solid foundation for long-term profitable growth. Successful execution of the ACCELERATE Growth Strategy and Profit Improvement Program could enable the company to capture market share, expand gross margins, and improve operating efficiency in the years ahead.