Columbia Sportswear, Inc. reported earnings fell 42.4 percent in the third quarter, dragged down by a steep impairment charge tied to Prana and Mountain Hardwear. Sales in the quarter as well as earnings, excluding the charge, topped company guidance. However,  Columbia provided a weak forecast for the fourth quarter, with earnings down about a third and sales declining between 8 percent to 5 percent.

Columbia also provided guidance for the full year that showed the company expects a steep drop in earnings on flattish sales and indicated wholesale sales in the first half of 2026 will be flat to up low-single-digit percent, with declines in the U.S. It had paused providing full-year guidance since the first quarter due to uncertainty around U.S. tariffs.

Third Quarter 2025 Revenues

Third Quarter 2025 Financial Results
(All comparisons are between third quarter 2025 and third quarter 2024, unless otherwise noted.)

  • Net sales increased 1 percent (flat on a constant-currency basis) to $943.4 million from $931.8 million for the comparable period in 2024. The increase primarily reflected changes in wholesale shipment timing, which benefitted sales in the quarter by approximately $30 million, partially offset by lower direct-to-consumer (DTC) net sales. Sales growth in most of our international markets was partially offset by underlying weakness in the U.S.
  • Gross margin contracted 20 basis points to 50.0 percent of net sales from 50.2 percent of net sales for the comparable period in 2024. Gross margin contraction reflected the impact of incremental tariffs and unfavorable foreign exchange rates, which more than offset higher channel profitability from lower clearance and promotional activity.
  • SG&A expenses were $380.9 million, or 40.4 percent of net sales, compared to $361.2 million, or 38.8 percent of net sales, for the comparable period in 2024. The largest changes in SG&A expenses were driven by higher demand creation and omni-channel expenses.
  • Impairment of goodwill and intangible assets included $29.0 million of charges related to prAna and Mountain Hardwear.
  • Operating income decreased 40 percent to $67.4 million, or 7.1 percent of net sales, compared to operating income of $112.5 million, or 12.1 percent of net sales, for the comparable period in 2024.
  • Interest income, net of $2.9 million, compared to $5.4 million for the comparable period in 2024.
  • Income tax expense of $19.0 million resulted in an effective income tax rate of 26.7 percent, compared to income tax expense of $29.0 million, or an effective income tax rate of 24.4 percent, for the comparable period in 2024.
  • Net income was $52.0 million, or 95 cents per diluted share for the quarter, compared to net income of $90.2 million, or $1.56 per diluted share, for the comparable period in 2024. The impairment charges related to Prana and Mountain Hardwear in third quarter 2025 negatively impacted diluted earnings per share by 46 cents.

First Nine Months 2025 Financial Results
(All comparisons are between first nine months 2025 and first nine months 2024, unless otherwise noted.)

  • Net sales increased 2 percent (3 percent constant-currency) to $2,327.1 million from $2,272.0 million for the comparable period in 2024.
  • Gross margin expanded 30 basis points to 50.1 percent of net sales from 49.8 percent of net sales for the comparable period in 2024.
  • SG&A expenses were $1,061.0 million, or 45.6 percent of net sales, compared to $1,013.3 million, or 44.6 percent of net sales, for the comparable period in 2024.
  • Impairment of goodwill and intangible assets included $29.0 million of charges related to prAna and Mountain Hardwear.
  • Operating income decreased 32 percent to $90.3 million, or 3.9 percent of net sales, compared to operating income of $133.4 million, or 5.9 percent of net sales, for the comparable period in 2024.
  • Interest income, net of $14.5 million, compared to $22.9 million for the comparable period in 2024.
  • Income tax expense of $25.2 million resulted in an effective income tax rate of 23.1 percent, compared to income tax expense of $37.6 million, or an effective income tax rate of 23.8 percent, for the comparable period in 2024.
  • Net income decreased 30 percent to $84.1 million, or $1.53 per diluted share, compared to net income of $120.7 million, or $2.04 per diluted share, for the comparable period in 2024.

Balance Sheet as of September 30, 2025

  • Cash, cash equivalents and short-term investments totaled $236.0 million, compared to $373.9 million as of September 30, 2024.
  • The company had no borrowings as of either September 30, 2025 or September 30, 2024.
  • Inventories of $800.4 million compared to $798.2 million as of September 30, 2024.

Cash Flow for the Nine Months Ended September 30, 2025

  • Net cash used in operating activities was $333.4 million, compared to $76.6 million for the same period in 2024.
  • Capital expenditures totaled $46.6 million, compared to $41.7 million for the same period in 2024.

Share Repurchases for the Nine Months Ended September 30, 2025

  • The company repurchased 2,400,131 shares of common stock for an aggregate of $171.7 million, or an average price per share of $71.53.
  • At September 30, 2025, $455.9 million remained available under our stock repurchase authorization, which does not obligate the company to acquire any specific number of shares or to acquire shares over any specified period of time.

Quarterly Cash Dividend
The Board of Directors approved a regular quarterly cash dividend of $0.30 per share, payable on December 4, 2025 to shareholders of record on November 20, 2025.

Full Year 2025 Financial Outlook

  • Net sales of $3.33 billion to $3.37 billion, representing a net sales decline of 1.0 percent to flat compared to 2024.
  • Operating income of $163 million to $185 million, representing an operating margin of 4.9 percent to 5.5 percent, including $29.0 million in impairment charges related to Prana and Mountain Hardwear.
  • Diluted earnings per share of $2.55 to $2.85, including a $0.46 negative impact from the impairment charges referred to above. 

CEO Boyle commented, “Third quarter results reflect sustained momentum in our international business, led by double-digit percent sales growth in our Europe-direct markets. This strong international performance underscores the Columbia brand’s ability to connect with younger and more active consumers, a key tenet of our Accelerate Growth Strategy.

“In the U.S., we are focused on revitalizing the Columbia brand through our Accelerate Growth Strategy. The launch of our new brand platform, ‘Engineered for Whatever,’ was a major milestone—celebrating the extremes of outdoor adventure and rekindling the brand’s irreverent spirit from the ’80s and ’90s. The early response has been overwhelmingly positive, and we intend to build upon that momentum with a robust pipeline of differentiated activations and other media investments during the important holiday sales period ahead.

“I’m confident we have the right strategy in place to unlock significant long-term growth opportunities. We remain committed to investing in our strategic priorities to:

  • accelerate profitable growth;
  • create iconic products that are differentiated, functional and innovative;
  • drive brand engagement through increased, focused demand creation investments;
  • enhance consumer experiences by investing in capabilities to delight and retain consumers;
  • amplify marketplace excellence, with digitally-led, omni-channel, global distribution; and
  • empower talent that is driven by our core values, through a diverse and inclusive workforce.”

Fourth Quarter 2025 Financial Outlook

  • Net sales are forecast in the range of $1.01 billion to $1.04 billion, representing a decrease of 8 percent to 5 percent from $1.10 billion for the comparable period in 2024. Net sales guidance includes a $30 million to $40 million impact resulting from a higher proportion of Fall 2025 shipments occurring in the third quarter of 2025 compared to the third quarter of 2024.
  • Operating margin is expected to be 7.2 percent to 9.1 percent, compared to the operating margin of 12.5 percent in the comparable period in 2024. Operating income includes $20 million to $25 million of incremental tariffs prior to mitigation actions
  • Diluted earnings per share are expected to be $1.04 to $1.34 range, compared to $1.80 per diluted share for the comparable period in 2024. Analysts’ consensus estimate was $1.38 per share.

Preliminary First Half 2026 Commentary
Wholesale net sales are expected to be flat to up low-single-digit percent, contemplating sustained international growth across direct and distributor markets, partially offset by a decline in the U.S.

Image courtesy Mountain Hardwear/Columbia Sportswear