Columbia Sportswear’s Q2 sales topped expectations, supported by growth in international markets offsetting U.S. declines. However, management again delivered a cautious outlook going forward as the Middle East conflict has led to supply chain disruptions and is expected to pressure consumer spending in the second half of the year.

Columbia reiterated its full-year guidance for sales despite sales topping expectations in the second quarter. It raised its earnings expectations for the year solely due to a benefit from the recovery of tariff refunds.

For the third quarter, guidance was provided that was well below analysts’ consensus estimates due in large part to logistic disruptions caused by the Middle East conflict, causing the company to become heavily reliant on its fourth-quarter performance to reach its annual targets.

Boyle said, “We now anticipate meaningful shifts in the timing of fall 2026 shipments from the third quarter to the fourth due to longer logistics lead time resulting from supply chain disruptions, as well as discrete delays stemming from capacity constraints within a node of our global supply chain. These delays are expected to shift all of our anticipated second half growth to the fourth quarter, creating greater risk to our outlook given the macroeconomic headwinds impacting operating environment.”

Management said more than $30 million in sales shifted from the third quarter to the fourth quarter. The company said that if the timing shift were adjusted out, third- and fourth-quarter growth would look more similar.

Higher gas prices stemming from the conflict are further expected to weigh on discretionary spending in the back half. He said, “The prolonged period of elevated global gasoline prices stemming from the conflict is putting pressure on discretionary spending and consumer sentiment, particularly among lower and middle-income consumers, which could impact consumer demand in the second half.”

On the somewhat positive side, Boyle said the company’s ACCELERATE strategy launched last year is beginning to show results, including new product attracting younger and more-active consumers to the Columbia brand as well as supporting higher-priced sales.

Columbia’s spring 2027 order book, which management said is nearly 90 percent completed, is also encouraging, pointing to low-single-digit to mid-single-digit growth, including gains seen for the Columbia Brand in the U.S. Additionally, Columbia is seeing order growth across account types and tiers, including “higher priority brand-enhancing partners.”

From a product perspective, footwear orders growth is still outpacing apparel but “solid growth” in orders is being achieved in both categories. Boyle added,  “It’s also particularly encouraging to see strong adoption of newer apparel and footwear styles, including growth in key styles targeting younger, dynamic, active consumers consistent with our ACCELERATE strategy.”

Nonetheless, Boyle inferred that the Columbia brand was still early in the turnaround process within the U.S. market. He said, “We know it will take more time and work to bring the newness, innovation, and elevated style to our product portfolio at the level we need in order to continue shifting consumers’ perceptions of the brand in the U.S. and put us back on a path of sustainable long-term growth.”

Shares of Columbia were trading down about 5 percent in early-afternoon trading on Friday, July 31.

Second-Quarter Results
Sales in the quarter increased 2 percent (1 percent constant-currency) to $614.4 million. Growth in most international markets was partially offset by lower U.S. net sales, primarily reflecting lower spring 2026 wholesale orders and, to a lesser extent, declines in its direct-to-consumer brick-and-mortar business.

Sales topped Columbia’s guidance in the range of $600 to $610 million and analysts’ consensus estimate of $605.6 million.

Overall, sales for the flagship Columbia Brand, which accounts for about 90 percent of sales, increased 1 percent in the quarter to $556.3 million, with international growth more than offsetting declines in the U.S.

Earnings jumped to $26.6 million, or 52 cents per diluted share, rebounding from a loss of $10.2 million, or 19 cents per diluted share, for the comparable period in 2025. The improvement reflected a recovery of IEEPA tariffs that benefited diluted earnings per share by 93 cents. Excluding the refund, underlying EPS was about 41 cents a share, which management said was roughly in line with the midpoint of guidance.

Boyle said sales beat the high end of Columbia’s guidance due to international strength while gross margins were slightly below plan on higher promotional activity.

Category Performance
Among product categories, footwear is a bright spot for the Columbia Brand, with growth in the quarter driven by several styles and particular strength in more technical footwear, featuring its proprietary Omni-Max technology, including the Tellurax and Peakfreak franchises in hike, the Konos in trail running, and the Dry Tortuga in fish. Companywide across brands, footwear sales grew 5 percent to $117.0 million. Apparel, accessories and equipment sales inched up 1 percent to $497.4 million.

U.S. Performance 
In the U.S., net sales decreased 4 percent to $320.1 million, declining slightly more than expected due to soft traffic within its DTC stores. The decline was primarily driven by a high single-digit percent decline in U.S. wholesale, resulting from a lower spring ’26 wholesale order book. The wholesale performance was slightly ahead of plan due to stronger than expected order conversion.

Boyle said the U.S. region saw sequential improvement “despite consumer discretionary spending coming in under mounting inflationary pressure.” Sales in the U.S. were down 10 percent in the first quarter.

U.S. DTC net sales were down slightly in the quarter, primarily reflecting the impact of store closures as well as softer traffic, resulting in higher discounts and lower sales than planned. E-commerce grew low-single digit and exceeded plan, driven by emerging brands. Boyle said that while Columbia Brand’s U.S. e-commerce was down low single-digit percent for the quarter, the company was “encouraged with improving underlying metrics as we reposition e-com as the pinnacle expression of the brand.”

He saw the improving metrics in Columbia Brand U.S. e-commerce, including new customer acquisition, as an indicator of progress on the ACCELERATE strategy. Boyle added, “Additionally, we’re seeing encouraging signs of the traction the Columbia brand is making with target consumers, including improvements in unaided awareness and purchase intent among professional elite and dynamic active consumers in North America. We’re also realizing stronger growth rates with newer and more elevated products and collections aimed at these target consumer groups.”

International Performance 
In other regions, LAAP sales increased 13 percent on a currency-neutral basis (+12 percent reported), to $125.9 million. China’s sales grew mid-single digits, driven by solid growth in e-commerce to offset single-digit percent declines in wholesale due to shipment timing and in DTC stores, reflecting soft traffic amid a more challenging macro environment. Japan and Korea’s sales increased low-double digits. LAAP distributor markets delivered mid-20 percent growth, driven by the fall 2026 order book and earlier fall shipments, reflecting continued momentum in these diverse global markets, driven by robust growth in Columbia Brand apparel.

EMEA sales increased 8 percent on a currency-neutral basis (+10 percent reported), to $143.1 million. The gains reflected continued momentum in both wholesale and DTC, albeit with a higher promotional activity in DTC amid weaker traffic.

Canada sales decreased 9 percent on a currency-neutral basis (-7 percent reported) to $25.2 million,  primarily reflecting declines in wholesale due to unfavorable shipment timing and lower spring 2026 orders. DTC grew with higher e-commerce sales partly offset by lower brick-and-mortar results due to weaker traffic.

Emerging Brands Performance
Among its emerging brands, Sorel’s sales declined 14 percent to $16.3 million, driven largely by later wholesale shipment timing versus the prior year, which was partly offset by growth in e-commerce. Boyle noted that the second quarter typically represents less than 10 percent of Sorel’s annual business.

Boyle said Columbia continues to expect a “stronger fall 2026 season” for Sorel, with growth expected in both wholesale and DTC for the second half. He also expects benefits from the recent appointment of Joe Vernachio, former president of Mountain Hardwear, as the boot brand’s president. He said, “He brings extensive industry experience as a proven consumer-focused and collaborative leader. I’m confident that Joe is the right leader at the right time to drive the next phase of Sorel’s growth and further unlock the brand’s tremendous potential.”

Prana’s sales increased 14 percent to $23.3 million, reflecting double-digit percentage growth in wholesale and high single-digit percent e-commerce growth, with flattish growth in DTC brick-and-mortar on lower traffic, which was offset by better conversion.

Boyle said, “We remain encouraged by the momentum building in Prana brand with healthy growth in both new and retained customers, particularly among its target younger consumer. A key highlight during the quarter was the opening of Prana’s third full-price store in La Jolla, California, which has gotten off to a great start enhanced by a steady stream of elevated in-store experiences.”

Mountain Hardwear’s sales grew 6 percent year-over-year to $18.5 million, driven by double-digit percent growth in DTC channels that offset a low double-digit percent decline in wholesale, reflecting substantially lower closeout sales year-over-year that was more than offset by low single-digit percent full-price growth. Boyle said of Mountain Hardwear, “A major highlight in the quarter was Mountain Hardwear’s fourth collaboration with Stüssy, which surpassed each of the prior collections in sales with remarkably strong sell-through. We were also excited to see the new Kazam ultralight trail backpack launch in Q2 and immediately become a top 10 style in terms of sell-through.”

Outlook
For the third quarter, Columbia expects sales to be between $929.0 million and $943.0 million, representing a 1.5 percent decline to flat growth year-over-year and well below Wall Street’s consensus estimate of $974.9 million. Earnings for the third quarter are projected between $1.15 to $1.35, significantly below the analyst consensus estimate of $1.56.

Columbia reiterated its expectations for sales for the year. Sales are expected to arrive in the range of $3.43 to $3.50 billion, representing net sales growth of 1.0 percent to 3.0 percent compared to 2025.

Gross margins are now expected in the range of 52.1 percent to 52.3 percent, up from prior guidance between 50.3 percent to 50.5 percent, with the change reflecting the impact of IEEPA tariff refunds.

Earnings guidance was also raised due to tariff refunds. Operating income is now projected in the range of $290 to $325 million (prior $230 to $262 million), representing an operating margin of 8.5 to 9.3 percent of sales (prior 6.7 to 7.5 percent). Diluted EPS is projected between $4.45 to $4.90 (prior $3.55 to $4.00).

Image courtesy Columbia Sportswear