Columbia Sportswear Company — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales increased 2% year-over-year to $962.6 million for the third quarter of 2026, compared to $943.4 million in the same period of 2025; constant-currency growth was also 2%.
• Operating income rose to $109.6 million (11.4% of net sales) in Q3 2026, up from $67.4 million (7.1% of net sales) in Q3 2025.
• Diluted earnings per share (EPS) reached $1.66 in Q3 2026, compared to $0.95 in Q3 2025; Q3 2025 results included $29.0 million in impairment charges that negatively impacted EPS by $0.46.
• Gross margin contracted 20 basis points to 49.8% in Q3 2026 from 50.0% in Q3 2025, primarily due to factory partner accommodations, partially offset by IEEPA tariff refunds.
• SG&A expenses were $375.6 million (39.0% of net sales) in Q3 2026, down from $380.9 million (40.4% of net sales) in Q3 2025.
• For the first nine months of 2026, net sales increased 1% to $2,356.0 million from $2,327.1 million in 2025; constant-currency sales were flat.
• Nine-month gross margin expanded 220 basis points to 52.3% from 50.1% in 2025, driven by a ~230 basis point benefit from IEEPA tariff refunds.
• Nine-month operating income was $182.5 million (7.7% of net sales), compared to $90.3 million (3.9% of net sales) in 2025.
• Nine-month diluted EPS was $2.82, compared to $1.53 in 2025; IEEPA tariff refunds benefited EPS by $0.85.
• Net cash used in operating activities for the nine months ended September 30, 2026, was $280.5 million, compared to $333.4 million in 2025.
• Capital expenditures totaled $40.8 million for the nine months ended September 30, 2026, down from $46.6 million in 2025.
• The company ended the quarter with $229.6 million in cash, cash equivalents, and short-term investments, with no borrowings.
• Inventories increased 11% to $889.2 million as of September 30, 2026, from $800.4 million in 2025, reflecting higher in-transit inventory and earlier Spring 2027 production.

Guidance and Future Outlook:

• Full-year 2026 net sales guidance was raised to $3.46–$3.50 billion (prior $3.43–$3.50 billion), representing 2.0–3.0% growth compared to 2025.
• Full-year 2026 gross margin is expected to be 52.1%–52.3%, unchanged from prior guidance, including the impact of IEEPA tariff refunds.
• Full-year 2026 operating income guidance is $300–$320 million (prior $290–$325 million), representing an operating margin of 8.7%–9.1%.
• Full-year 2026 diluted EPS guidance is $4.65–$4.90 (prior $4.45–$4.90).
• Full-year 2026 operating cash flow is expected to be $230–$250 million (prior $290–$310 million), impacted by earlier Spring 2027 inventory production.
• Full-year 2026 capital expenditures are planned at $60–$70 million (prior $65–$75 million).
• Fourth quarter 2026 net sales are expected to be $1,108–$1,145 million, representing 3.5%–7.0% growth from $1,070 million in Q4 2025.
• Fourth quarter 2026 operating margin is expected to be 10.8%–12.0% of net sales.
• Fourth quarter 2026 diluted EPS is expected to be $1.85–$2.10, compared to $1.73 in Q4 2025.
• Preliminary first-half 2027 wholesale net sales are expected to grow in the mid-single-digit percent range.

Business Segments and Product Lines:

• The Columbia brand U.S. DTC E-Commerce business showed momentum, described as the "pinnacle expression of our brand."
• International business continued to show momentum despite challenging macroeconomic conditions.
• U.S. net sales were lower in the quarter due to later shipments of Fall 2026 wholesale orders, partially offset by DTC growth.
• Brand performance in Q3 2026: Columbia sales grew 3% to $826.2 million; SOREL grew 2% to $82.8 million; prAna declined 1% to $30.2 million; Mountain Hardwear declined 17% to $23.3 million.
• Product category performance in Q3 2026: Apparel, accessories, and equipment grew 1% to $743.9 million; Footwear grew 5% to $218.7 million.
• Channel performance in Q3 2026: Wholesale sales were flat at $636.7 million; DTC sales grew 5% to $325.9 million.
• The ACCELERATE Growth Strategy continues to show traction, focusing on attracting younger, more active consumers through new brand platforms and product designs.

Market and Competitive Landscape:

• The operating environment remains challenging and uncertain with global macroeconomic conditions.
• The company operates in 122 countries with brands including Columbia, Mountain Hardwear, SOREL, and prAna.
• Management notes intense competition in the industry and the need to elevate brand perception in the U.S.
• Foreign currency translation is expected to benefit full-year 2026 net sales by approximately 50 to 70 basis points.

Risks and Challenges:

• Risks include unseasonable weather, global climate change, and seasonality affecting order timing.
• Potential risks involve changes in consumer spending, retail traffic patterns, and unfavorable economic conditions.
• Risks related to international trade include changes in tariffs, tax laws, and geopolitical tensions.
• Inventory management challenges exist due to the timing of wholesale orders and production schedules.
• Dependence on third-party manufacturers and potential volatility in global production and transportation costs.
• Risks associated with IT system security, business disruptions, and cyber-attacks.

Management Commentary and Tone:

• Chairman and CEO Tim Boyle expressed pleasure at delivering net sales and EPS growth exceeding guidance.
• Management cited delayed Fall '26 wholesale orders shipping earlier than expected, improved U.S. DTC trends, and international momentum as key drivers.
• Management stated the ACCELERATE Growth Strategy is gaining traction and putting the company on the right track for healthy, sustainable long-term growth.
• The tone was confident regarding the ability to raise the low end of full-year revenue and EPS guidance despite a challenging fourth quarter execution environment.
• Management emphasized a focus on what they can control, including accelerating profitable growth, creating iconic products, and enhancing consumer experiences.

Other Key Points:

• The Board of Directors approved a regular quarterly cash dividend of $0.30 per share, payable on December 3, 2026, to shareholders of record on November 19, 2026.
• During the nine months ended September 30, 2026, the company repurchased 3,342,569 shares of common stock for an aggregate of $200.0 million (average price $59.83 per share).
• As of September 30, 2026, $226.5 million remained available under the stock repurchase authorization.
• No impairment charges were recorded in Q3 2026 or the first nine months of 2026, whereas Q3 2025 and the first nine months of 2025 included $29.0 million in impairment charges related to prAna and Mountain Hardwear.
• The effective income tax rate for Q3 2026 was 24.0%, compared to 26.7% in Q3 2025.
• The effective income tax rate for the first nine months of 2026 was 25.4%, compared to 23.1% in 2025.
• A conference call regarding these results was held on October 29, 2026, at 5:00 p.m. ET.