Columbia Sportswear Company closed 2025 with softer top line trends but stronger than expected profitability and a rock solid balance sheet, while setting cautious but positive guidance for 2026 as its accelerate growth strategy and “Engineered for Whatever” brand platform begin to gain traction. Net sales dipped in the fourth quarter but rose modestly for the full year, even as tariffs, brand impairments, and profit improvement costs weighed on operating income.
Fourth Quarter 2025: Sales Dip, Margins Hold
In the fourth quarter ended December 31, 2025, net sales fell 2% to $1.07 billion (down 3% in constant currency) versus $1.10 billion a year earlier, mainly due to earlier shipment of Fall ’25 wholesale orders and ongoing U.S. softness. International growth and a modest increase in direct to consumer (DTC) partially offset the decline.
Despite lower sales, gross margin expanded 50 basis points to 51.6%, helped by healthier inventory, less clearance, and lower inventory loss provisions, offset by about $20 million in incremental U.S. tariffs before mitigation. Operating income declined 15% to $116.7 million, or 10.9% of net sales, from $137.3 million and a 12.5% margin in Q4 2024. Net income was $93.2 million, or $1.73 per diluted share, versus $102.6 million and $1.80 per diluted share a year earlier.
Full Year 2025: Slight Growth, Tariffs and Impairments Bite
For full year 2025, net sales edged up 1% to $3.40 billion (flat in constant currency) from $3.37 billion in 2024. Gross margin improved 30 basis points to 50.5%, even after absorbing around $31 million in incremental U.S. tariffs ahead of mitigation actions.
Operating income fell 24% to $207.0 million, or 6.1% of net sales, compared with $270.7 million and an 8.0% margin in 2024, weighed down by $29.0 million of impairment charges tied to prAna and Mountain Hardwear. Net income decreased 21% to $177.2 million, or $3.24 per diluted share, from $223.3 million and $3.82 per diluted share the prior year; the impairments reduced EPS by about $0.45.
Balance Sheet, Cash Flow and Shareholder Returns
As of December 31, 2025, Columbia Sportswear Company held $790.8 million in cash, cash equivalents, and short term investments and reported no borrowings, underscoring a conservative balance sheet. Inventories were essentially flat year over year at $689.5 million, reflecting disciplined stock management.
Net cash provided by operating activities was $282.9 million, down from $491.0 million in 2024, while capital expenditures totaled $66.2 million, slightly above the prior year. The company repurchased 2,972,889 shares for $201.1 million at an average price of $67.64 and ended the year with $426.5 million still available under its repurchase authorization. The board also approved a regular quarterly dividend of $0.30 per share, payable March 20 2026 to shareholders of record on March 9 2026.
CEO Commentary And ACCELERATE Strategy
Chairman and CEO Tim Boyle said, “We’re pleased to have delivered net sales and profitability exceeding our guidance for the fourth quarter driven by better-than-expected demand in the U.S. While our U.S. business remains challenged, I’m encouraged with continued growth internationally combined with early signs of momentum indicating that the Columbia ACCELERATE Growth Strategy is resonating with consumers, including new and enhanced product collections and differentiated marketing.
Over the past few months, we’ve witnessed brand momentum as consumers embraced our new product collections, with even more exciting launches on the horizon. ‘Engineered for Whatever’ has not only re-energized our unique brand voice but has provided powerful differentiation in a competitive marketplace.”
2026 Outlook: Cautious Growth, Tariff Pressure
For the full year 2026, Columbia Sportswear Company expects net sales to increase 1.0% to 3.0% to between $3.43 billion and $3.50 billion, with foreign currency expected to add about 50 to 100 basis points of tailwind. Gross margin is projected to contract by 70 to 50 basis points to 49.8% to 50.0%, reflecting roughly a 300 basis point headwind from incremental tariffs before mitigation.
SG&A is forecast at 43.6% to 44.2% of net sales, in line with or slightly better than 2025, and operating margin is expected to improve modestly to 6.2% to 6.9% from 6.1%. The company guides diluted EPS to $3.20 to $3.65, versus $3.24 in 2025, alongside anticipated operating cash flow of 300–330 million dollars and capital expenditures of $65 to $75 million.
For the first quarter of 2026, management expects net sales of $747 to $759 million, a decline of 4.0% to 2.5% from $778 million a year earlier, with FX adding about 200 basis points. Operating margin is projected at just 2.1% to 2.9%, down from 6.0%, and diluted EPS at $0.29 to $0.37 versus $0.75, reflecting sales deleverage and unmitigated tariff impacts early in the year.
