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    COLM
    Earnings call· Jun 2026(Q2 FY26)

    COLUMBIA SPORTSWEAR Q2 FY26 earnings call COLM

    Jul 30, 2026 Source

    Executive summary

    Columbia Sportswear Q2 FY26 — International Growth Offsets US Headwinds Amid Tariff Refunds and Supply Chain Shifts

    Columbia Sportswear reported mixed Q2 FY26 results, with strong international performance and the benefit of tariff refunds offsetting continued U.S. market challenges. The company is navigating macroeconomic headwinds and supply chain disruptions, leading to a significant shift in Fall '26 shipments to Q4. Management remains focused on its Accelerate strategy, showing early signs of traction in new customer acquisition and footwear momentum, while maintaining a strong balance sheet.

    Highlights

    5

    • Net sales growth exceeded quarterly guidance, increasing 2% year-over-year to $614 million.

    • International business grew 9% year-over-year, representing over 40% of sales.

    • Footwear saw high single-digit percent growth globally in Q2, with strong sell-through of technical styles like Tellurix.

    • Spring '27 wholesale order book indicates low to mid-single-digit percent growth, broad-based across brands and geographies.

    • PrAna net sales increased 14%, driven by double-digit wholesale growth and high single-digit DTC e-commerce growth.

    Concerns

    5

    • U.S. business remained challenged, declining 4% year-over-year.

    • Gross margin, excluding tariff refunds, contracted by 50 basis points versus the prior year due to increased discounting and U.S. tariffs.

    • Soft traffic in U.S. DTC brick-and-mortar led to higher discounts and lower sales than planned.

    • SOREL net sales decreased 14% due to later wholesale shipment timing.

    • Significant shift of Fall '26 shipments from Q3 to Q4 due to longer logistics lead times and capacity constraints, creating greater risk to the outlook.

    Guidance & targets

    10
    CategoryTargetConfidence
    Q3 FY26 Net Sales Growth
    down 1.5% to flat
    high materiality
    Medium
    Q3 FY26 Diluted Earnings Per Share
    $1.15 to $1.35
    high materiality
    Medium
    Full Year FY26 Net Sales Growth
    1% to 3%
    high materiality
    Medium
    Full Year FY26 Reported Gross Margin
    52.1% to 52.3%
    high materiality
    Medium
    Full Year FY26 SG&A as % of Net Sales
    43.6% to 44.2%
    medium materiality
    Medium
    Full Year FY26 Reported Operating Margin
    8.5% to 9.3%
    high materiality
    Medium
    Full Year FY26 Reported Diluted Earnings Per Share
    $4.40 to $4.90
    high materiality
    Medium
    Full Year FY26 Tax Rate
    approximately 25%
    medium materiality
    Medium
    Spring '27 Wholesale Order Book Growth
    low to mid-single-digit percent growth
    high materiality
    High
    China Full Year Growth
    double-digit growth
    medium materiality
    Medium

    Segment performance

    15
    SegmentRevenueYoYQoQMargin
    U.S. Net Sales
    Declined slightly more than expected due to soft traffic in DTC stores, primarily driven by lower Spring '26 wholesale order book. Improved conversion partially offset softer traffic in DTC.
    U.S. Wholesale Growth: high single-digit % declineU.S. DTC Net Sales: down slightlyU.S. E-commerce (emerging brands) Growth: low single-digit %Columbia Brand U.S. E-commerce Growth: down low single-digit %
    		—-4%——
    International Business
    Continues to lead growth, representing over 40% of total sales.
    		—+9%——
    LAAP Net Sales
    Strong performance across the region.
    		—+13% (constant currency)——
    China Net Sales
    Driven by solid DTC e-commerce growth, partly offset by wholesale declines due to shipment timing and soft traffic in DTC stores amid a challenging macro environment. Strong performance during 618 shopping event.
    DTC E-commerce Growth: solidWholesale Growth: single-digit % declineDTC Stores Growth: single-digit % decline
    		—mid-single-digit % (constant currency)——
    Japan Net Sales
    Rebounded nicely from a challenging Q1, reflecting growth in both wholesale and DTC despite weak outlet store traffic and adverse weather.
    		—low double-digit % (constant currency)——
    Korea Net Sales
    Strong growth in wholesale and DTC e-commerce, with DTC brick-and-mortar beating plan but with higher promotional activity due to lower traffic and increased consumer price sensitivity.
    Wholesale Growth: double-digit %DTC E-commerce Growth: double-digit %DTC Brick-and-Mortar Growth: low single-digit %
    		—low double-digit % (constant currency)——
    LAAP Distributor Markets
    Driven by Fall '26 order book and earlier fall shipments, reflecting continued momentum and robust growth in Columbia brand apparel.
    		—mid-20%——
    EMEA Net Sales
    Overall growth.
    		—high single-digit %——
    Europe Direct Net Sales
    Continued momentum in both wholesale and DTC, albeit with higher promotional activity in DTC amid weaker traffic due to macro headwinds and unfavorable weather.
    		—low double-digit %——
    EMEA Distributor Business
    Driven by increased Spring and Fall '26 orders, partially offset by later fall shipments.
    		—mid-single-digit %——
    Canada Net Sales
    Primarily due to declines in wholesale from unfavorable shipment timing and lower Spring '26 orders. Partially offset by DTC growth.
    Wholesale: declineDTC E-commerce: growthDTC Brick-and-Mortar: lower results
    		—high single-digit % decline——
    Columbia Brand
    International growth more than offset declines in the U.S.
    		—+1%——
    SOREL Brand
    Driven largely by later wholesale shipment timing, partly offset by growth in DTC e-commerce. Q2 typically represents less than 10% of SOREL's annual business.
    		—-14%——
    PrAna Brand
    Momentum building with healthy growth in new and retained customers, particularly younger consumers. Flattish DTC brick-and-mortar growth on lower traffic offset by better conversion.
    Wholesale Growth: double-digit %DTC E-commerce Growth: high single-digit %DTC Brick-and-Mortar Growth: flattish
    		—+14%——
    Mountain Hardwear Brand
    Driven by DTC growth, partly offset by lower wholesale due to substantially lower closeout sales, which more than offset low single-digit full-price growth.
    DTC Channels Growth: double-digit %Wholesale Decline: low double-digit %
    		—+6%——

    Operational metrics

    14
    Net Sales
    $614M+2% YoY
    Q2 FY26

    Exceeded quarterly guidance, driven by international growth.

    Gross Margin (reported)
    58.3%+920 bps YoY
    Q2 FY26

    Includes the impact of U.S. tariff refunds recognized during the quarter.

    SG&A Expense Growth
    +2%YoY
    Q2 FY26

    Reflecting higher DTC expenses, including unplanned store impairment charges, partly offset by lower personnel costs from profit improvement program.

    EPS (reported)
    $0.52
    Q2 FY26

    Includes the impact of tariff refunds.

    Loss Per Share (excluding tariff refunds)
    $0.41
    Q2 FY26

    Roughly in line with the midpoint of Q2 guidance range.

    Cash and Short-Term Investments
    $625M
    Q2 FY26 end

    Company maintains a fortress balance sheet with no debt.

    Tariff Refunds Recognized (Operating Margin Benefit)
    $60M
    Q2 FY26

    Primarily recognized as a reduction to cost of sales.

    Tariff Refunds Recognized (Interest Income)
    $2M
    Q2 FY26

    Recognized as interest income.

    Tariff Refunds Recognized (Reduction to Inventory)
    $15M
    Q2 FY26

    Recognized as a reduction to inventory on the balance sheet, to be realized over the balance of the year.

    Second Half Benefit to Cost of Sales from Tariff Refunds
    $15M
    H2 FY26

    Expected from the remaining IEEPA tariff refunds, largely offset by factory accommodations.

    Q3/Q4 Shipment Shift Magnitude
    north of $30M
    Q3 to Q4 FY26

    Shift of anticipated Fall '26 shipments from Q3 to Q4 due to logistics lead times and capacity constraints. If adjusted for this shift, Q3 and Q4 growth would be relatively equivalent in the 4%-5% range.

    Expedition Impossible Campaign Awards
    10
    Q2 FY26

    Recognized across social media, public relations, brand strategy, and direct marketing.

    Robert Irwin Campaign Views
    3.7M+
    Q2 FY26

    Campaign featuring Robert Irwin against crocodiles, resonating with his following.

    Europe Marketing Campaign Impressions
    650M+
    Q2 FY26

    Leveraging the 'engineered for whatever' platform.

    Industry KPIs

    7
    MetricValueDetails
    Effective tax rateapproximately 25%%
    Inventory position$625MUSD
    Revenue by channel—
    Operating margin sg a8.5% to 9.3%%
    Store fleet door investment3rdstore
    Tariff cost exposure recovery$78MUSD
    Franchise product cycle performance—

    Product announcements

    5
    ProductTypeDetails
    Tellurix Titanium OutDry shoelaunch
    Kazam ultralight trail backpacklaunch
    Bahama shirtupdate
    Tamiami shirtroadmap
    Amaze Puff collectionupdate

    Risks & headwinds

    7
    U.S. Business ChallengesQ2 FY26

    declined 4% YoY

    Mitigation: Focus on Accelerate strategy, improving U.S. e-commerce metrics, new customer acquisition, and elevated products.

    Soft Traffic and Higher Promotional Activity in U.S. DTCQ2 FY26

    Gross margin contracted 50 bps YoY (ex-tariff refunds)

    Mitigation: Dynamically adjusting price to ensure volume movement, focusing on maximizing revenue and profitability, elevating columbia.com as brand expression.

    U.S. Tariff Policy UncertaintyH2 FY26

    Current 10% to 12.5% tariff rates assumed through year-end

    Mitigation: Financial outlook assumes current tariff rates remain; focus on international markets where tariffs are less impactful.

    Macroeconomic Headwinds and Supply Chain DisruptionsH2 FY26

    Significant shift of Fall '26 shipments from Q3 to Q4 (north of $30M)

    Mitigation: Confident numbers will come through as planned despite known logistic issues and capacity constraints; leveraging fortress balance sheet and Accelerate strategy.

    Elevated Global Gasoline Prices and Discretionary Spending PressureH2 FY26

    Impacts consumer demand in H2 FY26, particularly among lower and middle-income consumers.

    Mitigation: Dynamically adjusting price to ensure volume movement; focusing on product mix with good, better, best options for dynamic active consumers.

    Q3 Gross Margin Headwind from Factory AccommodationsQ3 FY26

    Net headwind to gross margins

    Mitigation: Offset by a net tailwind to gross margin in Q4 related to remaining tariff refunds.

    Potential Input Cost Pressure from Elevated Oil PricesFY27

    Modest for Spring '27; potential headwind for Fall '27 if oil prices remain $90-$100 range

    Mitigation: Finalizing product line and going to market for Fall '27, taking actions to maintain product margin.

    What to watch in Q3 FY26

    5

    Spring '27 Wholesale Order Book Growth

    next quarter (October update)
    Currentlow to mid-single-digit percent growth (nearly complete)
    TargetConfirmation of growth at the upper end of the range

    Why it matters

    Provides an early indicator of H1 FY27 wholesale sales performance and the effectiveness of the Accelerate strategy.

    And based on the visibility we have today, we've got, call it, roughly 90% of the orders of 10, and that gives us the indication of the low single to mid-single-digit rate of growth in the first half of next year from a wholesale standpoint. And we're hopeful that we'll continue to take that forward over the course of the next couple of months. And the potential to be on the upper end of that. So we'll look forward to providing an update in October.

    Q&A highlights

    6

    Clarification on the Q3/Q4 shipment shift, its impact on the Fall '26 order book, and whether North American wholesale plans have changed.

    The Q3/Q4 shift is due to known logistic issues from the Middle East conflict and consolidation node capacity constraints, not cancellations. Fall '26 order book remains unchanged, with growth expected for U.S. and North America wholesale in the back half, but heavily weighted to Q4.

    “we're basically talking about a percent 1 way or the other. And it's not a function of any cancellations or any adjustments. These are both known and expected logistic issues around -- which were impacted both by the conflicts in the Middle East and the disruption to shipping as well as a certain topic in our -- from our consolidation nodes as we discussed.”

    asked by Robert Drbul · answered by Timothy Boyle

    2 min read6 chapters

    Detailed Narrative

    01

    Accelerate Strategy and Brand Pillars

    Columbia's multiyear Accelerate strategy, launched nearly a year ago, is showing tangible signs of progress. The Columbia brand is now focused on five strategic pillars: owning the trail, dominating warm (on-mountain warmth), powering PFG (fishing performance/lifestyle), fueling outdoor lifestyle, and accelerating footwear. These pillars leverage the brand's heritage and reputation for quality, aiming to meet consumer expectations for credibility, style, and relevance in outdoor activities and everyday wear.

    02

    Marketing and Brand Momentum

    The 'Expedition Impossible' campaign garnered 10 awards at the Cannes Lion Awards Festival, including the Grand Prix and Dan Wieden Titanium Award, making Columbia the most awarded company. A campaign featuring Robert Irwin against crocodiles attracted over 3.7 million views and 300,000 likes, driving strong sell-through of the Tellurix footwear. These marketing efforts are contributing to improved unaided awareness and purchase intent among target consumers in North America.

    03

    Footwear Performance and Product Innovation

    Footwear achieved high single-digit percent growth globally in Q2, driven by technical styles like Tellurix, Peak Freak, Konos, and Dry Tortuga. The Tellurix, a premium hike offering, sold out during the quarter and received media recognition. The success of sponsored athlete Gabriel Rueda in an ultra-trail race, completing it in Columbia Konos Speed Trail ATR shoes, validates the brand's performance credibility in trail running.

    04

    Tariff Refunds and Gross Margin Dynamics

    Columbia recognized approximately $78 million in U.S. IEEPA tariff refunds and interest in Q2, with $60 million benefiting operating margin and $15 million reducing inventory. While this boosted reported gross margin by 920 basis points to 58.3%, excluding refunds, gross margin contracted 50 bps due to increased discounting and ongoing tariffs. The second-half outlook includes a $15 million benefit to cost of sales from remaining refunds, largely offset by factory accommodations in Q3, leading to a Q3 gross margin headwind and a Q4 tailwind.

    05

    Supply Chain and Macroeconomic Headwinds

    The operating environment remains dynamic, with U.S. tariff policy uncertainty and the Middle East conflict impacting the business. Elevated global gasoline prices are pressuring discretionary spending, particularly for lower and middle-income consumers. Significant shifts in Fall '26 shipments from Q3 to Q4 are expected due to longer logistics lead times and capacity constraints, moving anticipated second-half growth primarily to Q4.

    06

    Emerging Brands Performance and Leadership

    PrAna net sales increased 14%, driven by strong wholesale and DTC e-commerce growth, with the opening of its third full-price store. Mountain Hardwear grew 6%, led by double-digit DTC growth and a successful collaboration with Stussy. SOREL's sales decreased 14% due to shipment timing, but a stronger Fall '26 season is anticipated. Joe Vernachio was welcomed back as President of the SOREL brand, expected to drive its next phase of growth.

    AI-generated summary of the company’s earnings call. Not investment advice.