Gross margin contracted 20 basis points (bps) to 50 percent, affected by incremental tariffs and unfavorable exchange rates, offsetting the benefits of reduced shipping activity and increased channel profitability. Selling, general and administrative (SG&A) expenses increased to $380.9 million (40.4 percent of net sales), up from $361.2 million (38.8 percent) a year earlier, largely due to increased demand creation and omnichannel investments, Columbia Sportswear said in a news release.
Columbia Sportswear’s third-quarter 2025 net sales rose 1 percent to $943.4 million, driven by strong direct growth in Europe offset by weaker DTC sales in the U.S. Operating income fell 40 percent to $67.4 million due to impairment charges of $29 million. For fiscal 2025, sales are forecast between $3.33 and $3.37 billion and EPS between $2.55 and $2.85. The brand remains focused on global expansion and its growth acceleration strategy.
Operating income fell sharply 40 percent to $67.4 million, or 7.1 percent of net sales, compared to $112.5 million (12.1 percent) in the third quarter of 2024, primarily due to $29 million in impairment charges related to Prana and Mountain Hardwear. Net income fell to $52 million, or $0.95 per diluted share, from $90.2 million, or $1.56 per share, last year. The impairment reduced earnings per share (EPS) by $0.46.
Regionally, sales in the United States decreased 4 percent to $546.7 million, while Latin America and Asia Pacific (LAAP) increased 6 percent to $143.4 million. The Europe, Middle East and Africa (EMEA) region posted the strongest growth, rising 16 percent (10 percent in constant currency) to $164.5 million, driven by direct market gains in Europe. Canada also grew 6 percent to $88.9 million.
By brand, Columbia generated $804 million in sales, an increase of 1 percent, while SOREL rose 10 percent to $81 million. Prana rose 6 percent to $30.4 million and Mountain Hardwear declined 5 percent to $28.1 million. Across all product categories, apparel, accessories and equipment contributed $734.3 million (flat year-on-year), while footwear advanced 6 percent to $209.1 million.
From a channel perspective, wholesale sales grew 5 percent to $634.2 million, supported by the shipping schedule, while DTC sales fell 5 percent to $309.3 million, affected by weaker demand in the US market.
“Third-quarter results reflect sustained momentum in our international business, led by double-digit sales growth in our direct markets to Europe. This strong performance underscores Columbia’s ability to connect with younger, more active consumers, a key tenet of our Accelerate Growth strategy,” he said. Tim Boyle, Chairman, President and CEO of Columbia Sportswear Company.
“In the US, we are focused on revitalizing the Columbia brand through our ‘Engineered for WHATS’ platform, a celebration of outdoor extremes and a revival of our irreverent spirit of the ’80s and ’90s. The initial response has been overwhelmingly positive and we plan to build on this during the upcoming holiday season,” added Boyle.
For the first nine months (9 months) of 2025, Columbia’s net sales increased 2 percent (3 percent in constant currency) to $2.33 billion. Gross margin expanded 30 basis points to 50.1 percent, while operating income fell 32 percent to $90.3 million. Net income for the period fell 30 percent to $84.1 million, or $1.53 per diluted share.
As of September 30, 2025, Columbia reported inventories of $800.4 million, up slightly from $798.2 million in 2024. Net cash used in operating activities was $333.4 million, compared to $76.6 million a year earlier, primarily reflecting changes in working capital. Capital expenditures totaled $46.6 million, while share buybacks totaled 2.4 million shares worth $171.7 million.
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.
For the full year, Columbia expects net sales of $3.33 billion to $3.37 billion, down 1 percent to flat from $3.37 billion in 2024. Gross margin is forecast between 50.0 percent and 50.2 percent, up 20 basis points from 2024. Operating income is projected between $163 million and $185 million (operating margin between 4.9 and 5.5 percent), compared to 8 percent in 2024, including $29 million in impairment charges related to Prana and Mountain Hardwear and $35 to $40 million in incremental fees before mitigation. Diluted EPS is anticipated between $2.55 and $2.85, including a negative impact of $0.46 from impairment, compared to $3.82 in 2024.
For the fourth quarter (Q4) of 2025, Columbia projects net sales of $1.01 billion to $1.04 billion, representing a decline of 8 to 5 percent from $1.1 billion in the fourth quarter of 2024. This guidance reflects a $30 to $40 million impact from a higher proportion of fall 2025 shipments that occurred in the third quarter rather than the fourth. Operating margin is expected to be between 7.2 and 9.1 percent, compared to 12.5 percent in the fourth quarter of 2024, and includes $20 million to $25 million of incremental fees before mitigation. EPS is projected to be between $1.04 and $1.34, compared to $1.80 last year.
Columbia expects wholesale net sales in the first half of 2026 to remain flat or increase by a single-digit percentage, driven by continued international growth in direct and distribution markets, partially offset by a decline in the U.S., the statement added.
“We remain committed to investing in our strategic priorities: accelerating profitable growth, creating iconic products, driving brand engagement and empowering talent through a diverse and inclusive culture,” Boyle concluded.
Fiber2Fashion News Desk (SG)
