COLUMBIA SPORTSWEAR CO (COLM)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 beat on both revenue and EPS vs guidance and Street: net sales $778.5M (+1% YoY) and diluted EPS $0.75; both exceeded prior company guidance and S&P Global consensus, driven by international strength, 30 bps gross margin expansion to 50.9%, and lower outbound shipping costs, partly offset by unfavorable FX hedge rates *. The company withdrew its FY25 outlook due to U.S. tariff uncertainty .
• International momentum remained robust (LAAP +10% reported/+14% cc; EMEA +3%/+7% cc), while U.S. and Canada declined modestly; wholesale grew 2% and DTC was flat .
• Management flagged incremental 2H tariff costs of $40–$45M to COGS at current rates (to be largely absorbed in 2025), stable fall order book, and stepped-up brand investment (marketing 6.4% of sales in Q1) despite cost headwinds .
• Near-term stock narrative hinges on: (1) tariff path and mitigation, (2) durability of international growth vs U.S. DTC softness, and (3) execution of the Columbia brand ACCELERATE strategy and demand creation ramp .

What Went Well and What Went Wrong

• What Went Well

  • International outperformance: LAAP grew double-digit and EMEA high-single-digit cc; Europe direct and China cited as strong, with localized assortments and marketplace execution .
  • Margin resilience: Gross margin expanded 30 bps to 50.9% on lower outbound shipping, higher closeout margins, and favorable Spring’25 input costs .
  • Brand investment momentum: Marketing spend reached 6.4% of sales in Q1, with a new global platform launching in August to target younger/active consumers; management sees this as competitive advantage amid peers’ potential spending constraints .

• What Went Wrong

  • North America softness: U.S. net sales -1% (DTC down low-single-digits, e-commerce down high-single-digits) and Canada -9% cc; weather and category headwinds weighed on spring demand .
  • Tariff overhang: Withdrew FY25 guidance; expects $40–$45M 2H COGS headwind at current incremental 10% rate, to be absorbed this year; vendor sharing uncertain .
  • Operating cash flow reversal: Operating cash flow -$32.0M vs +$106.8M last year; accounts payable and accrued liabilities outflows were notable drivers .

Financial Results

Table 1: Headline metrics by quarter (oldest → newest)

Table 2: Q1 YoY comparison and vs S&P Global consensus

Table 3: Q2 2025 outlook vs S&P Global consensus

Note: Values marked with * are retrieved from S&P Global.

Segment Breakdown (Q1 2025 vs Q1 2024)

Table 4: Geography net sales ($000s)

Table 5: Brand net sales ($000s)

Table 6: Channel net sales ($000s)

KPIs and Balance Sheet/Cash Flow

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Net sales and earnings exceeded our guidance range… healthy growth in nearly all our international markets, including double-digit percent growth in the LAAP region and high-single-digit percent constant currency growth in the EMEA region.” — Tim Boyle, CEO .
• “Due to macroeconomic uncertainty stemming from global trade policies, the Company is withdrawing its full year 2025 financial outlook.” .
• “Applying these tariff rates… would add between $40 million to $45 million to the cost of sales… we do not expect to offset these higher tariff costs in 2025.” — Tim Boyle .
• “Our marketing spend as a percentage of sales for the first quarter was 6.4%.” — Jim Swanson, CFO .
• “Our fall order book has not meaningfully changed since our call in February… we’ve not seen any meaningful cancellations to date.” — Management Q&A .

Q&A Highlights

• Tariff impact and mitigation: $40–$45M 2H COGS impact at current 10% rate; largely absorbed in 2025; exploring redesign/re-source/reprice; vendor burden-sharing uncertain .
• Order book and inventory: Fall order book stable; pulling forward receipts before tariff “pause”; rationalizing U.S. buys; leverage outlets and global reallocation to manage inventory risk .
• Market share opportunity: Expect share gains as China-centered private label/smaller brands face import challenges; Columbia’s value positioning and balance sheet seen as advantages .
• International outlook: Continued health in Europe and China embedded in Q2 view; U.S. DTC remains slower .
• Marketing cadence: Step-up begins in August; focus on efficiency and new brand voice to reach younger consumers .

Estimates Context

• Q1 2025 vs S&P Global: Revenue $778.5M vs $763.23M consensus (+2.0%); EPS $0.75 vs $0.661 (+13.5%); both beats support near-term sentiment despite FY guide withdrawal *.
• Q2 2025: Company revenue outlook $575–$600M brackets consensus $588.5M*; company did not provide EPS guidance . Values retrieved from S&P Global.

Key Takeaways for Investors

• Beat-and-withdraw quarter: Solid Q1 execution (international strength, margin expansion) but macro/trade uncertainty forced FY guide withdrawal — expect elevated volatility tied to tariff headlines .
• Watch 2H margin headwind: Management intends to absorb $40–$45M tariff COGS in 2H; gross margin trajectory could step down near-term before mitigation/pricing can take hold in 2026 planning .
• International remains the growth engine: China/Europe momentum offsets North America softness; sustaining these trends is pivotal to FY trajectory and estimate revisions .
• Brand investment as a differentiator: Marketing at ~6.4% of sales in Q1 with August platform launch; potential share gains if peers retrench on spend .
• Order book stable, inventory managed: No meaningful cancellations; proactive inventory pulls pre-tariff window should help service demand and protect dealer margins .
• Capital returns intact: $101.4M buybacks in Q1, $0.30 dividend maintained; fortress balance sheet supports flexibility through uncertainty .
• Estimate implications: Near-term Street models should reflect Q2 revenue guide range and 2H gross margin pressure from tariffs; upside drivers include continued international outperformance and efficient demand creation, while U.S. DTC remains a watchpoint .

Footnote: Values marked with * are retrieved from S&P Global.