Fannie Mae, Freddie Mac shares tumble after conservatorship comments
Introduction & Market Context
Columbia Sportswear Company (NASDAQ:COLM) reported modest growth in its first quarter of 2025, with net sales increasing 1% year-over-year to $778 million. However, the outdoor apparel and footwear maker has withdrawn its full-year 2025 financial outlook due to macroeconomic uncertainty stemming from global trade policies, according to the company’s first-quarter presentation released on May 1, 2025.
The company’s stock closed at $62.17 on the day of the announcement, with a slight increase of 0.08%. COLM is currently trading closer to its 52-week low of $59.07 than its 52-week high of $92.88, reflecting ongoing market challenges for the outdoor apparel sector.
Quarterly Performance Highlights
Columbia Sportswear delivered a 6% increase in diluted earnings per share to $0.75 in Q1 2025, outpacing its sales growth. The company also reported improvements in profitability metrics, with gross margin expanding by 30 basis points to 50.9% and operating margin increasing by 20 basis points to 6.0%.
As shown in the following financial overview from the company’s presentation:
The performance across regions revealed significant geographic disparities. While international markets showed strength, North American sales declined. The Asia-Pacific and Latin America (LAAP) region led growth with a 10% increase (14% in constant currency) to $152 million, followed by Europe, Middle East, and Africa (EMEA) with 3% growth (7% in constant currency) to $107 million. Conversely, U.S. sales declined 1% to $471 million, and Canada experienced a steeper 9% drop (2% in constant currency) to $48 million.
The regional performance breakdown illustrates these contrasting trends:
Among Columbia’s brand portfolio, only the flagship Columbia brand showed growth, increasing 3% (5% in constant currency) to $683 million. The company’s other brands all experienced declines: SOREL fell 8% (6% in constant currency) to $42 million, prAna dropped 10% to $28 million, and Mountain Hardwear declined 14% (13% in constant currency) to $25 million.
By sales channel, wholesale net sales increased 2% (4% in constant currency) to $400 million, while direct-to-consumer (DTC) sales remained flat (up 2% in constant currency) at $378 million.
This comprehensive breakdown of sales performance by category, brand, and channel provides further insight:
Detailed Financial Analysis
Columbia’s gross margin improvement of 30 basis points was primarily driven by channel profitability, including lower outbound shipping expenses, higher closeout margins, and favorable Spring ’25 product input costs. These positive factors were partially offset by unfavorable effects from foreign exchange hedge rates, as illustrated in the following gross margin bridge:
Selling, general, and administrative (SG&A) expenses increased by $5.2 million or 1% year-over-year to $354.5 million, representing 45.5% of net sales compared to 45.4% in Q1 2024. The increase was mainly driven by higher brick-and-mortar expenses related to new stores and increased demand creation spending, which represented 6.4% of sales versus 5.9% in the prior year. These increases were partially offset by lower supply chain expenses resulting from optimization efforts.
The following SG&A bridge details these changes:
On the balance sheet, Columbia ended the quarter with $658.4 million in cash, cash equivalents, and short-term investments, down from $787.7 million as of March 31, 2024. Inventories increased 3% year-over-year to $623.7 million, with the company noting that older season inventories represent a manageable portion of the total.
The company’s capital allocation activities included $101.4 million spent on repurchasing 1.25 million shares of common stock during the quarter. Columbia also paid a quarterly dividend of $0.30 per share. Operating cash flow was negative at -$32 million, compared to positive $106.8 million for the same period in 2024.
Strategic Initiatives
Columbia Sportswear continues to execute its "ACCELERATE" growth strategy, a consumer-centric approach focused on elevating consumers’ perception of the Columbia brand, emphasizing innovation and style, creating elevated omni-channel brand experiences, and delivering integrated marketing.
The company’s strategic framework is outlined below:
Additionally, Columbia is implementing a comprehensive profit improvement plan designed to achieve more than $150 million in annual cost savings by 2026. The company has already achieved $90 million in cost savings in 2024 and has initiated a review to pursue additional savings beyond the previous target.
Forward-Looking Statements
In a significant development, Columbia has withdrawn its full-year 2025 financial outlook due to macroeconomic uncertainty related to global trade policies. However, the company did provide guidance for the second quarter of 2025, projecting net sales of $575 million to $600 million, representing growth of 1% to 5% compared to Q2 2024.
This cautious approach reflects the challenging and uncertain global economic environment, particularly regarding international trade policies that could impact Columbia’s global supply chain and market access.
Conclusion
Columbia Sportswear’s Q1 2025 results demonstrate the company’s ability to generate modest growth and improve profitability metrics despite challenging market conditions, particularly in North America. The strength in international markets, especially in the LAAP region, partially offset weakness in the U.S. and Canada.
However, the withdrawal of full-year guidance signals significant uncertainty ahead. The company’s focus on its profit improvement plan and "ACCELERATE" growth strategy indicates a balanced approach of cost discipline and strategic investments to navigate through this uncertain period.
Investors will likely be watching closely for any updates on the macroeconomic environment, particularly regarding global trade policies, and their potential impact on Columbia’s operations and financial performance in the coming quarters.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.