Columbia Sportswear Q2 2025 slides: 6% sales growth driven by international markets

Introduction & Market Context

Columbia Sportswear Company (NASDAQ:COLM) presented its second quarter 2025 financial results on July 31, revealing a 6% increase in net sales despite challenging market conditions. The company reported a slight improvement in its seasonal loss to $0.19 per share, compared to $0.20 in the same period last year. Despite these modest improvements, Columbia’s stock has been under pressure, trading at $49.31 in aftermarket trading, close to its 52-week low of $48.11.

The outdoor apparel and footwear company’s performance reflects a divergence between robust international growth and continued softness in the U.S. market, a trend that has persisted in recent quarters. The company is navigating tariff impacts while implementing cost-saving measures to improve profitability.

Quarterly Performance Highlights

Columbia reported net sales of $605 million for Q2 2025, representing a 6% increase compared to the same period in 2024. The company’s operating loss improved slightly to $23.6 million, resulting in an operating margin of -3.9%, a 30 basis point improvement year-over-year.

As shown in the following financial overview from the company’s presentation:

The company’s performance varied significantly by region, with international markets driving growth while the U.S. market declined. EMEA (Europe, Middle East, and Africa) led with a 26% increase in net sales, while the LAAP (Latin America and Asia Pacific) region grew by 13%. In contrast, U.S. net sales declined by 2%.

The regional breakdown illustrates the company’s divergent performance across markets:

By brand, Columbia’s namesake brand grew 8%, while its smaller brands all experienced declines: prAna (-6%), SOREL (-10%), and Mountain Hardwear (-7%). From a channel perspective, wholesale sales increased by 14%, while direct-to-consumer (DTC) sales decreased by 1%.

The following chart details the performance across brands, product categories, and channels:

Detailed Financial Analysis

Columbia’s gross margin expanded by 120 basis points to 49.1% in Q2 2025, driven by healthier inventory composition and lower closeout sales. This improvement was partially offset by a higher mix of wholesale sales, which typically carry lower margins than direct-to-consumer sales.

The following gross margin bridge illustrates the factors contributing to this improvement:

Despite the gross margin expansion, SG&A expenses increased by 8% year-over-year to $325.6 million, representing 53.8% of net sales compared to 53.1% in Q2 2024. The increase was primarily driven by higher omni-channel expenses and increased demand creation investments.

The SG&A bridge below details these changes:

From a balance sheet perspective, Columbia ended the quarter with $579 million in cash and no borrowings, down from $711.1 million as of June 30, 2024. Inventory levels increased by 13% year-over-year to $926.9 million, which the company attributed to earlier receipt of Fall 2025 inventory ahead of potential tariff increases and higher replenishment inventory following last year’s transition to PFAS-free chemistry.

Strategic Initiatives

Columbia continues to execute its ACCELERATE growth strategy, which aims to elevate the brand by shifting focus toward younger and more active consumers. The strategy focuses on two main pillars: fueling growth with new consumers and strengthening core consumer segments.

The company’s strategic framework is outlined below:

In parallel, Columbia has made significant progress with its Profit Improvement Plan, exceeding the original target of $125-150 million in cost savings. The company has achieved approximately $90 million in annualized cost savings in 2024 and approximately $70 million in 2025 year-to-date.

The following slide details the company’s progress on cost-saving initiatives:

Forward-Looking Statements

Columbia provided a cautious outlook for the remainder of 2025, projecting full-year net sales between $3.33 billion and $3.40 billion, representing a range from a 1% decline to a 1% increase compared to 2024. The guidance assumes additional U.S. tariffs on imports remain at 10%, excluding China, which remains at 30%. The company expects these tariffs to impact 2025 results by $35-40 million.

For the third quarter of 2025, Columbia anticipates net sales between $904 million and $922 million, with diluted earnings per share projected at $1.00 to $1.20, a significant decline from $1.56 in Q3 2024. This outlook reflects continued challenges in the U.S. market and the impact of tariffs on profitability.

During the earnings call, CEO Tim Boyle emphasized the company’s commitment to strategic investments for growth, stating, "We remain committed to investing in our strategic priorities to accelerate profitable growth." CFO Jim Swanson addressed inventory management concerns, noting, "We’re in excellent shape, very comfortable with our overall inventories."

While Columbia continues to navigate challenging market conditions, particularly in the U.S., its international growth and cost-saving initiatives provide some counterbalance. However, investors remain cautious, as reflected in the stock’s proximity to its 52-week low, suggesting concerns about the company’s ability to overcome the current headwinds and return to consistent profitability growth.

Full presentation:

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