Columbia Sportswear Lifts Low End of 2026 Sales and EPS Outlook

Columbia Sportswear Company narrowed its 2026 outlook and raised the lower ends of its net sales and diluted earnings ranges after third-quarter results benefited from international growth, stronger U.S. direct-to-consumer trends and the absence of prior-year impairment charges. The company now expects 2026 net sales of $3.46 billion to $3.50 billion and diluted EPS of $4.65 to $4.90, compared with its previous forecasts of $3.43 billion to $3.50 billion and $4.45 to $4.90, respectively.

For the quarter ended September 30, net sales were approximately $963 million. Growth across most international markets and DTC channels was partly offset by lower U.S. sales, where the timing of Fall 2026 wholesale shipments weighed on results. Relative to the company’s guidance, sales also benefited from some delayed wholesale orders shipping earlier than expected and improved U.S. DTC trends.

Gross margin contracted 20 basis points year over year to 49.8%. Columbia attributed the decline primarily to accommodations provided to factory partners, partly offset by benefits from previously received refunds of tariffs imposed under the International Emergency Economic Powers Act. Lower DTC outbound freight costs also supported channel profitability.

Selling, general and administrative expenses declined $5.3 million, or 1%, with SG&A falling to 39.0% of sales from 40.4% a year earlier. Disciplined spending, lower distribution-center expenses and the timing of demand-creation investments more than offset higher incentive compensation and DTC expenses. Operating margin expanded, mainly because the prior-year period included $29.0 million of impairment charges related to prAna and Mountain Hardwear, as well as because of SG&A leverage. Diluted EPS increased by $0.71; the prior-year impairments had reduced EPS by $0.46.

International and DTC Growth Offset U.S. Wholesale Weakness

U.S. net sales declined 1% to $541 million on both a reported and constant-currency basis. U.S. wholesale sales fell by a low-single-digit percentage as increased Fall 2026 orders were less concentrated in the third quarter than a year earlier. U.S. DTC sales rose by a low-single-digit percentage, led by mid-single-digit growth at DTC.com. Brick-and-mortar DTC sales also increased by a low-single-digit percentage despite continued traffic pressure.

International markets delivered stronger results. EMEA sales increased 7% to $175 million, including high-thirties-percentage growth in the distributor business because more Fall 2026 orders shipped during the quarter. Europe-direct sales rose by a low-single-digit percentage, with robust DTC performance partly offset by lower wholesale sales stemming from supply-chain delays.

Latin America and Asia Pacific sales advanced 11% to $159 million, or 10% in constant currency. China recorded low-twenties-percentage reported growth and low-teens growth in constant currency, while Korea grew by a mid-teens percentage, led by wholesale. Japan increased by a low-single-digit percentage as reported and a low-double-digit percentage in constant currency. Canada declined 2% to $87 million but was approximately flat in constant currency.

By channel, wholesale sales were flat at $637 million, while DTC revenue rose 5% to $326 million, or 6% in constant currency. Brick-and-mortar DTC sales increased 4%, and e-commerce gained 9%. Footwear outpaced apparel, accessories and equipment, rising 5% to $219 million versus 1% growth to $744 million for the broader apparel category.

The Columbia brand generated 3% growth to $826 million, supported by international markets despite a modest U.S. decline. SOREL sales increased 2% to $83 million, primarily because of higher Fall 2026 wholesale orders. prAna sales slipped 1% to $30 million, while Mountain Hardwear declined 17% to $23 million because of lower Fall 2026 wholesale orders and closeout sales.

Outlook Includes Tariff-Refund Benefit

Columbia expects full-year sales growth of 2% to 3% and an operating margin of 8.7% to 9.1%, compared with 6.1% in 2025. Gross margin is forecast at 52.1% to 52.3%, representing expansion of 160 to 180 basis points. The outlook assumes current U.S. tariff rates remain in place through the end of 2026.

As of September 30, the company had received about $79 million in IEEPA tariff refunds, including interest. It recognized $58 million in earnings during the first nine months, including a $55 million benefit in cost of sales after factory-partner accommodations. Another $8 million remained deferred in inventory and is expected to benefit fourth-quarter gross margin as the related products are sold. Columbia estimates tariff refunds will add $0.97 to reported 2026 EPS.

For the fourth quarter, the company expects sales of $1.108 billion to $1.145 billion, representing growth of 3.5% to 7%. Management anticipates growth in both DTC and wholesale, partly reflecting Fall 2026 shipments moving from the third quarter into the fourth. Operating margin is projected at 10.8% to 12.0%, while diluted EPS is expected to be $1.85 to $2.10. Preliminary guidance calls for mid-single-digit wholesale growth in the U.S. and globally during the first half of 2027.

The company reduced its 2026 operating cash flow forecast to $230 million to $250 million from $290 million to $310 million, citing earlier production of Spring 2027 inventory and an expected increase in year-end inventory. Planned capital expenditures are now $60 million to $70 million, compared with the previous $65 million to $75 million range.

Inventory ended the quarter at $889.2 million, up 11% year over year, primarily because of delayed Fall 2026 receipts in transit and earlier Spring 2027 production. Columbia said the balance consisted mainly of current- and future-season products, with older inventory at manageable levels. Cash, cash equivalents and short-term investments totaled $229.6 million, and the company had no borrowings.

Columbia’s outlook remains subject to shipment timing, tariffs and trade policy, currency movements, consumer spending, weather, retail traffic, supply-chain conditions and the company’s ability to manage inventory and execute its ACCELERATE growth strategy. The multi-year initiative is focused on attracting younger, more active consumers through updated products, marketing and omnichannel brand experiences while maintaining the company’s core and value-oriented distribution.