Ongoing challenges in the U.S. contributed to flat full-year results at Columbia Sportswear, as growth in international markets was offset by domestic headwinds. While the flagship Columbia brand saw modest gains, the company faced declines across its emerging brand portfolio, including Mountain Hardwear, Sorel and prAna.
For full-year 2025, net sales increased just 1% to $3.39 billion compared to 2024. The company reported diluted earnings per share of $3.24, a decrease from $3.82 the previous year, impacted significantly by impairment charges and margin pressures.
“Our U.S. business remains challenged,” said Chairman and Chief Executive Officer Tim Boyle on the company’s earnings call Tuesday. “I’m encouraged with continued growth internationally combined with early signs of momentum indicating that the Columbia ACCELERATE growth strategy is resonating with consumers.”
Fourth-Quarter Performance
In the fourth quarter, total net sales decreased 2% to $1.07 billion. This decline was primarily driven by a 7% decrease in wholesale net sales, attributed largely to the earlier shipment of fall ‘25 orders which shifted revenue into previous quarters. Direct-to-consumer (DTC) sales provided a slight buffer, increasing by 1%.
Geographically:
- U.S. net sales fell by 8% in the quarter. The company cited a high-teens percentage drop in U.S. wholesale, reflecting both the timing of shipments and a lower order book. Inventory supply constraints also played a role, as the company curtailed Fall 2025 inventory purchases as a precautionary measure following earlier tariff announcements.
- LAAP region grew 10% on a constant-currency basis, while China increased by low double-digits.
- EMEA also posted growth, up 3% in constant currency, while Canada saw a similar 3% uptick.
Gross margin in the fourth quarter expanded 50 basis points to 51.6%. This improvement was driven by healthier inventory composition, which necessitated less clearance and promotional activity compared to the prior year. However, these gains were partially offset by $20 million in incremental U.S. tariffs incurred during the quarter.
Columbia Sportswear
The flagship brand remained relatively stable, with net sales decreasing 1% to $937.2 million in the fourth quarter. For the full year, the brand reported a 2% increase. The company highlighted the success of its “ACCELERATE” growth strategy, particularly the “Engineered for Whatever” campaign, which aimed to attract younger consumers.
“The Amaze puff collection was our top product story for the fall season,” Boyle noted, adding that many consumers buying from the collection were new to the brand.
Sorel
Sorel saw the steepest decline in the fourth quarter, with net sales declining 18% to $79.7 million. The drop was largely due to the timing of wholesale shipments and reduced promotional activity. On a full-year basis, Sorel sales were down 7% to $221.7 million.
Mountain Hardwear and prAna
Mountain Hardwear’s net sales decreased 5% in the quarter. Management attributed this to lower clearance and promotional activity compared to elevated levels in the prior year. For the full year, the brand’s sales decreased 8% to $100.2 million.
prAna offered a rare bright spot among the smaller brands in the fourth quarter, with sales increasing 6% to $23.8 million, driven by DTC momentum. For the full year, sales were flat to slightly down at $102.8 million.
The company recorded $29 million in impairment charges related to prAna and Mountain Hardwear during the year, which negatively impacted diluted earnings per share by $0.45.
Inventory and Tariffs
Inventory levels remained flat year-over-year at $689.5 million, though unit counts were down approximately 11%. This leaner inventory position contributed to gross margin expansion but also led to missed opportunities in fulfilling some demand.
Tariffs remain a significant headwind. The company absorbed $31 million in incremental U.S. tariffs for the full year prior to mitigation tactics. Looking ahead to 2026, unmitigated incremental tariff costs are expected to have a roughly 300 basis point unfavorable impact on gross margin. The company has implemented high-single-digit price increases for spring and fall 2026 in the U.S., alongside vendor negotiations and resourcing efforts.
Accelerate Growth Strategy
Management continues to bet heavily on its “ACCELERATE” strategy to revitalize the U.S. business. This involves significant investment in demand creation, which sat at 6.5% of sales in 2025.
“We do believe that the incremental investments that we’re making in marketing allow us to have a louder voice in the marketplace,” said CFO Jim Swanson. Recent marketing investments include its beer for Super Bowl fans, which contains bear scat, and its campaign poking fun at flat-earthers. The company plans to maintain marketing spend at roughly 6.4% of sales in 2026.
2026 Outlook and Eddie Bauer Impact
Looking ahead, Columbia Sportswear expects net sales to grow between 1% and 3%, reaching $3.43 to $3.5 billion.
Tim Boyle said it was difficult to predict how the rumored Eddie Bauer bankruptcy, which would close approximately 200 stores across North America, would impact Columbia, but that it could benefit should Eddie Bauer liquidate
“The brand is well-known, but it’s certainly fallen on hard times,” Boyle said, adding that the brand relied on its existing reputation rather than marketing and growth. “We don’t overlap in every store that they have in centers, but we would expect that as they leave the centers we will be within a position to accept more responsibility, more business from outdoors folks who would typically buy that brand. That brand, I would say, generally, is a notch below the Columbia pricing. So we hope we’ll get some of that, but it’ll be a question as to exactly how much.”
Operating income is projected to be between $211 million and $243 million, with operating margins expected to land between 6.2% and 6.9%. Diluted earnings per share are forecast in the range of $3.20 to $3.65.
The first quarter of 2026 is expected to be challenging, with net sales projected to decrease by 4% to 2.5%, driven by declines in U.S. wholesale orders and the closure of temporary clearance locations.
“While our U.S. business remains challenged, I’m encouraged with continued growth internationally,” Boyle said.
