Key Takeaways:
- Tariff refunds are lifting 2026 earnings, while earlier Spring 2027 production led the company to lower its cash flow forecast.
- International growth and e-commerce gains offset softer U.S. wholesale shipments.
- Sorel grew on stronger Fall orders while Mountain Hardwear posted a double-digit decline.
Columbia Sportswear Company raised the low end of its 2026 sales and earnings forecast Thursday after third-quarter results came in ahead of its own outlook, helped by a portion of delayed Fall wholesale orders shipping earlier than expected and improved trends in its U.S. direct-to-consumer business.
Net sales for the quarter ended Sept. 30 rose 2%, or 2% in constant currency, to $962.6 million from $943.4 million a year earlier.
Gross margin slipped 20 basis points to 49.8% from 50%. The Portland, Ore., company said the dip primarily reflected accommodations to its factory partners, partly offset by the benefit of refunds of tariffs it had previously paid under the International Emergency Economic Powers Act (IEEPA).
Net income rose 63% to $84.7 million, or $1.66 per diluted share, from $52 million, or 95 cents a share. The year-ago quarter included $29 million in impairment charges related to Prana and Mountain Hardwear, which reduced earnings by 46 cents a share.
“We’re pleased to have delivered net sales and EPS growth exceeding our guidance for the third quarter,” Chairman and Chief Executive Officer Tim Boyle said in a statement. “These results primarily reflected a portion of delayed Fall ’26 wholesale orders shipping earlier than expected, improved trends in our U.S. DTC business, and the continued momentum of our international business, despite challenging global macroeconomic conditions.”
Founded in 1938, the company sells its Columbia, Sorel, Mountain Hardwear, and Prana brands in 122 countries.
Columbia Brand
Columbia brand sales rose 3%, or 3% in constant currency, to $826.2 million. Growth in most international markets was partly offset by a modest decline in the U.S.
The brand is in a multi-year effort called the Accelerate Growth Strategy, aimed at elevating Columbia to attract younger and more active consumers. Last year, Columbia launched its “Engineered for Whatever” brand platform through a global campaign, released new products designed with that consumer in mind, and relaunched its U.S. Columbia.com site with enhanced features and photography.
“We are particularly encouraged by the momentum building in our Columbia brand U.S. DTC e-commerce business, which represents the pinnacle expression of our brand,” Boyle said.
As the strategy evolves, the company said the Columbia brand is sharpening its focus on five strategic pillars: Own the Trail, Dominate Warm, Power PFG, Fuel Outdoor Lifestyle, and Accelerate Footwear.
Companywide footwear sales rose 5% to $218.7 million, with both Columbia and Sorel footwear growing in the quarter. Apparel, accessories and equipment sales rose 1% to $743.9 million.
Sorel
Sorel sales rose 2%, or 3% in constant currency, to $82.8 million, primarily reflecting increased Fall 2026 wholesale orders. For the first nine months of the year, Sorel sales were down 4% at $136.3 million.
Mountain Hardwear and Prana
Mountain Hardwear sales fell 17%, or 16% in constant currency, to $23.3 million, primarily reflecting lower Fall 2026 wholesale orders and closeout sales. Through nine months, the brand was down 5% at $66.9 million.
Prana sales dipped 1%, or 1% in constant currency, to $30.2 million in the quarter. Year to date, Prana is up 1% at $80.2 million.
U.S. and International Markets
U.S. net sales slipped 1%, or 1% in constant currency, to $540.9 million. Wholesale was down by a low-single-digit percentage as increased Fall 2026 orders shipped less heavily in the third quarter than last year. U.S. direct-to-consumer sales rose by a low-single-digit percentage, led by e-commerce, which grew by a mid-single-digit percentage. Store sales also grew as productivity improved despite continued traffic headwinds.
The company ended the quarter with 169 U.S. stores, including 147 outlets and 22 branded stores, compared to 172 stores a year earlier.
Latin America and Asia Pacific sales rose 11%, or 10% in constant currency, to $159.5 million. China grew by a low-20% rate, or low teens in constant currency, and Korea grew by a mid-teens rate, or high teens in constant currency, led by wholesale. Japan rose by a low-single-digit percentage, or low double digits in constant currency, on healthy demand for fall season products.
Europe, Middle East and Africa sales rose 7%, or 7% in constant currency, to $175.3 million. Europe-direct sales grew on robust direct-to-consumer performance despite a warm start to the fall season, partly offset by a wholesale decline tied to Fall 2026 supply chain delays. EMEA distributor sales rose by a high-30% rate on shipment timing.
Canada sales fell 2%, or were flat in constant currency, at $87 million.
Across all regions, wholesale sales were flat at $636.7 million, and direct-to-consumer sales rose 5%, or 6% in constant currency, to $325.9 million. Store sales rose 4% and e-commerce rose 9%.
Tariff Refunds
As of Sept. 30, Columbia had received about $79 million in refunds of IEEPA tariffs it previously paid, including interest. Of that, $58 million has been recognized in earnings so far this year, and $8 million remains deferred in inventory, which the company expects to recognize as the goods sell in the fourth quarter.
The company said the net impact of the refunds will add 97 cents a share to its 2026 earnings. Its forecast assumes current U.S. tariff rates continue through the end of the year.
Inventory and Cash
Inventories rose 11% to $889.2 million, primarily reflecting in-transit goods from delayed Fall 2026 receipts and earlier production of Spring 2027 inventory. The company said older season inventory is a manageable portion of the total.
That earlier production led Columbia to lower its full-year operating cash flow forecast to $230 million to $250 million from $290 million to $310 million.
The company ended the quarter with $229.6 million in cash, cash equivalents, and short-term investments and no borrowings. It has repurchased $200 million in stock so far this year.
Updated Forecast
Columbia now forecasts 2026 net sales of $3.46 billion to $3.50 billion, up 2% to 3% from $3.40 billion in 2025. The previous forecast was $3.43 billion to $3.50 billion. The company expects growth from the Columbia, Sorel and Prana brands, with international growth partly offset by a modest decline in the U.S.
Gross margin is forecast at 52.1% to 52.3%, unchanged, including a benefit of about 180 basis points from the tariff refunds, net of factory partner accommodations. Diluted earnings per share are forecast at $4.65 to $4.90, compared to a prior range of $4.45 to $4.90 and $3.24 last year.
For the fourth quarter, Columbia forecasts net sales of $1.108 billion to $1.145 billion, up 3.5% to 7% from $1.07 billion a year earlier, partly reflecting Fall 2026 shipments shifting from the third quarter. Fourth-quarter earnings are forecast at $1.85 to $2.10 a share, compared to $1.73.
Looking further ahead, the company expects first-half 2027 wholesale sales to grow by a mid-single-digit percentage in the U.S. and globally, reflecting a larger Spring 2027 wholesale order book.
“While fourth-quarter execution will be critical to our full-year performance, better-than-expected third quarter performance combined with improving trends in our U.S. business and the shipment of remaining Fall ’26 global wholesale orders gives us the confidence to raise the low end of our full-year revenue and EPS guidance,” Boyle said.
“The operating environment remains challenging and uncertain, and we will continue working to elevate the Columbia brand and improve consumer perceptions in the U.S.,” he said. “That said, we are increasingly confident that the Columbia brand Accelerate Growth Strategy is gaining traction and putting us on the right track to return to healthy, sustainable growth over the longer-term.”
