Columbia Sportswear Co. delivered first-quarter results that surpassed guidance, despite a 10% decline in U.S. sales and ongoing macroeconomic headwinds.
While net sales remained relatively flat at $779 million, the company benefited from robust growth in international markets, which now represent more than 40% of total sales. Executives highlighted a “fortress” balance sheet and early traction from its Accelerate growth strategy as key drivers for an updated, more positive profit outlook for the full year.
However, the quarter was far from quiet on the geopolitical front. CEO Tim Boyle said he is eyeing a massive $80 million tariff refund following a Supreme Court ruling, while simultaneously warning that the escalating conflict in the Middle East has already triggered order cancellations and could further disrupt global supply chains.
Columbia Sportswear Q1 Financial Wrap
- Net sales were $779 million, flat compared to the first quarter of 2025.
- Net sales were down 3% on a constant-currency basis.
- Gross margin contracted 20 basis points to 50.7%, primarily due to a 310-basis-point hit from unmitigated U.S. tariffs.
- Operating income decreased 10% to $42 million, or 5.4% of net sales.
- Net income was $34.3 million, or 65 cents per diluted share, down from $42.2 million in the prior year.
- Globally, wholesale net sales were flat at $401 million.
- Direct-to-consumer sales were also flat at $378 million.
- The company exited the quarter with $535.4 million in cash and no borrowings.
The U.S. Wholesale Landscape: From Contraction to Recovery
The most significant drag on the quarter was the U.S. wholesale business, which fell by a low-teens percentage. Executives attributed this primarily to a lower Spring 2026 order book and a lack of inventory to fulfill demand after the company intentionally reduced winter product supply as a precaution against previous tariff threats.
Despite the double-digit dip, Boyle said he sees a turning point on the horizon. The global wholesale order book is trending toward mid-single-digit percentage growth for the second half of the year. In the U.S. specifically, the Fall order book closed out even healthier than anticipated, landing at the “north end” of that mid-single-digit range. Retail partners ended the quarter “quite clean,” which executives believe sets the stage for strong reorder potential.
“While our U.S. business remained challenged this quarter and declined 10 percent, the decrease was largely anticipated based on the decline in our advanced Spring ’26 wholesale orders,” Boyle said. “I’m encouraged by signs of growing momentum in the U.S., including an increased Fall ’26 order book, which we expect to enable the wholesale business to return to growth in the second half.”
Brand Breakdown
- Columbia: Sales rose 1% to $690 million, as international gains offset a slump in the U.S.
- SOREL: Sales fell 12% to $37 million, hindered by reduced winter product supply in the U.S.
- prAna: Sales dropped 5% to $27 million as wholesale declines offset solid growth in e-commerce.
- Mountain Hardwear: Sales were flat at $25 million; spring product momentum helped offset winter gear weakness caused by unfavorable weather in the Western U.S.
Product and Strategy Results
Boyle expressed confidence that the Accelerate growth strategy, launched two years ago to attract younger, active consumers, is gaining momentum. The Amaze women’s line was a standout, with orders more than double the prior year’s. Executives plan to triple the line’s presence in Dick’s Sporting Goods locations this fall. Performance Fishing Gear (PFG) also continues to perform; sales of the Dry Tortuga Boot more than tripled in the first quarter.
“It’s increasingly clear to me that the Columbia Accelerate Growth Strategy is gaining traction,” Boyle said. “We’re now increasingly seeing the new products created under this strategy hit the market, driving growth in the order book.”
Columbia Sportswear International Strength
Growth was fueled almost entirely by markets outside the U.S..
- EMEA: Net sales surged 35% to $145 million, fueled by strong Europe-direct performance and robust winter demand.
- LAAP: Sales rose 5% to $160 million, with China growing mid-single digits on a constant-currency basis.
- Canada: Sales rose 7% to $51 million, driven primarily by growth in DTC brick-and-mortar sales.
The $80 Million Tariff Tussle
Boyle addressed the recent U.S. Supreme Court ruling that struck down certain IEEPA tariffs, noting that the company has already submitted refund claims.
“We have paid a total of approximately $80 million in IEEPA tariffs,” Boyle said. “We fully intend to pursue every avenue available to secure the refunds that we are owed.”
When questioned by analysts about how the company plans to use the multimillion-dollar windfall, Boyle indicated that the funds would be managed through Columbia’s “standard allocation of capital rules.” He specifically noted that some of the money would likely be directed back to the company’s manufacturing partners.
“Some of our vendors were contributors along the line to helping us sort of in a spirit of partnership, and we want to make sure that those folks are well taken care of,” Boyle said. He emphasized that while the company wants to utilize the funds correctly, they will be “leaning on our historical capital allocation plans.”
While Columbia has not yet factored these refunds into its financial statements or outlook, the company lowered its expected full-year tariff headwind from 300 basis points to approximately 200 basis points due to a temporary reprieve in rates through July.
The Middle East Complication
While tariffs provided a potential upside, Boyle said the conflict in the Middle East has introduced a new “dynamic” risk.
“This conflict has already triggered order cancellations and forecasted order reductions for certain Middle East distributor markets,” Boyle said. “Further, the conflict’s impact on global supply chains could result in late arriving inventory, increased freight and logistics costs and potential order cancellations.”
Outlook: Q2 and FY 2026
Despite the global uncertainty, Columbia raised its full-year profit guidance.
- Full-year 2026 net sales: $3.43 billion to $3.50 billion, or 1% to 3% growth.
- Full-year 2026 diluted EPS: Raised to a range of $3.55 to $4.00, up from the previous range of $3.20 to $3.65.
- Second-quarter 2026 net sales: Expected to be between $600 million and $610 million.
- Second-quarter 2026 operating loss: Anticipated to be between 5.5% and 4.5% of net sales.
