Columbia Sportswear’s turnaround strategy showed some signs that it’s working, as the company reported stronger revenues in the fourth quarter and projected a return to growth in 2025.
Strong results at the Columbia brand and Mountain Hardwear in the quarter were offset by Sorel and Prana, which continue to struggle.
Full-year revenues declined by 3% year-over-year to $3.36 billion. The company anticipates that it will return to growth in 2025, projecting net sales of $3.4 to $3.47 billion, a 1% to 3% increase.
“I’d like to thank our global workforce whose hard work and dedication allowed us to overcome challenges throughout the year,” said Chairman, President, and CEO Tim Boyle on the company’s earnings call on Tuesday. “I’m proud of the many accomplishments our teams were able to achieve, including exiting the year.”
The company reduced its inventories by 7% to $690.5 million in the quarter ended Dec. 31 and Columbia plans to close most of its temporary clearance locations. Net income in the fourth quarter increased by 10% to $102.6 million. For the full year, net income decreased 11% to $223.3 million.
“While we made progress in many areas, our 2024 financial performance was short of my personal growth and profitability goals,” Boyle said.
Boyle said the company will aim to reduce SG&A expenses in 2025, which increased by nearly 2% to $1.44 billion over the course of the year, or 42.9% of sales. In the fourth quarter, higher incentive compensation and DTC expenses drove higher SG&A expenses, which grew by more than 6% to $430.6 million.
It will also continue its “Accelerate Growth” strategy, which is focused on fresher marketing campaigns that will launch in 2025, more sophisticated consumer segmentation, and innovative and stylish products. Columbia.com will evolve and the company will open a “small number” of branded stores in high-traffic malls in North America.
“[They] will allow us to showcase the brand fully blown out,” Boyle said. “We can have a real opportunity to show consumers the products that we’re putting together.”
Columbia Brand Net Sales Increase by 6% in the Fourth Quarter
In the fourth quarter:
- Columbia net sales were $945 million, a 6% increase from the same quarter a year ago.
- Sorel’s net sales were $97 million, a 16% decrease.
- Prana’s net sales were $22 million, a 2% decrease.
- Mountain Hardwear’s net sales were $31 million, a 5% increase.
By product category, companywide footwear sales declined by 4% to $227 million, while apparel, accessories, and equipment increased by 6% (5% in constant currency) to $868 million.
The wholesale channel grew by 7% in the quarter (6% in constant currency) to $459 million. DTC sales grew by 1% to $636 million.
By geography:
- U.S. net sales declined by 1% to $682 million.
- Latin America and Asia Pacific net sales grew 7% to $187 million.
- Europe, Middle East, and Africa net sales grew by 24% (21% in constant currency) to $161 million.
- Canada net sales were flat, or grew by 1% in constant currency, to $65 million.
“The U.S. wholesale business declined by a low, single-digit percent, reflecting our lower Fall ‘24 order book and challenging outdoor category trends,” Boyle said. “Even though sell-through is down year-over-year, our retail partners are exiting the season with clean inventory levels. This is helping to fuel our positive order book for both spring and fall.”
China has been the most successful region for the Columbia brand, where it offered a premium Transit product line specific to the country, with more offerings to come.
“We are working to create a more premium Columbia brand experience for Chinese consumers,” Boyle said. “We expect China to once again be our fastest-growing market in 2025.”
Boyle highlighted the Omni-Heat Arctic and Omni-Heat Infinity jackets, which were named in Esquire and other media outlets in product roundups. New products to watch include those made with the patented Omni-Shade material, a sun protection fabric that uses titanium dioxide reflective dots to deflect sunlight and maintain a lower temperature.
Sorel Net Sales Decline by 29% in 2024
For the year ended Dec. 31:
- Columbia sales declined by 1%, or were flat in constant currency, to $2.9 billion.
- Sorel’s net sales declined by 29% to $238 million.
- Prana’s net sales declined by 8% to $104 million.
- Mountain Hardwear’s net sales increased by 7% to $108 million.
By product category, companywide apparel, accessories, and equipment sales were flat, or increased by 1% in constant currency, to $2.6 billion. Footwear net sales decreased by 16% to $681 million.
By channel, wholesale net sales declined for the year by 7% to $1.7 billion, while DTC increased by 1% (2% in constant currency) to $1.6 billion.
By geography, net sales in:
- The U.S. declined by 8% to $2 billion.
- Latin America and Asia Pacific increased by 8%, or 11% in constant currency, to $560 million.
- Europe, Middle East, and Africa increased by 9%, or 8% in constant currency, to $511 million.
- Canada decreased by 11%, or 10% in constant currency, to $227 million.
The Columbia Greater Rewards Program, which relaunched in June, has grown its membership, with Titanium level members spending more than $300 each year.
Full-Year 2025 and First Quarter Outlook
In the first quarter, Columbia’s net sales are expected to decline by 3% to 1% year-over-year to $749 million to $764 million.
Its operating margin is expected to be 5.4% to 6% compared to 5.8% in the first quarter of 2024.
“Our initial 2025 net sales outlook contemplates modest growth in addition to Columbia brand growth,” Boyle said. “Our outlook contemplates a return to growth for Prana and continued momentum at Mountain Hardwear, while we expect the Sorel business to remain down in the spring. Efforts to reinvigorate the brand will be more evident in the fall.”
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.