REI Co-op executives addressed some of its toughest challenges, including its 2024 financial results, at an annual member meeting on Thursday afternoon.
REI reported $3.53 billion in net sales in 2024, a 6% decrease from $3.76 billion in 2023. Its net loss narrowed by 49% to $156 million as of Dec. 28, down from $311 million in 2023.
REI leadership also shared that three unopposed nominees did not receive enough votes to be elected to the board. Two nominees were up for re-election, and one would have been a new director.
“The external environment is incredibly turbulent,” said REI CEO Mary Beth Laughton in her prepared remarks at the meeting. “The impacts of tariffs on the stock market, on consumer sentiment, and on many of our partner brands are beyond what any of us were anticipating.”
Some of REI’s smaller brands have said they’re facing an existential threat to their survival because of tariffs, particularly those on products from China. But pressures aren’t just economic, Laughton said.
“We’re seeing an onslaught of attacks on public lands and basic human rights that are in direct conflict with the values at the core of who we are at the co-op,” Laughton said. Later on in the meeting, Laughton reiterated REI’s apology for endorsing Doug Burgum, the secretary of the interior who has signed orders recommending the sell-off of public lands for fossil fuel development.
“It’s a very challenging and dynamic time for our employees, and it’s a challenging and dynamic time for our business, looking at all the external and macro factors,” Laughton said. “I expect it to get harder before it gets easier, and we may have to make some very tough choices.”
Nominees Not Elected to Board of Directors
Three nominees to the board didn’t receive enough votes from members.
“We are disappointed with the outcome, especially because we’re losing two incoming directors who have been valuable contributors to the co-op for a number of years, and also one promising new director,” said Board Chair Chris Carr at the meeting. “Therefore, on behalf of the board, I would like to extend a word of gratitude and appreciation to the three of them.”
Laughton stepped into the CEO position on March 31 after serving on the board. To transition into the role, she said she visited dozens of REI stores and has spent most of that time listening to customers, employees, and vendor partners. She said the results of the vote are a signal that more listening needs to be done.
“Coming into this role, that’s a clear sign to me that we have a big opportunity to actively seek out and listen to what our members and employees are telling us,” Laughton said. “Going forward, I’m committed to elevating more member and employee voices more regularly.” That means soliciting feedback from members and aiming to grow the value of an REI membership, she said, to return the organization to its co-op roots.
Employees will also have a stronger voice, Laughton said, through initiatives such as its Compass Group. The group connects hourly store workers, distribution teams, and customer service reps to leadership.
REI Union, which represents some of REI’s workers, declared the results of the board vote a victory in a press release it sent out following the meeting. The union has been advocating for union members to be represented on the board.
“Over 115,000 of us went to the polls to make our voices heard and demand change from an REI that has failed to meet its own values and standards,” said Scott Ekin, a sales specialist at REI Santa Cruz and a member of the union, in a statement. “It is my hope that this vote will stand as the foundation for change and build atop it an REI that supports its workers with fair wages, safe workspaces, and can once again take its place as a haven for the lovers of outdoors and those that would fight for them.”
Both Laughton and COO Cameron Janes said they will continue to negotiate its first labor agreement with the union in good faith and said that it was taking years to negotiate because it’s the first time REI has been through the process.
“Everything is on the table, and we’re working through every detail from scratch, and both sides need time to build their positions, understand what is working, and find common ground,” Janes said. “We have made good progress. In fact, we have signed 84 tentative agreements, which are the building blocks of a full agreement. Looking ahead, we’re committed to making progress as we continue to bargain and negotiate in good faith.”
Merchandising Strategy and Impact Report
Kristin Shane, who joined REI one month ago as its chief merchandising officer, said she’s bringing an omni-channel expertise to the co-op that’s informed by her experience in previous roles and that her strategy will support long-term growth.
“That means strengthening our brand partnerships, incubating emerging brands, and expanding REI’s own label offerings and making sure our assortments are regionally and locally relevant, all with the goal of delivering a truly differentiated and inspiring experience for our members,” she said. “I want to foster a culture of creativity and curiosity within our teams, championing sustainable practices that protect the outdoor spaces that we all love, and most of all, I am so excited to work alongside people who are so passionate about the outdoors and the co-op’s mission.”
In addition to releasing its financial results, REI also published its impact report, which demonstrates the co-op’s contributions to protecting the environment. In 2024, REI became the first large U.S. national retailer to achieve a zero-waste target of diverting at least 90% of its operational waste from landfill.
“It was done by taking actions like expanding our recycling solutions, reducing inbound waste, joining with industry peers to establish an innovative system for e-bike battery recycling, and eliminating most shopping bags across all retail locations,” Laughton said. “One thing that has amazed me about these impact efforts at the co-op is the consistency of the passion that I feel from our employees and members around them, it is truly something special that can continue to serve as such a powerful guiding force as we navigate the dynamic times ahead.”
Kate Robertson can be reached at kate@shop-eat-surf-outdoor.com.
