What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-07 · 188 added, 304 removed, 157 unchanged (76% of the section changed)

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As a global leader in designing, developing, marketing, and distributing outdoor, active and lifestyle products, our mission is to connect active people with their passions.

We manage our product line in two major categories:

apparel, accessories, and equipment products and footwear products.

We provide our products through our four brands:

Columbia, SOREL, Mountain Hardwear, and prAna;

and two major product categories:

apparel, accessories and equipment products and footwear products.

Apparel, accessories and equipment products are provided by our Columbia, Mountain Hardwear and prAna brands.

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U.S., LAAP, EMEA, and Canada.

Our business is affected by the general seasonal trends common to the industry, including seasonal weather and discretionary consumer shopping and spending patterns.

Our products are marketed on a seasonal basis, and our sales are weighted substantially toward the third and fourth quarters, while our operating costs are more equally distributed throughout the year.

ACCELERATE Growth Strategy

As part of our strategic priorities, in October 2024, we announced the ACCELERATE Growth Strategy.

At its core, the ACCELERATE Growth Strategy is intended to elevate the Columbia brand ("Brand") to target a younger and more active consumer.

It is a multi-year initiative centered around several consumer-centric shifts to our Brand, product and marketplace strategies, as well as enhanced ways of working.

Last year, we announced the Columbia brand ("Brand") ACCELERATE Growth Strategy.

At its core, the ACCELERATE Growth Strategy is intended to elevate the Brand to target a younger and more active consumer.

It is a multi-year initiative centered around several consumer-centric shifts to the Brand, product and marketplace strategies, as well as enhanced ways of working.

We believe successful execution of the ACCELERATE Growth Strategy can elevate the Brand and drive profitable growth.

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• deliver integrated full-funnel marketing.

In addition, we are committed to investing in our strategic priorities with a renewed emphasis to:

In addition, we are committed to investing in our company-wide strategic priorities with a renewed emphasis to:

• accelerate profitable growth;

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• amplify marketplace excellence, with digitally-led, omni-channel, global distribution;

• empower talent that is driven by our core values through a diverse and inclusive workplace.

• empower talent that is driven by our core values.

Ultimately, we expect our investments to enable market share capture across our brand portfolio, expand gross margin, improve selling, general and administrative expense efficiency, and drive improved operating margin over the long-term.

Profit Improvement Program

Concurrent with our ACCELERATE Growth Strategy, we continue to make progress on our multi-year profit improvement program to accelerate profitable growth and improve the efficiency of our operations.

We are focused on four areas of cost reduction and realignment, including:

Concurrent with the ACCELERATE Growth Strategy, we continue to make progress on our multi-year Profit Improvement Program to accelerate profitable growth and improve the efficiency of our operations.

The Profit Improvement Program focuses on four areas of cost reduction and realignment, including:

• operational cost savings;

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• indirect, or non-inventory, spending.

When the benefits of this program are combined with the cost savings we anticipate to receive from normalized inventory levels, we believe we can reach $125 million to $150 million in annualized savings by 2026.

We anticipate these cost savings will ramp up over the course of

COLUMBIA SPORTSWEAR COMPANY | Q1 2025 FORM 10-Q | 20

2024 and 2025, with the full benefit being realized in 2026.

In 2024, we expect to attain approximately $90 million in realized cost savings and avoidance, net of approximately $3 million to $4 million of severance and other costs.

In 2024, our Profit Improvement Program delivered approximately $90 million in realized cost savings, net of approximately $3 million of severance costs.

In 2025, in response to ongoing SG&A expense and operating profit pressures, we have initiated a review of our cost structure as we pursue additional cost savings, beyond the previously stated $125 to $150 million target.

On a cumulative basis, actions executed in 2024 and planned for 2025 are intended to yield annualized cost savings exceeding $150 million.

Our review of the Company's cost structure is ongoing, as we seek additional savings and respond to tariff-induced pressures on profitability.

These actions are intended to lower the Company's SG&A expenses as a percentage of consolidated net sales and to increase the Company's operating margin, over time.

Business Environment and Trends

Increasing U.S.

Competitive Environment and Evolving U.S.

Consumer Trends | We believe our competition in the historical U.S.

outdoor apparel and footwear market has increased as many brands have shifted their strategies and new brands have entered the marketplace to capitalize on the emergence of casual and lifestyle trends .

The versatility of casual and lifestyle products provides consumers the ability to use these products in a variety of settings, including outdoor activities.

We believe the successful implementation of our strategic priorities, including our Columbia brand ACCELERATE Growth Strategy, will enable us to better compete in this evolved U.S.

marketplace in the future.

North America Economic Environment | We believe general economic uncertainty in the U.S.

and Canada is impacting consumer and customer behavior and demand.

A culmination of economic indicators including high interest rates, increased consumer debt, and ongoing inflationary pressures, amongst other indicators, are contributing to wholesale customer cautiousness, as well as changes in consumer confidence and shopping behavior.

This has contributed to slower-than-planned sales within our DTC and wholesale businesses in North America.

In the near-term, we expect our DTC and wholesale channels in North America to continue to be challenged, in part due to the economic environment.

Promotional and Clearance Environment | Since last year, we have been proactively managing promotional activity on Columbia.com to help establish the site as the best expression of the Brand.

However, we believe certain consumers are still seeking value, particularly in the U.S.

This, among other factors, is contributing to reduced demand for our direct-to-consumer ("DTC") e-commerce sites for certain brands and branded stores.

To capture demand associated with value conscious consumers, we have increasingly relied on our fleet of DTC brick-and-mortar outlet stores and clearance locations, which offer discounted and clearance merchandise.

Further, in an effort to reduce inventories and to assist with our transition of merchandise containing perfluoroalkyl and polyfluoroalkyl substances ("PFAS") chemicals, we opened temporary outlet stores in the U.S in 2024 .

The use of temporary clearance stores results in lower DTC product margins, increased SG&A expenses and modest operating income .

We believe this method of liquidation results in stronger financial returns to the Company in comparison to wholesale closeout sales channel alternatives and has a less disruptive impact in the marketplace.

We anticipate continuing to utilize temporary clearance locations to assist with inventory liquidation through 2024 with plans to ramp down these locations throughout 2025.

Changing International Consumer Trends | We believe consumers in our international markets have adjusted their shopping habits, particularly in China as the outdoor category sector rapidly expands and Japan as the market continues to benefit from international tourism.

We expect certain of our international businesses to continue to grow year-over-year and into 2025.

Delayed Inventory Receipts | Supply chain disruptions, including impacts of Red Sea closures, Bangladesh factory disruptions, port strikes and severe weather events, have extended our supply chain lead times resulting in delayed receipt of inventory.

Later receipts of inventory impact our ability to capture consumer demand and increase the risk of wholesale order cancellations and lower potential reorders, some of which is currently occurring.

Distribution Center and Third-Party Capacity Pressure | Elevated inventory levels resulted in storage and process capacity pressures within our distribution centers and third-party logistics operations throughout 2023.

These pressures included additional inventory carrying costs related to incremental outside storage, and other inventory related holding and handling costs, including losses in productivity, as we worked to normalize our inventory position.

We exited 2023 with more normalized inventory levels.

As these storage and process capacity pressures have alleviated, we have begun to realize lower distribution-related expenses and expect to see further benefit in our operating results for full year 2024.

Freight Cost Environment | We have realized declines in ocean freight rates and costs in comparison to prior elevated levels.

These lower ocean freight rates resulted in substantially lower inbound freight costs, which benefited our gross margin in 2023 and through the third quarter of 2024.

We anticipate these lower ocean freight costs will abate providing less of a gross margin benefit in the fourth quarter of 2024 and diminishing even more so into 2025.

Seasonality | Our business is affected by the general seasonal trends common to the industry, including seasonal weather and discretionary consumer shopping and spending patterns.

In 2023, nearly 60% of our net sales and nearly 80% of our operating income were realized in the second half of the year.

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Tariffs Uncertainty | We are headquartered in the U.S.

and are subject to the laws and regulations governing companies operating in the U.S.

In April 2025, the U.S.

presidential administration announced an incremental tariff of 10 percent on products imported into the U.S.

from most countries, with the potential for these incremental tariffs to move much higher.

These incremental tariffs are in addition to the product-based tariffs the Company already pays for its imported goods into the U.S.

These actions, and the potential for retaliatory actions by other countries and their consumers, have led to significant volatility and uncertainty in global markets.

We originally planned for Vietnam, Bangladesh, Indonesia, and India to represent approximately 44 percent, 22 percent, 11 percent, and 10 percent, respectively, of our finished goods imports into the U.S.

Additionally, we originally planned for China to represent a low-single-digit percent of our finished goods imports into the U.S.

These percentages were based on our original plan and will likely change based on our tariff mitigation strategies.

While we have very little direct exposure to the new U.S.

tariffs on products from China, China remains a strategically important country for us, and we intend to continue investing in product creation capabilities in China and remain committed to manufacturing in China to support our China direct business as well as other international markets.

While the final scope and application of these incremental tariffs remain uncertain at this time, higher tariffs on U.S.

imports are already adversely impacting our U.S.

p roduct input costs.

We expect these incremental tariffs may also impact demand for our products as consumers weigh discretionary spending.

While we are currently continuing to import products into the U.S.

to meet delivery deadlines and take advantage of the 90-day tariff pause, decisions across the industry could potentially lead to broader supply chain disruptions.

We expect our inventories to also be impacted by a reduction in consumer and customer demand and are rationalizing Fall 2025 and Spring 2026 inventory buys, while seeking to preserve our strategic sourcing relationships, in order to reduce the risk of excess inventory.

For Fall 2025, we are focused on maximizing our marketplace opportunity.

We are working with our wholesale partners to deliver value to consumers and keep inventory and wholesale partner margins healthy.

As a result, at this point in time, we expect to absorb much of the incremental tariff cost related to Fall 2025 in 2025 and early in 2026 as the costs are realized.

For 2026, we are contemplating strategies to offset the impact of higher U.S.

tariffs on our business.

Our team of experts is exploring possibilities to mitigate the impact of increased tariffs including to re-design, re-develop, re-resource and re-price products, among other mitigation tactics.

Our tariff mitigation strategy will evolve in response to trade policy changes.

We continue to monitor the changing tariff and trade restrictions and have taken several actions in response to the announced tariffs to reduce costs and capital outflows, including domesticating all on-hand U.S.

inventory through our owned Foreign Trade Zone distribution centers prior to the April 2 nd announcement, taking actions to restrain discretionary spending and making progress against our Profit Improvement Program.

Retaliatory actions and anti-American consumer sentiment may also adversely impact our ability to compete in other regions of the world.

Heightened Geopolitical Risk | We sell our products in more than 110 countries and our ability to sell, import into and produce in certain markets may be impacted by ongoing geopolitical tensions.

We believe these tensions will remain elevated and have manifested, and will continue to manifest, themselves in certain regions where we operate.

Increasing Regulatory Environment | Recently, the number of regulations at the global and jurisdictional level impacting our business, and in particular our products, has significantly increased.

We expect this trend to continue and, as a result, will impact our expenses, product input costs and ultimately our products, which may in turn impact our revenue.

These regulatory matters at a minimum include regulations related to climate, social, privacy, and product chemistry.

For example, in anticipation of the effectiveness of the regulations in California and New York states related to PFAS chemicals, we have worked to eliminate PFAS chemicals across our global product line.

These PFAS matters have resulted in a more promotional environment in 2024 as retailers sell through merchandise containing PFAS .

We believe these tensions will remain elevated and will continue to manifest themselves in certain regions where we operate.

Evolving North America Strategy | Over the past year, U.S.

consumer demand for traditional outdoor apparel and footwear brands softened and remains lackluster.

This weakness can be attributed to several factors, including a highly competitive environment as many brands have shifted their strategies and new brands have entered the marketplace to capitalize on the emergence of casual and lifestyle trends.

In response to marketplace trends and to drive profitable growth, the Columbia brand created the ACCELERATE Growth Strategy, to retain our historical value-oriented consumers while attracting younger and more active consumers to the Columbia brand.

As part of the Columbia brand ACCELERATE Growth Strategy, we are approaching the North America marketplace with an updated omni-channel perspective and evaluating how, when, and where we utilize promotions across all channels, creating new product assortments and enhancing our marketing to attract these younger and more active consumers.

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During 2024, we shifted our marketing strategies for the Columbia brand's U.S.

direct-to-consumer ("DTC") e-commerce business to become less promotional, in order for Columbia.com to represent the best expression of the Brand.

In our DTC brick-and-mortar business, we have opened a small number of branded stores in high-traffic shopping malls in North America.

These new branded stores feature elevated product assortments that showcase Columbia’s apparel and footwear innovations.

These stores join the hundreds of Columbia branded stores that raise the image of the Brand in important international markets.

Within our U.S.

wholesale business, we are implementing pricing, promotional and segmentation strategies that are also intended to elevate the positioning of the Brand in the marketplace.

While we expand the Columbia brand's North America target consumer, we intend to continue serving our core consumer base that is focused primarily on value.

To capture demand associated with value-oriented consumers, we have increasingly relied on our fleet of DTC brick-and-mortar outlet stores.

We remain committed to increasing our investment in demand creation in 2025 to bring our new highly differentiated marketing campaign and enhanced product assortment to life.

We are also leveraging modern digital and social-first strategies to be more efficient and effective with our demand creation investments.

In this period of tariff turmoil, we believe we have the opportunity to set ourselves apart.

International Trends | We haven’t seen a meaningful change in trends in most of our international businesses, which were quite healthy in the first quarter.

Across our LAAP and EMEA markets, our product offerings, marketing activations and marketplace strategies, are working to create a more premium Columbia brand experience.

However, it is not possible to predict the extent to which U.S.

tariff actions will impact international economic growth and consumer demand for our products globally.

RESULTS OF OPERATIONS

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Non-GAAP Financial Measure

To supplement financial information reported in accordance with accounting principles generally accepted in the United States ("GAAP"), we disclose constant-currency net sales information, which is a non-GAAP financial measure, to provide a framework to assess how the business performed excluding the effects of changes in foreign currency exchange rates against the United States dollar between comparable reporting periods.

We calculate constant-currency net sales by translating net sales in foreign currencies for the current period into United States dollars at the exchange rates that were in effect during the comparable period of the prior year.

To supplement financial information reported in accordance with U.S.

GAAP, we disclose constant-currency net sales information, which is a non-GAAP financial measure, to provide a framework to assess how the business performed excluding the effects of changes in foreign currency exchange rates against the U.S.

dollar between comparable reporting periods.

We calculate constant-currency net sales by translating net sales in foreign currencies for the current period into U.S.

dollars at the exchange rates that were in effect during the comparable period of the prior year.

Management believes that this non-GAAP financial measure reflects an additional and useful way of viewing an aspect of our operations that, when viewed in conjunction with our GAAP results, provides a more comprehensive understanding of our business and operations.

In particular, investors may find the non-GAAP measure useful by reviewing our net sales results without the volatility in foreign currency exchange rates.

In particular, investors may find the non-GAAP measure useful by reviewing our net sales results without the volatility of foreign currency exchange rates.

This non-GAAP financial measure also facilitates management's internal comparisons to our historical net sales results and comparisons to competitors' net sales results.

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The following table presents the items in our unaudited Condensed Consolidated Statements of Operations, both in dollars and as a percentage of net sales:

Three Months Ended September 30,

Nine Months Ended September 30,

(in millions, except for percentage of net sales and per share amounts) 2024 2023 2024 2023

Three Months Ended March 31,

(in thousands, except for percentage of net sales and per share amounts)

Net sales $ 778,452 100.0 % 769,982 100.0 %

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Interest income, net 6,817 0.9 % 9,197 1.2 %

Other non-operating income (expense), net 1.3 0.1 % (0.4) — % 2.0 0.1 % 0.4 — %

Other non-operating income, net

1,551 0.2 % 271 — %

Income before income tax 54,876 7.0 % 54,149 7.0 %

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COLUMBIA SPORTSWEAR COMPANY | Q1 2025 FORM 10-Q | 23

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

Net sales by brand, product category and channel are summarized in the following table:

Three Months Ended September 30,

(in millions, except for percentages) Reported

Adjust for Foreign Currency Translation Constant-currency

% Change Constant-currency

Brand Net Sales:

Columbia $ 799.7 $ 3.7 $ 803.4 $ 804.0 (1)% —%

SOREL 73.9 0.2 74.1 122.1 (39)% (39)%

prAna 28.6 — 28.6 30.7 (7)% (7)%

Mountain Hardwear 29.6 0.2 29.8 28.9 2% 3%

Total $ 931.8 $ 4.1 $ 935.9 $ 985.7 (5)% (5)%

Product Category Net Sales:

Apparel, Accessories and Equipment $ 735.4 $ 2.9 $ 738.3 $ 731.7 1% 1%

Footwear 196.4 1.2 197.6 254.0 (23)% (22)%

Total $ 931.8 $ 4.1 $ 935.9 $ 985.7 (5)% (5)%

Channel Net Sales:

Wholesale $ 605.2 $ 2.3 $ 607.5 $ 664.3 (9)% (9)%

Direct-to-consumer 326.6 1.8 328.4 321.4 2% 2%

Total $ 931.8 $ 4.1 $ 935.9 $ 985.7 (5)% (5)%

(1) Constant-currency net sales is a non-GAAP financial measure.

See "Non-GAAP Financial Measure" above for further information.

Our global net sales decrease primarily reflects lower wholesale net sales in the U.S.

and Canada, partially offset by continued strength in international markets, compared to the same period in 2023.

The declines in wholesale net sales reflect the impact of lower Fall 2024 wholesale orders as a result of retailer cautiousness and a difficult competitive environment in the U.S.

and Canada, as well as delayed shipment of Fall 2024 wholesale orders in the third quarter compared to earlier shipment of Fall 2023 orders in the same period of the prior year.

The strength in international markets is aided by a higher portion of Fall 2024 distributor orders shipping in the third quarter compared to the timing of Fall 2023 shipments in the prior year, as well as generally robust consumer demand within many markets of our LAAP and EMEA businesses.

DTC net sales increased, reflecting growth in our brick-and-mortar business from temporary and new stores, partially offset by declines in our e-commerce business, compared to the same period in 2023.

The declines in e-commerce net sales resulted from softness in the U.S., which we attribute to a challenging e-commerce environment for outdoor brands, coupled with efforts to de-emphasize promotions on Columbia.com.

Gross Profit.

Gross profit is summarized in the following table:

Three Months Ended September 30,

(in millions, except for percentages and basis points) 2024 2023 Change

Gross profit $ 467.6 $ 480.2 $ (12.6) (3) %

Gross margin 50.2 % 48.7 % 150 bps

Gross margin expanded primarily due to the following factor:

• favorable other costs, including lower inbound freight costs;

partially offset by

COLUMBIA SPORTSWEAR COMPANY | Q3 2024 FORM 10-Q | 25

• unfavorable decrease in channel profitability reflecting higher clearance and promotional activity, partially offset by favorable input costs and product mix.

Selling, General and Administrative Expenses.

SG&A expenses are summarized in the following table:

Three Months September 30,

(in millions, except for percentages and basis points) 2024 2023 Change

Selling, general and administrative expenses $ 361.2 $ 351.6 $ 9.6 3 %

Selling, general and administrative expenses as percent of net sales 38.8 % 35.7 % 310 bps

SG&A expenses increased primarily due to the following factors:

• higher omni-channel expenses of $14.3 million, reflecting higher DTC brick-and-mortar expenses, including costs associated with new stores and temporary clearance locations and personnel expense;

• higher incentive compensation, reflecting higher performance against target as compared to the comparative period;

partially offset by

• lower supply chain expenses, reflecting decreased global distribution center expenses resulting from more normalized inventory levels and supply chain optimization efforts.

Interest Income, Net.

Interest income, net is summarized in the following table:

Three Months Ended September 30,

(in millions, except for percentages) 2024 2023 Change

Interest income, net $ 5.4 $ 1.9 $ 3.5 184 %

Interest income, net as a percent of net sales 0.6 % 0.1 %

Interest income, net increased, primarily reflecting higher yields on increased levels of cash, cash equivalents and short-term investments.

Income Tax Expense.

Income tax expense and the related effective income tax rate are summarized in the following table:

Three Months Ended September 30,

(in millions, except for percentages) 2024 2023 Change

Income tax expense $ 29.0 $ 32.6 $ (3.6) (11) %

Effective income tax rate 24.4 % 24.0 %

Income tax expense decreased to $29.0 million for the third quarter of 2024 from a tax expense of $32.6 million for the comparable period in 2023.

Our effective tax rate was 24.4% for the three months ended September 30, 2024 compared to 24.0% for the same period in 2023.

For the three months ended September 30, 2024, our effective tax rate was primarily impacted by a non-recurring expense related to a foreign currency gain resulting from an intercompany transaction.

For the three months ended September 30, 2023, our effective tax rate was primarily impacted by a non-recurring benefit related to a foreign currency loss resulting from an intercompany transaction.

COLUMBIA SPORTSWEAR COMPANY | Q3 2024 FORM 10-Q | 26

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Net sales by brand, product category and channel are summarized in the following table:

Nine Months Ended September 30,

(in millions, except for percentages) Reported

Three Months Ended March 31,

(in thousands, except for percentages)

Adjust for Foreign Currency Translation Constant-currency

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Apparel, accessories and equipment

$ 628,820 $ 10,312 $ 639,132 $ 619,054 2% 3%

Footwear 149,632 2,979 152,611 150,928 (1)% 1%

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See "Non-GAAP Financial Measure" above for further information.

Our global net sales decrease primarily reflects lower wholesale net sales in the U.S.

and Canada, partially offset by continued strength in international markets, compared to the same period in 2023.

The declines in wholesale net sales have generally resulted from retailer cautiousness and a difficult competitive environment throughout the year, primarily in the U.S and Canada.

The strength in international markets has generally resulted from robust consumer demand within many markets of our LAAP and EMEA businesses.

The declines in e-commerce net sales have resulted from softness in the U.S.

throughout the year, which we attribute to a challenging environment for outdoor brands, coupled with efforts to de-emphasize promotions on Columbia.com.

Our global net sales increase was driven by growth within our LAAP and EMEA regions, partially offset by declines in Canada and the U.S., as compared to the same period in 2024.

The growth in our LAAP and EMEA net sales was largely driven by the strength of our Columbia brand within our wholesale business across many markets.

The strength in our Columbia brand was attributable to the execution of our business strategies, as well as to the benefit of certain trends and/or factors favorably impacting the outdoor apparel and footwear sector.

The declines in Canada and the U.S.

were primarily driven by retailer cautiousness and increased competition within the outdoor lifestyle category, coupled with a difficult macroeconomic environment as global economic uncertainty weighs on consumer sentiment, particularly in the U.S.

Gross Profit.

Gross profit is summarized in the following table:

Nine Months Ended September 30,

(in millions, except for percentages and basis points) 2024 2023 Change

Three Months Ended March 31,

(in thousands, except for percentages and basis points)

2025 2024 Change

Gross profit $ 396,057 $ 389,559 $ 6,498 2 %

Gross margin 50.9 % 50.6 % 30 bps

Gross margin expanded primarily due to the following factors:

• favorable other costs, including lower inbound freight costs;

• favorable region and channel net sales mix;

partially offset by

• unfavorable decrease in channel profitability reflecting higher clearance and promotional activity, partially offset by favorable input costs and product mix.

Gross margin expanded due to several factors including a favorable increase in channel profitability reflecting lower outbound shipping expenses, higher closeout margins, and favorable Spring 2025 product input costs.

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SG&A expenses are summarized in the following table:

Nine Months Ended September 30,

(in millions, except for percentages and basis points) 2024 2023 Change

Three Months Ended March 31,

(in thousands, except for percentages and basis points)

2025 2024 Change

Selling, general and administrative expenses $ 354,471 $ 349,270 $ 5,201 1 %

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SG&A expenses increased primarily due to the following factors:

• higher omni-channel expenses of $31.7 million, reflecting higher DTC brick-and-mortar expenses, including costs associated with new stores and temporary clearance locations and personnel expenses;

partially offset by

• lower supply chain expenses of $26.0 million, reflecting decreased global distribution center expenses resulting from more normalized inventory levels and supply chain optimization efforts;

• lower demand creation expenses, primarily reflecting decreased net sales.

• higher omni-channel expenses, reflecting higher DTC brick-and-mortar expenses associated with new stores;

• higher demand creation expenses, reflecting our increased investment in demand creation in line with our ACCELERATE Growth Strategy.

Interest Income, Net.

Interest income, net is summarized in the following table:

Nine Months Ended September 30,

(in millions, except for percentages) 2024 2023 Change

Three Months Ended March 31,

(in thousands, except for percentages)

2025 2024 Change

Interest income, net $ 6,817 $ 9,197 $ (2,380) (26) %

Interest income, net as a percent of net sales 0.9 % 1.2 %

Interest income, net increased, primarily reflecting higher yields on increased levels of cash, cash equivalents and short-term investments.

Interest income, net, decreased primarily reflecting lower yields on decreased levels of cash, cash equivalents and short-term investments.

Income Tax Expense.

Income tax expense and the related effective income tax rate are summarized in the following table:

Nine Months Ended September 30,

(in millions, except for percentages) 2024 2023 Change

Three Months Ended March 31,

(in thousands, except for percentages)

2025 2024 Change

Income tax expense $ 12,628 $ 11,849 $ 779 7 %

Effective income tax rate 23.0 % 21.9 %

Income tax expense decreased to $37.6 million through the third quarter of 2024 from $48.1 million for the comparable period in 2023.

Our effective tax rate was 23.8% for the nine months ended September 30, 2024 compared to 23.4% for the same period in 2023.

For the nine months ended September 30, 2024, our effective tax rate was primarily impacted by a non-recurring benefit related to a decrease in accrued foreign withholding taxes.

For the nine months ended September 30, 2023, our effective income tax rate was primarily impacted by a non-recurring benefit related to a foreign currency loss resulting from an intercompany transaction.

Income tax expense increased to $12.6 million for the three months ended March 31, 2025 from a tax expense of $11.8 million for the comparable period in 2024.

Our effective tax rate was 23.0% for the three months ended March 31, 2025 compared to 21.9% for the comparable period in 2024.

For the three months ended March 31, 2025, our effective income tax rate increased as compared to the same period in 2024 due to discrete non-deductible compensation tax adjustments included in the current period.

COLUMBIA SPORTSWEAR COMPANY | Q1 2025 FORM 10-Q | 25

Results of Operations — Segment

Segment operating income includes net sales, cost of sales, SG&A expenses, and net licensing income for each of our four reportable geographic segments.

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

Net sales by geographic segment are summarized in the following table:

Three Months Ended September 30,

(in millions, except for percentage changes) Reported

Adjust for Foreign Currency Translation Constant-currency

% Change Constant-currency

$ 571.3 $ — $ 571.3 $ 635.4 (10)% (10)%

LAAP 135.0 1.7 136.7 115.4 17% 18%

EMEA 141.8 0.5 142.3 129.4 10% 10%

Canada 83.7 1.9 85.6 105.5 (21)% (19)%

$ 931.8 $ 4.1 $ 935.9 $ 985.7 (5)% (5)%

(1) Constant-currency net sales is a non-GAAP financial measure.

See "Non-GAAP Financial Measure" above for further information.

Operating income for each reportable segment and unallocated corporate expenses are summarized in the following table:

Three Months Ended September 30,

(in millions) 2024 2023 Change

$ 115.4 $ 131.6 $ (16.2)

LAAP 20.4 14.5 5.9

EMEA 33.2 34.2 (1.0)

Canada 22.4 30.2 (7.8)

Total segment operating income 191.4 210.5 (19.1)

Unallocated corporate expenses (78.9) (75.9) (3.0)

Operating income $ 112.5 $ 134.6 $ (22.1)

operating income decreased $16.2 million to $115.4 million, or 20.2% of net sales, for the third quarter of 2024 from $131.6 million, or 20.7% of net sales, for the comparable period in 2023.

The decrease was driven primarily by decreased net sales and gross margin, partially offset by lower SG&A expenses.

net sales decreased $64.1 million, or 10%, for the third quarter of 2024, compared to the same period in 2023, driven primarily by decreased net sales in our U.S.

wholesale business.

DTC net sales decreased modestly as a result of lower e-commerce net sales, partially offset by net sales growth from our brick-and-mortar business.

The declines in wholesale net sales reflect the impact of lower Fall 2024 wholesale orders as a result of retailer cautiousness and a difficult competitive environment in the U.S., as well as delayed shipment of Fall 2024 wholesale orders in the third quarter compared to earlier shipment of Fall 2023 orders.

The declines in e-commerce net sales resulted from continued softness in the U.S., which we attribute to a challenging e-commerce environment for outdoor brands, coupled with efforts to de-emphasize promotions on Columbia.com.

The increases in brick-and-mortar net sales were primarily driven by temporary clearance locations and new stores, coupled with increased productivity from existing stores.

As of September 30, 2024, our U.S.

business operated 42 temporary clearance locations, compared to 36 locations for the comparable period in 2023.

In addition, our U.S.

business operated 169 retail stores as of September 30, 2024, compared to 159 stores for the comparable period in 2023.

SG&A expenses increased as a percentage of net sales to 30.2% for the third quarter of 2024 compared to 27.6% for the same period in 2023, driven by fixed SG&A expenses and decreased net sales.

In total, U.S.

SG&A expenses decreased for the third quarter of 2024, compared to the same period in 2023, primarily driven by lower supply chain expenses resulting from more normalized inventory levels and supply chain optimization efforts, as well as lower demand creation expenses, partially offset by higher DTC brick-and-mortar expenses, including costs associated with new stores and temporary clearance locations and personnel expenses.

COLUMBIA SPORTSWEAR COMPANY | Q3 2024 FORM 10-Q | 29

LAAP operating income increased $5.9 million to $20.4 million, or 15.1% of net sales, for the third quarter of 2024 from $14.5 million, or 12.6% of net sales, for the comparable period in 2023.

The increase was driven primarily by increased net sales and gross margin.

LAAP net sales increased 17% (18% constant-currency), for the third quarter of 2024, compared to the same period in 2023, primarily driven by our China and LAAP distributor businesses.

Increased net sales in our China business reflected continued strong consumer demand, aided by positive outdoor category trends, compared to the same period in the prior year.

Increased net sales in our LAAP distributor business reflected growth in our Fall 2024 distributor orders compared to the same period in the prior year.

Japan net sales increased within our DTC and wholesale businesses primarily due to strong international tourism.

Korea net sales increased primarily due to wholesale net sales reflecting a higher portion of Fall 2024 wholesale orders shipping in the third quarter compared to the timing of Fall 2023 shipments in the prior year, partially offset by declines in DTC net sales reflecting ongoing consumer demand headwinds.

LAAP SG&A expenses decreased as a percentage of net sales to 39.4% for the third quarter of 2024 compared to 42.5% for the same period in 2023, driven by increased net sales.

In total, LAAP SG&A expenses increased for the third quarter of 2024, compared to the same period in 2023, primarily driven by higher demand creation expenses.

EMEA operating income decreased $1.0 million to $33.2 million, or 23.4% of net sales, for the third quarter of 2024 from $34.2 million, or 26.5% of net sales, for the comparable period in 2023.

EMEA net sales increased $12.4 million, or 10% (10% constant-currency), for the third quarter of 2024, compared to the same period in 2023, primarily driven by our EMEA distributor and Europe-direct businesses.

Increased net sales in our EMEA distributor business primarily reflected a higher portion of Fall 2024 distributor orders shipping in the third quarter compared to the timing of Fall 2023 shipments in the prior year and, to a lesser extent, increased Fall 2024 orders.

Increased net sales in our Europe-direct business reflect continued momentum and increased traffic within our DTC brick-and-mortar and e-commerce businesses.

This net sales increase was partially offset by decreased net sales in our Europe-direct wholesale business driven by later shipment of Fall 2024 orders as compared to the same period in the prior year.

EMEA SG&A expenses increased as a percentage of net sales to 26.5% for the third quarter of 2024 compared to 25.0% in 2023, primarily driven by higher personnel expenses and variable DTC expenses.

Canada operating income decreased $7.8 million to $22.4 million, or 26.8% of net sales, for the third quarter of 2024 from $30.2 million, or 28.6% of net sales, for the comparable period in 2023.

Canada net sales decreased $21.8 million, or 21% (19% constant-currency), for the third quarter of 2024, compared to the same period in 2023, primarily reflecting decreased net sales in our wholesale business.

Decreased net sales in our wholesale business primarily reflected the impact of lower Fall 2024 wholesale orders due to retailer cautiousness and a difficult competitive environment in Canada, as well as delayed shipment of Fall 2024 wholesale orders in the third quarter compared to earlier shipment of Fall 2023 orders.

DTC net sales decreased modestly as a result of lower e-commerce net sales, partially offset by net sales growth from our brick-and-mortar business.

Canada SG&A expenses increased as a percentage of net sales to 22.6% for the third quarter of 2024 compared to 18.2% for the same period in 2023, primarily driven by fixed SG&A expenses and decreased net sales.

In total, Canada SG&A expenses decreased for the third quarter of 2024 compared to the same period in 2023.

Unallocated Corporate Expenses

Unallocated corporate expenses increased by $3.0 million to $78.9 million in the third quarter of 2024, from $75.9 million for the same period in 2023.

COLUMBIA SPORTSWEAR COMPANY | Q3 2024 FORM 10-Q | 30

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Net sales by geographic segment are summarized in the following table:

Nine Months Ended September 30,

(in millions, except for percentage changes) Reported

Segment operating income includes net sales, cost of sales, segment SG&A expenses, and other segment items for each of our four reportable segments.

For each reportable segment, other segment items include certain corporate expenses and net licensing income allocated to each of the reportable segments, as well as net licensing income directly attributable to each of the reportable segments.

Refer to Note 16 in Part II, Item 8 of our Annual Report on Form 10-K for further information.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Net sales by reportable segment are summarized in the following table:

Three Months Ended March 31,

(in thousands, except for percentage changes)

Adjust for Foreign Currency Translation Constant-currency

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See "Non-GAAP Financial Measure" above for further information.

Operating income for each reportable segment and unallocated corporate expenses are summarized in the following table:

Nine Months Ended September 30,

(in millions) 2024 2023 Change

Segment operating income for each reportable segment and unallocated corporate expenses are summarized in the following table:

Three Months Ended March 31,

(in thousands)

2025 2024 Change

$ 65,954 $ 72,993 $ (7,039)

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Operating income $ 46,508 $ 44,681 $ 1,827

operating income decreased $56.5 million to $211.8 million, or 15.3% of net sales, for the nine months ended September 30, 2024 from $268.3 million, or 17.3% of net sales, for the comparable period in 2023.

The decrease was driven primarily by decreased net sales and gross margin, partially offset by lower SG&A expenses.

net sales decreased $166.1 million, or 11%, for the nine months ended September 30, 2024, compared to the same period in 2023, driven primarily by decreased net sales in our U.S.

wholesale business.

DTC net sales decreased modestly as a result of lower e-commerce net sales, partially offset by net sales growth from our brick-and-mortar business.

The declines in wholesale net sales have generally resulted from retailer cautiousness and a difficult competitive environment throughout the year.

The increases in brick-and-mortar net sales were primarily driven by temporary clearance locations and new stores, coupled with increased productivity of existing stores for the nine months ended September 30, 2024.

SG&A expenses increased as a percentage of net sales to 34.7% for the nine months ended September 30, 2024 compared to 32.3% for the same period in 2023, primarily driven by fixed SG&A expenses and decreased net sales.

In total, U.S.

SG&A expenses decreased for the nine months ended September 30, 2024 compared to the same period in 2023, primarily driven by lower supply chain expenses resulting from more normalized inventory levels and supply chain optimization efforts, as well as lower demand creation expenses, partially offset by higher DTC brick-and-mortar expenses, including costs associated with new stores and temporary clearance locations and personnel expenses.

LAAP operating income increased $11.4 million to $48.3 million, or 12.9% of net sales, for the nine months ended September 30, 2024 from $36.9 million, or 10.7% of net sales, for the comparable period in 2023.

The increase was driven primarily by increased net sales and gross margin.

LAAP net sales increased $28.1 million, or 8% (12% constant-currency), for the nine months ended September 30, 2024, compared to the same period in 2023, primarily driven by our China business.

Increased net sales in our China business reflected continued strong

segment operating income decreased $7.0 million to $66.0 million, or 14.0% of net sales, for the first quarter of 2025 from $73.0 million, or 15.4% of net sales, for the comparable period in 2024.

The decrease was driven primarily by decreased net sales and gross profit combined with increased segment SG&A expenses.

net sales decreased $3.2 million, or 1%, for the first quarter of 2025, compared to the same period in 2024, driven primarily by decreased net sales in our U.S.

DTC e-commerce business, partially offset by growth in our U.S.

DTC brick-and-mortar business.

The declines in our e-commerce net sales were attributable to a challenging e-commerce environment for outdoor brands and increased competition within the outdoor lifestyle category, coupled with a difficult macroeconomic environment as global economic uncertainty weighs on consumer sentiment.

The growth in our brick-and-mortar business was primarily driven by new stores for the three months ended March 31, 2025.

As of March 31, 2025, our U.S.

business operated 169 retail stores, compared to 161 stores as of March 31, 2024.

wholesale business remained relatively flat, reflecting a modest increase in Spring 2025 shipments as compared to the same period in 2024.

segment SG&A expenses increased as a percentage of net sales to 31.1% for the first quarter of 2025, compared to 29.3% for the same period in 2024.

COLUMBIA SPORTSWEAR COMPANY | Q1 2025 FORM 10-Q | 26

consumer demand, aided by positive outdoor category trends.

Our LAAP distributor business also saw increased net sales driven by growth in our Fall 2024 orders compared to the same period in the prior year.

This net sales increase was partially offset by decreased net sales in our Korea DTC business reflecting a challenging competitive and economic environment.

Japan net sales were flat driven by strong demand from increased international tourism which was largely offset by unfavorable foreign currency translation compared to the same period in the prior year.

LAAP SG&A expenses decreased as a percentage of net sales to 42.4% for the nine months ended September 30, 2024, compared to 44.6% for the same period in 2023, primarily driven by increased net sales.

In total, LAAP SG&A expenses increased for the nine months ended September 30, 2024 compared to the same period in 2023, primarily driven by higher demand creation expenses.

EMEA operating income decreased $2.8 million to $66.8 million, or 19.1% of net sales, for the nine months ended September 30, 2024 from $69.6 million, or 20.6% of net sales, for the comparable period in 2023.

The decrease was driven primarily by increased SG&A expenses.

EMEA net sales increased $11.7 million, or 3% (3% constant-currency), for the nine months ended September 30, 2024, compared to the same period in 2023, primarily driven by our Europe-direct business.

Increased net sales in our Europe-direct business were driven by robust demand throughout our DTC brick-and-mortar and e-commerce businesses.

Our EMEA distributor business also saw increased net sales.

This net sales increase was partially offset by decreased net sales in our Europe-direct wholesale business.

EMEA SG&A expenses increased as a percentage of net sales to 28.6% for the nine months ended September 30, 2024 compared to 26.5% for the same period in 2023, primarily driven by higher personnel expenses and variable DTC expenses.

Canada operating income decreased $7.6 million to $33.5 million, or 20.6% of net sales, for the nine months ended September 30, 2024 from $41.1 million, or 21.4% of net sales, for the comparable period in 2023.

This decrease was primarily driven by lower net sales and gross margin, partially offset by lower SG&A expenses.

Canada net sales decreased $28.9 million, or 15% (14% constant-currency), for the nine months ended September 30, 2024, compared to the same period in 2023, driven primarily by decreased net sales in our Canada wholesale business.

DTC net sales increased driven by increases in our brick-and-mortar business, offset by declines in our e-commerce business.

Canada SG&A expenses increased as a percentage of net sales to 28.8% for the nine months ended September 30, 2024 compared to 25.2% for the same period in 2023, primarily as a result of fixed expenses and decreased net sales.

In total, Canada SG&A expenses decreased for the nine months ended September 30, 2024 compared to the same period in 2023.

LAAP segment operating income increased $4.5 million to $26.3 million, or 17.3% of net sales, for the first quarter of 2025 from $21.8 million, or 15.7% of net sales, for the comparable period in 2024.

The increase was driven primarily by increased net sales and gross profit.

LAAP net sales increased $13.6 million, or 10% (14% constant-currency), for the first quarter of 2025, compared to the same period in 2024, primarily driven by increased net sales in our China, LAAP distributor, and Japan businesses, partially offset by declines in our Korea business.

The growth in our China business reflected continued strong consumer demand which we believe was attributable to the execution of our marketplace strategies, including premium product offerings and marketing activations.

The growth was further aided by positive outdoor category trends as compared to the same period in 2024.

The growth in our LAAP distributor business was driven by double-digit growth in our Spring 2025 orders as compared to the same period in 2024.

The growth in our Japan business was driven by strong consumer demand for late season winter products across all channels, as compared to the same period in 2024.

The declines in our Korea business reflected unfavorable effects from foreign currency fluctuation, which more than offset constant-currency net sales growth resulting from consumer demand for late season winter products.

LAAP segment SG&A expenses decreased as a percentage of net sales to 34.9% for the first quarter of 2025, compared to 36.2% for the same period in 2024, primarily driven by increased net sales.

In total, LAAP segment SG&A expenses increased 5.7% for the three months ended March 31, 2025 as compared to the same period in 2024.

EMEA segment operating income decreased $0.2 million to $19.0 million, or 17.7% of net sales, for the first quarter of 2025 from $19.1 million, or 18.3% of net sales, for the comparable period in 2024.

The decrease was driven primarily by increased segment SG&A expenses.

EMEA net sales increased $3.0 million, or 3% (7% constant-currency), for the first quarter of 2025, compared to the same period in 2024, primarily driven by our Europe-direct business, partially offset by a decline in our EMEA distributor business.

The growth in our Europe-direct business was primarily driven by robust demand within our DTC brick-and-mortar businesses that we believe was attributable to the execution of our marketplace strategies, including marketing activations and elevating the in-store consumer experience.

The decline in our EMEA distributor business was driven by a shift of Spring 2025 shipments out of the first quarter of 2025 into the second quarter of 2025, partially offset by growth in our Spring 2025 orders as compared to the same period in 2024.

EMEA segment SG&A expenses increased as a percentage of net sales to 29.9% for the first quarter of 2025, compared to 27.6% for the same period in 2024.

Canada segment operating income decreased $2.2 million to $9.0 million, or 18.8% of net sales, for the first quarter of 2025 from $11.2 million, or 21.3% of net sales, for the comparable period in 2024.

The decrease was primarily driven by lower net sales and gross profit combined with increased segment SG&A expenses.

Canada net sales decreased $4.8 million, or 9% (2% constant-currency), for the first quarter of 2025, compared to the same period in 2024, driven by decreased net sales in our Canada wholesale and DTC businesses.

The declines in our wholesale and DTC businesses resulted from retailer cautiousness.

Canada segment SG&A expenses increased as a percentage of net sales to 24.3% for the first quarter of 2025, compared to 19.8% for the same period in 2024.

Unallocated Corporate Expenses

Unallocated corporate expenses increased by $8.3 million to $227.0 million for the nine months ended September 30, 2024 from $218.7 million for the same period in 2023.

Unallocated corporate expenses decreased by $6.7 million to $73.7 million for the first quarter of 2025 from $80.4 million for the same period in 2024, driven by lower personnel expenses.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity include cash, cash equivalents, short-term investments, and available committed credit lines.

Our liquidity may be affected by the general seasonal trends common to the industry.

Our liquidity is affected by the general seasonal trends common to the industry.

Our products are marketed on a seasonal basis and our sales are weighted substantially toward the third and fourth quarters, while our operating costs are more equally distributed throughout the year.

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This trough cash position is impacted by the amount of product we order from our contract manufacturers in anticipation of customer demand and is more heavily impacted in advance of periods of expected high demand.

We expect that our cash position will be impacted by incremental tariff costs for U.S.

product in the third and fourth quarter of 2025 in a meaningful way.

To the extent necessary in the third and fourth quarter of 2025, we have a $500 million committed credit facility on which we can draw until we receive fourth quarter cash receipts.

COLUMBIA SPORTSWEAR COMPANY | Q1 2025 FORM 10-Q | 27

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Cash flows are summarized in the following table:

Nine Months Ended September 30,

(in millions) 2024 2023 Change

Three Months Ended March 31,

(in thousands)

2025 2024 Change

Net cash provided by (used in):

3 unchanged sentences

Net effect of exchange rate changes on cash 3,588 (4,396) 7,984

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

$ (208,530) $ 68,143 $ (276,673)

The change in cash flows used in operating activities was driven by a $55.9 million increase in cash used in changes in assets and liabilities, as well as a $42.9 million decrease in cash provided by net income and non-cash adjustments.

The most significant comparative changes in assets and liabilities included Inventories , Prepaid expenses and other current assets , and Accounts payable.

The $185.8 million decrease in cash provided by Inventories reflected cash provided of $135.4 million for the nine months ended September 30, 2023 as we liquidated excess inventory levels throughout 2023, as well as cash used of $50.3 million for the nine months ended September 30, 2024 as we aligned inventory supply with anticipated seasonal demand.

The $21.8 million decrease in cash provided by Prepaid expenses and other current assets was primarily driven by lower inventory prepayments.

These amounts were partially offset by the $135.1 million decrease in cash used in Accounts payable driven by the timing of inventory receipts, including higher in-season inventory, and related payments, including a reduction in the use of early payments.

Net cash provided by investing activities was $321.1 million for the nine months ended September 30, 2024, compared to $38.5 million of cash used in investing activities for the nine months ended September 30, 2023.

For the 2024 period, net cash provided by investing activities consisted of $751.2 million in cash provided by sales and maturities of short-term investments, partially offset by $388.3 million in cash used for purchases of short-term investments and $41.7 million for capital expenditures.

For the 2023 period, net cash used in investing activities consisted of $117.9 million in purchases of short-term investments and $41.4 million for capital expenditures, partially offset by $120.7 million provided by sales and maturities of short-term investments.

Net cash used in financing activities was $284.6 million for the nine months ended September 30, 2024 compared to $197.6 million for the nine months ended September 30, 2023.

For the 2024 period, net cash used in financing activities primarily consisted of repurchases of common stock of $230.9 million and dividend payments to our shareholders of $52.9 million.

For the 2023 period, net cash used in financing activities primarily consisted of repurchases of common stock of $144.6 million and dividend payments to our shareholders of $55.4 million.

The change in cash flows used in operating activities was driven by a $142.0 million decrease in cash provided by changes in assets and liabilities, as well as a $3.2 million increase in cash provided by net income and non-cash adjustments.

The most significant comparative changes in assets and liabilities included Inventories , Accounts payable and Accrued Liabilities.

The $60.1 million decrease in cash provided by Inventories reflected cash provided of $131.7 million for the three months ended March 31, 2024 as we liquidated excess inventory levels, as compared to cash provided of $71.6 million for the three months ended March 31, 2025 as we replenished inventory levels to align inventory supply with anticipated seasonal demand.

The $40.3 million increase in cash used in Accounts Payable was primarily driven by the timing of inventory receipts, including higher in-season inventory, and increased related payments for the three months ended March 31, 2025 as compared to March 31, 2024 .

The $22.0 million increase in cash used in Accrued liabilities primarily reflected a decrease in our sales returns reserve for specific wholesale customers as compared to March 31, 2024 .

Net cash used in investing activities was $61.4 million for the three months ended March 31, 2025, compared to $37.1 million of cash provided by investing activities for the three months ended March 31, 2024.

The decrease in cash provided by investing was primarily driven by higher purchases of short-term investments in the first quarter of fiscal 2025, as compared to the first quarter of fiscal 2024.

Net cash used in financing activities was $118.6 million for the three months ended March 31, 2025 compared to $71.3 million for the three months ended March 31, 2024.

The increase in cash used in financing in the first quarter of fiscal 2025 was primarily driven by higher share repurchases of common stock, as compared to the first quarter of fiscal 2024.

Sources of Liquidity

Cash and cash equivalents and short-term investments

As of September 30, 2024, we had cash and cash equivalents of $306.7 million and short-term investments of $67.2 million, compared to $350.3 million and $414.2 million, respectively, as of December 31, 2023 and $213.3 million and $1.5 million, respectively, as of September 30, 2023.

Domestic Credit Facility

Refer to Note 7 in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023 for further information regarding our domestic credit facility.

As of September 30, 2024, we had available an unsecured, committed revolving credit facility, which provides for borrowings up to $500.0 million.

As of March 31, 2025, we had cash and cash equivalents of $323.3 million and short-term investments of $335.1 million, compared to $531.9 million and $283.6 million, respectively, as of December 31, 2024 and $418.5 million and $369.3 million, respectively, as of March 31, 2024.

Committed Credit Facilities

As of March 31, 2025, we had available an unsecured, committed revolving credit facility, which provides for borrowings up to $500.0 million.

We were in compliance with all associated covenants and there was no balance outstanding under the facility.

COLUMBIA SPORTSWEAR COMPANY | Q3 2024 FORM 10-Q | 33

International Credit Facility

As of September 30, 2024, our European subsidiary had available an unsecured, committed line of credit, which is guaranteed by the Company and provides for borrowings up to €4.4 million (approximately US$4.9 million).

Refer to Note 6 in Part II, Item 8 of our Annual Report on Form 10-K for further information regarding our domestic credit facility.

Further, as of March 31, 2025, our European subsidiary had available an unsecured, committed line of credit, which is guaranteed by the Company and provides for borrowings up to €4.4 million (approximately US$4.8 million).

There was no balance outstanding under the facility.

Other Sources

As of September 30, 2024, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$106.4 million.

There was no balance outstanding under these facilities.

Uncommitted Credit Facilities

As of March 31, 2025, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$98.9 million.

There were no balances outstanding under these facilities.

COLUMBIA SPORTSWEAR COMPANY | Q1 2025 FORM 10-Q | 28

Capital Requirements

Our expected short-term and long-term cash needs are primarily for working capital and capital expenditures.

We expect to meet these short-term and long-term cash needs primarily with cash flows from operations and, if needed, borrowings from our existing credit facilities.

Our working capital management goals include maintaining an optimal level of inventory necessary to deliver goods on time to our customers and our retail stores to satisfy end consumer demand, alleviating manufacturing capacity constraints, and driving efficiencies to minimize the cycle time from the purchase of inventory from our suppliers to the collection of accounts receivable balances from our customers.

We expect to meet these short-term and long-term cash needs primarily with cash and cash equivalents, short-term investments, cash flows from operations and, if needed, borrowings from our existing credit facilities.

Our working capital management goals include maintaining an optimal level of inventory necessary to deliver goods on time to our customers and to satisfy end consumer demand, alleviating manufacturing capacity constraints, and driving efficiencies to minimize the cycle time from the purchase of inventory from our suppliers to the collection of accounts receivable balances from our customers.

Inventory balances may be elevated in advance of periods of expected high demand.

As of September 30, 2024, our inventory balance decreased to $798.2 million, compared to $885.2 million as of September 30, 2023, driven by a reduction in current season and carryover inventory resulting from lower inventory buys, as well as the use of our outlet stores and temporary clearance locations to profitably sell excess merchandise.

As of March 31, 2025, our inventory balance increased to $623.7 million, compared to $607.4 million as of March 31, 2024, as we replenished inventory levels to align inventory supply with anticipated seasonal demand, as compared to the same period in 2024 which saw inventory levels decrease as we liquidated excess inventory levels.

We believe older season inventories represent a manageable portion of our total inventory mix.

We have planned 2025 capital expenditures of approximately $60 to $80 million.

This includes investments in our DTC operations, including new stores and digital and supply chain capabilities to support our strategic priorities.

This includes investments in our DTC operations, including new stores and supply chain and digital capabilities to support our strategic priorities.

Our actual capital expenditures may differ from the planned amounts depending on factors such as the timing of system implementations and new store openings and related construction.

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Other cash commitments

Our inventory purchase obligations were $437.2 million as of September 30, 2024, compared to $343.4 million and $367.3 million as of December 31, 2023 and September 30, 2023, respectively.

Our inventory purchase obligations were $708.6 million as of March 31, 2025, compared to $473.0 million and $675.0 million as of December 31, 2024 and March 31, 2024, respectively.

There have been no other significant changes to our other cash commitments as described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.

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The preparation of these financial statements requires us to make various estimates and judgments that affect reported amounts of assets, liabilities, sales, cost of sales, and expenses and related disclosure of contingent assets and liabilities.

We believe that the estimates, assumptions and judgments involved in the accounting for sales reserves, allowance for uncollectible accounts receivable, excess, close-out and slow-moving inventory, impairment of long-lived assets, intangible assets and goodwill, and income taxes have the greatest potential effect on our financial statements, so we consider these to be our critical accounting policies and estimates.

Because of the uncertainty inherent in these matters, actual results may

COLUMBIA SPORTSWEAR COMPANY | Q3 2024 FORM 10-Q | 34

differ from the estimates we use in applying these critical accounting policies and estimates.

We base our ongoing estimates on historical experience and other assumptions that we believe to be reasonable in the circumstances.

Refer to Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information regarding our critical accounting policies and estimates.

The business and economic uncertainty resulting from volatile geopolitical conditions, including expanded tariffs, have made such estimates and assumptions more difficult to calculate.

Accordingly, actual results may differ from these estimates and assumptions.

Refer to Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information regarding our critical accounting policies and estimates.

Management regularly discusses with our audit committee our critical accounting estimates and the development and selection of these accounting estimates.

These discussions typically occur at our quarterly audit committee meetings and include the basis and methodology used in developing and selecting these estimates, the trends in and amounts of these estimates, specific matters affecting the amount of and changes in these estimates, and any other relevant matters related to these estimates, including significant issues concerning accounting principles and financial statement presentation.

These discussions typically occur at our quarterly audit committee meetings and include the basis and methodology

COLUMBIA SPORTSWEAR COMPANY | Q1 2025 FORM 10-Q | 29

used in developing and selecting these estimates, the trends in and amounts of these estimates, specific matters affecting the amount of and changes in these estimates, and any other relevant matters related to these estimates, including significant issues concerning accounting principles and financial statement presentation.

There have been no significant changes to the Company's significant accounting policies described in Note 2 in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2024.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis