What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 269 added, 116 removed, 229 unchanged (63% of the section changed)

14 unchanged sentences

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.

At its core, the ACCELERATE Growth Strategy is intended to elevate the Brand to target a younger and more active consumer while maintaining those consumers that have known and trusted Columbia to offer high quality products at an exceptional value.

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.

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• operating model improvements;

• indirect, or non-inventory, spending.

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 23

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.

• indirect, or non-inventory, spending.

In 2024, our Profit Improvement Program resulted in approximately $90 million of annualized cost savings.

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

On a cumulative basis, actions executed in 2024 and through the first half of 2025 yield annualized cost savings exceeding $150 million.

Despite achieving our target, we continue to pursue profit improvement opportunities.

Our Profit Improvement Program is 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

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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.

presidential administration has announced incremental tariffs on products imported into the U.S.

from most countries.

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.

We expect Vietnam, Bangladesh, Indonesia, and India to represent approximately 42 percent, 26 percent, 11 percent, and 9 percent, respectively, of our finished goods imports into the U.S.

Additionally, we expect for China to represent a minimal percent of our finished goods imports into the U.S.

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.

Additional information about the potential expense related to these incremental tariffs can be found in Part II, Item 5 under "Tariff Expense" of this Quarterly Report on Form 10-Q.

In an effort to mitigate the impact of further potential tariff increases, we have partnered with our finished goods vendors and logistics providers to accelerate the timing of inventory receipts.

Additionally, we have worked with our wholesale customers to ship Fall 2025 orders earlier than initially planned, which will help alleviate storage capacity constraints within our distribution center network.

Nevertheless, we have begun to incur additional temporary storage expenses as a result of these earlier inventory receipts.

Higher tariffs on U.S.

imports are already adversely impacting our U.S.

p roduct input costs.

product 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.

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

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

For 2026, we are implementing 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.

Our goal is to offset higher tariffs over time through a combination of actions including price increases, vendor negotiations, SG&A expense efficiencies and other mitigation tactics.

We intend to balance these actions with our overall growth strategy, seeking to minimize the impact to consumer demand and maximize our market share potential.

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

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

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

consumer demand for many traditional outdoor apparel and footwear brands has softened.

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.

In response to these trends and to drive profitable growth, the Columbia brand initiated 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.

COLUMBIA SPORTSWEAR COMPANY | Q1 2025 FORM 10-Q | 21

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.

In our DTC brick-and-mortar business, we have

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 24

opened a small number of branded stores in high-traffic shopping malls in North America, featuring elevated product assortments that showcase Columbia’s apparel and footwear innovations.

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.

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 continuing to serve 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.

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

In August 2025, we began the roll out of our new global marketing platform that will be the Columbia brand character and voice for years to come.

This new campaign is designed to bring Columbia back to the roots of what made us an iconic global brand, by leveraging our signature irreverence and humor in memorable advertising.

Not only are we investing more in demand creation, but we are also investing more efficiently, leveraging modern digital and social-first strategies.

We are launching a new site redesign on Columbia.com with enhanced mobile capabilities and up-leveled photography that highlights the beauty and craftsmanship of our iconic products.

We are also enhancing our product assortment to emphasize innovation and style, with new product launching this coming Fall.

International Trends | We have not seen a meaningful change in trends in the majority of our international businesses, which were quite healthy in the first half of 2025.

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

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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 March 31,

Three Months Ended June 30,

Six Months Ended June 30,

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

2025 2024 2025 2024

Net sales $ 605,246 100.0 % $ 570,244 100.0 % $ 1,383,698 100.0 % $ 1,340,226 100.0 %

3 unchanged sentences

Net licensing income 4,929 0.8 % 5,528 1.0 % 9,851 0.7 % 9,920 0.7 %

Operating income 46,508 6.0 % 44,681 5.8 %

Operating income (loss) (23,591) (3.9) % (23,802) (4.2) % 22,917 1.7 % 20,879 1.6 %

Interest income, net 4,838 0.8 % 8,344 1.5 % 11,655 0.8 % 17,541 1.3 %

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2,164 0.4 % 476 0.1 % 3,715 0.3 % 747 0.1 %

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

Income tax expense 12,628 1.6 % 11,849 1.5 %

Net income $ 42,248 5.4 % $ 42,300 5.5 %

Diluted earnings per share $ 0.75 $ 0.71

Income (loss) before income tax (16,589) (2.7) % (14,982) (2.6) % 38,287 2.8 % 39,167 3.0 %

Income tax expense (benefit) (6,393) (1.1) % (3,241) (0.6) % 6,235 0.5 % 8,608 0.6 %

Net income (loss) $ (10,196) (1.7) % $ (11,741) (2.0) % $ 32,052 2.3 % $ 30,559 2.4 %

Diluted earnings (loss) per share $ (0.19) $ (0.20) $ 0.58 $ 0.51

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 26

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

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

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

Three Months Ended March 31,

Three Months Ended June 30,

(in thousands, except for percentages) Reported

Adjust for Foreign Currency Translation Constant-currency

% Change Constant-currency

Brand net sales:

Columbia $ 548,345 $ (2,202) $ 546,143 $ 508,613 8% 7%

SOREL 18,826 (5) 18,821 21,034 (10)% (11)%

prAna 20,537 3 20,540 21,796 (6)% (6)%

Mountain Hardwear 17,538 (42) 17,496 18,801 (7)% (7)%

Total $ 605,246 $ (2,246) $ 603,000 $ 570,244 6% 6%

Product category net sales:

Apparel, accessories and equipment $ 494,302 $ (1,353) $ 492,949 $ 463,940 7% 6%

Footwear 110,944 (893) 110,051 106,304 4% 4%

Total $ 605,246 $ (2,246) $ 603,000 $ 570,244 6% 6%

Channel net sales:

Wholesale $ 317,218 $ (1,015) $ 316,203 $ 278,384 14% 14%

Direct-to-consumer 288,028 (1,231) 286,797 291,860 (1)% (2)%

Total $ 605,246 $ (2,246) $ 603,000 $ 570,244 6% 6%

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

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

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

The growth in our EMEA and LAAP net sales was largely driven by increased net sales of our Columbia brand across both wholesale and DTC channels in most markets.

We attribute the international strength of the Columbia brand to the execution of our business strategies and brand positioning, as well as to the benefit of certain trends and/or factors favorably impacting the outdoor apparel and footwear sector.

The growth in our Canada net sales reflects the impact of favorable timing of wholesale shipments, partially offset by declines in our Canada DTC business.

The decline in the U.S.

net sales was driven by declines in our U.S.

DTC e-commerce and brick-and-mortar businesses, partially offset by growth in our U.S.

wholesale business.

The decline in our U.S.

DTC e-commerce business was 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 decline in our U.S.

DTC brick-and-mortar business was attributable to the closure of our temporary clearance locations, partially offset by contributions from new stores.

The increase in wholesale net sales reflected the impact of favorable timing of wholesale shipments and increased Spring 2025 orders, partially offset by lower closeout sales.

Underlying business trends within our U.S.

wholesale business remain under pressure.

Gross Profit.

Gross profit is summarized in the following table:

Three Months Ended June 30,

(in thousands, except for percentages and basis points) 2025 2024 Change

Gross profit $ 297,108 $ 273,419 $ 23,689 9 %

Gross margin 49.1 % 47.9 % 120 bps

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 27

Gross margin expanded primarily due to the following factors:

• an approximate 245 bps increase in channel profitability resulting from healthier overall inventory composition, which enabled higher product margins across our wholesale and DTC channels.

Higher wholesale margins were driven by lower closeout sales with higher margins and a favorable product net sales mix.

Higher DTC margins were driven by less promotional activity and lower outbound freight costs;

partially offset by

• unfavorable channel and regional net sales mix resulting from a higher portion of wholesale net sales, including distributor net sales, which generally carry lower margins.

Selling, General and Administrative Expenses.

SG&A expenses are summarized in the following table:

Three Months Ended June 30,

(in thousands, except for percentages and basis points) 2025 2024 Change

Selling, general and administrative expenses $ 325,628 $ 302,749 $ 22,879 8 %

Selling, general and administrative expenses as percent of net sales 53.8 % 53.1 % 70 bps

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

• higher omni-channel expenses of $12.7 million, reflecting higher DTC brick-and-mortar expenses associated with new stores, partially offset by temporary clearance location closures;

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

• higher other expenses, reflecting a variety of both recurring and non-recurring expenses.

Interest Income, Net.

Interest income, net is summarized in the following table:

Three Months Ended June 30,

(in thousands, except for percentages) 2025 2024 Change

Interest income, net $ 4,838 $ 8,344 $ (3,506) (42) %

Interest income, net as a percent of net sales 0.8 % 1.5 %

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

Income Tax Benefit.

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

Three Months Ended June 30,

(in thousands, except for percentages) 2025 2024 Change

Income tax benefit $ ( 6,393 ) $ (3,241) $ (3,152) 97 %

Effective income tax rate 38.5 % 21.6 %

Our effective income tax rate increased primarily due to a tax benefit associated with foreign currency losses.

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 28

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

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

Six Months Ended June 30,

(in thousands, except for percentages)

18 unchanged sentences

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

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.

Our global net sales increase was driven by growth within our EMEA and LAAP regions, partially offset by declines in the U.S.

and Canada, as compared to the same period in 2024.

The growth in our EMEA and LAAP net sales was largely driven by increased net sales of our Columbia brand across both wholesale and DTC channels in most markets.

The decline in the U.S.

net sales was driven by declines in our U.S.

DTC e-commerce and brick-and-mortar businesses, partially offset by growth in our U.S.

wholesale business.

The decline in our U.S.

A modest decline in our U.S.

DTC brick-and-mortar business was attributable to the closure of our temporary clearance locations, partially offset by contributions from new stores.

The increase in wholesale net sales reflected the impact of favorable timing of wholesale shipments and increased Spring 2025 orders, partially offset by lower closeout sales.

Underlying business trends within our U.S.

wholesale business remain under pressure.

The decline in Canada net sales was primarily attributable to a difficult macroeconomic environment as global uncertainty weighs on consumer spending, coupled with a shift of consumers turning to local brands.

Gross Profit.

Gross profit is summarized in the following table:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands, except for percentages and basis points)

2 unchanged sentences

Gross margin 50.1 % 49.5 % 60 bps

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.

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 29

Gross margin expanded primarily due to a favorable increase in channel profitability resulting from healthier overall inventory composition which enabled higher product margins across our wholesale and DTC channels.

Higher wholesale margins were driven by lower closeout sales with higher margins.

Higher DTC margins were driven by less promotional activity and lower outbound freight costs.

Selling, General and Administrative Expenses.

SG&A expenses are summarized in the following table:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands, except for percentages and basis points)

3 unchanged sentences

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

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

• higher omni-channel expenses of $19.6 million, reflecting higher DTC brick-and-mortar expenses associated with new stores, partially offset by temporary clearance location closures;

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

• higher other expenses, reflecting a variety of both recurring and non-recurring expenses.

Interest Income, Net.

Interest income, net is summarized in the following table:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands, except for percentages)

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands, except for percentages)

2 unchanged sentences

Effective income tax rate 16.3 % 22.0 %

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.

Our effective income tax rate decreased primarily due to a tax benefit associated with foreign currency losses.

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 30

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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

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

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

Three Months Ended June 30,

(in thousands, except for percentage changes) Reported

Adjust for Foreign Currency Translation Constant-currency

% Change Constant-currency

$ 335,117 $ — $ 335,117 $ 340,228 (2)% (2)%

LAAP 112,333 (928) 111,405 99,484 13% 12%

EMEA 130,562 (2,010) 128,552 103,922 26% 24%

Canada 27,234 692 27,926 26,610 2% 5%

$ 605,246 $ (2,246) $ 603,000 $ 570,244 6% 6%

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

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

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

Three Months Ended June 30,

(in thousands) 2025 2024 Change

$ 17,338 $ 23,466 $ (6,128)

LAAP 7,022 6,082 940

EMEA 21,630 14,419 7,211

Canada (1,954) (23) (1,931)

Total segment operating income 44,036 43,944 92

Unallocated corporate expenses 67,627 67,746 (119)

Operating loss $ (23,591) $ (23,802) $ 211

operating income decreased $6.1 million to $17.3 million, or 5.2% of net sales, for the second quarter of 2025 from $23.5 million, or 6.9% of net sales, for the comparable period in 2024.

The decrease was driven primarily by decreased net sales and increased segment SG&A expenses, partially offset by increased gross profit.

net sales decreased $5.1 million, or 2%, for the second quarter of 2025, compared to the same period in 2024, primarily driven by decreased net sales in our DTC e-commerce and brick-and-mortar businesses, partially offset by net sales growth in our U.S.

wholesale business.

The decline in our U.S.

DTC brick-and-mortar business was attributable to the closure of our temporary clearance locations, partially offset by contributions from new stores.

As of June 30, 2025, our U.S.

business operated 171 retail stores and 7 temporary clearance locations, compared to 163 retail stores and 46 temporary clearance locations for the comparable period in 2024.

The increase in wholesale net sales reflected a shift of Spring 2025 and Fall 2025 shipments into the second quarter of 2025 and increased Spring 2025 orders, partially offset by lower closeout sales.

segment SG&A expenses increased as a percentage of net sales to 40.0% for the second quarter of 2025, compared to 35.1% for the same period in 2024, driven primarily by fixed SG&A expense deleverage on decreased net sales.

In total, U.S.

segment SG&A expenses increased 12.1% for the three months ended June 30, 2025, as compared to the same period in 2024, driven primarily by our investment in demand creation in line with our ACCELERATE Growth Strategy.

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 31

LAAP operating income increased $0.9 million to $7.0 million, or 6.3% of net sales, for the second quarter of 2025 from $6.1 million, or 6.1% of net sales, for the comparable period in 2024.

LAAP net sales increased 13% (12% constant-currency), for the second quarter of 2025, compared to the same period in 2024, primarily driven by our China, LAAP distributor and Japan businesses, partially offset by a decline in our Korea business.

The growth in our China business was driven by robust demand across all channels, which we believe was attributable to the execution of our marketplace strategies, including premium product offerings and unique marketing activations.

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

The growth in our LAAP distributor business was driven by growth in our Fall 2025 distributor orders as compared to the same period in the prior year.

The growth in our Japan business was driven by healthy demand across all channels, which we believe was attributable to the execution of our marketplace strategies, as well as the effect of increased inbound international tourism.

The decline in our Korea business reflected unfavorable effects from foreign currency fluctuation, which more than offset constant-currency net sales growth within our Korea wholesale business, which reflected a shift of Fall 2025 shipments into the second quarter of 2025, partially offset by a decline in our Korea DTC business.

LAAP segment SG&A expenses decreased as a percentage of net sales to 39.8% for the second quarter of 2025, compared to 40.9% for the same period in 2024, driven by fixed SG&A expense leverage on increased net sales.

In total, LAAP segment SG&A expenses increased 9.9% for the three months ended June 30, 2025, as compared to the same period in 2024.

EMEA operating income increased $7.2 million to $21.6 million, or 16.6% of net sales, for the second quarter of 2025 from $14.4 million, or 13.9% of net sales, for the comparable period in 2024.

The increase was driven primarily by increased net sales and gross profit, partially offset by increased segment SG&A expenses.

EMEA net sales increased $26.6 million, or 26% (24% constant-currency), for the second quarter of 2025, compared to the same period in 2024, primarily driven by our EMEA distributor and Europe-direct businesses.

The growth in our EMEA distributor business was primarily driven by growth in our Fall 2025 distributor orders, as well as a shift of Fall 2025 shipments out of the third quarter of 2025 into the second quarter of 2025, as compared to the same period in 2024.

The growth in our Europe-direct businesses was driven by robust demand across all channels, which we believe was attributable to the execution of our marketplace strategies, including marketing activations and elevating the online and in-store customer experience.

EMEA segment SG&A expenses decreased as a percentage of net sales to 22.9% for the second quarter of 2025, compared to 23.3% in 2024, driven by fixed SG&A expense leverage on increased net sales.

In total, EMEA segment SG&A expenses increased 23.3% for the three months ended June 30, 2025, as compared to the same period in 2024.

Canada operating loss increased $1.9 million to $2.0 million, or 7.2% of net sales, for the second quarter of 2025 from $0.1 million, or 0.1% of net sales, for the comparable period in 2024.

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

Canada net sales increased $0.6 million, or 2% (5% constant-currency), for the second quarter of 2025, compared to the same period in 2024, primarily driven by increased net sales in our Canada wholesale business, partially offset by decreased net sales in our Canada DTC business.

Canada segment SG&A expenses increased as a percentage of net sales to 41.0% for the second quarter of 2025, compared to 35.8% for the same period in 2024, driven primarily by fixed SG&A expense deleverage on decreased net sales.

In total, Canada segment SG&A expenses increased 17.0% for the three months ended June 30, 2025, as compared to the same period in 2024.

Unallocated Corporate Expenses

Unallocated corporate expenses decreased by $0.1 million to $67.6 million in the second quarter of 2025, from $67.7 million for the same period in 2024.

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 32

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands, except for percentage changes)

9 unchanged sentences

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

7 unchanged sentences

Operating income $ 22,917 $ 20,879 $ 2,038

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.

segment operating income decreased $13.2 million to $83.3 million, or 10.3% of net sales, for the six months ended June 30, 2025 from $96.5 million, or 11.8% of net sales, for the comparable period in 2024.

The decrease was driven primarily by decreased net sales and increased segment SG&A expenses, partially offset by increased gross profit.

net sales decreased $8.3 million, or 1%, for the six months ended June 30, 2025, compared to the same period in 2024, driven primarily by decreased net sales in our U.S.

DTC e-commerce and brick-and-mortar businesses, partially offset by net sales growth in our U.S.

wholesale business.

The decline in our U.S.

DTC business was attributable to a challenging e-commerce environment for outdoor brands and increased competition within the outdoor lifestyle category, coupled with a difficult macroeconomic environment weighing on consumer sentiment.

The decline in our U.S.

DTC brick-and-mortar business was attributable to the closure of our temporary clearance locations, partially offset by contributions from new stores.

As of June 30, 2025, our U.S.

business operated 171 retail stores and 7 temporary clearance locations, compared to 163 retail stores and 46 temporary clearance locations for the comparable period in 2024.

The increase in wholesale net sales reflected a shift of Fall 2025 shipments into the first half of 2025 and increased Spring 2025 orders, partially offset by lower closeout sales.

segment SG&A expenses increased as a percentage of net sales to 34.8% for the six months ended June 30, 2025, compared to 31.7% for the same period in 2024, driven primarily by fixed SG&A deleverage on decreased net sales.

In total, U.S.

segment SG&A expenses increased 8.6% for the six months ended June 30, 2025, as compared to the same period in 2024, driven primarily by our investment in demand creation in line with our ACCELERATE Growth Strategy.

LAAP segment operating income increased $5.4 million to $33.4 million, or 12.6% of net sales, for the six months ended June 30, 2025 from $27.9 million, or 11.7% of net sales, for the comparable period in 2024.

The increase was driven primarily by increased net sales and gross profit, partially offset by increased segment SG&A expenses.

LAAP net sales increased $26.4 million, or 11% (13% constant-currency), for the six months ended June 30, 2025, compared to the same period in 2024, primarily driven by our China, LAAP distributor and Japan

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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.

businesses, partially offset by a decline in our Korea business.

The growth in our China business reflected continued robust demand, which we believe was attributable to the execution of our marketplace strategies throughout the first half of 2025, including premium product offerings and unique marketing strategies.

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 growth in our LAAP distributor business was driven by growth in our Spring 2025 and Fall 2025 distributor orders as compared to the same period in the prior year.

The growth in our Japan business was driven by strong demand across all channels, which we believe was attributable to the execution of our marketplace strategies, as well as the effect of increased inbound international tourism throughout the first half of 2025, as compared to the same period in 2024.

The decline in our Korea business reflected unfavorable effects from foreign currency fluctuation, which more than offset constant-currency net sales growth resulting from a shift of Fall 2025 shipments into the first half of 2025 and consumer demand for late season products within our Korea wholesale business, partially offset by a decline in our Korea DTC business.

LAAP segment SG&A expenses decreased as a percentage of net sales to 37.0% for the six months ended June 30, 2025, compared to 38.2% for the same period in 2024, primarily driven by fixed SG&A leverage on increased net sales.

In total, LAAP segment SG&A expenses increased 7.6% for the six months ended June 30, 2025, as compared to the same period in 2024.

EMEA segment operating income increased $7.0 million to $40.6 million, or 17.1% of net sales, for the six months ended June 30, 2025 from $33.6 million, or 16.1% of net sales, for the comparable period in 2024.

The increase was driven primarily by increased net sales and gross profit, partially offset by increased segment SG&A expenses.

EMEA net sales increased $29.6 million, or 14% (15% constant-currency), for the six months ended June 30, 2025, compared to the same period in 2024, primarily driven by our EMEA distributor and Europe-direct businesses.

The growth in our EMEA distributor business was primarily driven by growth in our Fall 2025 and Spring 2025 distributor orders as compared to the same period in the prior year.

The growth in our Europe-direct business was driven by robust demand across all channels, which we believe was attributable to the execution of our marketplace strategies so far this year, including marketing activations and elevating the online and in-store customer experience.

EMEA segment SG&A expenses increased as a percentage of net sales to 26.0% for the six months ended June 30, 2025, compared to 25.4% for the same period in 2024.

In total, EMEA segment SG&A expenses increased 16.9% for the six months ended June 30, 2025, as compared to the same period in 2024.

Canada segment operating income decreased $4.1 million to $7.0 million, or 9.4% of net sales, for the six months ended June 30, 2025 from $11.1 million, or 14.1% 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.

Canada net sales decreased $4.2 million, or 5% (0% constant-currency), for the six months ended June 30, 2025, compared to the same period in 2024, driven by decreased net sales in our Canada DTC and wholesale businesses.

Canada segment SG&A expenses increased as a percentage of net sales to 30.3% for the six months ended June 30, 2025, compared to 25.2% for the same period in 2024, primarily driven by fixed SG&A expense deleverage on decreased net sales.

In total, Canada segment SG&A expenses increased 14.1% for the six months ended June 30, 2025, as compared to the same period in 2024.

Unallocated Corporate Expenses

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.

Unallocated corporate expenses decreased by $6.9 million to $141.3 million for the six months ended June 30, 2025 from $148.2 million for the same period in 2024.

LIQUIDITY AND CAPITAL RESOURCES

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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.

product in the third and fourth quarters of 2025.

While we currently project having adequate liquidity to meet our working capital needs in the third quarter, we have a $500.0 million committed credit facility on which we can draw, should it be needed, until we receive cash receipts in the fourth quarter.

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 34

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Cash flows are summarized in the following table:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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Net effect of exchange rate changes on cash 13,501 (8,381) 21,882

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 $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.

Net decrease in cash and cash equivalents $ (104,065) $ (8,497) $ (95,568)

The change in cash flows used in operating activities for the six months ended June 30, 2025 was primarily driven by a $181.2 million decrease in cash provided by changes in assets and liabilities.

The most significant comparative changes in assets and liabilities included Inventories, Accounts Payable, and Accounts receivable.

A $129.3 million increase in cash used in Inventories and $56.9 million increase in cash provided by Accounts payable were primarily driven by the strategic timing of inventory receipts and payments as we proactively seek to mitigate the impact of potential further incremental tariffs.

A $55.2 million decrease in cash provided by Accounts receivable reflected lower wholesale sales collected in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024.

Net cash provided by investing activities was $110.6 million for the six months ended June 30, 2025, compared to $30.0 million of cash provided by investing activities for the six months ended June 30, 2024.

The increase in cash provided by investing was primarily driven by lower purchases of short-term investments for the six months ended June 30, 2025, as compared to the same period in 2024.

Net cash used in financing activities was $165.3 million for the six months ended June 30, 2025, compared to $139.0 million for the six months ended June 30, 2024.

The increase in cash used in financing was primarily driven by higher share repurchases of common stock for the six months ended June 30, 2025, as compared to the same period in 2024.

Sources of Liquidity

Cash and cash equivalents and short-term investments

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.

As of June 30, 2025, we had cash and cash equivalents of $427.8 million and short-term investments of $151.2 million, compared to $531.9 million and $283.6 million, respectively, as of December 31, 2024 and $341.8 million and $369.3 million, respectively, as of June 30, 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.

As of June 30, 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.

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).

Further, as of June 30, 2025, our European subsidiary had available an unsecured, committed line of credit, which is guaranteed by the Company and provides for borrowings up to €5.0 million (approximately US$5.9 million).

There was no balance outstanding under the facility.

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.

As of June 30, 2025, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$101.8 million.

There were no balances outstanding under these facilities.

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

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.

As of June 30, 2025, our inventory balance increased to $926.9 million, compared to $823.6 million as of June 30, 2024, as we accelerated the production and receipt of Fall 2025 inventory, to the extent possible, to mitigate the impact of potential further incremental tariffs, as compared to the same period in 2024.

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.

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

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

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Other cash commitments

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.

Our inventory purchase obligations were $315.9 million as of June 30, 2025, compared to $473.0 million and $450.9 million as of December 31, 2024 and June 30, 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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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

COLUMBIA SPORTSWEAR COMPANY | Q2 2025 FORM 10-Q | 36

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.

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.

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.

4 unchanged sentences

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