What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-27 · 163 added, 200 removed, 241 unchanged (60% of the section changed)

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and two major product categories:

apparel, accessories and equipment products and footwear products.

consisting of apparel, accessories and equipment products, and footwear products.

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

Footwear products are provided by our Columbia and SOREL brands.

We sell our products in more than 110 countries and operate in four geographic segments:

We sell our products in 115 countries and operate in four geographic segments:

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 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.

Through the ACCELERATE Growth Strategy, we will focus on achieving the following objectives:

In 2024, we announced the Columbia brand (the "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 while maintaining those consumers that have known and trusted Columbia to offer high quality products at an exceptional value.

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

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

2025 was an important milestone in this journey.

The Columbia brand launched its new brand platform "Engineered for Whatever" through a global Brand campaign in print, on social and in-person.

The Columbia brand also released certain new products designed with a younger, more active consumer in mind, and re-launched the U.S.

Columbia.com website, with enhanced features and photography.

We're encouraged with early indicators, which signal that our differentiated marketing communications and enhanced products are resonating with consumers, providing us confidence as we plan for future seasons.

Through the ACCELERATE Growth Strategy, we are focused on achieving the following objectives:

• steward existing consumer segments while focusing on bringing new younger and active consumers into the Brand;

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• create product based on a consumer-centric product construct;

• enhance the positioning of the Brand in the U.S.

• enhance the positioning of the Brand globally, particularly in the U.S.

• 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.

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Profit Improvement Program

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.

In 2024, we focused on four areas of cost reduction and realignment, including:

Concurrent with the ACCELERATE Growth Strategy, we successfully executed our multi-year Profit Improvement Program, achieving our objectives to position the Company to scale the business with profitable growth and improve the efficiency of our operations.

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

• operational cost savings;

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• indirect, or non-inventory, spending.

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In 2024, our Profit Improvement Program delivered approximately $90 million in realized cost savings, net of approximately $3 million to $4 million of severance and other costs.

While this program has meaningfully slowed SG&A spending growth, it has not been enough to align our cost structure with current sales levels.

With this in mind, we are expanding the review of our cost structure as we pursue additional savings and enhance profitability.

As we expand the program, our objectives include exceeding our previously stated goal of achieving $125 to $150 million in annualized savings by 2026 and positioning the Company to achieve SG&A expense leverage and operating margin expansion in future years.

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 2025 yielded annualized cost savings exceeding $150 million.

These savings enabled the Company to slow the rate of SG&A growth while investing in the Columbia ACCELERATE Growth Strategy.

Going forward, we remain committed to driving SG&A expense efficiency and achieving operating margin leverage, over time.

Business Environment and Trends

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 will continue to manifest themselves in certain regions where we operate.

Changing U.S.

Regulatory Environment | We are headquartered in the U.S.

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

The recent U.S.

presidential administration change may impact us in several respects, including in the areas of taxes and tariffs.

With respect to tariffs, tariffs have long been built into apparel and footwear pricing and we attempt to minimize the impact felt by consumers through diversification of our source base and product engineering.

To that end, we expect less than 3 percent of our finished products imported into the U.S.

in 2025, by dollar value, will be manufactured in China.

To the extent broad-based tariffs are imposed by the U.S.

that impact a larger percentage of our source base, we may choose to raise prices to offset the increase in our cost of goods sold.

Tariffs can also have an impact outside of expenses incurred by the Company or prices to consumers;

they could impact the demand for our products as consumers weigh discretionary spending or even impact the availability of certain sourcing regions.

Retaliatory measures may also increase and impact our ability to compete in other regions of the world.

Increasing U.S.

Competitive Environment and Evolving U.S.

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

outdoor and active apparel and footwear market has increased as many brands have shifted their strategies and new parties 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 the Columbia brand ACCELERATE Growth Strategy, will enable us to better compete in this evolved U.S.

marketplace in the future.

Evolving North America Omni-channel Strategy | As part of the Columbia brand ACCELERATE Growth Strategy, we are approaching the North America marketplace with an omni-channel perspective and evaluating how, when, and where we utilize promotions across all channels to attract different consumer segments.

We intend to retain our historical value-oriented consumers while attracting younger and more active consumers to the Columbia brand.

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

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 are opening 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 will 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 implemented pricing, promotional and segmentation strategies which are also intended to elevate the positioning of the Brand in the marketplace.

While we expand the Columbia brand's 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 believe general economic uncertainty in the U.S.

and Canada is particularly impactful to these value-oriented consumers.

Normalizing Inventory Levels in the U.S.

| In 2024 we operated numerous temporary clearance locations in the U.S.

to move through excess inventory in a way that provided stronger financial returns to the Company in comparison to wholesale closeout sales channel alternatives and that had a less disruptive impact in the marketplace.

As we exited 2024, our inventories were down 7% for the year and we plan to rapidly close our temporary clearance locations now that our inventories are in a healthier position.

We also believe wholesale partners are entering 2025 with cleaner inventory levels.

We expect these changes in inventory in the market will support expansion of the Company's gross margin in 2025.

Changing International Consumer Trends | We believe consumers in many international markets have adjusted their shopping habits.

In China, the outdoor apparel and footwear market has expanded, driven, in part, by governmental efforts to stimulate outdoor recreation.

In Japan, the weakness of the Japanese Yen has contributed to an influx of international tourism which has benefited consumer demand, while

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domestic consumption has been soft due to inflationary pressures.

Despite economic and geopolitical challenges in many other international markets, the outdoor apparel and footwear industry has been resilient and demand for our products has been healthy.

We expect most of our international businesses to continue to grow in 2025, despite currency pressures.

Supply Chain Disruptions | Continuing Red Sea disruptions resulted in longer inbound transit times for Fall 2024 inventory.

With pressure on key trade lanes, we expect inbound transit times to be elevated until the resolution of this conflict, which should result in reduced transit times and more favorable transit pricing.

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 2024, over 60% of our net sales and over 90% of o ur operating income were realized in the second half of the year.

The Columbia brand in the U.S.

| The Columbia brand in the U.S.

has been under pressure due to numerous factors, including changes in consumer trends and competitive pressures.

While product functionality, quality and value remain important elements for consideration, outdoor consumer preferences have increasingly shifted to also incorporate versatility and style for everyday wear.

Athletic, athleisure, emerging outdoor, and other brands have capitalized on this casualization and style trend.

The Columbia brand's ACCELERATE Growth Strategy is intended to overcome certain of these headwinds, elevate the consumers' perception of the Brand and bring younger and more active consumers into the Brand, all while continuing to serve historical value-oriented consumers and to fuel future revenue growth.

To elevate consumers’ perception of the Columbia brand, the Brand began to refresh portions of its product line to resonate more with target consumers and launched a new Brand marketing campaign, Engineered for Whatever, coupled with increased investment in demand creation.

These improvements, among others, are expected to elevate consumers' perception of the Columbia brand over time with the focus on younger and more active consumers becoming more pervasive and sustained within the Brand.

While the increased investment in demand creation began in the second half of 2025, we expect such investment to continue in seasons to come.

We have already seen proof points of the ACCELERATE Growth Strategy in products such as the Amaze Puff, which brought new younger consumers into the Brand.

Trade Policy Uncertainty | The majority of our revenue is derived from products sold in the U.S.

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

On February 20, 2026, the U.S.

Supreme Court held in Learning Resources that IEEPA does not authorize a U.S.

President to impose tariffs during peacetime national emergencies and that the challenge to the legality of the incremental tariffs was within the exclusive jurisdiction of the CIT, thus affirming a prior decision of the CIT that the U.S.

President lacked authority to impose incremental tariffs.

As a result, on February 20, 2026, the U.S.

President issued an executive order stating that the incremental tariffs were no longer in effect and ending the collection of the incremental tariffs.

However, the U.S.

President then issued an additional executive order imposing tariffs pursuant to Section 122 of the Trade Act of 1974 for 150 days, effective on February 24, 2026.

We continue to monitor the changing tariff and trade restrictions and are evaluating the potential impacts of these decisions on our business plans for 2026 and any potential impacts on consumer demand and pricing expectations.

We are also pursuing all avenues to recover the approximately $50 million in incremental tariffs that we paid in 2025, in addition to the incremental tariffs we have paid in 2026 (see Part I, Item 3 of this Annual Report on Form 10-K for additional information).

Macro-economic Pressures | The impacts of the current U.S.

economic environment, including constrained discretionary spending and an increased focus on value among the low-to-middle income consumer, is impacting consumer and customer behavior and demand for our products.

In this environment, our tariff-induced price increases for the U.S.

Spring 2026 and Fall 2026 seasons may further impact demand for our products as end consumers weight discretionary spending and wholesale customers rationalize their open to buy budgets.

We believe these trends will persist in 2026 and that our efforts to elevate the Columbia brand to drive consumer consideration and affinity are intended to help offset macro-economic pressures.

RESULTS OF OPERATIONS

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The following discussion of our results of operations and liquidity and capital resources should be read in conjunction with Part II, Item 8 of this Annual Report on Form 10-K.

Non-GAAP Financial Measure

To supplement financial information reported in accordance with accounting principles generally accepted in the U.S.

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.

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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 discussion includes references to constant-currency net sales, and we provide a reconciliation of this non-GAAP measure to the most directly comparable financial measure calculated in accordance with GAAP below.

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Results of Operations — Consolidated

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Selling, general and administrative expenses 1,502,506 44.2 % 1,443,906 42.9 %

Impairment of goodwill

Impairment of goodwill and intangible assets

29,000 0.9 % — — %

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Operating income

207,039 6.1 % 270,741 8.0 %

Interest income, net 17,867 0.5 % 27,703 0.8 %

Other non-operating income (expense), net

4,718 0.1 % (257) — %

Income before income tax

229,624 6.8 % 298,187 8.9 %

Income tax expense

Net income $ 223,273 6.6 % $ 251,400 7.3 %

52,400 1.5 % 74,914 2.2 %

$ 177,224 5.2 % $ 223,273 6.6 %

Diluted earnings per share

$ 3.24 $ 3.82

COLUMBIA SPORTSWEAR COMPANY | 2025 FORM 10-K | 25

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Apparel, accessories and equipment

$ 2,712,390 $ 364 $ 2,712,754 $ 2,687,174 1% 1%

Footwear 684,961 (1,973) 682,988 681,408 1% —%

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

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

and Canada, partially offset by strength in international markets, as compared to 2023.

The declines in wholesale net sales were driven by lower Spring and Fall 2024 orders, resulting from retailer cautiousness, including the transition of products to non-PFAS chemistry and a change in promotional practices, and a difficult competitive environment throughout the year, primarily in the U.S and Canada.

Internationally, our net sales growth was broad-based across many markets within our LAAP and EMEA regions.

We believe international net sales growth 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.

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

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

and Canada throughout the year, which we attribute to a challenging environment and increased competition within the outdoor lifestyle category, and our decision to de-emphasize promotions on Columbia.com as part of the Brand's ACCELERATE Growth Strategy.

Our global net sales increase reflected strength of the Columbia brand across most of our international markets and channels within those markets, partially offset by underlying weakness in the U.S.

across channels and brands.

Gross Profit.

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Gross margin 50.5 % 50.2 % 30 bps

Gross margin expanded primarily due to the following factors:

• favorable inbound freight costs;

• favorable region and channel net sales mix;

partially offset by

• unfavorable decrease in channel profitability reflecting higher clearance and promotional activity.

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Selling, General and Administrative Expenses ("SG&A").

Gross margin expanded primarily due to a favorable increase in channel profitability driven by healthier inventory composition resulting in less clearance and promotional activity, partially offset by the impact of unmitigated incremental U.S.

Selling, General and Administrative Expenses.

SG&A expenses are summarized in the following table:

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Selling, general and administrative expenses as percent of net sales 44.2 % 42.9 % 130 bps

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

• higher omni-channel expenses of $40.5 million, reflecting higher DTC brick-and-mortar expenses, including costs associated with new stores and temporary clearance locations and personnel expenses;

• higher incentive compensation, reflecting higher performance against target as compared to 2023;

• higher omni-channel expenses of $36.9 million, reflecting higher DTC brick-and-mortar expenses, including the impact of new stores and variable expenses, as well as impairment charges related to underperforming retail stores - particularly in the U.S., partially offset by temporary clearance location closures in the U.S.;

• higher demand creation expenses of $24.1 million, primarily reflecting increased investment in demand creation to support the Columbia brand's ACCELERATE Growth Strategy;

• higher other expenses, reflecting certain SG&A expenses associated with our Profit Improvement Program;

partially offset by

• lower supply chain expenses of $28.7 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.

Impairment of Goodwill.

For the year ended December 31, 2024, there were no impairment charges recorded for goodwill.

For the year ended December 31, 2023, we recognized $25.0 million of impairment charges related to goodwill attributable to the prAna reporting unit resulting from our annual fourth quarter impairment testing.

Refer to our Critical Accounting Estimates below for further information regarding impairments.

• lower expenses in targeted areas of the business resulting from our Profit Improvement Program.

Impairment of Goodwill and Intangible Assets.

For the year ended December 31, 2025, we recognized $29.0 million of impairment charges for the prAna and Mountain Hardwear trade names and goodwill reporting units.

These charges consisted of a $12.2 million impairment charge related to the Mountain Hardwear goodwill reporting unit, comprising the full Mountain Hardwear goodwill balance, an $8.8 million impairment charge related to the prAna goodwill reporting unit, and an $8.0 million impairment charge related to the prAna trade name.

Refer to Note 9 in Part II, Item 8 and our Critical Accounting Estimates in Part II, Item 7 of this Annual Report on Form 10-K for further information regarding these impairments.

Interest Income, Net.

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Interest income, net as a percent of net sales 0.5 % 0.8 %

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.

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Effective income tax rate 22.8 % 25.1 %

Income tax expense increased to $74.9 million for the year ended December 31, 2024 from $74.8 million for 2023.

Our effective tax rate was 25.1% for the year ended December 31, 2024 compared to 22.9% for 2023.

For the year ended December 31, 2024, our effective tax rate included a non-recurring expense related to a valuation allowance.

For the year ended December 31, 2023, our effective income tax rate included a non-recurring benefit related to a foreign currency loss resulting from an intercompany transaction and a non-recurring foreign tax benefit.

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Our effective income tax rate decreased primarily due to a non-recurring expense related to a valuation allowance included in the year ended December 31, 2024, as well as a tax benefit associated with foreign currency losses and a revaluation of deferred tax assets included in the year ended December 31, 2025.

Results of Operations — Segment

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Refer to Note 4 in Part II, Item 8 of this Annual Report on Form 10-K for further information.

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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

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segment operating income decreased $59.6 million to $297.1 million, or 15.0% of net sales, in 2025 from $356.7 million, or 17.2% of net sales, in 2024.

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

net sales decreased $173.2 million, or 8%, in 2024, compared to 2023, driven primarily by decreased net sales in our U.S.

wholesale business.

DTC net sales also decreased driven by lower e-commerce net sales, partially offset by net sales growth from our brick-and-mortar business.

The declines in e-commerce net sales were attributable to a challenging e-commerce environment for outdoor brands, increased competition within the outdoor lifestyle category, and our decision to de-emphasize promotions on Columbia.com as part of the Brand's ACCELERATE Growth Strategy.

The increases in brick-and-mortar net sales were primarily driven by temporary clearance locations and new stores for the year ended December 31, 2024.

segment SG&A expenses and other segment items increased as a percentage of net sales to 31.9% in 2024 compared to 30.1% in 2023, primarily driven by fixed SG&A expenses and decreased net sales.

The decrease in U.S.

segment operating income was driven primarily by decreased net sales and increased segment SG&A expenses.

net sales decreased $89.2 million, or 4%, in 2025, compared to 2024, driven by decreased net sales in our U.S.

DTC and wholesale businesses.

We attribute the decline in our U.S.

business to ongoing challenges as we seek to elevate the Columbia brand in the U.S.

marketplace, as well as external factors, including a difficult macroeconomic environment weighing on consumer sentiment.

The decline in our U.S.

business is also partially attributable to lower promotional activity in comparison to elevated levels in the prior year as we sought to normalize inventories across the brand portfolio.

The decline in our U.S.

DTC business was broad-based across the U.S.

DTC brick-and-mortar and e-commerce businesses.

The decline in our U.S.

DTC brick-and-mortar business was further impacted by the closure of temporary clearance locations, partially offset by increased productivity from existing stores and contributions from new stores.

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

DTC brick-and-mortar business operated 173 retail stores and 8 temporary clearance locations, compared to 172 retail stores and 28 temporary clearance locations for the comparable period in 2024.

segment gross margin expanded to 49.6% for the twelve months ended December 31, 2025 from 49.1% for the comparable period in 2024 due to a favorable increase in channel profitability driven primarily by healthier inventory composition resulting in less clearance and promotional activity, partially offset by the impact of unmitigated incremental U.S.

segment SG&A expenses increased as a percentage of net sales to 30.9% in 2025, compared to 27.9% in 2024, driven primarily by fixed SG&A deleverage on decreased net sales.

In total, U.S.

segment SG&A expenses and other segment items decreased for the year ended December 31, 2024 compared to 2023, primarily driven by lower supply chain expenses resulting from more normalized inventory levels and our Profit Improvement Program, including supply chain optimization efforts.

segment SG&A expenses increased 6.0% for the twelve months ended December 31, 2025, as compared to the same period in 2024, driven primarily by our investment in demand creation to support the Columbia brand's ACCELERATE Growth Strategy and impairment charges related to underperforming DTC brick-and-mortar retail stores.

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LAAP segment operating income increased $10.9 million to $87.9 million, or 14.4% of net sales, in 2025 from $77.0 million, or 13.7% of net sales, in 2024.

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

LAAP net sales increased $41.0 million, or 8% (11% constant-currency), in 2024, compared to 2023.

Increased LAAP net sales were primarily driven by our China, LAAP distributor, and, to a lesser extent, our Japan businesses, partially offset by declines in our Korea business.

Increased net sales in our China business reflected continued strong consumer demand, aided by positive outdoor category trends.

Increased net sales in our LAAP distributor business reflected growth in our Fall 2024 and Spring 2025 orders as compared to the same period in the prior year.

Increased net sales in our Japan business were 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.

Decreased net sales in our Korea business reflected a continued challenging environment and increased competition within the outdoor lifestyle category.

LAAP segment SG&A expenses and other segment items decreased as a percentage of net sales to 42.1% in 2024, compared to 44.4% in 2023, primarily driven by increased net sales.

In total, LAAP segment SG&A expenses and other segment items increased for the year ended December 31, 2024 compared to 2023.

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

LAAP net sales increased $50.4 million, or 9% (10% constant-currency), in 2025, compared to 2024, driven primarily by growth in our China, LAAP distributor and Japan businesses, partially offset by a decline in our Korea business.

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

The growth was further aided by continued positive outdoor category trends despite warm weather that dampened fourth quarter demand for cold weather merchandise.

The growth in LAAP distributor net sales was driven by growth in our distributor orders as compared to the same period in the prior year.

The growth in Japan net sales 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 through most of 2025, as compared to the same period in 2024.

The decline in Korea net sales reflected unfavorable effects from foreign currency fluctuation, which more than offset constant-currency net sales growth which included growth in 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 36.4% in 2025, compared to 37.0% in 2024, primarily driven by fixed SG&A leverage on increased net sales.

In total, LAAP segment SG&A expenses increased 7.3% in 2025, as compared to the same period in 2024, primarily driven by higher DTC expenses, including personnel and other variable expenses from higher DTC sales.

EMEA segment operating income increased $17.9 million to $121.4 million, or 21.0% of net sales, in 2025 from $103.5 million, or 20.2% of net sales, in 2024.

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

EMEA net sales increased $42.5 million, or 9% (8% constant-currency), in 2024, compared to 2023, primarily driven by our Europe-direct business.

Increased net sales in our Europe-direct business were driven by robust demand within our DTC brick-and-mortar and e-commerce businesses for the year ended December 31, 2024.

Our Europe-direct wholesale business realized a modest increase in net sales reflecting retailer cautiousness.

Increased net sales in our EMEA distributor business reflected growth in our Fall 2024 and Spring 2025 orders as compared to the same period in 2023.

EMEA segment SG&A expenses and other segment items increased in total and as a percentage of net sales to 28.1% in 2024 compared to 26.8% in 2023.

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

EMEA net sales increased $65.1 million, or 13% (10% constant-currency), in 2025, compared to 2024, driven by growth in our Europe-direct and EMEA distributor businesses.

The growth in Europe-direct net sales was driven by increased demand across all channels.

Europe-direct's DTC brick-and-mortar business drove particularly strong growth throughout the year, reflecting increased productivity from existing outlet stores, as well as contributions from new outlets.

We believe Europe-direct sales growth across channels was also attributable to the execution of our marketplace strategies, including marketing activations, elevating the online and in-store customer experience, and partnering with strategic wholesale partners and brand authenticators.

The growth in EMEA distributor net sales was primarily driven by growth in our distributor orders as compared to the same period in the prior year.

EMEA segment gross margin expanded to 49.3% for the twelve months ended December 31, 2025 from 48.3% for the comparable period in 2024, driven primarily by favorable channel mix, higher channel profitability reflecting lower outbound shipping expenses and favorable product mix.

EMEA segment SG&A expenses increased as a percentage of net sales to 25.4% in 2025, compared to 24.6% in 2024, primarily driven by higher DTC brick-and-mortar expenses, including costs associated with new stores and variable expenses from higher DTC sales.

In total, EMEA segment SG&A expenses increased 16.1% in 2025, as compared to the same period in 2024.

Canada segment operating income decreased $3.4 million to $44.4 million, or 19.3% of net sales, in 2025 from $47.8 million, or 21.0% of net sales, in 2024.

This decrease was primarily driven by lower net sales and gross profit.

Canada net sales decreased $28.9 million, or 11% (10% constant-currency), in 2024, compared to 2023, driven primarily by decreased net sales in our Canada wholesale business.

Decreased net sales in our wholesale business primarily reflected lower Spring and Fall 2024 orders, resulting from retailer cautiousness and a difficult competitive environment throughout the year.

DTC net sales decreased, driven by lower net sales in our Canada e-commerce business, partially offset by an increase in our Canada brick-and-mortar business.

Canada segment SG&A expenses and other segment items increased as a percentage of net sales to 29.1% in 2024 compared to 25.9% in 2023, primarily as a result of fixed expenses and decreased net sales.

In total, Canada segment SG&A expenses and other segment items were flat for the year ended December 31, 2024 compared to 2023.

Canada net sales increased $2.4 million, or 1% (4% constant-currency), in 2025, compared to 2024, driven primarily by our Canada wholesale business, partially offset by declines in our Canada DTC business, reflecting a decline in consumer demand for our Canada DTC e-commerce business.

Canada segment SG&A expenses increased as a percentage of net sales to 23.4% in 2025, compared to 21.6% in 2024, driven primarily by fixed SG&A deleverage on decreased net sales.

In total, Canada segment SG&A expenses increased 9.6% in 2025, as compared to the same period in 2024.

Unallocated corporate expenses

Unallocated corporate expenses decreased by $7.5 million to $314.3 million in 2024 from $321.8 million in 2023.

Unallocated corporate expenses increased by $29.6 million to $343.8 million in 2025 from $314.3 million for the comparable period in 2024, driven primarily by $29.0 million of impairment charges related to Mountain Hardwear and prAna goodwill and the prAna trade name.

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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.

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Our cash position is also impacted by incremental tariff costs for U.S.

While we currently project having adequate liquidity to meet our short-term and long-term working capital needs, 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.

Cash Flow Activities

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$ (89,841) $ 181,550 $ (271,391)

The change in cash flows provided by operating activities was driven by a $86.1 million decrease in cash provided by changes in assets and liabilities, as well as a $59.2 million decrease in cash provided by net income and non-cash adjustments.

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

The $244.7 million decrease in cash provided by Inventories was primarily driven by inventory liquidation efforts throughout 2023 and 2024.

The $135.6 million decrease in cash provided by Accounts receivable reflected cash provided of $123.8 million for the year ended December 31, 2023, primarily driven by a higher portion of fourth quarter wholesale sales collected in 2023 compared to the same period in 2022, as well as cash used of $11.8 million for the year ended December 31, 2024, primarily driven by a lower portion of fourth quarter wholesale sales collected in 2024 as compared to the same period in 2023.

These amounts were partially offset by the $241.0 million decrease in cash used in Accounts payable, reflecting cash used of $85.9 million for the year ended December 31, 2023, primarily resulting from the earlier production of and payment for Spring 2024 and Fall 2024 inventory, as well as cash provided of $155.0 million for the year ended December 31, 2024, primarily resulting from the timing of inventory receipts and related payments, including a reduction in the use of early payments and extension of payment terms with certain vendors.

Net cash provided by investing activities was $87.3 million for 2024, compared to $461.8 million of cash used in investing activities for 2023.

For 2024, net cash provided by investing activities consisted of $816.2 million in cash provided by sales and maturities of short-term investments, partially offset by $669.1 million in cash used for purchases of short-term investments and $59.8 million for capital expenditures.

For 2023, net cash used in investing activities consisted of $528.5 million in cash used for purchases of short-term investments and $54.6 million for capital expenditures, partially offset by $121.3 million in cash provided by sales and maturities of short-term investments.

Net cash used in financing activities was $386.2 million for 2024 compared to $254.8 million for 2023.

For 2024, net cash used in financing activities primarily consisted of repurchases of common stock of $317.8 million and dividend payments to our shareholders of $69.7 million.

For 2023, net cash used in financing activities primarily consisted of repurchases of common stock of $184.0 million and dividend payments to our shareholders of $73.4 million.

The change in cash flows provided by operating activities for 2025 was primarily driven by a $221.1 million decrease in cash provided by changes in assets and liabilities.

The most significant comparative change in assets and liabilities was driven by changes in Accounts payable.

The $155.6 million decrease in cash provided by Accounts payable was driven primarily by a reduction in the use of early payments and extension of payment terms with certain vendors enacted at the end of 2024.

The change in cash flows used in investing activities was primarily driven by lower sales and maturities of short-term investments for the twelve months ended December 31, 2025, as compared to the same period in 2024.

The change in cash flows used in financing activities was primarily driven by lower share repurchases of common stock for the twelve months ended December 31, 2025, as compared to the same period in 2024.

Sources of Liquidity

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As of December 31, 2025, we had cash and cash equivalents of $442.0 million and short-term investments of $348.8 million, compared to $531.9 million and $283.6 million, respectively, as of December 31, 2024.

Domestic Credit Facility

Committed credit facilities

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

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Refer to Note 11 in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding our domestic credit facility.

International Credit Facility

As of December 31, 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$4.6 million).

Further, as of December 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 €5.0 million (approximately US$5.9 million).

There was no balance outstanding under the facility.

Uncommitted credit facilities

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Other Sources

As of December 31, 2025, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$101.2 million.

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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.

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 December 31, 2024, our inventory balance decreased to $690.5 million, compared to $746.3 million as of December 31, 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 December 31, 2025, our inventory balance was relatively flat at $689.5 million, compared to $690.5 million as of December 31, 2024.

While inventory dollars were flat, units were down by approximately 11% as of December 31, 2025, as compared to the same period in 2024.

The 2025 inventory balance included approximately $23 million of incremental tariff costs.

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 2026 capital expenditures of approximately $65 to $75 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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$ 109,510 $ 97,462 $ 84,637 $ 66,055 $ 52,937 $ 152,395 $ 562,996

Tax Cuts and Jobs Act transition tax obligations

13,281 — — — — — 13,281

(1) Refer to Operating Leases in Note 8 in Part II, Item 8 of this Annual Report on Form 10-K.

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Refer to Note 2 in Part II, Item 8 of this Annual Report on Form 10-K for additional information regarding the significant accounting policies and methods used in the preparation of our consolidated financial statements.

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We believe that the estimates, assumptions and judgments involved in the accounting policies described below 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 differ from the estimates we use in applying these critical accounting policies and estimates.

Because of the uncertainty

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inherent in these matters, actual results may 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.

Our critical accounting policies and estimates relate to sales reserves, excess, close-out and slow-moving inventory, impairment of long-lived assets, intangible assets and goodwill, and income taxes.

Our critical accounting policies and estimates relate to sales reserves, excess, close-out and slow-moving inventory, impairment of long-lived assets, impairment of indefinite-lived intangible assets and goodwill, and income taxes.

Management regularly discusses with our Audit Committee each of our critical accounting estimates, the development and selection of these accounting estimates, and the disclosure about each estimate in this Annual Report on Form 10-K.

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The reserve for returns from customers or consumers is the component of our sales-related reserves most susceptible to estimation uncertainty.

These estimates are based on 1) historical rates of product returns and claims;

and 2) events and circumstances that indicate changes to such historical rates are warranted, such as our customers' inventory positions and their anticipated sell-through rates.

These estimates are based on historical rates of product returns and claims, as well as events and circumstances that indicate changes to such historical rates are warranted, such as our customers' inventory positions and their anticipated sell-through rates.

However, actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates.

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As of December 31, 2025, our inventory provisions reduced gross inventory by $18.7 million compared to $20.4 million as of December 31, 2024.

The level of estimated excess inventory as of December 31, 2024 decreased, reflecting the use of our outlet stores and temporary clearance locations to profitably sell excess merchandise.

The level of estimated excess inventory as of December 31, 2025 decreased, reflecting healthier inventory composition.

Long-Lived Assets

Long-lived assets, which include property, plant and equipment, lease right-of-use ("ROU") assets, and capitalized implementation costs for cloud computing arrangements are evaluated for impairment only when events or circumstances indicate the carrying value may not be recoverable.

Long-lived assets, which include property, plant and equipment ("PP&E"), lease right-of-use ("ROU") assets, and capitalized implementation costs for cloud computing arrangements are evaluated for impairment only when events or circumstances indicate the carrying value may not be recoverable.

Our retail store fleet long‐lived assets are generally evaluated at the retail location level.

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An impairment is recorded if the fair value of the asset or asset group is less than the carrying amount.

During 2024, we tested certain long-lived assets consisting of property, plant, and equipment and lease ROU assets for impairment at certain underperforming retail locations.

For the years ended December 31, 2024 and 2023, impairment charges from underperforming retail stores were not material.

Further declines in projected future performance may adversely affect the recovery of retail location assets.

During 2025, we tested certain long-lived assets for impairment at certain underperforming retail locations.

Impairment charges for PP&E were $10.1 million for the year ended December 31, 2025 and were not material for the year ended December 31, 2024.

Indefinite-Lived Intangible Assets and Goodwill

During the third quarter of 2025, the Company identified triggering events related to the prAna and Mountain Hardwear trade names and goodwill reporting units.

As a result, we performed interim quantitative impairment tests where the Company compared the estimated fair values and the prAna and Mountain Hardwear trade names and goodwill reporting units to their carrying values.

Refer to Note 2 and Note 9 in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding these impairments.

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We review and test our intangible assets with indefinite lives and goodwill for impairment in the fourth quarter of each year and when events or changes in circumstances indicate that it is more likely than not that the fair value of the asset or reporting unit is less than its carrying amount.

Our intangible assets with indefinite lives consist of trademarks and trade names (collectively, "trademarks").

Substantially all of our goodwill is recorded in the U.S.

segment and impairment testing for goodwill is performed at the reporting unit level.

Key assumptions used in the discounted cash flow models are cash flow projections and the discount rate.

Cash flow projections are developed in part from our annual planning process.

The discount rate is based on the estimated weighted-average costs of capital of the reporting unit from a market-participant perspective.

When we include market-based valuation methods to estimate fair value of our reporting units as part of the goodwill impairment testing, we utilize market multiples for guideline public companies.

In the impairment tests for trademarks, we compare the estimated fair value of each asset to its carrying amount.

The fair values of trademarks are estimated using a relief from royalty method under the income approach.

If the carrying amount of a trademark exceeds its estimated fair value, we calculate impairment as the excess of carrying amount over the estimate of fair value.

At December 31, 2024, the carrying value of indefinite-lived intangible assets was $79.2 million, of which $51.8 million was attributed to prAna's trademark.

In our 2024 impairment test, the fair value of prAna's trademark exceeded its carrying value by approximately 33% as of the measurement date and, therefore, no impairment was recognized.

As part of our evaluation, we performed a sensitivity analysis on the trademark impairment model.

A 300 basis point decline in the compound annual growth rate for net sales assumed over the first eight years would reduce the excess of fair value over the carrying amount to approximately 12%.

Separately, a 100 basis point increase in the assumed discount rate would reduce the excess of the fair value over the carrying value to approximately 22%.

A separate 50 basis point decline in the assumed royalty rate would reduce the excess of fair value over the carrying amount to approximately 21%.

In our 2023 impairment test, we determined that the prAna brand's trademark was not impaired.

In our 2022 impairment test, we determined that the prAna brand's trademark was impaired and we recognized a $18.7 million impairment charge for the year ended December 31, 2022.

In the impairment test for goodwill, we compare the estimated fair value of the reporting unit with the carrying amount of that reporting unit.

If the carrying amount of the reporting unit exceeds its estimated fair value, we calculate an impairment as the excess of carrying amount over the estimate of fair value.

We estimate the fair value of our reporting units using a combination of discounted cash flow analysis and market-based valuation methods, as appropriate.

At December 31, 2024, the carrying value of goodwill was $26.7 million, of which $12.3 million was attributed to the prAna reporting unit.

In our 2024 impairment test, the fair value of the prAna reporting unit exceeded its carrying value by approximately 23% as of the measurement date and, therefore, no impairment was recognized.

As part of our evaluation, we performed a sensitivity analysis on the goodwill impairment model.

A 300 basis point decline in the compound annual growth rate for net sales assumed over the first eight years would reduce the excess of fair value over the carrying amount to approximately 8%.

Separately, a 100 basis point increase in the assumed discount rate would reduce the excess of the fair value over the carrying value to approximately 15%.

In our 2023 and 2022 impairment tests, we determined that prAna goodwill was impaired and we recognized a $25.0 million and $16.9 million impairment charge for the years ended December 31, 2023 and December 31, 2022, respectively.

Our impairment tests and related fair value estimates are based on a number of factors, including assumptions and estimates for projected net sales, income, cash flows, discount rates, market-based multiples, and other operating performance measures.

In our interim quantitative impairment test of the prAna trade name, the fair value of the prAna trade name was less than its carrying value of $51.8 million and, therefore, an impairment charge of $8.0 million was recorded.

In our interim quantitative impairment test of the Mountain Hardwear trade name, the fair value of the Mountain Hardwear trade name exceeded its carrying value of $15.0 million by approximately 75 percent and, therefore, no impairment charge was recorded.

As part of our evaluation, we performed a sensitivity analysis on the trade name impairment model.

A 300 basis point decline in the compound annual growth rate for net sales assumed over the first five years would reduce the excess of the fair value over the carrying value to approximately 51 percent.

Separately, a 100 basis point increase in the assumed discount rate would reduce the excess of the fair value over the carrying value to approximately 57 percent.

A separate 50 basis point decline in the assumed royalty rate would reduce the excess of the fair value over the carrying amount to approximately 31 percent.

There were no triggering events or additional impairment charges recorded for trade names as part of our annual impairment test.

In our interim quantitative impairment test of the prAna reporting unit, the fair value of the prAna reporting unit was less than its carrying value of $12.2 million and, therefore, an impairment charge of $8.8 million was recorded.

In our interim quantitative impairment test of the Mountain Hardwear reporting unit, the fair value of the Mountain Hardwear reporting unit was less than its carrying value and, therefore, an impairment

charge of $12.2 million was recorded, comprising the full Mountain Hardwear goodwill balance.

There were no triggering events or additional impairment charges recorded for goodwill as part of our annual impairment test.

Our impairment tests and related fair value estimates are based on a number of factors, including assumptions and estimates for projected net sales, income, cash flows, discount rates, royalty rates, market-based multiples, and other operating performance measures.

Changes in estimates or the application of alternative assumptions could produce significantly different results.

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Changes in any of the assumptions, judgments and estimates mentioned above could cause our actual income tax obligations to differ from our estimates, which could materially affect our financial position, results of operations or cash flows.

Our assumptions, judgement and estimates relative to uncertain tax positions take into account whether a tax position is more likely than not to be sustained upon examination by the relevant taxing authority based on the technical merits of the position and the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority.

Changes in tax law or our

COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 33

interpretation of tax laws and the resolution of current and future tax audits could significantly affect the amounts provided for Income tax expense in our Consolidated Statements of Operations.

Our assumptions, judgment and estimates relative to uncertain tax positions take into account whether a tax position is more likely than not to be sustained upon examination by the relevant taxing authority based on the technical merits of the position and the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant taxing authority.

Changes in tax law or our interpretation of tax laws and the resolution of current and future tax audits could significantly affect the amounts provided for Income tax expense in our Consolidated Statements of Operations.

Our tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period.

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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-K

Item 7. Management’s Discussion and Analysis