What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 255 added, 142 removed, 195 unchanged (67% of the section changed)

11 unchanged sentences

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.

Company Wide Strategic Priorities

We are committed to investing in our company wide strategic priorities to:

• accelerate profitable growth;

• create iconic products that are differentiated, functional and innovative;

• drive brand engagement through increased, focused demand creation investments;

• enhance consumer experiences by investing in capabilities to delight and retain consumers;

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

• 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.

ACCELERATE Growth Strategy

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.

ACCELERATE is a growth strategy intended to elevate the Columbia brand (the "Brand") by targeting 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.

To further the ACCELERATE Growth Strategy, the Columbia brand is sharpening its focus on areas that leverage our authenticity and heritage in outdoor performance and lifestyle.

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:

4 unchanged sentences

• deliver integrated full-funnel marketing.

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

• accelerate profitable growth;

• create iconic products that are differentiated, functional and innovative;

• drive brand engagement through increased, focused demand creation investments;

• enhance consumer experiences by investing in capabilities to delight and retain consumers;

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

• empower talent that is driven by our core values.

COLUMBIA SPORTSWEAR COMPANY | Q2 2026 FORM 10-Q | 23

5 unchanged sentences

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

The Columbia brand's ACCELERATE Growth Strategy is intended to overcome certain of these headwinds and elevate the consumers' perception of the Brand to 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, beginning in 2024, the Brand began to refresh portions of its product line to appeal to target consumers and, in Fall 2025, launched a new Brand marketing campaign, Engineered for Whatever, coupled with increased investment in demand creation, which we expect to maintain in seasons to come.

To elevate consumers’ perception of the Columbia brand, in 2025, the Brand launched a new Brand marketing campaign, Engineered for Whatever, coupled with increased investment in demand creation, which we expect to maintain in seasons to come.

Additionally, the Brand released new products designed with a younger, more active consumer in mind, and re-launched the U.S.

Columbia.com website.

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.

We have already begun to see proof points of the ACCELERATE Growth Strategy, including in products such as the Amaze Puff, which is bringing new younger consumers into the Brand.

Tariffs | On February 20, 2026, the U.S.

Supreme Court ruled that U.S.

tariffs imposed under IEEPA were unconstitutional.

Subsequently, the CIT ruled that the collected tariffs in question shall be refunded in accordance with the law.

The CBP has issued an official notice and launched a special tariff refund program to facilitate such refunds.

We have begun the process of requesting refunds of IEEPA tariffs paid.

However, as of March 31, 2026, we did not recognize any tariff refunds in our unaudited condensed consolidated financial statements as we were unable to assert loss recovery is probable due to the uncertainty surrounding the tariff refund program.

To the extent more clarity comes from the tariff refund program which changes the evaluation of probability, we could recognize a receivable for the amount of the IEEPA tariffs paid.

If recognized, the receivable/refunds will benefit cost of sales to the extent the associated inventory has been sold.

At the time the IEEPA tariffs were ruled unconstitutional, we had already paid approximately $80 million of IEEPA tariffs.

As of March 31, 2026, approximately $55 million of that amount had been realized through cost of sales, with the remainder in inventory.

The ultimate benefit to gross margin from any tariff refunds is subject to variability due to a number of factors, including accommodations to certain third-party vendors.

Further, outstanding amounts to be recovered are also subject to interest payable to us.

We absorbed much of the incremental tariff cost related to Fall 2025 as the costs were realized and did not raise prices on our products in 2025.

As of the date of this filing, we have not received any portion of the IEEPA tariff refunds which we requested.

In addition to the potential recovery of IEEPA tariffs previously paid, we are also facing uncertainly surrounding any future incremental tariffs.

In response to the decision on IEEPA tariffs, the U.S.

President issued an executive order imposing incremental 10% tariffs pursuant to Section 122 of the Trade Act of 1974 for 150 days, effective on February 24, 2026 (“Section 122 Tariffs”).

Our financial outlook assumes Section 122 Tariffs continue through July 2026 before returning to rates approximate to levels that were in place prior to the U.S.

Supreme Court’s tariff ruling on IEEPA.

However, further trade policy actions are very uncertain and volatile.

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

The foundational shifts of the ACCELERATE Growth Strategy are starting to show tangible signs of traction with our target consumers.

That said, we know it will take more time and work to bring the newness, innovation and elevated style to our product portfolio, marketing and distribution at the level we need in order to continue shifting consumers' perception of the Columbia brand in the U.S.

Tariffs | On March 4, 2026, the CIT issued a ruling that importers that paid tariffs under IEEPA are due refunds and directed the CBP to begin the refund process for all importers who were subject to IEEPA duties.

During the second quarter of 2026, we began receiving refunds of IEEPA tariffs, with the majority of cash owed received in June 2026.

As of June 30, 2026, we received refunds of approximately $78 million for IEEPA tariffs previously paid, including interest.

Of this amount, $62 million was recognized in earnings, including a benefit of $60 million recognized in cost of sales and $2 million recognized as interest income, and $15 million was recognized as a reduction to inventory.

The future period benefit to gross margin of the $15 million is expected to be largely offset by anticipated accommodations to certain third-party factory partners.

We absorbed much of the impact of IEEPA tariff costs related to Fall 2025 as the costs were realized.

We continue to closely monitor and evaluate the changing tariff rates and trade restrictions and the potential impacts of these decisions on our business plans for 2026 and 2027 and any potential impacts on consumer demand.

Geopolitical Uncertainty | We sell our products in 122 countries, and our ability to sell, import into and produce in certain markets is impacted by ongoing geopolitical tensions.

The current domestic and international political environment, including volatile trade relations and heightened military action and diplomacy in the Middle East, have contributed to uncertainty surrounding the future state of the global economy.

The conflict in the Middle East, which broke out in late February 2026, has resulted in volatility in energy and transportation costs and heightened risk across international supply chains.

These conditions have already resulted in cancellations of orders as well as reductions of forecasted orders for our Middle East distributor markets.

Further potential impacts include softening of global consumer confidence and spending levels, increases to product input costs with exposure beginning in our Spring 2027 season, as well as disruptions to our supply chain, which may result in increased lead times, increased freight and logistics costs, order cancellations, customer accommodations for inventory that may be delivered late, and factory production disruptions, including potential energy availability issues and potential input bottlenecks.

We continue to closely monitor the situation.

The duration, scope and our ability to effectively respond to the impacts of the conflict could significantly impact our business plans for 2026.

Macroeconomic Pressures | The current global macroeconomic environment is creating a complex and challenging retail environment and has had, and may continue to have, a negative impact on consumer and customer behavior and demand for our products.

These pressures may result in moderation of or a slowdown in our international businesses.

In the U.S., targeted price increases for the U.S.

Spring 2026 and

COLUMBIA SPORTSWEAR COMPANY | Q1 2026 FORM 10-Q | 20

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

Macroeconomic Headwinds and Supply Chain Disruptions | The current global macroeconomic and geopolitical environment is creating a complex and challenging retail environment, which has, and may continue to have a negative impact on consumer and customer behavior and demand for our products.

The conflict in the Middle East, which broke out in late February 2026, has contributed to macroeconomic headwinds, including volatility in energy and transportation costs, and heightened risk across international supply chains.

These conditions have, and may continue to, put pressure on discretionary spending and consumer sentiment, which could impact consumer demand in the second half of 2026, as well as contribute to declines of consumer traffic at retail, including our direct-to-consumer ("DTC") brick-and-mortar ("B&M") business.

The ongoing conflict in the Middle East has also led to order cancellations and reductions of forecasted orders for our Middle East distributor markets.

Supply chain disruptions are expected to result in later receipt of Fall 2026 inventory and potentially limit our ability to fulfill wholesale orders and DTC demand.

Additionally, a node within our supply chain has experienced congestion related to these events, which is contributing to our expectation of later Fall 2026 inventory receipts.

RESULTS OF OPERATIONS

The following discussion of our results of operations and liquidity and capital resources should be read in conjunction with Part I, Item 1 of this Quarterly Report on Form 10-Q.

COLUMBIA SPORTSWEAR COMPANY | Q2 2026 FORM 10-Q | 24

Non-GAAP Financial Measure

11 unchanged sentences

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)

2026 2025 2026 2025

Net sales $ 614,362 100.0 % $ 605,246 100.0 % $ 1,393,375 100.0 % $ 1,383,698 100.0 %

3 unchanged sentences

Net licensing income 4,643 0.8 % 4,929 0.8 % 8,811 0.6 % 9,851 0.7 %

Operating income

41,993 5.4 % 46,508 6.0 %

Operating income (loss) 30,884 5.0 % (23,591) (3.9) % 72,877 5.2 % 22,917 1.7 %

Interest income, net 6,216 1.0 % 4,838 0.8 % 11,099 0.8 % 11,655 0.8 %

Other non-operating income, net

397 0.1 % 1,551 0.2 %

Income before income tax

47,273 6.1 % 54,876 7.0 %

Income tax expense

12,965 1.7 % 12,628 1.6 %

$ 34,308 4.4 % $ 42,248 5.4 %

Diluted earnings per share

$ 0.65 $ 0.75

Other non-operating income (expense), net (815) (0.1) % 2,164 0.4 % (418) — % 3,715 0.3 %

Income (loss) before income tax 36,285 5.9 % (16,589) (2.7) % 83,558 6.0 % 38,287 2.8 %

Income tax expense (benefit) 9,732 1.6 % (6,393) (1.1) % 22,697 1.6 % 6,235 0.5 %

Net income (loss) $ 26,553 4.3 % $ (10,196) (1.7) % $ 60,861 4.4 % $ 32,052 2.3 %

Diluted earnings (loss) per share $ 0.52 $ (0.19) $ 1.17 $ 0.58

COLUMBIA SPORTSWEAR COMPANY | Q2 2026 FORM 10-Q | 25

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

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 $ 556,226 $ (921) $ 555,305 $ 548,345 1% 1%

SOREL 16,282 (38) 16,244 18,826 (14)% (14)%

prAna 23,325 (2) 23,323 20,537 14% 14%

Mountain Hardwear 18,529 94 18,623 17,538 6% 6%

Total $ 614,362 $ (867) $ 613,495 $ 605,246 2% 1%

Product category net sales:

Apparel, accessories and equipment $ 497,368 $ (370) $ 496,998 $ 494,302 1% 1%

Footwear 116,994 (497) 116,497 110,944 5% 5%

Total $ 614,362 $ (867) $ 613,495 $ 605,246 2% 1%

Channel net sales:

Wholesale $ 318,353 $ (798) $ 317,555 $ 317,218 —% —%

Direct-to-consumer 296,009 (69) 295,940 288,028 3% 3%

Total $ 614,362 $ (867) $ 613,495 $ 605,246 2% 1%

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

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

Our global net sales increased, reflecting growth of the Columbia brand across most of our international markets, led by our international distributor and DTC e-commerce businesses, partially offset by continued softness in the U.S., primarily in the Columbia and SOREL brands across channels within those brands.

Our global footwear net sales increased, reflecting growth of the Columbia brand across most regions, led by the U.S., partially offset by declines in the SOREL brand.

Gross Profit.

Gross profit is summarized in the following table:

Three Months Ended June 30,

(in thousands, except for percentages and basis points) 2026 2025 Change

Gross profit $ 358,432 $ 297,108 $ 61,324 21 %

Gross margin 58.3 % 49.1 % 920 bps

Gross margin expanded primarily due to an approximate 980 bps benefit from the recovery of IEEPA tariffs previously paid, partially offset by an unfavorable decrease in channel profitability resulting from increased promotional activity within DTC B&M.

COLUMBIA SPORTSWEAR COMPANY | Q2 2026 FORM 10-Q | 26

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) 2026 2025 Change

Selling, general and administrative expenses $ 332,191 $ 325,628 $ 6,563 2 %

Selling, general and administrative expenses as percent of net sales 54.1 % 53.8 % 30 bps

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

• higher omni-channel expenses of $11.5 million, reflecting higher DTC B&M expenses, including impairment charges related to underperforming retail stores, as well as the impact of new stores globally;

partially offset by

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

Interest Income, Net.

Interest income, net is summarized in the following table:

Three Months Ended June 30,

(in thousands, except for percentages) 2026 2025 Change

Interest income, net $ 6,216 $ 4,838 $ 1,378 28 %

Interest income, net as a percent of net sales 1.0 % 0.8 %

Interest income, net, increased, primarily reflecting interest received from the recovery of IEEPA tariffs previously paid.

Income Tax Expense (Benefit).

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

Three Months Ended June 30,

(in thousands, except for percentages) 2026 2025 Change

Income tax expense (benefit) $ 9,732 $ (6,393) $ 16,125 (252) %

Effective income tax rate 26.8 % 38.5 %

Our effective income tax rate decreased primarily due to a change in the geographic mix of earnings in the three months ended June 30, 2026, and our effective tax rate in the three months ended June 30, 2025 was favorably impacted by a tax benefit related to foreign currency losses.

Diluted Earnings (Loss) Per Share.

Diluted earnings (loss) per share is summarized in the following table:

Three Months Ended June 30,

2026 2025 Change

Diluted earnings (loss) per share $ 0.52 $ (0.19) $ 0.71 (374) %

Diluted earnings per share increased, primarily reflecting an approximate $0.93 benefit from the recovery of IEEPA tariffs previously paid.

COLUMBIA SPORTSWEAR COMPANY | Q2 2026 FORM 10-Q | 27

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

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 were relatively flat, reflecting strength of the Columbia brand across most of our international markets and channels within those markets, offset by underlying weakness in the U.S., primarily in the Columbia and SOREL brands across channels.

Our global net sales increased, reflecting growth of the Columbia brand across most of our international markets, led by our international distributor and Europe-direct businesses, partially offset by continued softness in the U.S., primarily in the Columbia and SOREL brands across channels within those brands.

Net sales included a favorable 160 basis point impact from foreign currency translation.

Our global footwear net sales increased, reflecting growth of the Columbia brand across most regions, including the U.S., partially offset by declines in the SOREL brand.

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 54.1 % 50.1 % 400 bps

Gross margin contracted primarily due to an unfavorable decrease in channel profitability driven by a 310 basis point unmitigated impact of incremental U.S.

tariffs, partially offset by mitigation tactics, which primarily included targeted price increases for our Spring 2026 product lines.

Gross margin expanded primarily due to an approximate 430 bps benefit from the recovery of IEEPA tariffs previously paid, partially offset by an unfavorable decrease in channel profitability resulting from increased promotional activity within DTC B&M.

COLUMBIA SPORTSWEAR COMPANY | Q2 2026 FORM 10-Q | 28

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)

2 unchanged sentences

Selling, general and administrative expenses as percent of net sales 49.5 % 49.2 % 30 bps

COLUMBIA SPORTSWEAR COMPANY | Q1 2026 FORM 10-Q | 22

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

• higher omni-channel expenses, reflecting higher DTC brick-and-mortar expenses, including the impact of new stores and variable expenses;

• an unfavorable impact from foreign currency translation;

• higher omni-channel expenses of $18.6 million, reflecting higher DTC B&M expenses associated with new stores globally, the impact of variable expenses, and impairment charges related to underperforming retail stores;

partially offset by

2 unchanged sentences

Interest income, net is summarized in the following table:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands, except for percentages)

2 unchanged sentences

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

Interest income, net, decreased, primarily reflecting lower yields on decreased 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 in the U.S., partially offset by interest received from the recovery of IEEPA tariffs previously paid.

Income Tax Expense.

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 27.2 % 16.3 %

Our effective income tax rate increased primarily due to an expense related to share-based compensation for the three months ended March 31, 2026, compared to a benefit related to a decrease in accrued foreign withholding taxes included in the three months ended March 31, 2025.

Our effective income tax rate increased primarily due to a change in the geographic mix of earnings in the six months ended June 30, 2026, and our effective tax rate in the six months ended June 30, 2025 was favorably impacted by a tax benefit related to foreign currency losses.

Diluted Earnings Per Share.

Diluted earnings per share is summarized in the following table:

Six Months Ended June 30,

(in thousands, except for percentages)

2026 2025 Change

Diluted earnings per share $ 1.17 $ 0.58 $ 0.59 102 %

Diluted earnings per share increased, primarily reflecting a $0.92 benefit from the recovery of IEEPA tariffs previously paid.

Results of Operations — Segment

2 unchanged sentences

Refer to Note 3 in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

COLUMBIA SPORTSWEAR COMPANY | Q2 2026 FORM 10-Q | 29

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025

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

$ 320,086 $ — $ 320,086 $ 335,117 (4)% (4)%

LAAP 125,933 1,529 127,462 112,333 12% 13%

EMEA 143,115 (2,077) 141,038 130,562 10% 8%

Canada 25,228 (319) 24,909 27,234 (7)% (9)%

$ 614,362 $ (867) $ 613,495 $ 605,246 2% 1%

(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) 2026 2025 Change

$ 68,023 $ 17,338 $ 50,685

LAAP 13,336 7,022 6,314

EMEA 20,407 21,630 (1,223)

Canada (3,028) (1,954) (1,074)

Total segment operating income 98,738 44,036 54,702

Unallocated corporate expenses 67,854 67,627 227

Operating income (loss) $ 30,884 $ (23,591) $ 54,475

segment operating income increased $50.7 million to $68.0 million, or 21.3% of net sales, for the second quarter of 2026 from $17.3 million, or 5.2% of net sales, for the comparable period in 2025.

The increase in U.S.

segment operating income was driven primarily by the recovery of IEEPA tariffs previously paid, partially offset by decreased net sales.

net sales decreased $15.0 million, or 4%, for the second quarter of 2026, compared to the same period in 2025, driven primarily by declines in our U.S.

wholesale and DTC B&M businesses, partially offset by slight growth in our U.S.

DTC e-commerce business.

We attribute the decline in our U.S.

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

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

Decreased U.S.

wholesale net sales primarily reflected lower Spring 2026 wholesale orders in response to weak sell-through performance during the Spring 2025 season.

The decline in our U.S.

DTC B&M business was impacted by store closures and decreased productivity from existing stores, including the impact of decreased traffic.

As of June 30, 2026, our U.S.

business operated 169 retail stores, compared to 171 retail stores for the comparable period in 2025.

The underlying business trends within our U.S.

business remain under pressure.

segment gross margin expanded to 68.0% for the second quarter of 2026 from 50.5% for the comparable period in 2025, driven primarily by an approximate 1,875 bps benefit from the recovery of IEEPA tariffs previously paid, partially offset by an unfavorable decrease in channel profitability resulting from increased promotional activity.

segment SG&A expenses increased as a percentage of net sales to 41.8% for the second quarter of 2026, compared to 40.1% for the same period in 2025, driven primarily by fixed SG&A expense deleverage on decreased net sales.

In total, U.S.

segment SG&A expenses were relatively flat as compared to the same period in 2025, driven primarily by higher DTC expenses, including impairment charges related to underperforming retail stores, offset by lower other expenses.

COLUMBIA SPORTSWEAR COMPANY | Q2 2026 FORM 10-Q | 30

LAAP segment operating income increased $6.3 million to $13.3 million, or 10.6% of net sales, for the second quarter of 2026 from $7.0 million, or 6.3% of net sales, for the comparable period in 2025.

The increase in LAAP segment operating income was primarily driven by increased net sales and gross profit.

LAAP net sales increased $13.6 million, or 12% (13% constant-currency), for the second quarter of 2026, compared to the same period in 2025, with growth across all LAAP markets, led by our LAAP distributor and China businesses.

The growth in LAAP distributor net sales was driven by healthy growth of Fall 2026 distributor orders, as well as a shift of Fall 2026 shipments into the second quarter of 2026, as compared to the same period in the prior year.

The growth in China net sales was driven by solid DTC e-commerce demand, which we believe was attributable to the execution of our marketplace strategies, and favorable effects from foreign currency fluctuations, which more than offset constant-currency softness in our DTC B&M business amid a weakening macroeconomic environment and increased marketplace competition.

LAAP segment gross margin expanded to 52.7% for the second quarter of 2026 from 52.0% for the comparable period in 2025, driven primarily by a decrease in inventory reserve provisions, partially offset by unfavorable region and channel mix.

LAAP segment SG&A expenses decreased as a percentage of net sales to 36.7% for the second quarter of 2026, compared to 39.8% for the same period in 2025, driven primarily by fixed SG&A leverage on increased net sales.

In total, LAAP segment SG&A expenses increased 3% for the second quarter of 2026, as compared to the same period in 2025.

EMEA segment operating income decreased $1.2 million to $20.4 million, or 14.3% of net sales, for the second quarter of 2026 from $21.6 million, or 16.6% of net sales, for the comparable period in 2025.

EMEA net sales increased $12.6 million, or 10% (8% constant-currency), for the second quarter of 2026, compared to the same period in 2025, with growth across our Europe-direct and EMEA distributor businesses.

The growth in Europe-direct net sales was fueled by strong wholesale and DTC B&M performance which we believe was attributable to the execution of our marketplace strategies.

The growth in Europe-direct's DTC B&M business was driven by contributions from new stores, as well as increased productivity from existing stores, aided by strategic promotional activity amid traffic headwinds, as compared to the same period in 2025.

The growth in EMEA distributor net sales was driven by healthy growth of Fall 2026 distributor orders, which more than offset a shift in timing of shipments out of the second quarter of 2026, as compared to the same period in 2025.

EMEA segment gross margin was flat at 43.1% for the second quarter of 2026, as compared to the same period in 2025.

EMEA segment SG&A expenses increased as a percentage of net sales to 25.3% for the second quarter of 2026, compared to 22.9% in 2025, driven primarily by higher DTC expenses associated with new stores.

In total, EMEA segment SG&A expenses increased 21% for the second quarter of 2026, as compared to the same period in 2025.

Canada segment operating loss increased $1.1 million to $3.0 million, or 12.0% of net sales, for the second quarter of 2026 from $2.0 million, or 7.2% of net sales, for the comparable period in 2025.

Canada net sales decreased $2.0 million, or 7% (9% constant-currency), for the second quarter of 2026, compared to the same period in 2025, driven primarily by our Canada wholesale business, which reflected unfavorable shifts in timing of shipments and, to a lesser extent, lower Spring 2026 wholesale orders, partially offset by growth in our Canada DTC business, led by growth in DTC e-commerce.

Canada segment gross margin expanded to 49.8% for the second quarter of 2026 from 48.1% for the comparable period in 2025, driven primarily by favorable channel mix with a higher portion of DTC net sales, which generally carry higher gross margins than wholesale net sales, as well as favorable other costs, including lower inbound freight costs, partially offset by unfavorable foreign exchange hedge rates.

Canada segment SG&A expenses increased as a percentage of net sales to 48.3% for the second quarter of 2026, compared to 41.0% for the same period in 2025, driven primarily by fixed SG&A deleverage on decreased net sales.

In total, Canada segment SG&A expenses increased 9% for the second quarter of 2026, as compared to the same period in 2025, driven primarily by higher DTC expenses, including impairment charges related to underperforming retail stores.

Unallocated corporate expenses

COLUMBIA SPORTSWEAR COMPANY | Q2 2026 FORM 10-Q | 31

Unallocated corporate expenses increased by $0.2 million to $67.9 million in the second quarter of 2026, from $67.6 million for the comparable period in 2025.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

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)

8 unchanged sentences

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

COLUMBIA SPORTSWEAR COMPANY | Q1 2026 FORM 10-Q | 23

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 $ 72,877 $ 22,917 $ 49,960

segment operating income decreased $16.9 million to $49.0 million, or 11.6% of net sales, for the first quarter of 2026 from $66.0 million, or 13.9% of net sales, for the comparable period in 2025.

The decrease in U.S.

segment operating income was driven primarily by decreased net sales and gross profit, partially offset by decreased segment SG&A expenses.

net sales decreased $48.7 million, or 10%, for the first quarter of 2026, compared to the same period in 2025, driven by decreased net sales in our U.S.

segment operating income increased $33.7 million to $117.0 million, or 15.8% of net sales, for the six months ended June 30, 2026 from $83.3 million, or 10.3% of net sales, for the comparable period in 2025.

The increase in U.S.

segment operating income was driven primarily by the recovery of IEEPA tariffs previously paid, partially offset by decreased net sales.

net sales decreased $63.8 million, or 8%, for the six months ended June 30, 2026, compared to the same period in 2025, driven by declines in our U.S.

wholesale and DTC businesses.

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marketplace and external factors, including geopolitical uncertainty and a difficult macroeconomic environment weighing on consumer sentiment.

In addition, results were impacted by inventory supply constraints resulting from our decision to curtail Fall 2025 inventory purchases as a precautionary measure following prior-year U.S.

In addition, results were impacted by inventory supply constraints during the first quarter 2026 resulting from our decision to curtail Fall 2025 inventory purchases as a precautionary measure following prior-year U.S.

tariff announcements.

Decreased U.S.

wholesale net sales primarily reflected lower Spring 2026 wholesale orders in response to weak sell-through performance during the Spring 2025 season.

The decline in our U.S.

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

DTC business included decreases within our U.S.

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

The decline in our U.S.

DTC brick-and-mortar business was further impacted by lower clearance sales, primarily reflecting cleaner inventories and the closure of temporary clearance locations, as well as decreased productivity from existing stores.

As of March 31, 2026, our U.S.

DTC brick-and-mortar business operated 170 retail stores, compared to 169 retail stores for the comparable period in 2025.

segment gross margin contracted to 48.4% for the first quarter of 2026 from 49.1% for the comparable period in 2025 due to an unfavorable decrease in channel profitability driven by a 580 basis point unmitigated impact of incremental U.S.

tariffs, partially offset by mitigation tactics, which primarily included targeted price increases for our Spring 2026 product lines.

segment SG&A expenses increased as a percentage of net sales to 32.5% for the first quarter of 2026, compared to 31.1% for the same period in 2025, driven primarily by fixed SG&A deleverage on decreased net sales.

DTC brick-and-mortar business was impacted by store closures and decreased productivity from existing stores, including the impact of decreased traffic.

As of June 30, 2026, our U.S.

business operated 169 retail stores, compared to 171 retail stores for the comparable period in 2025.

The underlying business trends within our U.S.

business remain under pressure.

segment gross margin expanded to 56.9% for the six months ended June 30, 2026 from 49.7% for the comparable period in 2025, driven primarily by an approximate 800 bps benefit from the recovery of IEEPA tariffs previously paid, partially offset by the impact of incremental U.S.

segment SG&A expenses increased as a percentage of net sales to 36.5% for the six months ended June 30,

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2026, compared to 34.8% for the same period in 2025, driven primarily by fixed SG&A deleverage on decreased net sales.

In total, U.S.

segment SG&A expenses decreased 6.3% for the first quarter of 2026, as compared to the same period in 2025.

LAAP segment operating income increased $0.6 million to $26.9 million, or 16.8% of net sales, for the first quarter of 2026 from $26.3 million, or 17.3% of net sales, for the comparable period in 2025.

LAAP net sales increased $8.0 million, or 5% (3% constant-currency), for the first quarter of 2026, compared to the same period in 2025, driven primarily by growth in our China, LAAP distributor and Korea businesses, partially offset by a decline in our Japan business.

The growth in China net sales was driven primarily by our China wholesale business, partially aided by earlier wholesale shipment timing.

We believe the China net sales growth was further aided by the execution of our unique marketplace strategies, as well as favorable market conditions driving outdoor category growth in China.

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

The growth in Korea net sales was broad-based across all channels, which we believe was attributable to the execution of our marketplace strategies, including unique marketing activations, and improving outdoor category trends, compared to the same period in 2025.

The decline in Japan net sales primarily reflected the impact of decreased inbound international tourism and later wholesale shipment timing, compared to the same period in 2025.

LAAP segment gross margin expanded to 56.9% for the first quarter of 2026 from 56.5% for the comparable period in 2025.

LAAP segment SG&A expenses increased as a percentage of net sales to 35.4% for the first quarter of 2026, compared to 34.9% for the same period in 2025, primarily driven by unfavorable impacts from foreign currency translation.

In total, LAAP segment SG&A expenses increased 6.9% for the first quarter of 2026, as compared to the same period in 2025.

segment SG&A expenses decreased 3% for the six months ended June 30, 2026, as compared to the same period in 2025.

LAAP segment operating income increased $6.9 million to $40.2 million, or 14.1% of net sales, for the six months ended June 30, 2026 from $33.4 million, or 12.6% of net sales, for the comparable period in 2025.

LAAP net sales increased $21.6 million, or 8% (8% constant-currency), for the six months ended June 30, 2026, compared to the same period in 2025, driven primarily by growth in our China, LAAP distributor and Korea businesses, partially offset by a decline in our Japan business.

The growth in China net sales was driven by our China wholesale and DTC e-commerce businesses, as well as favorable effects from foreign currency fluctuations, which more than offset constant-currency softness in our DTC B&M business amid a weakening macroeconomic environment and increased marketplace competition.

We believe the growth in our China wholesale and DTC e-commerce businesses was aided by the execution of our marketplace strategies.

The growth in LAAP distributor net sales was driven by strong growth of Spring and Fall 2026 distributor orders and, to a lesser extent, a shift in timing of shipments into the first six months of 2026, as compared to the same period in 2025.

The growth in Korea was led by the wholesale business, which we believe was attributable to the execution of our marketplace strategies and resilient outdoor category trends, despite a weakening macroeconomic environment, as compared to the same period in 2025.

The decline in Japan net sales reflected unfavorable effects from foreign currency fluctuations, which more than offset constant-currency net sales growth within our wholesale and DTC e-commerce businesses, partially offset by declines in our DTC B&M business, compared to the same period in 2025.

LAAP segment gross margin expanded to 55.1% for the six months ended June 30, 2026 from 54.5% for the comparable period in 2025, driven primarily by a decrease in inventory reserve provisions, partially offset by unfavorable region and channel mix.

LAAP segment SG&A expenses decreased as a percentage of net sales to 36.0% for the six months ended June 30, 2026, compared to 37.0% for the same period in 2025, primarily driven by fixed SG&A leverage on increased net sales.

In total, LAAP segment SG&A expenses increased 5% for the six months ended June 30, 2026, as compared to the same period in 2025.

EMEA segment operating income increased $8.0 million to $48.6 million, or 16.8% of net sales, for the six months ended June 30, 2026 from $40.6 million, or 17.1% of net sales, for the comparable period in 2025.

EMEA net sales increased $50.4 million, or 21% (14% constant-currency), for the six months ended June 30, 2026, compared to the same period in 2025, with growth across our Europe-direct and EMEA distributor businesses.

The growth in Europe-direct net sales was fueled by strong wholesale and DTC B&M performance, which we believe was attributable to the execution of our marketplace strategies.

The growth in Europe-direct's DTC B&M business was driven by increased productivity from existing stores, partially reflecting strategic promotional activity amid second quarter traffic headwinds, as well as contributions from new stores, as compared to the same period in 2025.

The growth in EMEA distributor net sales was driven by healthy growth of Spring and Fall 2026 distributor orders, which more than offset a shift in timing of shipments out of the second quarter of 2026, as compared to the same period in 2025.

EMEA segment gross margin expanded to 47.3% for the six months ended June 30, 2026 from 46.6% for the comparable period in 2025, driven primarily by favorable channel and region mix.

EMEA segment SG&A expenses increased as a percentage of net sales to 27.1% for the six months ended June 30, 2026, compared to 26.0% for the same period in 2025, primarily driven by higher DTC B&M expenses, including personnel and rent expenses, as well as variable expenses from higher DTC sales.

In total, EMEA segment SG&A expenses increased 26% for the six months ended June 30, 2026, as compared to the same period in 2025.

Canada segment operating income decreased $1.8 million to $5.2 million, or 6.8% of net sales, for the six months ended June 30, 2026 from $7.0 million, or 9.4% of net sales, for the comparable period in 2025.

Canada net sales increased $1.4 million, or 2% (decrease of 2% constant-currency), for the six months ended June 30, 2026, compared to the same period in 2025.

The increase in Canada net sales reflected growth in our DTC business and favorable effects from foreign currency fluctuations, partially offset by a decline in our wholesale business, compared to the same period in 2025.

Canada segment gross margin contracted to 48.7% for the six months ended June 30, 2026 from 49.9% for the comparable period in 2025, driven primarily by an unfavorable decrease in channel profitability resulting from increased promotional activity.

Canada segment SG&A

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EMEA segment operating income increased $9.2 million to $28.2 million, or 19.4% of net sales, for the first quarter of 2026 from $19.0 million, or 17.7% of net sales, for the comparable period in 2025.

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 $37.9 million, or 35% (21% constant-currency), for the first quarter of 2026, compared to the same period in 2025, driven by growth in our Europe-direct and EMEA distributor businesses.

The growth in Europe-direct net sales was fueled by strong Europe-direct DTC performance, partially reflecting promotional activity, and healthy Europe-direct wholesale sales, partially reflecting earlier wholesale shipment timing.

Europe-direct's DTC brick-and-mortar business drove particularly strong growth for the first quarter of 2026, reflecting increased productivity from existing stores, as well as contributions from new stores.

Results across all channels reflected robust demand for winter season products and ample inventory availability.

We believe Europe-direct net sales growth across channels was also attributable to the execution of our marketplace strategies, including marketing activations.

The growth in EMEA distributor net sales was driven primarily by earlier wholesale shipment timing and healthy growth in our distributor orders, as compared to the same period in 2025.

EMEA segment gross margin expanded to 51.5% for the first quarter of 2026 from 50.8% for the comparable period in 2025, driven primarily by a favorable increase in channel profitability reflecting lower outbound shipping expenses and favorable sales mix, as well as a favorable increase in channel and regional net sales mix reflecting a higher portion of Europe-direct DTC sales, partially offset by higher Europe-direct DTC promotional activity.

EMEA segment SG&A expenses decreased as a percentage of net sales to 28.9% for the first quarter of 2026, compared to 29.9% for the same period in 2025, primarily driven by fixed SG&A leverage on increased net sales.

In total, EMEA segment SG&A expenses increased 30.9% for the first quarter of 2026, as compared to the same period in 2025, driven primarily by unfavorable impacts from foreign currency translation and higher DTC brick-and-mortar expenses, including personnel expenses and variable expenses from higher DTC sales.

Canada segment operating income decreased $0.7 million to $8.2 million, or 16.1% of net sales, for the first quarter of 2026 from $9.0 million, or 18.8% of net sales, for the comparable period in 2025.

Canada net sales increased $3.4 million, or 7% (1% constant-currency), for the first quarter of 2026, compared to the same period in 2025, driven by our Canada DTC brick-and-mortar business, reflecting increased productivity from existing stores and strong demand for winter season products, partially aided by promotional activity in the first quarter of 2026, compared to the same period in 2025.

Canada segment gross margin contracted to 48.1% for the first quarter of 2026 from 50.9% for the comparable period in 2025, driven primarily by an unfavorable decrease in channel profitability reflecting higher closeout sales at lower margins.

Canada segment SG&A expenses increased as a percentage of net sales to 24.4% for the first quarter of 2026, compared to 24.3% for the same period in 2025.

In total, Canada segment SG&A expenses increased 7.7% for the first quarter of 2026, as compared to the same period in 2025.

expenses increased as a percentage of net sales to 32.3% for the six months ended June 30, 2026, compared to 30.3% for the same period in 2025.

In total, Canada segment SG&A expenses increased 8% for the six months ended June 30, 2026, as compared to the same period in 2025.

Unallocated corporate expenses

Unallocated corporate expenses decreased by $3.4 million to $70.3 million for the first quarter of 2026 from $73.7 million for the comparable period in 2025.

Unallocated corporate expenses decreased by $3.2 million to $138.1 million for the six months ended June 30, 2026 from $141.3 million for the comparable period in 2025.

LIQUIDITY AND CAPITAL RESOURCES

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Refer to "Sources of Liquidity" below for further information regarding our domestic credit facility.

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Cash Flow Activities

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 (755) 13,501 (14,256)

Net decrease in cash and cash equivalents

$ (122,687) $ (208,530) $ 85,843

The change in cash flows used in operating activities for the three months ended March 31, 2026 was primarily driven by a $42.9 million increase in cash used in changes in assets and liabilities.

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

The $30.3 million increase in cash used in Accounts payable was driven primarily by the timing of receipt and payment of invoices.

The change in cash flows provided by investing activities was primarily driven by lower purchases of short-term investments for the three months ended March 31, 2026, as compared to the same period in 2025.

The change in cash flows used in financing activities was primarily driven by higher share repurchases of common stock for the three months ended March 31, 2026, as compared to the same period in 2025.

Net increase (decrease) in cash and cash equivalents $ 90,277 $ (104,065) $ 194,342

The change in cash flows provided by operating activities for the six months ended June 30, 2026 was primarily driven by the recovery of approximately $78 million of IEEPA tariffs previously paid, as compared to the same period in 2025 .

The change in cash flows provided by investing activities for the six months ended June 30, 2026 was primarily driven by lower purchases of short-term investments, as compared to the same period in 2025.

The change in cash flows used in financing activities for the six months ended June 30, 2026 was primarily driven by higher share repurchases of common stock, as compared to the same period in 2025.

Sources of Liquidity

Cash and cash equivalents and short-term investments

As of March 31, 2026, we had cash and cash equivalents of $319.3 million and short-term investments of $216.0 million, compared to $442.0 million and $348.8 million, respectively, as of December 31, 2025.

As of June 30, 2026, we had cash and cash equivalents of $532.3 million and short-term investments of $92.3 million, compared to $442.0 million and $348.8 million, respectively, as of December 31, 2025.

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Committed credit facilities

In March 2026, we terminated our prior domestic credit agreement and, simultaneously, entered into a new Domestic Credit Agreement which provides for up to $500.0 million of borrowings pursuant to an unsecured, committed revolving credit facility.

As of March 31, 2026, we were in compliance with all associated covenants and there was no balance outstanding under the facility.

As of June 30, 2026, we were in compliance with all associated covenants and there was no balance outstanding under the facility.

Refer to Note 7 in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

Further, as of March 31, 2026, our European subsidiary had available an unsecured, committed overdraft facility, which provides for borrowings up to €3.0 million (approximately US$3.4 million).

Further, as of June 30, 2026, our European subsidiary had available an unsecured, committed overdraft facility, which provides for borrowings up to €3.0 million (approximately US$3.4 million).

There was no balance outstanding under the facility.

Uncommitted credit facilities

As of March 31, 2026, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$78.3 million.

As of June 30, 2026, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$78.1 million.

There were no balances outstanding under these facilities.

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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, lines of credit and overdraft 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

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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 March 31, 2026, our inventory balance decreased to $624.0 million, from $689.5 million as of December 31, 2025, primarily resulting from our decision to curtail Fall 2025 inventory purchases as a precautionary measure following prior-year U.S.

tariff announcements and to better align inventory supply with anticipated seasonal demand.

The decrease was partially offset by approximately $25 million of incremental tariff costs.

As of June 30, 2026, our inventory balance increased to $874.8 million, compared to $689.5 million as of December 31, 2025, primarily reflecting the alignment of inventory supply with anticipated seasonal demand.

Our inventory balance as of December 31, 2025 also reflected prior-year decisions to proactively mitigate the impact of incremental tariffs, including accelerating the production, receipt and shipment of Fall 2025 inventory and curtailing Fall 2025 inventory purchases.

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

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Other cash commitments

Our inventory purchase obligations were $618.3 million as of March 31, 2026, compared to $523.8 million as of December 31, 2025.

Our inventory purchase obligations were $534.6 million as of June 30, 2026, compared to $523.8 million as of December 31, 2025.

There have been no other significant changes to our other cash commitments as described in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.

CRITICAL ACCOUNTING ESTIMATES

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The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

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There has not been any material change in the market risk disclosure contained in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2025.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis