Columbia Sportswear Company Q3 FY2025 earnings call

• Sustained momentum in international markets, led by double-digit sales growth in Europe direct. • Launched new global brand platform 'Engineered for Whatever' in August, with positive early response. • Estimated 2025 direct tariff impact $35-40M, expect to absorb much cost this year; plan to mitigate 2026 impact via price increases, vendor negotiations, etc. • Incurred $29M noncash impairment charges related to prAna and Mountain Hardwear, but confident in their growth strategies. • Details on product launches: Amaze Puff jacket, ROC pant, rerelease of Bugaboot 1, and redesigned columbia.com website.

Net sales increased 1% year-over-year to $943 million. Wholesale net sales grew 5%, while direct-to-consumer was down 5%. Gross margin declined 20 basis points to 50%. By geography, U.S. net sales decreased 4%, while international saw growth: Europe direct had double-digit sales growth, China mid-single-digit, EMEA up 10%, Canada up 7%. By brand, Columbia net sales increased 1% (international growth offsetting U.S. challenges), SOREL up 10%, prAna up 6%, and Mountain Hardwear down 5%.

• Fourth quarter net sales expected to decline 5%-8%, diluted EPS $1.04-$1.34. • Full year net sales outlook $3.3B-$3.4B (flat to down 1% y-o-y), full year EPS $2.55-$2.85 (including $0.46 impairment impact). • 2026 first half wholesale growth forecasted as flat to low single-digit, with international growth offsetting U.S. decline.

• Tariffs pose a significant risk: unmitigated annualized impact in 2026 estimated at $160M; need to balance price increases with consumer demand. • SG&A rate deleverage due to investments in demand creation for brand platform launch.

Q: On the product side, who gets credit for the Bugaboots rerelease?

A: Tim Boyle said he did the product work, his mom did the name.

Q: About the Engineered for Whatever campaign, any early feedback?

A: Tim Boyle said feedback is gratifying as it reflects the brand's irreverent spirit and sets it apart.

Q: Concern about $160M unmitigated tariff impact next year; confidence in offsetting?

A: Tim Boyle and Jim Swanson stated confidence due to ability to navigate tariffs, balance sheet strength, and mitigation tactics like price increases and vendor negotiations.

Q: SG&A rate recovery timeline?

A: Jim Swanson said intent is to sustain investments but work on achieving SG&A leverage as business grows, with focus on U.S. business efficiency.