SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS [Forward-Looking Statements Disclosure](index=3&type=section&id=Forward-Looking%20Statements%20Disclosure) The report contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ - Forward-looking statements are identified by words such as "will" and "anticipate" and cover future performance and market conditions[7](index=7&type=chunk) - Actual results may differ materially due to risks detailed in Part II, Item 1A of the report[8](index=8&type=chunk) - The company does not undertake any duty to update forward-looking statements unless legally required[8](index=8&type=chunk) PART I — FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and accompanying detailed notes [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Condensed Consolidated Balance Sheets (Unaudited) - Key Figures (in thousands) | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | Cash and cash equivalents | $418,462 | $350,319 | $361,049 | | Short-term investments | $369,270 | $414,185 | $99,511 | | Inventories | $607,373 | $746,288 | $959,234 | | Total current assets | $1,846,218 | $2,014,685 | $1,987,364 | | Total assets | $2,762,231 | $2,939,013 | $2,888,974 | | **LIABILITIES AND EQUITY** | | | | | Total current liabilities | $447,306 | $596,627 | $568,685 | | Total liabilities | $852,788 | $1,000,403 | $941,189 | | Total shareholders' equity | $1,909,443 | $1,938,610 | $1,947,785 | - Total assets decreased from **$2,939,013 thousand** at December 31, 2023, to **$2,762,231 thousand** at March 31, 2024[10](index=10&type=chunk) - Inventories significantly decreased from **$959,234 thousand** at March 31, 2023, to **$607,373 thousand** at March 31, 2024[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) Condensed Consolidated Statements of Operations (Unaudited) - Key Figures (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net sales | $769,982 | $820,593 | | Cost of sales | $380,423 | $421,093 | | Gross profit | $389,559 | $399,500 | | Operating income | $44,681 | $56,427 | | Net income | $42,300 | $46,202 | | Basic EPS | $0.71 | $0.74 | | Diluted EPS | $0.71 | $0.74 | - Net sales decreased by **6.2%** from $820,593 thousand in Q1 2023 to **$769,982 thousand** in Q1 2024[12](index=12&type=chunk) - Net income decreased by **8.4%** from $46,202 thousand in Q1 2023 to **$42,300 thousand** in Q1 2024[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) Condensed Consolidated Statements of Comprehensive Income (Unaudited) - Key Figures (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net income | $42,300 | $46,202 | | Other comprehensive income (loss) | $(5,355) | $(3,941) | | Comprehensive income | $36,945 | $42,261 | - Comprehensive income decreased from **$42,261 thousand** in Q1 2023 to **$36,945 thousand** in Q1 2024, primarily due to a larger 'Other comprehensive loss'[14](index=14&type=chunk) - Foreign currency translation adjustments contributed a loss of **$(14,987) thousand** in Q1 2024, compared to a gain of $1,480 thousand in Q1 2023[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Condensed Consolidated Statements of Cash Flows (Unaudited) - Key Figures (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $106,773 | $78,002 | | Net cash provided by (used in) investing activities | $37,109 | $(111,680) | | Net cash used in financing activities | $(71,343) | $(35,561) | | Net increase (decrease) in cash and cash equivalents | $68,143 | $(69,192) | | Cash and cash equivalents, end of period | $418,462 | $361,049 | - Net cash provided by operating activities increased by **$28,771 thousand**, from $78,002 thousand in Q1 2023 to $106,773 thousand in Q1 2024[16](index=16&type=chunk) - Investing activities shifted from a net cash outflow of **$111,680 thousand** in Q1 2023 to a net cash inflow of **$37,109 thousand** in Q1 2024[16](index=16&type=chunk) [Condensed Consolidated Statements of Equity (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity%20(Unaudited)) Condensed Consolidated Statements of Equity (Unaudited) - Key Figures (in thousands) | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | $1,909,443 | $1,938,610 | $1,947,785 | | Retained Earnings | $1,960,634 | $1,984,446 | $1,981,287 | | Accumulated Other Comprehensive Income (Loss) | $(51,191) | $(45,836) | $(34,578) | | Common Stock Shares Outstanding | 59,473 | 59,996 | 62,076 | - Total shareholders' equity decreased from **$1,938,610 thousand** at December 31, 2023, to **$1,909,443 thousand** at March 31, 2024[18](index=18&type=chunk) - The company repurchased **631 thousand shares** of common stock for **$50,168 thousand** during Q1 2024[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) [Note 1 Basis of Presentation and Organization](index=10&type=section&id=Note%201%20Basis%20of%20Presentation%20and%20Organization) This note outlines the basis for preparing the unaudited financial statements, which are not indicative of full-year results - The financial statements are unaudited and include all normal recurring material adjustments, prepared in accordance with GAAP[21](index=21&type=chunk) - The business is seasonal, meaning Q1 results are not indicative of other quarters or the full year[21](index=21&type=chunk) - The company is evaluating ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures) for future impact[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [Note 2 Revenues](index=12&type=section&id=Note%202%20Revenues) This note disaggregates net sales by geographic segment, product category, and channel for Q1 2024 and 2023 Disaggregated Net Sales by Product Category (in thousands) | Product Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Apparel, Accessories and Equipment | $619,054 | $632,602 | | Footwear | $150,928 | $187,991 | | Total | $769,982 | $820,593 | Disaggregated Net Sales by Channel (in thousands) | Channel | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Wholesale | $390,897 | $452,488 | | Direct-to-consumer | $379,085 | $368,105 | | Total | $769,982 | $820,593 | - Wholesale net sales decreased by **$61,591 thousand (13.6%)** from Q1 2023 to Q1 2024, while Direct-to-consumer net sales increased by **$10,980 thousand (3.0%)**[31](index=31&type=chunk) [Note 3 Intangible Assets, Net and Goodwill](index=14&type=section&id=Note%203%20Intangible%20Assets,%20Net%20and%20Goodwill) This note provides a breakdown of intangible assets and confirms no changes to goodwill since year-end 2023 Intangible Assets, Net (in thousands) | Category | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--- | :--- | :--- | :--- | | Net carrying amount (definite lives) | $275 | $687 | $1,925 | | Intangible assets with indefinite lives | $79,221 | $79,221 | $79,221 | | Total Intangible assets, net | $79,496 | $79,908 | $81,146 | - Amortization expense for intangible assets with definite lives was **$0.4 million** for both Q1 2024 and Q1 2023[35](index=35&type=chunk) - There have been no changes to the Company's goodwill since December 31, 2023[36](index=36&type=chunk) [Note 4 Commitments and Contingencies](index=14&type=section&id=Note%204%20Commitments%20and%20Contingencies) This note addresses legal matters, which management believes will not materially affect the company's financial position - The company is involved in litigation and legal matters related to employment, retail, and intellectual property[37](index=37&type=chunk) - Management does not believe the ultimate resolution of these proceedings will materially adversely affect the company's financials[37](index=37&type=chunk) [Note 5 Shareholders' Equity](index=14&type=section&id=Note%205%20Shareholders'%20Equity) This note details the company's stock repurchase program, including total authorization and shares repurchased - Since 2004, the Board of Directors has authorized **$2.0 billion** for common stock repurchases[38](index=38&type=chunk) - As of March 31, 2024, the company had repurchased **34.7 million shares** for **$1,704.8 million**, with **$295.2 million** remaining available[39](index=39&type=chunk) - During Q1 2024, the company repurchased **$50.2 million** of common stock, compared to **$15.8 million** in Q1 2023[39](index=39&type=chunk) [Note 6 Stock-Based Compensation](index=16&type=section&id=Note%206%20Stock-Based%20Compensation) This note outlines stock-based compensation expenses and unrecognized costs for stock options and restricted stock units Stock-Based Compensation Expense (in thousands) | Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Stock options | $1,647 | $2,038 | | Restricted stock units | $3,997 | $3,770 | | Total | $5,644 | $5,808 | - Total stock-based compensation expense decreased slightly from **$5,808 thousand** in Q1 2023 to **$5,644 thousand** in Q1 2024[42](index=42&type=chunk) - As of March 31, 2024, unrecognized costs for stock options totaled **$13.4 million** and for restricted stock units totaled **$45.6 million**[43](index=43&type=chunk)[44](index=44&type=chunk) [Note 7 Earnings Per Share](index=17&type=section&id=Note%207%20Earnings%20Per%20Share) This note provides a reconciliation of common shares used to compute basic and diluted earnings per share (EPS) Earnings Per Share (EPS) Reconciliation (in thousands, except per share amounts) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Weighted average common shares outstanding, basic | 59,823 | 62,133 | | Effect of dilutive stock options and restricted stock units | 175 | 284 | | Weighted average common shares outstanding, diluted | 59,998 | 62,417 | | Basic EPS | $0.71 | $0.74 | | Diluted EPS | $0.71 | $0.74 | - Both basic and diluted EPS decreased from **$0.74** in Q1 2023 to **$0.71** in Q1 2024[47](index=47&type=chunk) - Anti-dilutive common shares excluded from diluted EPS computation were **1,996 thousand** in Q1 2024, up from 1,574 thousand in Q1 2023[47](index=47&type=chunk) [Note 8 Accumulated Other Comprehensive Income (Loss)](index=18&type=section&id=Note%208%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details the components and changes in accumulated other comprehensive income (loss) Changes in Accumulated Other Comprehensive Income (Loss) (in thousands) | Component | Balance as of Dec 31, 2023 | Net OCI (Loss) during Q1 2024 | Balance as of Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Available-for-sale securities | $145 | $(145) | $0 | | Derivative transactions | $3,689 | $9,777 | $13,466 | | Foreign currency translation adjustments | $(49,670) | $(14,987) | $(64,657) | | Total | $(45,836) | $(5,355) | $(51,191) | - Accumulated other comprehensive loss increased from **$(45,836) thousand** at December 31, 2023, to **$(51,191) thousand** at March 31, 2024[49](index=49&type=chunk) - Foreign currency translation adjustments were the primary driver of the net other comprehensive loss in Q1 2024, with a **$(14,987) thousand** impact[49](index=49&type=chunk) [Note 9 Segment Information](index=19&type=section&id=Note%209%20Segment%20Information) This note provides financial information for the company's four reportable geographic segments Net Sales to Unrelated Entities by Segment (in thousands) | Segment | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | U.S. | $474,406 | $517,475 | | LAAP | $138,646 | $136,413 | | EMEA | $104,520 | $108,289 | | Canada | $52,410 | $58,416 | | Total | $769,982 | $820,593 | Segment Operating Income (in thousands) | Segment | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | U.S. | $72,993 | $81,600 | | LAAP | $21,822 | $18,326 | | EMEA | $19,146 | $20,354 | | Canada | $11,168 | $10,801 | | Total segment operating income | $125,129 | $131,081 | | Unallocated corporate expenses | $(80,448) | $(74,654) | | Income before income tax | $54,149 | $60,560 | - LAAP segment net sales increased by **2% (7% constant-currency)** in Q1 2024, while U.S., EMEA, and Canada segments experienced declines[51](index=51&type=chunk) [Note 10 Financial Instruments and Risk Management](index=19&type=section&id=Note%2010%20Financial%20Instruments%20and%20Risk%20Management) This note describes the company's financial risk management strategies, primarily focusing on currency exchange rate risk - The company uses currency forward contracts designated as cash flow hedges to manage currency risks from foreign purchases and sales[54](index=54&type=chunk)[56](index=56&type=chunk) - Currency forward contracts not designated as hedges are used to manage remeasurement risk of foreign currency assets and liabilities[57](index=57&type=chunk) Gross Notional Amount of Outstanding Derivative Instruments (in thousands) | Category | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--- | :--- | :--- | :--- | | Designated as cash flow hedges | $597,355 | $634,676 | $525,781 | | Not designated as hedges | $231,449 | $342,532 | $393,450 | [Note 11 Fair Value Measures](index=22&type=section&id=Note%2011%20Fair%20Value%20Measures) This note provides information on assets and liabilities measured at fair value on a recurring basis, categorized into a three-tier hierarchy - Fair value is defined as an exit price in an orderly transaction, categorized into Level 1, Level 2, and Level 3 inputs[62](index=62&type=chunk)[68](index=68&type=chunk) Assets Measured at Fair Value (in thousands) - March 31, 2024 | Category | Level 1 | Level 2 | Total | | :--- | :--- | :--- | :--- | | Cash equivalents | $57,144 | $115,527 | $172,671 | | Short-term investments | $2,288 | $366,982 | $369,270 | | Derivative financial instruments (assets) | $0 | $20,265 | $20,265 | | Total assets measured at fair value | $86,413 | $502,774 | $589,187 | - The majority of assets measured at fair value are categorized as **Level 2**, primarily U.S. Government treasury bills and derivatives[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides its perspective on financial performance, business trends, and liquidity for Q1 2024 [Overview](index=26&type=section&id=OVERVIEW) - Columbia Sportswear Company is a global leader in outdoor, active, and lifestyle products across four key brands[73](index=73&type=chunk) - Strategic priorities include accelerating growth, creating iconic products, and enhancing consumer experiences[74](index=74&type=chunk)[79](index=79&type=chunk) - Investments aim to capture market share, expand gross margin, and improve SG&A efficiency long-term[74](index=74&type=chunk) [Profit Improvement Program](index=27&type=section&id=Profit%20Improvement%20Program) - The company is implementing a multi-year profit improvement program focused on operational and organizational cost savings[75](index=75&type=chunk)[80](index=80&type=chunk) - The program aims to achieve **$125 million to $150 million** in annualized savings by 2026, with **$75 million to $90 million** anticipated in 2024[75](index=75&type=chunk) [Business Environment and Trends](index=27&type=section&id=Business%20Environment%20and%20Trends) - The market is increasingly competitive due to a shift towards casual and lifestyle trends[76](index=76&type=chunk) - Economic uncertainty is impacting consumer demand, leading to cautious inventory management and advance orders[77](index=77&type=chunk) - The company is using temporary clearance locations and outlet stores to liquidate excess inventory[78](index=78&type=chunk) - Lower inbound freight costs are expected to continue benefiting gross margin throughout 2024[84](index=84&type=chunk) - New regulations, such as those related to PFAS chemicals, are impacting expenses and product input costs[87](index=87&type=chunk) [Results of Operations](index=29&type=section&id=RESULTS%20OF%20OPERATIONS) [Non-GAAP Financial Measure](index=29&type=section&id=Non-GAAP%20Financial%20Measure) This section introduces constant-currency net sales as a non-GAAP measure to assess performance excluding currency effects - Constant-currency net sales is a non-GAAP measure calculated by translating current period foreign currency net sales using prior year exchange rates[89](index=89&type=chunk) - This measure helps assess performance without foreign currency volatility and facilitates comparisons[89](index=89&type=chunk) [Results of Operations — Consolidated](index=31&type=section&id=Results%20of%20Operations%20%E2%80%94%20Consolidated) This section provides a consolidated overview of financial performance for Q1 2024 compared to Q1 2023 Consolidated Results of Operations (in millions, except per share amounts) | Metric | Q1 2024 | % of Net Sales (2024) | Q1 2023 | % of Net Sales (2023) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $770.0 | 100.0% | $820.6 | 100.0% | | Gross profit | $389.6 | 50.6% | $399.5 | 48.7% | | Operating income | $44.7 | 5.8% | $56.4 | 6.9% | | Net income | $42.3 | 5.5% | $46.2 | 5.6% | | Diluted earnings per share | $0.71 | | $0.74 | | - Net sales decreased by **6%** to **$770.0 million** in Q1 2024, driven by declines in U.S. and Canada wholesale businesses[92](index=92&type=chunk)[93](index=93&type=chunk) - Gross margin expanded by **190 basis points to 50.6%** in Q1 2024, primarily due to lower inbound freight costs[92](index=92&type=chunk)[96](index=96&type=chunk)[100](index=100&type=chunk) - SG&A expenses increased by **$1.9 million (1%)** to **$349.3 million**, representing 45.4% of net sales[92](index=92&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) - Operating income decreased by **20.8%** to **$44.7 million**, and net income decreased by **8.4%** to **$42.3 million**[92](index=92&type=chunk) [Results of Operations — Segment](index=35&type=section&id=Results%20of%20Operations%20%E2%80%94%20Segment) This section analyzes the financial performance of each of the company's four geographic segments Net Sales by Geographic Segment (in millions) | Segment | Q1 2024 | Q1 2023 | Reported % Change | Constant Currency % Change | | :--- | :--- | :--- | :--- | :--- | | U.S. | $474.4 | $517.5 | (8)% | (8)% | | LAAP | $138.7 | $136.4 | 2% | 7% | | EMEA | $104.5 | $108.3 | (4)% | (6)% | | Canada | $52.4 | $58.4 | (10)% | (11)% | | Total | $770.0 | $820.6 | (6)% | (6)% | Operating Income by Geographic Segment (in millions) | Segment | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | U.S. | $73.0 | $81.6 | $(8.6) | | LAAP | $21.8 | $18.3 | $3.5 | | EMEA | $19.1 | $20.4 | $(1.3) | | Canada | $11.2 | $10.8 | $0.4 | | Unallocated corporate expenses | $(80.4) | $(74.7) | $(5.7) | - U.S. operating income decreased by **$8.6 million** due to lower net sales and gross margin, despite lower SG&A expenses[104](index=104&type=chunk) - LAAP operating income increased by **$3.5 million**, driven by increased net sales (especially in China) and gross margin[105](index=105&type=chunk)[107](index=107&type=chunk) - Unallocated corporate expenses increased by **$5.7 million**, primarily due to higher personnel expenses[110](index=110&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's liquidity position, cash flow activities, and capital allocation strategy - As of March 31, 2024, the company had approximately **$1.5 billion** in total liquidity[111](index=111&type=chunk) Cash Flow Activities (in millions) | Activity | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Operating activities | $106.8 | $78.0 | $28.8 | | Investing activities | $37.1 | $(111.7) | $148.8 | | Financing activities | $(71.4) | $(35.6) | $(35.8) | | Net increase/(decrease) in cash | $68.1 | $(69.2) | $137.3 | - Net cash provided by operating activities increased by **$28.8 million**, primarily due to a **$60.2 million** increase in cash from inventories[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - Net cash provided by investing activities was **$37.1 million** in Q1 2024, a significant improvement from **$111.7 million used** in Q1 2023[115](index=115&type=chunk) - Planned 2024 capital expenditures are approximately **$60 to $80 million**, focusing on DTC operations and digital capabilities[125](index=125&type=chunk) - The long-term capital allocation goal includes returning at least **40% of free cash flow** to shareholders[126](index=126&type=chunk) [Critical Accounting Estimates](index=41&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) This section identifies critical accounting estimates that require significant management judgment and assumptions - Critical accounting estimates include sales reserves, allowance for uncollectible accounts, inventory valuation, and impairment[128](index=128&type=chunk) - These estimates involve significant judgment and assumptions, and actual results may differ[128](index=128&type=chunk) [Recent Accounting Pronouncements](index=41&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This section refers to Note 1 for details on recently issued accounting pronouncements not yet adopted - Refer to Note 1 for information on recently issued accounting pronouncements not yet adopted[131](index=131&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to market risk disclosures from the 2023 Annual Report on Form 10-K - No material change in market risk disclosure from the Annual Report on Form 10-K for the year ended December 31, 2023[132](index=132&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures, concluding they are effective - Management concluded that disclosure controls and procedures were effective as of March 31, 2024[134](index=134&type=chunk)[135](index=135&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2024[136](index=136&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal matters which are not expected to have a material adverse effect - The company is involved in litigation and legal matters related to employment, retail, and intellectual property[139](index=139&type=chunk) - Management believes the ultimate resolution of these proceedings will not have a material adverse effect on the company's financials[139](index=139&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks related to product demand, supply chain, strategic execution, IT, and global operations [Changes in Product Demand Can Adversely Affect Our Financial Results](index=44&type=section&id=CHANGES%20IN%20PRODUCT%20DEMAND%20CAN%20ADVERSELY%20AFFECT%20OUR%20FINANCIAL%20RESULTS) - Risks to product demand include volatile economic conditions, competition, and shifts in consumer preferences[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) - Wholesale order cancellations can lead to sales declines, inventory write-downs, and increased discounts[145](index=145&type=chunk) - Inaccurate demand forecasting can result in excess inventory or lost sales[146](index=146&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk) [We Are Subject to Various Risks in Our Supply Chain](index=48&type=section&id=WE%20ARE%20SUBJECT%20TO%20VARIOUS%20RISKS%20IN%20OUR%20SUPPLY%20CHAIN) - Reliance on contract manufacturers poses risks such as supply disruptions, quality control issues, and non-compliance with labor standards[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - Volatility in raw material availability and prices can adversely affect revenues, costs, and profitability[155](index=155&type=chunk) - Dependence on a limited number of suppliers for technical materials may cause increased costs or production delays[156](index=156&type=chunk) - Success depends on third-party logistics, with risks including operational disruptions, capacity constraints, and geopolitical conflicts[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) [Our Investment in Strategic Priorities Exposes Us to Certain Risks](index=50&type=section&id=OUR%20INVESTMENT%20IN%20STRATEGIC%20PRIORITIES%20EXPOSES%20US%20TO%20CERTAIN%20RISKS) - Inability to effectively execute strategic priorities could limit business growth and cause profitability to decline[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Upgrading business processes and IT systems involves risks such as business interruptions, higher costs, and data loss[167](index=167&type=chunk)[168](index=168&type=chunk) - Investments in DTC operations may not yield expected returns if sales are insufficient to cover fixed costs[169](index=169&type=chunk) [We Are Subject to Certain Information Technology Risks](index=52&type=section&id=WE%20ARE%20SUBJECT%20TO%20CERTAIN%20INFORMATION%20TECHNOLOGY%20RISKS) - Reliance on IT systems exposes the company to risks of disruptions, outages, and data loss due to cyberattacks or human error[170](index=170&type=chunk)[171](index=171&type=chunk) - Security breaches could lead to substantial costs, litigation, reputational damage, and operational disruptions[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) - Dependence on legacy IT systems, particularly in Japanese and Korean businesses, may inhibit operational efficiency[176](index=176&type=chunk) [We Are Subject to Legal and Regulatory Risks](index=54&type=section&id=WE%20ARE%20SUBJECT%20TO%20LEGAL%20AND%20REGULATORY%20RISKS) - Success depends on protecting intellectual property rights; risks include infringement, litigation costs, and counterfeit products[177](index=177&type=chunk)[178](index=178&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) - Products are subject to stringent regulations (e.g., PFAS), which can increase compliance expenses and lead to delays or penalties[182](index=182&type=chunk) - Product recalls or liability claims could harm brand reputation and incur additional expenses[183](index=183&type=chunk) - Additional tax liabilities may arise from changes in tax laws or unfavorable audit findings[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) [We Operate Globally and Are Subject to Significant Risks in Many Jurisdictions](index=56&type=section&id=WE%20OPERATE%20GLOBALLY%20AND%20ARE%20SUBJECT%20TO%20SIGNIFICANT%20RISKS%20IN%20MANY%20JURISDICTIONS) - Global operations expose the company to risks from geopolitical disputes, currency fluctuations, and natural disasters[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) - Imported products are subject to duties, tariffs, and import limitations, which affect costs and quantities[190](index=190&type=chunk)[191](index=191&type=chunk) - Fluctuations in inflation and currency exchange rates can lead to lower revenues, higher costs, and decreased margins[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) [We Are Subject to Numerous Operational Risks](index=60&type=section&id=WE%20ARE%20SUBJECT%20TO%20NUMEROUS%20OPERATIONAL%20RISKS) - The seasonal nature of the business can impact profits if fixed costs are not managed effectively during lower sales seasons[197](index=197&type=chunk) - Labor matters and changes in labor laws can disrupt sourcing, distribution, and sales[198](index=198&type=chunk)[199](index=199&type=chunk) - Downturns in global markets can lead to increased expenses and challenges in meeting financial covenants[200](index=200&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk) - Acquisitions are subject to risks including integration difficulties, substantial costs, and potential impairment charges[202](index=202&type=chunk)[203](index=203&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) - Extreme weather, climate change, and disease outbreaks can negatively impact operations and supply chains[207](index=207&type=chunk)[208](index=208&type=chunk) - Dependence on key personnel and the ability to attract and retain talent is crucial[210](index=210&type=chunk) - Licensing proprietary rights to third-parties carries risks of reputational damage if licensees misuse brands[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk) [Risks Related to Our Securities](index=64&type=section&id=RISKS%20RELATED%20TO%20OUR%20SECURITIES) - The common stock price may be volatile due to general market conditions and financial results fluctuations[215](index=215&type=chunk) - Three related shareholders collectively control just under **50%** of outstanding common stock, enabling significant influence[216](index=216&type=chunk) - The sale of a substantial number of shares by these controlling shareholders could cause the stock price to decline[217](index=217&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides details on the company's common stock repurchase program and activity during Q1 2024 - The Board of Directors has authorized **$2.0 billion** for common stock repurchases since 2004[219](index=219&type=chunk) - As of March 31, 2024, **$1,704.8 million** had been used to repurchase **34.7 million shares**, with **$295.2 million** remaining available[219](index=219&type=chunk) Common Stock Repurchases (Q1 2024) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares that May Yet Be Purchased (in millions) | | :--- | :--- | :--- | :--- | | January 1, 2024 - January 31, 2024 | 2,153 | $74.53 | $345.2 | | February 1, 2024 - February 29, 2024 | 253,900 | $79.02 | $325.1 | | March 1, 2024 - March 31, 2024 | 375,415 | $79.76 | $295.2 | | Total | 631,468 | $79.45 | $295.2 | [Item 5. Other Information](index=66&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading arrangements were entered into or terminated by directors or officers during Q1 2024 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were entered into or terminated by directors or officers during Q1 2024[222](index=222&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists all documents filed as exhibits to the Quarterly Report on Form 10-Q - The exhibit index includes corporate governance documents, various incentive plan agreements, and required certifications[223](index=223&type=chunk)[224](index=224&type=chunk) [Signatures](index=67&type=section&id=Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q - The report is signed by Jim A. Swanson, Executive Vice President and Chief Financial Officer, dated May 2, 2024[225](index=225&type=chunk)[226](index=226&type=chunk)

Columbia Sportswear Company (COLM) posted first-quarter 2024 results, wherein both the top and bottom lines declined year over year due to a tough operating landscape in the United States and sluggish overall demand. However, both metrics came ahead of the respective Zacks Consensus Estimate. Management raised its bottom-line view for 2024 while keeping the sales guidance unchanged.Shares of this Zacks Rank #3 (Hold) company jumped 10.1% in the after-market trading session on Apr 25.The company is on track ...

Financial Data and Key Metrics Changes - Net sales decreased 6% year-over-year to $770 million, exceeding the high end of guidance due to earlier timing of spring wholesale shipments [11][12] - Gross margin expanded by 190 basis points, driven by lower inbound freight costs and a favorable channel mix [12] - Diluted earnings per share decreased 4% to $0.71 [12] Business Line Data and Key Metrics Changes - Direct-to-consumer net sales increased 3%, led by brick-and-mortar growth, while e-commerce sales declined due to last year's promotional activity [11][12] - Wholesale business declined 14% year-over-year, primarily due to lower spring 2024 orders [12] - Columbia brand net sales decreased 6%, reflecting lower spring orders but partially offset by DTC brick-and-mortar growth [19] Market Data and Key Metrics Changes - North America remains the most challenging market, with net sales decreasing 8% driven by mid-teens percent decrease in wholesale sales [13] - Latin America and Asia Pacific region net sales increased 7%, with China net sales increasing high 20% due to exceptional e-commerce performance [15] - Europe, Middle East, and Africa region net sales decreased 6%, with Europe direct net sales essentially flat [16] Company Strategy and Development Direction - The company is focused on bringing younger active consumers into the brand through a reinvigorated product line emphasizing innovation, performance, and style [9] - A profit improvement program is on track to deliver $125 million to $150 million in savings by 2026, with $75 million to $90 million in cost savings expected this year [10] - The company is investing in strategic priorities to accelerate profit and growth, enhance consumer experiences, and drive brand engagement [28] Management's Comments on Operating Environment and Future Outlook - Management reiterated the full year net sales outlook while modestly raising the diluted earnings per share range [8] - The company expects to continue facing inflationary pressures impacting consumer demand, particularly in North America [12] - Management remains confident in the long-term growth opportunities despite current challenges [28] Other Important Information - Inventory was down 37% year-over-year, with a focus on improving inventory turns and operational efficiency [8][10] - The company is actively managing promotional activity to establish its e-commerce site as the best expression of the brand [14] Q&A Session Summary Question: Inventory reduction and comfort level for the fall season - Management expressed pride in the 37% inventory reduction and indicated there is still room for improvement in inventory utilization [30][31] Question: European business health and order trends - Management reported positive trends in the European business and expressed optimism for growth opportunities [32] Question: Q1 top line beat and international performance - The upside surprise in Q1 was attributed to favorable weather in January and earlier shipments [34][35] Question: US consumer activity and outdoor category trends - Management noted that consumer activity is improving, particularly around seasonal events like Mother's Day and Father's Day [46] Question: Hike Society initiative and younger consumer engagement - Management confirmed the success of the Hike Society initiative in Europe and indicated plans to introduce it in the US [49] Question: Gross margin guidance and competitive environment - Management explained the slight reduction in gross margin guidance due to shifts in business composition and increased reliance on outlet stores [51][52] Question: Order book status and SOREL brand outlook - The consolidated order book for fall 2024 is expected to be down low single digits, with SOREL facing challenges in e-commerce [59][62] Question: China market performance and margin comparison - Management highlighted improvements in the China market due to better operations and local market relevance, noting it is among the most profitable regions [80][82]

Columbia Sportswear (COLM) came out with quarterly earnings of $0.71 per share, beating the Zacks Consensus Estimate of $0.35 per share. This compares to earnings of $0.74 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 102.86%. A quarter ago, it was expected that this maker of outdoor gear would post earnings of $2 per share when it actually produced earnings of $1.86, delivering a surprise of -7%.Over the last four quarters, ...

Columbia Sportswear Company. CFO Commentary and Financial Review First Quarter 2024 April 25, 2024 FORWARD-LOOKING STATEMENTS This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes. This presentation contains forward-looking tatements within the meaning of the federal securities laws regarding Columbia Sportwear Company's business opportunities and anticipated results of operations. Forward-looking statement ...

Exhibit 99.1 Columbia Sportswear Company Reports First Quarter 2024 Financial Results; Updates Full Year 2024 Financial Outlook First Quarter 2024 Highlights Full Year 2024 Financial Outlook The following forward-looking statements reflect our expectations as of April 25, 2024 and are subject to significant risks and business uncertainties, including those factors described under "Forward-Looking Statements" below. Additional disclosures and financial outlook details can be found in the Full Year 2024 Finan ...

Columbia Sportswear Company (COLM) appears troubled, with its shares down 14.5% in a year compared with the industry’s decline of 9.4%. The company has been bearing the brunt of soft consumer demand due to a difficult operating landscape.Additionally, management expects 2024 to be a difficult year, with retailers placing orders cautiously and elevated economic and geopolitical uncertainty. Columbia Sportswear has also been seeing elevated SG&A expenses for a while now.The Zacks Consensus Estimate for 2024 e ...

Several companies in the apparel space are grappling with soft consumer demand stemming from a tough operating landscape. Columbia Sportswear Company (COLM) is no exception, which saw its fourth-quarter 2023 sales decline across all channels, categories and brands. Apart from this, the company has been seeing elevated SG&A expenses for a while now.The persistence of these factors poses concerns for the near term. The Zacks Consensus Estimate for 2024 earnings per share has descended 4.6% to $3.70 over the p ...

Investors interested in Textile - Apparel stocks are likely familiar with PVH (PVH) and Columbia Sportswear (COLM) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks wit ...

Key PointsThe apparel industry is giving you more reasons to keep watching it today; here is why the pros could come into it, too.Breaking down the chess board is the best upside in Ermenegildo Zegna stock, and it is Goldman's top pick in the space.Markets agree it is head and shoulders above peers, and you shouldn't ignore it.5 stocks we like better than CME GroupWhen professional traders at investment houses like The Goldman Sachs Group NYSE: GS look for places to put their capital to work, they must have ...