Columbia(COLM) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Release Overview Executive Summary and Strategic Overview The company reported a 6% Q2 net sales increase driven by international markets, maintains a strong balance sheet, and provides a limited full-year 2025 outlook Q2 2025 Key Financial Highlights | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $605.2M | $570.2M | +6% | | Operating Loss | ($23.6M) | ($23.8M) | +0.8% | | Net Loss per Diluted Share | ($0.19) | ($0.20) | +5.0% | - The company's fortress balance sheet is highlighted by $579.0 million in cash, cash equivalents, and short-term investments, with no outstanding borrowings[6] - Strategic priorities are centered on the ACCELERATE growth strategy, which aims to attract younger consumers by creating iconic products, increasing brand engagement, and enhancing consumer experiences[4][7][9] - Management notes that the apparel industry is facing increasing tariffs and is focused on mitigating financial impacts and delivering value to consumers for the Fall 2025 season[5] Second Quarter 2025 Financial Results Q2 2025 net sales grew 6% to $605.2 million and gross margin improved to 49.1%, while a slight improvement was seen in operating loss to $23.6 million Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $605.2M | $570.2M | | Gross Margin | 49.1% | 47.9% | | SG&A Expenses | $325.6M (53.8% of sales) | $302.7M (53.1% of sales) | | Operating Loss | ($23.6M) | ($23.8M) | | Net Loss | ($10.2M) | ($11.7M) | | Diluted Loss Per Share | ($0.19) | ($0.20) | - Net sales increase was primarily driven by changes in wholesale shipment timing and higher Spring 2025 wholesale orders, with international market growth offsetting weakness in the U.S. and lower DTC sales[10] - Gross margin expansion was attributed to healthier inventory composition leading to less clearance activity and favorable product sales mix[11] First Half 2025 Financial Results For the first six months of 2025, net sales increased 3% to $1.38 billion, operating income rose 10%, and diluted EPS grew to $0.58 First Half 2025 vs First Half 2024 Performance | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Sales | $1,383.7M | $1,340.2M | | Gross Margin | 50.1% | 49.5% | | Operating Income | $22.9M | $20.9M | | Net Income | $32.1M | $30.6M | | Diluted EPS | $0.58 | $0.51 | Financial Position and Cash Flow The company's balance sheet remained strong with $579.0 million in cash and no debt, though inventories rose 13% and operating activities used cash Balance Sheet Highlights (as of June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, & short-term investments | $579.0M | $711.1M | | Inventories | $926.9M | $823.6M | | Borrowings | $0 | $0 | Cash Flow Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash (Used in) Provided by Operating Activities | ($62.9M) | $108.9M | | Capital Expenditures | $30.0M | $27.8M | Capital Allocation In H1 2025, the company returned capital to shareholders by repurchasing 1.7 million shares for $131.7 million and declaring a quarterly dividend of $0.30 per share - The company repurchased 1,677,784 shares of common stock for $131.7 million in the first six months of 2025[24] - A quarterly cash dividend of $0.30 per share was approved by the Board of Directors[25] - As of June 30, 2025, $495.9 million remained available under the stock repurchase authorization[24] Financial Outlook The company issued a limited full-year 2025 outlook projecting net sales between -1% and +1%, with Q3 2025 net sales expected to decrease by 1% to 3% Full Year 2025 Financial Outlook | Metric | Expected Range | YoY Change | | :--- | :--- | :--- | | Net Sales | $3.33B - $3.40B | -1.0% to +1.0% | Third Quarter 2025 Financial Outlook | Metric | Expected Range | YoY Comparison (2024) | | :--- | :--- | :--- | | Net Sales | $904M - $922M | $932M | | Operating Margin | 7.6% - 9.0% | 12.1% | | Diluted EPS | $1.00 - $1.20 | $1.56 | Consolidated Financial Statements This section provides detailed unaudited financial statements, including balance sheets, statements of operations, cash flows, and a GAAP to non-GAAP reconciliation Condensed Consolidated Balance Sheets The balance sheet shows an increase in total assets to $2.89 billion and total liabilities to $1.24 billion, driven by higher inventories and lease liabilities - This section contains the detailed Condensed Consolidated Balance Sheets as of June 30, 2025, compared to June 30, 2024[37][38] Condensed Consolidated Statements of Operations The income statement details increased net sales and gross profit for Q2 and H1 2025, with a narrowing Q2 net loss and rising H1 net income - This section contains the detailed Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024[39][40] Condensed Consolidated Statements of Cash Flows The statement shows a net cash decrease of $104.1 million in H1 2025, driven by cash used in operating and financing activities - This section contains the detailed Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024[41][42] Reconciliation of GAAP to Non-GAAP Financial Measures This section reconciles reported net sales growth to constant-currency growth, highlighting strong international performance in EMEA and LAAP - The company provides constant-currency net sales information, a non-GAAP measure, to assess performance excluding foreign currency exchange rate fluctuations[30] Q2 2025 Net Sales Growth by Geography (Constant-Currency) | Region | Reported Change | Constant-Currency Change | | :--- | :--- | :--- | | United States | (2)% | (2)% | | LAAP | 13% | 12% | | EMEA | 26% | 24% | | Canada | 2% | 5% | | Total | 6% | 6% | H1 2025 Net Sales Growth by Brand (Constant-Currency) | Brand | Reported Change | Constant-Currency Change | | :--- | :--- | :--- | | Columbia | 5% | 6% | | SOREL | (8)% | (8)% | | prAna | (8)% | (8)% | | Mountain Hardwear | (11)% | (11)% | | Total | 3% | 4% |