Financial Data and Key Metrics Changes - Full year 2025 net sales increased by 1% to $3.4 billion, with international market growth offsetting challenges in the U.S. [9][10] - Fourth quarter net sales decreased by 2% year-over-year to $1.1 billion, driven by a 7% decrease in wholesale net sales, partially offset by a 1% increase in direct-to-consumer sales [12] - Gross margin expanded by 50 basis points to 51.6%, attributed to cleaner inventories and lower promotions [12] - SG&A expenses increased by 3%, reflecting higher DTC expenses and non-recurring costs associated with a profit improvement program [12] Business Line Data and Key Metrics Changes - The Columbia brand saw modest sales growth, while emerging brands experienced declines, particularly Sorel, which decreased by 18% due to earlier shipments and less clearance activity [15][23] - Prana net sales increased by 6%, driven by DTC growth and enhanced marketing efforts [23] - Mountain Hardwear net sales decreased by 5%, but underlying business trends remained healthy [24] Market Data and Key Metrics Changes - U.S. net sales decreased by 8%, with the wholesale business down in the high teens percentage [13] - International sales growth was strong, with LAAP net sales increasing by 10% and China net sales increasing in the low double digits [15][16] - EMEA net sales increased by 3%, with Europe showing potential for strong growth despite challenges [17] Company Strategy and Development Direction - The Columbia Accelerate Growth Strategy is aimed at attracting younger consumers through new product collections and differentiated marketing [8] - The company is focused on maintaining a fortress balance sheet, exiting 2025 with $791 million in cash and no debt [9] - The initial full-year net sales outlook for 2026 anticipates growth of 1%-3%, with all emerging brands expected to grow, led by Prana [11][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the acceptance of new collections and the potential for growth in the second half of 2026, despite ongoing tariff headwinds [32][68] - The company is cautious about the impact of tariffs on consumer behavior and pricing strategies [46][84] - Management highlighted the importance of weather conditions on sales performance, indicating that favorable weather could lead to improved order book performance [58] Other Important Information - The company executed a successful marketing campaign, "Engineered for Whatever," which significantly increased brand engagement and awareness [19][28] - The company is the official uniform sponsor for the USA Curling National Team at the upcoming Winter Olympic Games [21] Q&A Session Summary Question: Trends in the business and order book status - Management noted strong bookings and cautious approaches due to tariff impacts, with expectations for improved performance in the second half of 2026 [32] Question: Brand advertising and marketing spend - Management believes current marketing spend is efficient and plans to maintain it, with a slight decrease expected in 2026 [36][37] Question: Overlap with Eddie Bauer store closures - Management indicated potential opportunities to capture market share if Eddie Bauer closes stores, but noted uncertainty regarding the extent of overlap [42] Question: Gross margin and tariff impacts - Management discussed the significant impact of unmitigated tariffs on gross margins and outlined strategies to mitigate these costs through price increases and vendor negotiations [46][55] Question: Health of the U.S. market and growth expectations - Management expects a return to growth in the U.S. wholesale business in the second half of 2026, with low- to mid-single-digit growth anticipated [68] Question: U.S. wholesale order book and DTC store openings - Management confirmed that the U.S. wholesale order book is expected to grow at a low single-digit rate, with new store openings balancing out closures [77]

Financial Data and Key Metrics Changes - Full year 2025 net sales increased by 1% to $3.4 billion, with international market growth offsetting challenges in the U.S. [8][10] - Fourth quarter net sales decreased by 2% year-over-year to $1.1 billion, driven by a 7% decrease in wholesale net sales, partially offset by a 1% increase in direct-to-consumer sales [11][12] - Gross margin expanded by 50 basis points to 51.6%, attributed to cleaner inventories and lower promotions [11][12] - SG&A expenses increased by 3%, reflecting higher DTC expenses and non-recurring costs associated with a profit improvement program [11][12] Business Line Data and Key Metrics Changes - Columbia brand net sales decreased by 1%, with international growth offset by declines in the U.S. [17] - Sorel net sales decreased by 18% due to earlier shipment of fall wholesale orders and less clearance activity [21] - Prana net sales increased by 6%, driven by DTC growth and strong momentum for updated product offerings [22] - Mountain Hardwear net sales decreased by 5%, despite healthy underlying business trends in outerwear and fleece [23] Market Data and Key Metrics Changes - U.S. net sales decreased by 8%, with wholesale business down in the high teens percentage [12][13] - International sales showed strong growth, with LAAP net sales increasing by 10% and China net sales increasing in the low double digits [13][16] - Japan net sales increased by high single digits, while Korea net sales increased by low single digits [14][15] Company Strategy and Development Direction - The Columbia Accelerate Growth Strategy is attracting younger consumers with new product collections and differentiated marketing [6][10] - The Engineered for Whatever campaign has driven robust consumer engagement and brand awareness [18][19] - The company aims to maintain a fortress balance sheet with $791 million in cash and no debt, while returning cash to shareholders through share repurchases and dividends [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for growth in the second half of 2026, particularly in the U.S. wholesale business [24][50] - The company anticipates net sales growth of 1%-3% for 2026, with a focus on expanding operating margins despite ongoing tariff headwinds [10][26] - Management highlighted the importance of weather conditions on sales performance and inventory levels [56][80] Other Important Information - The company has successfully launched new product collections, including the Amaze Puff, which resonated well with consumers [9][17] - The company is the official uniform sponsor for the USA Curling National Team at the upcoming 2026 Winter Olympic Games [19] Q&A Session Summary Question: Trends in the business and order book status - Management noted strong bookings and cautious retailer approaches due to tariff impacts, with expectations for improved performance in the spring [31][32] Question: Brand advertising and marketing spend - Management indicated that current marketing spend is efficient, with plans to maintain similar levels in 2026 [34][36] Question: Overlap with Eddie Bauer store closures - Management acknowledged potential opportunities to gain market share as Eddie Bauer closes stores, though exact overlap is uncertain [40][42] Question: Gross margin and tariff impacts - Management explained that unmitigated tariff costs are expected to impact gross margins, with price increases planned to offset these costs [43][45] Question: U.S. market health and growth expectations - Management expects a return to growth in the U.S. wholesale business in the second half of 2026, with improvements anticipated across all brands [49][66] Question: Fall 2026 order book and pricing strategy - Management confirmed that the U.S. wholesale order book is up, but unit sales may be down due to cautious retailer behavior [79][80]