Columbia flat in Q1 as tariffs and US weakness weigh on margins

Columbia Sportswear Company reported first-quarter 2026 net sales of $779.0 million, essentially unchanged from a year earlier but down 3 percent on a constant-currency basis. A 35 percent jump in Europe, the Middle East and Africa (EMEA) and growth across most international markets were not enough to offset a 10 percent decline in the US and a tariff-driven squeeze on profitability that pushed operating income down 10 percent and net income down 19 percent year on year. The Q1 results were published alongside an upgraded full-year financial outlook.

EMEA surges 35% and LAAP stays mostly positive

EMEA was the standout, with net sales rising 35 percent to $145.0 million – or 21 percent in constant-currency terms – driven by robust winter season demand, strong direct-to-consumer (DTC) performance and healthy wholesale volumes, partly supported by earlier-than-usual shipment timing. The EMEA distributor business grew around 30 percent.

In the Latin America and Asia Pacific (LAAP) region, Korea posted high-single-digit gains, supported by improving outdoor category trends. China advanced in the low-double digits in reported terms (mid-single digits constant currency), reflecting wholesale growth partly brought forward by earlier shipment timing. Japan edged down mid-single digits, weighed by softer international tourism and delayed wholesale orders. Canada rose 7 percent in reported terms but only 1 percent constant currency, led by DTC brick-and-mortar (B&M) sales.

US sales slide 10% as wholesale orderbook softens and DTC slows

US net sales fell 10 percent to $422.0 million, with declines in both wholesale and direct-to-consumer (DTC). Wholesale revenue dropped in the low teens as the Spring 2026 orderbook came in lighter than a year earlier. DTC sales fell in the high single digits, with brick-and-mortar down mid-single digits and e-commerce down in the low teens. Management also pointed to a 2025 decision to reduce winter inventory supply in response to tariff announcements, which left the company short of product to meet first-quarter demand.

Tariffs and higher selling costs weigh on profitability

Gross margin slipped 20 basis points year on year to 50.7 percent, as incremental US tariff costs flowed through the cost of goods sold and offset the benefit of targeted price increases and a more favorable channel and regional mix.

The company said it has paid about $80 million in US IEEPA tariffs that were later struck down by the Supreme Court, but it is not assuming any recovery in its results or outlook. Quarter-end inventories also carried roughly $25 million of tariff-related costs ahead of mitigation measures.

Operating expenses rose as the group scaled its omni-channel and international DTC operations, including costs tied to new store openings and variable selling expenses. Savings from its Profit Improvement Program in enterprise technology and supply chain staffing partially mitigated the increase.

By brand: SOREL drags, Columbia steadies, prAna slips.

By brand, the Columbia label edged up 1 percent in reported terms (down 2 percent constant currency) to $690.1 million, with growth in most international markets partially offset by the US decline. SOREL fell 12 percent to $37.2 million (down 14 percent constant currency), hampered by a shortage of winter season inventory and lower closeout volumes. prAna declined 5 percent to $26.7 million, with softer wholesale sales partly offset by solid DTC growth. Mountain Hardwear was flat at $25.0 million.

By category: footwear outperforms

By category, footwear was the relative bright spot, rising 4 percent in reported terms (flat constant currency) to $155.9 million, driven by the Columbia brand, although SOREL’s weakness partially offset that momentum. Apparel, accessories and equipment edged down 1 percent (down 3 percent constant currency) to $623.1 million.

Management remains confident in the ACCELERATE strategy

Chairman and Chief Executive Officer Tim Boyle said the company was encouraged by early momentum in the US and cited the Fall 2026 wholesale orderbook as the basis for a return to wholesale growth in the second half of the year.

The multi-year ACCELERATE Growth Strategy – built around product differentiation, elevating the omni-channel marketplace and increasing demand-creation investment – remains the core framework for the Columbia brand’s push to reach younger, more active consumers. Within that strategy, the 2025 “Engineered for Whatever” brand campaign, now slated for a 2026 sequel, has served as the tentpole. Management also highlighted the relaunch of the US Columbia.com site as a key proof point in the execution.

Full-year outlook raised, but prudent

Columbia lifted its full-year 2026 gross margin outlook to 50.3–50.5 percent of net sales, from 49.8–50.0 percent previously, while keeping net sales guidance unchanged at $3.43 billion–$3.50 billion, implying 1–3 percent growth over 2025.

The higher margin outlook reflects lower-than-expected effective US tariff rates. Management assumed current tariff levels persist through July 2026 before reverting to a structure closer to that in place prior to the Supreme Court ruling. It also reiterated that the outlook excludes any potential refund of IEEPA tariffs already paid.