For the quarter ended June 30, 2026, Columbia Sportswear posted net sales of $614.4 million, up 2 per cent year on year (YoY), or 1 per cent in constant currency, compared to $605.2 million in the corresponding quarter of FY25.
American manufacturer and distributor Columbia Sportswear Company has returned to profitability in Q2 FY26 as net sales rose 2 per cent to $614.4 million, supported by international growth and a $78 million IEEPA tariff refund.
The company raised its FY26 profit and EPS guidance, while maintaining its sales outlook despite softer US demand and ongoing macroeconomic uncertainty.
“We are pleased to have delivered net sales exceeding our guidance for the second quarter, driven by the resilience of our international business, which was partly offset by continued softness in the US, amid growing global macroeconomic headwinds,” said Tim Boyle, chairman and chief executive officer at Columbia Sportswear.
Columbia maintained its FY26 revenue guidance at $3.43-3.50 billion, representing growth of 1-3 per cent over FY25. However, it significantly raised profitability expectations following the tariff refund. Gross margin is now projected at 52.1-52.3 per cent, up from the previous guidance of 50.3-50.5 per cent, while operating income is expected to reach $290-325 million, compared with the earlier forecast of $230-262 million.
The company also increased its diluted earnings per share (EPS) guidance to $4.45-4.90 from the previous range of $3.55-4.00, while assuming current US tariff rates remain unchanged through the end of 2026. Third-quarter net sales are expected to range between $929 million and $943 million, with earnings per share projected at $1.15-1.35.
In Q2, growth across most international markets was partly offset by lower US sales, reflecting weaker Spring 2026 wholesale orders and softer performance in the company’s direct-to-consumer (DTC) brick-and-mortar business, the Columbia Sportswear said in a press release.
Gross margin expands on IEEPA tariff recovery
The company received an IEEPA tariff refund of approximately $78 million during the quarter, including interest. Around $62 million was recognised in earnings, comprising a $60 million benefit in cost of sales and $2 million in interest income, while the remaining $15 million reduced inventory costs and is expected to benefit future gross margins as inventory is sold.
The gross margin expanded sharply by 920 basis points to 58.3 per cent of net sales from 49.1 per cent a year earlier. Columbia said the improvement included an approximately 980-basis-point (bps) benefit from the recovery of IEEPA tariffs, partially offset by weaker channel profitability amid higher promotional activity in its direct-to-consumer stores.
The operating income improved to $30.9 million, representing 5 per cent of net sales, compared with an operating loss of $23.6 million, or 3.9 per cent of net sales, in Q2 FY25. Net income reached $26.6 million, or $0.52 per diluted share, versus a net loss of $10.2 million, or $0.19 per diluted share, a year earlier. The tariff refund alone increased diluted earnings per share by $0.93.
The company ended the quarter with $624.6 million in cash, cash equivalents and short-term investments and reported no borrowings.
“Our reported second quarter earnings and profit margins include the impact of US tariff refunds recognised during the quarter. Excluding this impact, our underlying performance was largely in-line with our expectations,” Boyle added.
ACCELERATE strategy gains traction with footwear
He also highlighted progress under the company’s ACCELERATE Growth Strategy, noting: “We continue to see encouraging signs of progress with our ACCELERATE Growth Strategy. We are particularly pleased with our strong second quarter performance in Columbia brand footwear, one of the brand’s strategic growth pillars.”
Looking ahead, Boyle cautioned that the company had become slightly more conservative about the second half of the year due to external pressures. “While our first half operating results have been in-line to slightly favourable overall as compared to our expectations at the start of the year, our outlook for the second half has incrementally moderated, largely due to external geopolitical and macroeconomic headwinds,” he said.
“Despite the more challenging environment, we remain confident that the Columbia brand ACCELERATE Growth Strategy is beginning to gain traction and is putting us on the right track to return to healthy, sustainable growth over the longer-term,” Boyle added.
Selling, general and administrative (SG&A) expenses increased to $332.2 million from $325.6 million a year earlier, reflecting higher direct-to-consumer expenses, including store impairment charges and costs related to new stores. These increases were partly offset by lower enterprise technology costs following actions taken under the company’s Profit Improvement Programme.
First-half results reflect stronger profitability
For the first half of FY26, net sales rose 1 per cent YoY to $1.39 billion, while operating income climbed to $72.9 million from $22.9 million. Net income increased to $60.9 million, or $1.17 per diluted share, compared with $32.1 million, or $0.58 per diluted share, in the first half of FY25. Operating cash flow also improved to $37.5 million, reversing a cash outflow of $62.9 million in the prior-year period.
Third quarter (Q3) outlook
For Q3 FY26, Columbia Sportswear expects net sales of $929-943 million, ranging from a 1.5 per cent decline to flat year on year, reflecting a higher proportion of Fall 2026 shipments shifting into the fourth quarter. Operating margin is projected at 8.1-9.5 per cent of net sales, supported by the cost of sales benefit from IEEPA tariff refunds in inventory, despite slight SG&A growth and anticipated accommodations to factory partners. Diluted EPS are forecast at $1.15-1.35, compared with $0.95 in the prior-year quarter.
Fibre2Fashion News Desk (SG)
