Columbia Sportswear lifts FY26 outlook after Q3 profit surge

Columbia Sportswear has raised its full-year 2026 outlook to net sales of $3.46bn–$3.50bn, up from a prior minimum of $3.43bn, after third-quarter profit growth that exceeded its own guidance.

The Portland-based outdoor brand also lifted its diluted EPS projection to $4.65–$4.90, up from a previous lower bound of $4.45. It maintained its forecast for gross margin expansion of 52.1%–52.3% of net sales, supported by tariff refunds claimed under the International Emergency Economic Powers Act (IEEPA).

What drove the Q3 numbers?

Third-quarter net sales reached $962.6m, a 2% increase year-on-year. International markets and direct-to-consumer (DTC) channels offset a decline in US wholesale revenue, the company stated.

US sales were hit by later shipments of Fall 2026 wholesale orders. Improved DTC trends softened the blow. Notably, a portion of those delayed wholesale orders actually shipped earlier than expected — a timing benefit the company itself flagged.

Gross margin slipped 20 basis points to 49.8% in the quarter. Columbia attributed the decline to support provided to factory partners — a cost brand owners across the supply chain will recognise as vendors absorb tariff and demand pressures.

Operating income climbed to $109.6m, or 11.4% of net sales, from $67.4m, or 7.1%, a year earlier. Net income rose to $84.7m, or $1.66 per diluted share, from $52.0m, or $0.95, in the prior-year quarter, which had been weighed down by impairment charges.

Chairman and chief executive officer Tim Boyle said: "We're pleased to have delivered net sales and EPS growth exceeding our guidance for the third quarter. These results primarily reflected a portion of delayed Fall '26 wholesale orders shipping earlier-than-expected, improved trends in our US DTC business, and the continued momentum of our international business, despite challenging global macroeconomic conditions."

How large is the IEEPA tariff effect?

For the first nine months of 2026, the refunds materially reshape the margin picture. Net sales for the period totalled $2.36bn, up 1% year-on-year, while gross margin expanded 220 basis points to 52.3% of net sales from 50.1% — driven largely by an approximately 230 basis-point benefit from previously received IEEPA tariff refunds.

Nine-month net income reached $145.6m, or $2.82 per diluted share, against $84.1m, or $1.53, in the comparable 2025 period. The IEEPA refunds, after allowances to factory partners, added $0.85 to diluted EPS. Sourcing teams should note the sequence: the refunds flowed through, but part of the gain was shared back with manufacturers, consistent with the factory support that compressed quarterly gross margin.

What comes next for the ACCELERATE strategy?

Columbia tied the quarterly performance to early milestones in its ACCELERATE Growth Strategy, which targets product innovation, digital enhancements and expansion of US DTC e-commerce to reach younger consumers. The company has not specified new capital commitments tied to the strategy in this release.

Boyle acknowledged the limits of one strong quarter. He said: "The operating environment remains challenging and uncertain, and we will continue working to elevate the Columbia brand and improve consumer perceptions in the US. That said, we are increasingly confident that the Columbia brand ACCELERATE Growth Strategy is gaining traction and putting us on the right track to return to healthy, sustainable growth over the longer term."

The raised guidance now rests on wholesale shipment timing normalising, US DTC momentum holding and international growth continuing through the fourth quarter.