• Net Sales: Decreased 3% to $3.4 billion for 2024.
• Fourth-Quarter Net Sales: Increased 3% year over year to $1.1 billion.
• Gross Margin: Expanded 50 basis points to 51.1% in the fourth quarter.
• SG&A Expenses: Increased 6% in the fourth quarter.
• Share Repurchases: $318 million returned to shareholders.
• Dividends Paid: Approximately $70 million.
• Cash and Equivalents: $815 million with no debt at year-end.
• Fourth-Quarter US Net Sales: Decreased 1%.
• China Net Sales: Increased mid-teens percent in the fourth quarter.
• Japan Net Sales: Increased mid-single digit percent in the fourth quarter.
• Korea Net Sales: Decreased mid-single digit percent in the fourth quarter.
• EMEA Net Sales: Increased 21% in the fourth quarter.
• Columbia Brand Net Sales: Increased 6% in the fourth quarter.
• Mountain Hard Wear Net Sales: Increased 5% in the fourth quarter.
• prAna Net Sales: Decreased 2% in the fourth quarter.
• SOREL Net Sales: Decreased 16% in the fourth quarter.
• 2025 Net Sales Growth Outlook: Expected growth of 1% to 3%.
• 2025 Gross Margin Outlook: Expected to expand 80 basis points to approximately 51%.
• 2025 Operating Margin Outlook: Expected to be 7.7% to 8.3%.
• 2025 Diluted Earnings Per Share Outlook: Expected to be in the range of $3.80 to $4.15.

• Warning! GuruFocus has detected 5 Warning Sign with COLM.

Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Columbia Sportswear Co (NASDAQ:COLM) achieved a 3% increase in fourth-quarter net sales, reaching $1.1 billion, driven by a 7% increase in wholesale net sales.
• The company successfully reduced inventories by 7%, contributing to a healthier inventory position and supporting gross margin expansion.
• Columbia Sportswear Co (NASDAQ:COLM) returned $318 million to shareholders through share repurchases and paid approximately $70 million in dividends.
• The ACCELERATE Growth Strategy is showing positive momentum, with plans to elevate the brand and attract younger consumers through refreshed marketing and product innovation.
• International markets, particularly China and Europe, are experiencing strong growth, with China net sales increasing by mid-teens percent and Europe direct net sales growing by high-teens percent.

Negative Points

• Overall 2024 net sales decreased by 3% to $3.4 billion, reflecting challenging market conditions in North America.
• Operating margin contracted due to net sales decline and ongoing cost pressures, leading to a decline in earnings.
• The SOREL brand experienced a 16% decrease in net sales, driven by lower wholesale and direct-to-consumer sales.
• The US direct-to-consumer net sales declined by low single-digit percent, with lower e-commerce sales partially offset by modest brick-and-mortar growth.
• SG&A expenses increased by 6%, primarily due to higher incentive compensation and direct-to-consumer expenses, contributing to operating margin pressure.

Q & A Highlights

Q: Can you expand on the order book for spring and fall, and provide more details on the performance in China? A: Our order book for both spring and fall is positive, with growth led by China and Europe. In China, we've focused on product relevance and store productivity, which has resulted in significant improvements. Our leadership in China is concentrating on monthly store performance, which has been beneficial. (Timothy Boyle, CEO)

Q: Regarding the demand creation commitment for 2025, will the spending be more concentrated in the second half of the year? A: The first half will see moderated spending, while the second half will be more aggressive, aligning with the introduction of new materials and larger budgets. (Timothy Boyle, CEO; Jim Swanson, CFO)

Q: How do you reconcile the growth expectations for the US DTC business despite closing temporary stores? A: We are closing temporary locations used for inventory clearance and focusing on columbia.com to enhance brand positioning. We're also opening new stores in high-traffic areas to showcase our brand and products. (Timothy Boyle, CEO)

Q: What are the key metrics you are targeting with the new marketing direction? A: We aim to attract younger, more active consumers by combining new products with compelling marketing messages. Key performance indicators include conversion rates and member acquisition and retention through our loyalty program. (Andrew Burns, VP of Investor Relations)

Q: Why is the fall order book lighter than spring, and was there any pull forward of demand in Q4? A: The fall order book reflects modest growth despite lower sell-through in fall 2024. There was no pull forward of demand into Q4; however, some sales shifted from Q3 to Q4 due to supply chain disruptions. (Jim Swanson, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.