Columbia Sportswear Company's (NASDAQ: COLM) stock plummeted 7.99% in pre-market trading on Wednesday, following the company's mixed fourth-quarter results and disappointing guidance for the year 2025.

In the fourth quarter of 2024, Columbia Sportswear reported a 3% increase in net sales to $1.1 billion, driven by a 7% rise in wholesale net sales. However, the company missed analysts' expectations on both revenue and earnings per share (EPS). While gross margin expanded by 50 basis points to 51.1%, driven by lower closeout sales and improved margins, selling, general, and administrative (SG&A) expenses increased by 6%, primarily due to higher incentive compensation and direct-to-consumer expenses.

For the full year 2025, Columbia Sportswear forecasted a 1% to 3% increase in net sales, with foreign currency expected to be a 140-basis-point headwind. The company's outlook for gross margin expansion of 80 basis points to approximately 51% was overshadowed by projected SG&A growth, driven by investments in demand creation, higher incentive compensation, and direct-to-consumer store growth. As a result, Columbia Sportswear provided an operating margin guidance of 7.7% to 8.3%, leading to a diluted EPS range of $3.80 to $4.15, which fell short of analysts' expectations.

While Columbia Sportswear faced challenges in its home market, with US direct-to-consumer sales declining, the company witnessed strong momentum in international markets, particularly in China and Europe. In China, net sales increased by mid-teens percent in the fourth quarter, driven by healthy growth across wholesale and direct-to-consumer channels. Europe direct net sales also grew by high-teens percent, led by robust direct-to-consumer growth.