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What changed in COLUMBIA SPORTSWEAR CO's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of COLUMBIA SPORTSWEAR CO's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+265 added−259 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-26)

Top changes in COLUMBIA SPORTSWEAR CO's 2024 10-K

265 paragraphs added · 259 removed · 202 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

51 edited+3 added−7 removed26 unchanged
Biggest changeOur design and utility patents describe the technologies, processes and designs incorporated into many of our most important products. We file applications for United States and foreign patents to protect inventions, designs and enhancements that we deem to have commercial value.
Biggest changeWe also place significant importance on trade dress (the overall appearance and image of our products) which, as much as trademarks, distinguishes Columbia’s products in the marketplace. Our design and utility patents describe the technologies, processes and designs incorporated into many of our most important products.
U.S. U.S. is our largest segment and provides apparel, accessories and equipment products through our Columbia, Mountain Hardwear, and prAna brands and footwear products through our Columbia and SOREL brands. These products are sold by our U.S. wholesale and DTC businesses. We have over 1,850 wholesale customers in the U.S.
U.S. is our largest segment and provides apparel, accessories and equipment products through our Columbia, Mountain Hardwear and prAna brands and footwear products through our Columbia and SOREL brands. These products are sold by our U.S. wholesale and DTC businesses. We have over 1,850 wholesale customers in the U.S.
We distribute the majority of EMEA products from a distribution center that we own and operate in France for our Europe-direct business, as well as through third-party logistics companies that operate facilities located near receiving ports.
We distribute the majority of our EMEA products from a distribution center that we own and operate in France for our Europe-direct business, as well as through third-party logistics companies that operate facilities located near receiving ports.
Kulok held various leadership positions at Nike, Inc., including USA Apparel Marketplace Planning Director and Director of Regional Planning. Richelle T. Luther joined the Company in 2008 as Deputy General Counsel. She was appointed Senior Vice President & Chief Human Resource Officer in September 2015 and named Executive Vice President, Corporate Affairs and Chief Human Resources Officer in January 2023.
Kulok held various leadership positions at NIKE, Inc., including USA Apparel Marketplace Planning Director and Director of Regional Planning. Richelle T. Luther joined the Company in 2008 as Deputy General Counsel. She was appointed Senior Vice President & Chief Human Resources Officer in September 2015 and named Executive Vice President, Corporate Affairs and Chief Human Resources Officer in January 2023.
Unless the context indicates otherwise, the terms "we," "us," "our," "the Company," and "Columbia" refer to Columbia Sportswear Company, together with its wholly owned subsidiaries and entities in which it maintained a controlling financial interest. BRANDS AND PRODUCTS We connect active people with their passions by providing them with the products they need to seek inspiration and adventure.
Unless the context indicates otherwise, the terms "we," "us," "our," "the Company," and "Columbia" refer to Columbia Sportswear Company, together with its wholly owned subsidiaries and entities in which it maintains a controlling financial interest. BRANDS AND PRODUCTS We connect active people with their passions by providing them with the products they need to seek inspiration and adventure.
MANUFACTURING AND SOURCING We seek to substantially limit our invested capital and avoid the costs and risks associated with large production facilities and the associated labor forces; therefore, we do not own, operate or manage manufacturing facilities. The majority of our finished goods are produced by contract manufacturers located outside the United States.
MANUFACTURING AND SOURCING We seek to substantially limit our invested capital and avoid the costs and risks associated with large production facilities and the associated labor forces; therefore, we do not own, operate or manage manufacturing facilities. The majority of our finished goods are produced by contract manufacturers located outside the United States ("U.S.").
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 1 Table of Contents Our team of specialists leads both our internal research and development efforts and works closely with independent suppliers to conceive, develop and commercialize innovative technologies and products to provide the unique performance benefits desired by consumers.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 1 Table of Contents Our team of specialists leads both our internal research and development efforts and works closely with independent suppliers to conceive, develop and commercialize innovative technologies and products to provide the unique performance benefits desired by consumers.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 3 Table of Contents We distribute the majority of Canada products from a distribution center that we own and operate in the province of Ontario in Canada, as well as through third-party logistics companies that operate facilities located near receiving ports.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 3 Table of Contents We distribute the majority of Canada products from a distribution center that we own and operate in the province of Ontario in Canada, as well as through third-party logistics companies that operate facilities located near receiving ports.
Our SOREL brand leverages its rich heritage, innovation and style to offer distinct, compelling, and unexpected footwear to consumers around the world. Mountain Hard Wear® | Acquired in 2003, our Mountain Hardwear brand's mission is to encourage and equip people to seek a wilder path in life.
Our SOREL brand leverages its rich heritage, innovation and style to offer distinct, compelling, and unexpected footwear to consumers around the world. Mountain Hardwear® | Acquired in 2003, our Mountain Hardwear brand's mission is to encourage and equip people to seek a wilder path in life.
We identify our primary competitive factors in the markets for outdoor, active and lifestyle products to be brand strength, product innovation, design, functionality, durability, and price, as well as effective marketing and delivery of product in alignment with consumer expectations.
We identify our primary competitive factors in the markets for outdoor, active and lifestyle products to be brand strength, product innovation, design, versatility, functionality, performance, durability, and price, as well as effective marketing and delivery of product in alignment with consumer expectations.
Our marketing supports and enhances our competitive position in the marketplace, drives alignment through seasonal initiatives, builds brand equity, raises brand relevance and awareness, infuses our brands with excitement, and, most importantly, stimulates consumer demand for our products.
Our marketing supports and enhances our competitive position in the marketplace, drives alignment through seasonal initiatives, builds brand equity, raises brand relevance and awareness, infuses our brands with excitement, and, most important, stimulates consumer demand for our products.
Independent contractors manufacturing our products are subject to our standards of manufacturing practices to facilitate safe and humane working conditions, as well as to promote ethical business practices. We have programs in place to monitor manufacturer practices and assess alignment against these standards. We maintain eight manufacturing liaison offices in seven Asia Pacific countries.
Independent contractors manufacturing our products are subject to our standards of manufacturing practices to facilitate safe and humane working conditions, as well as to promote ethical business practices. We have programs in place to monitor manufacturer practices and assess alignment with these standards. We maintain manufacturing liaison offices in seven Asia Pacific countries.
Five of the largest contract finished goods manufacturers account for approximately 75% of our footwear production, with the two largest manufacturers accounting for approximately 20% each and three manufacturers accounting for approximately 15%, 10% and 10% individually.
Five of the largest contract finished goods manufacturers account for approximately 80% of our footwear production, with the two largest manufacturers accounting for approximately 20% each and three manufacturers accounting for approximately 15%, 15% and 10% individually.
In the United States, for our largest employee base, we sponsor comprehensive medical, dental, vision and health savings or flexible spending account plans. We also provide 401(k) plan matching of employee contributions, paid time off, an employee assistance plan, life insurance, and short-term and long-term disability insurance.
In the U.S., for our largest employee base, we sponsor comprehensive medical, dental, vision, and health savings or flexible spending account plans. We also provide 401(k) plan matching of employee contributions, paid time off, an employee assistance plan, life insurance, and short-term and long-term disability insurance.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 5 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth information about our executive officers. All information is as of the date of the filing of this report. Name Age Position Timothy P. Boyle 74 Chairman, President and Chief Executive Officer Joseph P.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 5 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth information about our executive officers. All information is as of the date of the filing of this report. Name Age Position Timothy P. Boyle 75 Chairman, President and Chief Executive Officer Joseph P.
Swanson 49 Executive Vice President, Chief Financial Officer Craig Zanon 64 Executive Vice President, Emerging Brands, EMEA and Asia Direct Timothy P. Boyle joined the Company in 1971 as General Manager, served as the Company's President from 1988 to 2015 and reassumed the role in 2017. Mr. Boyle has served as Chief Executive Officer since 1988.
Swanson 50 Executive Vice President, Chief Financial Officer Craig Zanon 65 Executive Vice President, Emerging Brands, EMEA and Asia Direct Timothy P. Boyle joined the Company in 1971 as General Manager, served as the Company's President from 1988 to 2015 and reassumed the role in 2017. Mr. Boyle has served as Chief Executive Officer since 1988.
Our personnel in these offices monitor production at our contract manufacturers' facilities to ensure our products are manufactured to our specifications. In 2023, our apparel, accessories and equipment products for our wholesale and direct-to-consumer ("DTC") businesses were manufactured into finished goods in 15 countries.
Our personnel in these offices monitor production at our contract manufacturers' facilities to ensure our products are manufactured to our specifications. In 2024, our apparel, accessories and equipment products for our wholesale and direct-to-consumer ("DTC") businesses were manufactured into finished goods in 14 countries.
We also arrange to have products directly shipped from contract manufacturers to wholesale customer-designated facilities in the United States. LAAP LAAP provides apparel, accessories and equipment products through our Columbia, Mountain Hardwear and prAna brands and footwear products through our Columbia and SOREL brands.
We also arrange to have products directly shipped from contract manufacturers to wholesale customer-designated facilities in the U.S. LAAP LAAP provides apparel, accessories and equipment products through our Columbia, Mountain Hardwear and prAna brands and footwear products through our Columbia and SOREL brands.
GOVERNMENT REGULATION As a company with global operations, we are, and our products are, subject to the laws of the United States and multiple foreign jurisdictions in which we operate and the rules and regulations of various governing bodies, which may differ among jurisdictions, including laws and regulations concerning product safety, environmental standards, trade, information security, privacy, labor and employment, health, marketing, competition, and safety.
GOVERNMENT REGULATION As a company with global operations, we are, and our products are, subject to the laws of the U.S. and multiple foreign jurisdictions in which we operate and the rules and regulations of various governing bodies, which may differ among jurisdictions, including, but not limited to, laws and regulations concerning product safety, environmental standards, trade, information security, privacy, labor and employment, health, marketing, competition, and safety.
We establish and maintain long-term relationships with key finished good manufacturing partners, but generally do not maintain formal long-term manufacturing volume commitments. The use of contract manufacturers for our finished goods maximizes our flexibility and improves our product pricing. We value legal, ethical and fair treatment of people involved in manufacturing our products.
We establish and maintain long-term relationships with key finished good manufacturing partners, but generally do not maintain formal long-term manufacturing volume commitments. The use of contract manufacturers for our finished goods maximizes our flexibility and historically has benefited our product costs. We value legal, ethical and fair treatment of people involved in manufacturing our products.
In 2023, finished goods manufacturers in Vietnam, Bangladesh, Indonesia, and India produced approximately 40%, 20%, 15% and 10%, respectively, of these products. Five of the largest contract finished goods manufacturers account for approximately 30% of our apparel, accessories and equipment production, with the largest manufacturer accounting for approximately 10%.
In 2024, finished goods manufacturers in Vietnam, Bangladesh, Indonesia, and India produced approximately 40%, 25%, 10% and 10%, respectively, of these products. Five of the largest contract finished goods manufacturers account for approximately 30% of our apparel, accessories and equipment production, with the largest manufacturer accounting for approximately 10%.
We own many trademarks, including Columbia Sportswear Company®, Columbia®, SOREL®, Mountain Hard Wear®, prAna®, the Columbia diamond shaped logo, the Mountain Hardwear nut logo, the SOREL polar bear logo, and the prAna sitting pose logo, as well as many other trademarks relating to our brands, products, styles, and technologies.
We own many trademarks, including Columbia Sportswear Company®, Columbia®, SOREL®, Mountain Hardwear®, prAna®, the Columbia diamond shaped logo, the Mountain Hardwear nut logo, the SOREL polar bear logo, and the prAna sitting pose and horn design logos, as well as many other trademarks relating to our brands, products, styles, and technologies.
As of December 31, 2023, our global workforce was self-disclosed as 54% female, 43% male, less than 1% non-binary and 2% undisclosed or chose not to identify.
As of December 31, 2024, our global workforce was self-disclosed as 55% female, 42% male, less than 1% non-binary, and 2% undisclosed or chose not to identify.
We distribute the majority of our U.S. products from distribution centers that we own and operate in Portland, Oregon and Robards, Kentucky, as well as through third-party logistics companies that operate distribution centers in Cincinnati, Ohio and Louisville, Kentucky and other facilities located near United States ports.
We distribute the majority of our U.S. products from distribution centers that we own and operate in Portland, Oregon and Robards, Kentucky, as well as through a third-party logistics company that operates a distribution center in Cincinnati, Ohio and other facilities located near U.S. receiving ports.
In the United States, the self-disclosed ethnicity of our workforce, including retail and distribution employees, was 56% White, 23% Hispanic or Latino, 7% Asian, 6% Black, less than 1% American Indian or Alaskan Native, less than 1% Native Hawaiian or other Pacific Islander, 4% two or more races and 2% undisclosed or chose not to identify.
In the U.S., the self-disclosed ethnicity of our workforce, including retail and distribution employees, was 55% White, 24% Hispanic or Latino, 7% Asian, 7% Black, less than 1% American Indian or Alaskan Native, less than 1% Native Hawaiian or other Pacific Islander, 3% two or more races, and 2% undisclosed or chose not to identify.
Compensation and Benefits Our compensation plans aim to reward performance. We offer competitive wages and, to align the interest of our management with those of our shareholders, shares of our common stock through a stock incentive plan. Globally, we offer employees affordable, competitive and comprehensive benefit programs.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 4 Table of Contents Compensation and Benefits Our compensation plans aim to reward performance. We offer competitive wages and, to align the interest of our management with those of our shareholders, shares of our common stock through a stock incentive plan. Globally, we offer employees affordable, competitive and comprehensive benefit programs.
These products are sold by our wholly-owned subsidiaries in Japan, Korea and China, and through distributors in other LAAP markets. We have nearly 350 wholesale customers, including distributors, in LAAP. In 2023, our four largest LAAP wholesale customers accounted for approximately 15% of LAAP net sales, and were less than 10% individually.
These products are sold by our wholly owned subsidiaries in Japan, Korea and China, and through distributors in other LAAP markets. We have over 350 wholesale customers, including distributors, in LAAP. In 2024, our five largest LAAP wholesale customers accounted for approximately 10% of LAAP net sales.
Zanon spent more than 20 years with Nike, Inc. and held various leadership roles, including Vice President and General Manager of Global Basketball, as well as Vice President of U.S. Footwear and General Manager for the Americas.
Zanon spent more than 20 years with NIKE, Inc. and held various leadership roles, including Vice President and General Manager of Global Basketball, as well as Vice President of U.S. Footwear and General Manager for the Americas. COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 6 Table of Contents
In 2023, our footwear products for our wholesale and DTC businesses were manufactured into finished goods in five countries. In 2023, finished goods manufacturers in Vietnam and China produced approximately 75% and 20%, respectively, of these products.
In 2024, our footwear products for our wholesale and DTC businesses were manufactured into finished goods in four countries. In 2024, finished goods manufacturers in Vietnam and China produced approximately 80% and 15%, respectively, of these products.
As of December 31, 2023, our employee workforce of approximately 10,070 employees consisted of approximately 5,770 full-time and part-time retail employees, 1,150 distribution center employees and 3,150 corporate and/or office employees.
As of December 31, 2024, our employee workforce of approximately 9,780 employees consisted of approximately 5,630 full-time and part-time retail employees, 1,080 distribution center employees and 3,070 corporate and/or office employees.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 6 Table of Contents Craig Zanon joined the Company in 2021 as Senior Vice President, Emerging Brands and was elevated to Executive Vice President, Emerging Brands, EMEA and Asia Direct in February 2024. Prior to joining the Company, Mr.
Craig Zanon joined the Company in 2021 as Senior Vice President, Emerging Brands and was elevated to Executive Vice President, Emerging Brands, EMEA and Asia Direct in February 2024. Prior to joining the Company, Mr.
Prior to joining the Company, she served at Northwest Natural Gas from 2002 to 2008, most recently as Corporate Secretary and Chief Governance Officer, and was an attorney at Stoel Rives LLP from 1997 to 2002. Skip Potter joined the Company in 2021 as Executive Vice President, Chief Digital Information Officer. Prior to joining the Company, Mr.
Prior to joining the Company, she served at Northwest Natural Gas from 2002 to 2008, most recently as Corporate Secretary and Chief Governance Officer, and was an attorney at Stoel Rives LLP from 1997 to 2002. Jim A.
Boyle 43 Executive Vice President, Columbia Brand President Peter J. Bragdon 61 Executive Vice President, Chief Administrative Officer and General Counsel Lisa A. Kulok 58 Executive Vice President, Chief Supply Chain Officer Richelle T. Luther 55 Executive Vice President, Corporate Affairs and Chief Human Resources Officer Skip Potter 53 Executive Vice President, Chief Digital Information Officer Jim A.
Boyle 44 Executive Vice President, Columbia Brand President Peter J. Bragdon 62 Executive Vice President, Chief Administrative Officer and General Counsel Lisa A. Kulok 59 Executive Vice President, Chief Supply Chain Officer Richelle T. Luther 56 Executive Vice President, Corporate Affairs and Chief Human Resources Officer Jim A.
From December 31, 2022 to December 31, 2023, we had an overall employee turnover rate of approximately 57%, impacted by approximately 80% and 66% turnover rates in our retail and distribution employee base, respectively. Approximately 29% of our workforce was located outside of the United States as of December 31, 2023.
From December 31, 2023 to December 31, 2024, we had an overall employee turnover rate of approximately 56%, impacted by approximately 79% and 54% turnover rates in our retail and distribution employee base, respectively. Approximately 32% of our workforce was located outside of the U.S. as of December 31, 2024.
In addition, we reinforce our brands' marketing messages with our key wholesale customers by utilizing digital platforms, television, print and advertising campaigns, as well as in-store branded visual merchandising display tools and favorable product presentation. We operate branded e-commerce and marketing sites and maintain an active presence on a variety of global social media platforms.
In addition, we reinforce our brands' marketing messages with our key wholesale customers by utilizing digital platforms, television, print and advertising campaigns, as well as in-store branded visual merchandising display tools and favorable product presentation.
These products are sold by our Europe-direct and EMEA distributor businesses. We have over 3,400 wholesale customers, including distributors, in EMEA. In 2023, our three largest EMEA wholesale customers accounted for approximately 15% of EMEA net sales, and were less than 10% individually. As of December 31, 2023, we directly operated 31 retail stores and third-parties operated 23 concession-based stores.
These products are sold by our Europe-direct and EMEA distributor businesses. We have nearly 3,350 wholesale customers, including distributors, in EMEA. In 2024, our three largest EMEA wholesale customers accounted for approximately 20% of EMEA net sales and less than 10% individually. As of December 31, 2024, our Europe-direct distribution channel sold our products in over 60 retail stores.
We have design and utility patents, which expire at various times, as well as pending patent applications in the United States and other countries. We vigorously protect these proprietary rights against counterfeit reproductions and other infringing activities.
We file applications for U.S. and foreign patents to protect inventions, designs and enhancements that we deem to have commercial value. We have design and utility patents, which expire at various times, as well as pending patent applications in the U.S. and other countries. We vigorously protect these proprietary rights against counterfeit reproductions and other infringing activities.
These products are sold by our Canada wholesale and DTC businesses. We have nearly 550 wholesale customers in Canada. In 2023, our two largest Canada wholesale customers accounted for approximately 25% of Canada net sales, and were approximately 15% and 10% individually. As of December 31, 2023, we directly operated 13 retail stores.
These products are sold by our Canada wholesale and DTC businesses. We have nearly 450 wholesale customers in Canada. In 2024, our two largest Canada wholesale customers accounted for approximately 25% of Canada net sales; approximately 18% and 7%, respectively. As of December 31, 2024, our Canada DTC distribution channel sold our products in over 10 retail stores.
Our integrated marketing efforts deliver consistent messages about the performance benefits, features and styles of our products within each of our brands and their target consumers. We utilize a variety of means to deliver our marketing messages, including digital marketing, social media interactions, television and print publications, experiential events, brand ambassadors, enhanced product store displays, and consumer-focused public relations efforts.
We utilize a variety of means to deliver our marketing messages, including digital marketing, branded e-commerce and marketing sites, social media interactions, television and print publications, experiential events, brand ambassadors, branded and enhanced product store displays, and consumer-focused public relations efforts.
With over 30 years of wild wisdom, our Mountain Hardwear brand continues to design essential, premium apparel, accessories and equipment products for climbers, mountaineers, skiers, snowboarders, and trail athletes. prAna® | Acquired in 2014, our prAna brand's mission is to inspire an intentional, authentic life.
With over 30 years of wild wisdom, our Mountain Hardwear brand continues to offer essential, premium apparel, accessories and equipment products for climbers, mountaineers, skiers, snowboarders, and trail athletes. prAna® | Acquired in 2014, our prAna brand's mission is to celebrate the spirit of adventure and discovery, encouraging individuals to pursue their passions inspired by an active California lifestyle.
Each geographic segment operates predominantly in one industry: the design, development, marketing, and distribution of outdoor, active and lifestyle apparel, footwear, accessories, and equipment products. We sell our products through a mix of distribution channels.
These reportable segments are organized by geographic location. Each reportable COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 2 Table of Contents segment operates predominantly in one industry: the design, development, marketing, and distribution of outdoor, active and lifestyle products, including apparel, footwear, accessories, and equipment. We sell our products through a mix of distribution channels.
Our DTC distribution channel consists of our own network of branded and outlet retail stores, brand-specific e-commerce sites, and concession or franchise based arrangements with third-parties at branded, outlet and shop-in-shop retail locations in the LAAP and EMEA regions. In addition, we earn revenue through licensing certain of our trademarks across a range of apparel, accessories, equipment, and home products.
Our DTC distribution channel includes a network of branded, outlet, temporary clearance and employee retail stores, brand-specific e-commerce sites and shop-in-shop retail locations. In addition, we earn revenue through licensing certain of our trademarks across a range of apparel, accessories, equipment, and home products. U.S.
COMPETITION The markets for outdoor, active and lifestyle apparel, footwear, accessories, and equipment products are highly competitive and we face significant competition from numerous companies. Our competition includes large companies with significant financial, marketing and operational resources, small companies with limited resources but deep entrenchment in their local markets, emerging brands with a large DTC presence, and other branded competitors.
Our competition includes large companies with significant financial, marketing and operational resources, small companies with limited resources but deep entrenchment in their local markets, emerging brands with a large DTC presence, non-traditional outdoor brands, and other branded competitors.
Each of our four brands focuses on impacts that are unique to their positioning within this strategy. Detailed information regarding our (and our brands’) corporate responsibility priorities and progress can be found in our latest "Impact Report: Environmental, Social, Governance" at http://columbia.com/corporate-responsibility. The content of such report is not incorporated by reference.
Detailed information regarding our (and our brands’) corporate responsibility priorities and progress can be found in our latest "Impact Report" at http://columbia.com/corporate-responsibility. The content of such report is not incorporated by reference in this Annual Report on Form 10-K.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 4 Table of Contents HUMAN CAPITAL We believe that attracting and retaining talent strengthens our enterprise. As part of these efforts, we strive to offer a competitive compensation and benefits program and promote employee well-being.
See Item 1A of this Annual Report on Form 10-K for more information of risks relating to these laws, rules, and regulations. HUMAN CAPITAL We believe that attracting and retaining talent strengthens our enterprise. As part of these efforts, we strive to offer a competitive compensation and benefits program and promote employee well-being.
In 2023, our four largest U.S. wholesale customers accounted for approximately 20% of U.S. net sales, and were less than 10% individually. As of December 31, 2023, we directly operated 161 retail stores and 34 temporary clearance locations.
In 2024, our five largest U.S. wholesale customers accounted for approximately 20% of U.S. net sales and less than 10% individually. As of December 31, 2024, our U.S. DTC distribution channel sold our products in over 170 retail stores, including 28 temporary clearance locations.
SEASONALITY AND VARIABILITY OF BUSINESS Our business is affected by the general seasonal trends common to the industry, including seasonal weather and discretionary consumer shopping and spending patterns. Our products are marketed on a seasonal basis, and our sales are weighted substantially toward the third and fourth quarters, while our operating costs are more equally distributed throughout the year.
Our products are marketed on a seasonal basis, and our sales are weighted substantially toward the third and fourth quarters, while our operating costs are more equally distributed throughout the year.
As of December 31, 2023, we directly operated 248 retail stores, and third-parties operated 27 concession and 47 franchise based stores. We distribute LAAP products through third-party logistics companies that operate distribution centers near Tokyo, Seoul, and Shanghai for our Japan, Korea and China businesses, respectively.
We distribute LAAP products through third-party logistics companies that operate distribution centers near Tokyo, Seoul, and Shanghai for our Japan, Korea and China businesses, respectively, as well as through third-party logistics companies that operate facilities located near receiving ports for our China business.
Energized by the culture of yoga and climbing, our prAna brand offers apparel, accessories and equipment products for consumers defining their own kind of movement. Across our diverse portfolio of brands, our products have gained recognition for their innovation, quality, value, and performance.
Our prAna brand offers apparel and accessories that blend style and versatility for individuals who embrace movement and have a deep reverence for nature. Across our diverse portfolio of brands, our products have gained recognition for their innovation, quality, value, and performance.
Our footwear products include durable, lightweight hiking boots, trail running shoes, rugged cold weather boots for activities on snow and ice, sandals and shoes for use in water activities, and footwear for lifestyle wear.
Our footwear products include durable, lightweight hiking boots, trail running shoes, rugged cold weather boots, sandals, shoes for use in water activities, and footwear for lifestyle wear. SEASONALITY AND VARIABILITY OF BUSINESS Our business is affected by the general seasonal trends common to the industry, including seasonal weather and discretionary consumer shopping and spending patterns.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 2 Table of Contents SALES AND DISTRIBUTION We sell our products in more than 100 countries and operate in four geographic segments: United States ("U.S."), Latin America and Asia Pacific ("LAAP"), Europe, Middle East and Africa ("EMEA"), and Canada.
We also authorize and encourage our international distributors to connect with consumers by operating e-commerce and marketing sites and maintaining a presence on social media platforms. SALES AND DISTRIBUTION We sell our products in more than 110 countries and operate in four reportable segments: U.S., Latin America and Asia Pacific ("LAAP"), Europe, Middle East and Africa ("EMEA"), and Canada.
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We also authorize and encourage our international distributors to connect with consumers by operating e-commerce and marketing sites and maintaining a presence on social media platforms. Digital marketing and social media engagement increase our ability to build strong emotional connections with consumers through consistent, brand-enhancing content.
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Our integrated marketing efforts deliver messages about the performance benefits, features and styles of our products within each of our brands to their target consumers.
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Our digital media connects our consumers to brand content and products, while facilitating their direct product purchases or directing them to nearby retail locations.
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As of December 31, 2024, our LAAP DTC distribution channel sold our products in nearly 310 retail stores.
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See Item 1A of this Annual Report on Form 10-K for more information of risks relating to these laws, rules, and regulations.
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COMPETITION The markets for outdoor, active and lifestyle apparel, footwear, accessories, and equipment products are highly competitive and we face significant competition from numerous companies.
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SUSTAINABILITY Our sustainability strategy is to sustain active lifestyles through investing in initiatives that have a positive impact on the people we reach, the places we touch and the products we make through: • empowering people; • sustaining places; and • maintaining responsible practices.
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Diversity, Equity and Inclusion A Diversity, Equity and Inclusion Leadership Team was formed in 2020 to focus on diversity, equity, and inclusivity in the workplace. This team focuses on supporting strategies and efforts in the following categories: listening and learning, diversifying talent, creating and sponsoring opportunities, and being a force for good.
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Employee Well-Being We align our employee programs to the five elements of well-being: physical health, career, social and emotional health, financial, and community. For more information on our efforts to support our workforce, see our "Impact Report: Environmental, Social, Governance" at http://columbia.com/corporate-responsibility. The content of such report is not incorporated by reference.
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Potter held various leadership positions, including Chief Technology Officer and Managing Vice President of Engineering with Nike, Inc., as well as Vice President of Technology Innovation with Capital One, and CIO/CTO for British Telecommunication's Enterprise Group. Jim A.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

55 edited+12 added−3 removed118 unchanged
Biggest changeAcquisitions may also cause us to incur debt or result in dilutive issuances of our equity securities. Our acquisitions may cause large one-time expenses or create goodwill or other intangible assets that could result in significant impairment charges in the future (as has recently occurred with the prAna brand).
Biggest changeOur acquisitions may cause large one-time expenses or create goodwill or other intangible assets that could result in significant impairment charges in the future (as has recently occurred with the prAna brand). We also make various estimates and assumptions in order to determine purchase price allocation and estimate the fair value of assets acquired and liabilities assumed.
In each of our geographic markets, we face significant competition from global and regional branded apparel, footwear, accessories, and equipment companies. More recently this competition has extended to emerging brands that may not be viewed as outdoor brands but are participating in the outdoor apparel industry.
In each of our geographic markets, we face significant competition from global and regional branded apparel, footwear, accessories, and equipment companies. More recently this competition has extended to emerging brands that may not be viewed as outdoor brands but are participating in the outdoor apparel and footwear industry.
We may choose (and have chosen in the past) to limit our credit risk by reducing our level of business with wholesale customers experiencing financial difficulties and may not be able to replace those revenues with other customers or through our DTC businesses within a reasonable period or at all. • Innovation.
We may choose (and have chosen in the past) to limit our credit risk by reducing our level of business with wholesale customers experiencing financial difficulties and may not be able to replace those revenues with other customers or through our DTC businesses within a reasonable period or at all.
Non-U.S. data privacy and data security laws and regulations, various U.S. federal and state laws and other information privacy and security standards may be and are applicable to us. Violations of these requirements could result in significant penalties, COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 11 Table of Contents investigations or litigation.
Non-U.S. data privacy and data security laws and regulations, various U.S. federal and state laws and other information COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 11 Table of Contents privacy and security standards may be and are applicable to us. Violations of these requirements could result in significant penalties, investigations or litigation.
The magnitude of climate change and whether resulting weather patterns continue to trend warmer will influence the extent to which consumer and customer demand for our outerwear products will be negatively affected. • Shifts in Retail Traffic Patterns.
The magnitude of climate change and whether resulting weather patterns continue to trend warmer will influence the extent to which consumer and customer demand for our outerwear and cold weather footwear products will be negatively affected. • Shifts in Retail Traffic Patterns.
Our sales are affected by weather conditions. Our DTC sales are dependent in part on the weather and our DTC sales growth is likely to be adversely impacted or may even decline in years in which weather conditions do not stimulate demand for our products.
Our DTC sales are dependent in part on the weather and our DTC sales growth is likely to be adversely impacted or may even decline in years in which weather conditions do not stimulate demand for our products.
Our legacy product development, retail and other systems, on which we continue to manage a portion of our business activities, rely on the availability of limited internal and external resources with the expertise to maintain the systems.
Our legacy product development, retail and other systems, on which we continue to manage a portion of our business activities, depend on the availability of limited internal and external resources with the expertise to maintain the systems.
Certain Shareholders Have Substantial Control Over Us and Are Able to Influence Corporate Matters. As of December 31, 2023, three related shareholders, Timothy P. Boyle, Joseph P. Boyle, and Molly E. Boyle, controlled just under 50% of our common stock outstanding. As a result, if acting together, Timothy P. Boyle, Joseph P. Boyle, and Molly E.
Certain Shareholders Have Substantial Control Over Us and Are Able to Influence Corporate Matters. As of December 31, 2024, three related shareholders, Timothy P. Boyle, Joseph P. Boyle, and Molly E. Boyle, controlled just over 50% of our common stock outstanding. As a result, if acting together, Timothy P. Boyle, Joseph P. Boyle, and Molly E.
Our failure to accurately forecast consumer and/or customer demand could result in inventory levels in excess of demand (as currently is the case), which may cause inventory write-downs and/or the sale of excess inventory at discounted prices through our outlet stores, temporary clearance locations, or third-party liquidation channels and could have a material adverse effect on our brand image and gross margin.
Our failure to accurately forecast consumer and/or customer demand could result in inventory levels in excess of demand, which may cause inventory write-downs and/or the sale of excess inventory at discounted prices through our outlet stores, temporary clearance locations, or third-party liquidation channels and could have a material adverse effect on our brand image and gross margin.
Our international revenues and expenses generally are derived from sales and operations in foreign currencies, and these revenues and expenses could be and have been affected by currency fluctuations, specifically amounts recorded in foreign currencies and translated into United States dollars for consolidated financial reporting, as weakening of foreign currencies relative to the United States dollar adversely affects the United States dollar value of the Company’s foreign currency-denominated sales and earnings.
Our international revenues and expenses generally are derived from sales and operations in foreign currencies, and these revenues and expenses could be and have been affected by currency fluctuations, specifically amounts recorded in foreign currencies and translated into U.S. dollars for consolidated financial reporting, as weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of the Company’s foreign currency-denominated sales and earnings.
We and many of our third-party vendors manage and maintain various types of proprietary information and sensitive and confidential data relating to our business, such as personally identifiable information of our consumers, our customers, our employees, and our business partners, as well as credit card information in certain instances.
We and many of our third-party vendors manage and maintain various types of proprietary information and sensitive and confidential data relating to our business, such as personally identifiable information of our consumers, our customers, our employees, and our business partners, as well as payment information in certain instances.
Our ability to accurately predict consumer and/or customer demand well in advance of the selling season for our products is impacted by these risks, as well as our reliance on manual processes and judgments that are subject to human error. These risks are heightened during periods of macroeconomic and geopolitical volatility, such as we are currently experiencing.
Our ability to accurately predict consumer and/or customer demand well in advance of the selling season for our products is impacted by these risks, as well as our reliance on manual processes and judgments that are subject to human error. These risks are heightened during periods of macroeconomic and geopolitical volatility.
As these changes are adopted by countries, tax uncertainty could increase and may adversely affect our provision for income taxes. Due to the nature of the findings in the Korea 2009 through 2014 income tax audits, the Company has invoked the Mutual Agreement Procedures outlined in the United States-Korean income tax treaty.
As these changes are adopted by countries, tax uncertainty could increase and may adversely affect our provision for income taxes. Due to the nature of the findings in the Korea 2009 through 2014 income tax audits, the Company has invoked the Mutual Agreement Procedures outlined in the U.S.-Korean income tax treaty.
Weakening of a wholesale customer’s functional currency relative to the United States dollar makes it more expensive for it to purchase finished goods inventory from us, which may cause a wholesale customer to cancel orders or increase prices for our products, which may make our products less price-competitive in those markets.
Weakening of a wholesale customer’s functional currency relative to the U.S. dollar makes it more expensive for it to purchase finished goods inventory from us, which may cause a wholesale customer to cancel orders or increase prices for our products, which may make our products less price-competitive in those markets.
Moreover, climate change and natural disasters such as earthquakes, hurricanes and tsunamis, whether occurring in the United States or abroad, and their related consequences and effects, including energy shortages and public health issues, could disrupt our operations, the operations of our vendors and other suppliers or result in economic instability and changes in consumer preferences and spending that may negatively impact our operating results and financial condition.
Moreover, climate change and natural disasters such as wildfires, earthquakes, hurricanes and tsunamis, whether occurring in the U.S. or abroad, and their related consequences and effects, including energy shortages and public health issues, could disrupt our operations, the operations of our vendors and other suppliers or result in economic instability and changes in consumer preferences and spending that may negatively impact our operating results and financial condition.
As a result, our consolidated results are directly exposed to transactional foreign currency exchange risk and have been and could be further impacted by the United States dollar strengthening during the six to nine months between when we establish seasonal local-currency prices and when we purchase inventory.
As a result, our consolidated results are directly exposed to transactional foreign currency exchange risk and have been and could be further impacted by the U.S. dollar strengthening during the six to nine months between when we establish seasonal local-currency prices and when we purchase inventory.
In markets outside of the United States, it may be more difficult for us to establish our proprietary rights and to successfully challenge use of those rights by other parties. Litigation is often necessary to defend against claims of infringement or to enforce and protect our intellectual property rights.
In markets outside of the U.S., it may be more difficult for us to establish our proprietary rights and to successfully challenge use of those rights by other parties. Litigation is often necessary to defend against claims of infringement or to enforce and protect our intellectual property rights.
In addition, in order to make purchases and pay us on a timely basis, our international distributors must exchange sufficient quantities of their functional currency for United States dollars through the financial markets and may be limited in the amount of United States dollars they are able to obtain.
In addition, in order to make purchases and pay us on a timely basis, our international distributors must exchange sufficient quantities of their functional currency for U.S. dollars through the financial markets and may be limited in the amount of U.S. dollars they are able to obtain.
Our exposure to these risks is heightened in Vietnam, where a significant portion of our contract manufacturing is located, and in China, where a large portion of the raw materials used in our products is sourced by our contract manufacturers.
Our exposure to these risks is heightened in Vietnam, where a significant portion of our contract manufacturing is located, as well as in China, where a large portion of the raw materials used in our products is sourced by our contract manufacturers.
The majority of our purchases of finished goods inventory from contract manufacturers are denominated in United States dollars, including purchases by our foreign entities. These purchase and sale transactions expose us to the volatility of global economic conditions, including fluctuations in inflation and foreign currency exchange rates.
The majority of our purchases of finished goods inventory from contract manufacturers are denominated in U.S. dollars, including purchases by our foreign entities. These purchase and sale transactions expose us to the volatility of global economic conditions, including fluctuations in inflation and foreign currency exchange rates.
We derive a significant portion of our sales from markets outside the United States, which consist of sales to wholesale customers and directly to consumers by our entities in Europe, Asia, and Canada and sales to independent international distributors who operate within EMEA and LAAP.
We derive a significant portion of our sales from markets outside the U.S., which consist of sales to wholesale customers and directly to consumers by our entities in Europe, Asia, and Canada and sales to independent international distributors who operate within EMEA and LAAP.
Our continued success depends in part on our ability to adapt to a rapidly changing media environment, including our increasing reliance on social media and online dissemination of advertising campaigns. In addition, consumer and customer sentiment could be shaped by our sustainability policies and related design, sourcing and operational decisions. • Weather Conditions, Including Global Climate Change Trends.
Our continued success depends in part on our ability to adapt to a rapidly changing media environment, including our increasing reliance on social media and online dissemination of advertising campaigns. In addition, consumer and customer sentiment could be shaped by our sustainability policies and related design, sourcing and operational decisions.
Our exposure is increased with respect to our wholesale customers (including international distributors), where, in order to facilitate solicitation of advance orders for the spring and fall seasons, we establish local-currency-denominated wholesale and retail price lists in each of our foreign entities approximately six to nine months prior to United States dollar-denominated seasonal inventory purchases.
Our exposure is increased with respect to our wholesale customers, where, in order to facilitate solicitation of advance orders for the spring and fall seasons, we establish local-currency-denominated wholesale and retail price lists in each of our foreign entities approximately six to nine months prior to U.S. dollar-denominated seasonal inventory purchases.
Our reputation and ability to attract, retain and serve consumers and customers is dependent upon the reliable performance of our underlying technology infrastructure and external service providers, including third-party cloud-based solutions. These systems are vulnerable to damage or interruption and we have experienced interruptions in the past.
Our reputation and ability to attract, retain and serve consumers and customers is dependent upon the reliable performance of our underlying technology infrastructure and external service providers, including third-party cloud-based solutions. The services these systems provide are vulnerable to interruption, in particular during a period of transition of systems, and we have experienced interruptions in the past.
Matters that may affect our workforce at contract manufacturers where our goods are produced, shipping ports, transportation carriers, retail stores, or distribution centers create risks for our business, particularly if these COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 14 Table of Contents matters result in work shut-downs (with little to no notice), slowdowns, lockouts, strikes, or other disruptions.
Matters that may affect our workforce at contract manufacturers where our goods are produced, shipping ports, transportation carriers, retail stores, or distribution centers create risks for our business, particularly if these matters result in work shut-downs (with little to no notice), slowdowns, lockouts, strikes, or other disruptions.
In addition, we have experienced and may continue to experience additional costs and margin pressure relating to the storage and processing of excess inventory, including through our outlet stores and temporary clearance locations.
In addition, we may experience additional costs and margin pressure relating to the storage and processing of excess inventory, including through our outlet stores.
Boyle are able to exercise COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 16 Table of Contents significant influence over all matters requiring shareholder approval. These holdings could be significantly diminished (and with them the related effective control percentage) to satisfy any applicable estate or unrealized gains tax obligations of the holders.
Boyle are able to exercise significant influence over all matters requiring shareholder approval. These holdings could be significantly diminished (and with them the related effective control percentage) to satisfy any applicable estate or unrealized gains tax obligations of the holders.
If a contract manufacturer fails to ship orders in a timely manner, we could experience supply disruptions that result in missed delivery deadlines, which may cause our customers to cancel their orders, refuse to accept deliveries or demand a reduction in purchase price or cause us to incur additional freight costs. Reliance on contract manufacturers also creates quality control risks.
If a contract manufacturer fails to ship orders in a timely manner (as recently occurred), we could experience supply disruptions that result in missed delivery deadlines, which may cause our customers to cancel their orders, refuse to accept deliveries or demand a reduction in purchase price or cause us to incur additional freight costs.
WE ARE SUBJECT TO CERTAIN INFORMATION TECHNOLOGY RISKS We Rely on Information Technology Systems, including Third-Party Cloud-based Solutions, and Any Failure of These Systems May Result in Disruptions or Outages in Our E-Commerce and In-Store Retail Platforms, Loss of Processing Capabilities, and/or Loss of Data, Any of Which May Have a Material Adverse Effect on Our Financial Condition, Results of Operations or Cash Flow.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 10 Table of Contents WE ARE SUBJECT TO CERTAIN INFORMATION TECHNOLOGY RISKS We Rely on Information Technology Systems, including Third-Party Cloud-based Solutions, and Any Failure of These Systems or Interruption in Services Provided by the Systems May Result in Disruptions or Outages in Our E-Commerce and In-Store Retail Platforms, Loss of Processing Capabilities, and/or Loss of Data, Any of Which May Have a Material Adverse Effect on Our Financial Condition, Results of Operations or Cash Flow.
Product recalls or product liability claims resulting from the failure, or alleged failure, of our products could have a material adverse effect on the reputation of our brands and result in additional COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 12 Table of Contents expenses. Most of our products carry limited warranties for defects in quality and workmanship.
Product recalls or product liability claims resulting from the failure, or alleged failure, of our products could have a material adverse effect on the reputation of our brands and result in additional expenses. Most of our products carry limited warranties for defects in quality and workmanship.
In addition, obtaining real estate and effectively COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 10 Table of Contents renewing real estate leases for our DTC brick and mortar operations is subject to the real estate market and we may not be able to secure adequate new locations or successfully renew leases for existing locations.
In addition, obtaining real estate and effectively renewing real estate leases for our DTC brick and mortar operations is subject to the real estate market and we may not be able to secure adequate new locations or successfully renew leases for existing locations.
Contract manufacturers may need to use sub-contracted manufacturers to fulfill our orders, which could result in compromised quality of our products.
Reliance on contract manufacturers also creates quality control risks. Contract manufacturers may need to use sub-contracted manufacturers to fulfill our orders, which could result in compromised quality of our products.
In addition, our legacy systems, including aged systems in our Japanese and Korean businesses, may not support desired functionality for our operations and may inhibit our ability to operate efficiently.
In addition, our legacy systems, including aged systems in our Japanese and Korean businesses and systems associated with our retail order management process, may not support desired functionality for our operations and may inhibit our ability to operate efficiently and cost effectively.
WE ARE SUBJECT TO NUMEROUS OPERATIONAL RISKS Our Ability to Manage Fixed Costs Across a Business That is Affected by Seasonality May Impact Our Profits. Our business is affected by the general seasonal trends common to the outdoor industry.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 14 Table of Contents WE ARE SUBJECT TO NUMEROUS OPERATIONAL RISKS Our Ability to Manage Fixed Costs Across a Business That is Affected by Seasonality May Impact Our Profits. Our business is affected by the general seasonal trends common to the outdoor industry.
The fixed costs associated with owning, operating and maintaining such distribution centers during a period of economic weakness or declining sales can result in lower operating efficiencies, financial deleverage and potential impairment in the recorded value of distribution assets. We also receive and distribute our products through third-party operated distribution facilities internationally and domestically.
The fixed costs associated with owning, operating and maintaining such distribution centers during a period of economic weakness or declining sales can result in lower operating efficiencies, financial deleverage and potential impairment in the recorded value of distribution assets.
We depend on these third-parties to manage the operation of their distribution facilities as necessary to meet our business needs. If the third-parties fail to manage these responsibilities, our international and domestic distribution operations could face significant disruptions or we could incur additional expense. Transitions within our distribution network amongst third-party distribution partners, as is currently occurring, exacerbates this risk.
If the third-parties fail to manage these responsibilities, our international and domestic distribution operations could face significant disruptions or we could incur additional expense. Transitions within our distribution network amongst third-party distribution partners exacerbates this risk.
Additionally, our DTC business depends on customers' willingness to entrust us with their personal information. Events that adversely affect that trust could adversely affect our brand and reputation. We Depend on Certain Legacy Information Technology Systems, Which May Inhibit Our Ability to Operate Efficiently.
Events that adversely affect that trust could adversely affect our brand and reputation. We Depend on Certain Legacy Information Technology Systems, Which May Inhibit Our Ability to Operate Efficiently.
Significant or continuing noncompliance with these standards and laws could disrupt our business and harm our reputation. Our products are generally used in outdoor activities, sometimes in severe conditions.
Significant or continuing noncompliance with these standards and laws could disrupt our business and harm our reputation. COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 12 Table of Contents Our products are generally used in outdoor activities, sometimes in severe conditions.
Additionally, our existing cloud-based solution providers have broad discretion to change and interpret their terms of service and other policies with respect to us, and they may take actions beyond our control that could harm our business. We also may not be able to control the quality of the systems and services we receive from our third-party cloud-based solution providers.
Our existing cloud-based solution providers have broad discretion to change and interpret their terms of service and other policies with respect to our use of their systems, and they may take actions beyond our control that could harm our business.
The diverted attention of these employees may impact our operations and there may be additional costs incurred by us for third-party resources to advise on the constantly changing landscape. We have experienced this with the new privacy laws in China. Limitations on the use of data may also impact our future business strategies.
The diverted attention of these employees may impact our operations and there may be additional costs incurred by us for third-party resources to advise on the constantly changing landscape. Limitations on the use of data may also impact our future business strategies. Additionally, our DTC business depends on customers' willingness to entrust us with their personal information.
However, these third-parties may not operate the stores in a manner consistent with our standards, which could cause reputational damage to our brands or harm these third-parties' sales. RISKS RELATED TO OUR SECURITIES Our Common Stock Price May Be Volatile. Our common stock is traded on the NASDAQ Global Select Market.
However, these third-parties may not operate the stores in a manner consistent with our standards, which could cause reputational damage to our brands or harm these third-parties' sales. COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 16 Table of Contents RISKS RELATED TO OUR SECURITIES Our Common Stock Price May Be Volatile.
We also make various estimates and assumptions in order to determine purchase price allocation and estimate the fair value of assets acquired and liabilities assumed. If our estimates or assumptions used to value these assets and liabilities vary from actual or future projected results, we may be exposed to losses, including impairment losses, that could be material.
If our estimates or assumptions used to value these assets and liabilities vary from actual or future projected results, we may be exposed to losses, including impairment losses, that could be material.
We may not complete a potential acquisition for a variety of reasons, but we may nonetheless incur material costs in the preliminary stages of evaluating and pursuing such an acquisition that we cannot recover.
We may not complete a potential acquisition for a variety of reasons, but we may nonetheless incur material costs in the preliminary stages of evaluating and pursuing such an acquisition that we cannot recover. Extreme Weather Conditions, Climate Change, and Natural Disasters Could Negatively Impact Our Operating Results and Financial Condition.
The Company does not anticipate that adjustments relative to these findings will result in material changes to its financial condition, results of operations or cash flows.
The Company does not anticipate that adjustments relative to these findings will result in material changes to its financial condition, results of operations or cash flows. Changes to the U.S. tax laws as a result of the recent U.S. presidential administration change may impact our U.S. corporate tax rate.
These related business impacts have already occurred at certain of our wholesale customers. We face increased risk of order reduction and cancellation when dealing with financially ailing wholesale customers.
These related business impacts have already occurred at certain of our wholesale customers. We face increased risk of order reduction and cancellation when dealing with financially ailing wholesale customers. We also extend credit to our wholesale customers based on an assessment of the wholesale customer's financial condition, generally without requiring collateral.
Furthermore, increases in distribution costs, including but not limited to freight costs, could adversely affect our costs, which we may not be able to offset through price increases or decreased promotions.
Furthermore, increases in distribution costs, including but not limited to freight costs, could adversely affect our costs, which we may not be able to offset through price increases or decreased promotions. We receive our products from third-party logistics providers at our owned distribution centers in the U.S., Canada and France.
Without long-term commitments, there is no assurance that COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 8 Table of Contents we will be able to secure adequate or timely production capacity and our competitors may obtain production capacities that effectively limit or eliminate the availability of our contract manufacturers.
Without long-term commitments, there is no assurance that we will be able to secure adequate or timely production capacity and our competitors may obtain production capacities that effectively limit or eliminate the availability of our contract manufacturers. If we are unable to obtain necessary production capacities, we may be unable to meet consumer demand, resulting in lost sales.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 15 Table of Contents Extreme Weather Conditions, Climate Change, and Natural Disasters Could Negatively Impact Our Operating Results and Financial Condition. Extreme weather conditions in the areas in which our retail stores, suppliers, consumers, customers, distribution centers, headquarters and vendors are located could adversely affect our operating results and financial condition.
Extreme weather conditions in the areas in which our retail stores, suppliers, consumers, customers, distribution centers, headquarters and vendors are located could adversely affect our operating results and financial condition.
In addition, many of our imported products are subject to duties, tariffs or other import limitations that affect the cost and quantity of various types of goods imported into the United States and other markets, including the punitive tariffs on U.S. products imported from China imposed in 2019.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 13 Table of Contents In addition, many of our imported products are subject to duties, tariffs or import limitations that affect the cost and quantity of various types of goods imported into the U.S. and other markets.
We are investigating alternatives to mitigate these additional costs in the future. Fluctuations in Inflation and Currency Exchange Rates Could Result in Lower Revenues, Higher Costs and/or Decreased Margins and Earnings.
As a result of no longer having "free circulation" between the U.K. and the E.U., we have incurred and will continue to incur additional duties. We are investigating alternatives to mitigate these additional costs in the future. Fluctuations in Inflation and Currency Exchange Rates Could Result in Lower Revenues, Higher Costs and/or Decreased Margins and Earnings.
In addition, goods suspected of being manufactured with forced labor could be blocked from importation into the U.S., which could materially impact sales. In connection with the United Kingdom's exit from the European Union (commonly referred to as "Brexit"), on December 24, 2020, the European Union ("E.U.") and the United Kingdom ("U.K.") reached an agreement, the E.U.-U.K.
In connection with the United Kingdom's exit from the European Union (commonly referred to as "Brexit"), on December 24, 2020, the European Union ("E.U.") and the United Kingdom ("U.K.") reached an agreement, the E.U.-U.K. Trade and Cooperation Agreement, to govern aspects of the relationship of the E.U. and U.K. following Brexit.
Any transition of the cloud-based solutions currently provided to different cloud providers would be difficult to implement and may cause us to incur significant time and expense.
We also may not be able to control the quality of the systems and services we receive from our third-party cloud-based solution providers. Some transitions of the cloud-based solutions currently provided to different cloud providers would be difficult to implement and may cause us to incur significant time and expense, or an interruption in services.
To distinguish our products in the marketplace and achieve commercial success, we rely on product innovations, including new or exclusive technologies, inventive and appealing design or other differentiating features. If we fail to introduce innovative products that appeal to consumers and customers, we could suffer reputational damage to our brands and demand for our products could decline.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 7 Table of Contents • Innovation. To distinguish our products in the marketplace and achieve commercial success, we rely on product innovations, including new or exclusive technologies, inventive and appealing design or other differentiating features.
As we continue to transition from our legacy systems and implement new systems, certain functionality and information from our legacy systems, including that of third-party systems that interface with our legacy systems, may not be fully compatible with the new systems. WE ARE SUBJECT TO LEGAL AND REGULATORY RISKS Our Success Depends on the Protection of Our Intellectual Property Rights.
Consequently, these transitions could result in the interruption of our operations. WE ARE SUBJECT TO LEGAL AND REGULATORY RISKS Our Success Depends on the Protection of Our Intellectual Property Rights.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 9 Table of Contents We receive our products from third-party logistics providers at our owned distribution centers in the United States, Canada and France.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 9 Table of Contents We also receive and distribute our products through third-party operated distribution facilities internationally and domestically. We depend on these third-parties to manage the operation of their distribution facilities as necessary to meet our business needs.
Removed
We also extend credit to our wholesale customers based on an assessment of the wholesale COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 7 Table of Contents customer's financial condition, generally without requiring collateral.
Added
Finally, demand in certain channels may be impacted in the short term as we seek to bring additional consumer segments to our brands by proactively managing the promotional activity of the brands in the marketplace. • Weather Conditions, Including Global Climate Change Trends. Our sales are affected by weather conditions.
Removed
If we are unable to obtain necessary production capacities, we may be unable to meet consumer demand, resulting in lost sales. In addition, contract manufacturers may fail to perform as expected.
Added
If we fail to introduce innovative products that appeal to consumers and customers, we could suffer reputational damage to our brands and demand for our products could decline.
Removed
Trade and Cooperation Agreement, to govern aspects of the relationship of the E.U. and U.K. following Brexit. As a result of no longer having "free circulation" between the U.K. and COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 13 Table of Contents the E.U., we have incurred and will continue to incur additional duties.
Added
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 8 Table of Contents In addition, contract manufacturers may fail to perform as expected.
Added
The continued use of these legacy systems also increases the risk of service disruption and can complicate recovery effort when issues arise. Moreover, our continued transition from these legacy systems to new ones is complex and requires significant change management, including extensive coordination and integration with third-parties and their systems.
Added
Although we cannot predict whether or in what form these proposals will pass, several of the proposals considered, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense and cash flows.
Added
In addition, goods suspected of being manufactured with forced labor could be blocked from importation into the U.S. or other countries, which could materially impact sales.
Added
Proposals to implement new tariffs or other trade restrictions in the U.S. could impact the products we import into the U.S. and also result in retaliatory measures in international markets where we sell our products. Punitive measures have been threatened against certain countries that run trade surpluses with the U.S., such as Vietnam, Indonesia and India.
Added
We expect Vietnam, Indonesia and India to represent approximately 44 percent, 11 percent, and 10 percent, respectively, of the value of our imports to the U.S. in 2025.
Added
Although we cannot predict whether and in what form such measures will be adopted or implemented, these proposals for tariffs or other trade restrictions could have an adverse impact on our cost of sales, gross margin and cash flows; disrupt the U.S. marketplace; and cause an increase in our product prices, to the extent possible, and potential adverse impacts to resulting net sales in the U.S.
Added
Changes in tariffs may also cause a change to our sourcing strategy, which we may or may not be able to implement based on timing and availability.
Added
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 15 Table of Contents Acquisitions may also cause us to incur debt or result in dilutive issuances of our equity securities.
Added
Our common stock is traded on the NASDAQ Global Select Market.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+1 added−1 removed4 unchanged
Biggest changeSee Item 1A of this Annual Report on Form 10-K for more information of risks relating to cybersecurity, including the risk factors "We Rely on Information Technology Systems, including Third-Party Cloud-based Solutions, and Any Failure of These Systems May Result in Disruptions or Outages in Our E-Commerce and In-Store Retail Platforms, Loss of Processing Capabilities, and/or Loss of Data, Any of Which May Have a Material Adverse Effect on Our Financial Condition, Results of Operations or Cash Flow" and "A Security Breach of Our or Our Third- COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 17 Table of Contents Parties' Systems, Exposure of Personal or Confidential Information or Increased Government Regulation Relating to Handling of Personal Data, Could, Among Other Things, Disrupt Our Operations or Cause Us to Incur Substantial Costs or Negatively Affect Our Reputation".
Biggest changeSee Item 1A of this Annual Report on Form 10-K for more information of risks relating to cybersecurity, including the risk factors "We Rely on Information Technology Systems, including Third-Party Cloud-based Solutions, and Any Failure of These Systems or Interruption in Services Provided by the Systems May Result in Disruptions or Outages in Our E-Commerce and In-Store Retail Platforms, Loss of Processing Capabilities, and/or Loss of Data, Any of Which May Have a Material Adverse Effect on Our Financial Condition, Results of Operations or Cash Flow" and "A Security Breach of Our or Our Third-Parties' Systems, Exposure of Personal or Confidential Information or Increased Government Regulation Relating to Handling of Personal Data, Could, Among Other Things, Disrupt Our Operations or Cause Us to Incur Substantial Costs or Negatively Affect Our Reputation".
Our CISO has served in various information technology and information security roles for over 20 years, including management of information security programs in the Department of Defense, private and public companies, as well as holds multiple industry certifications in information security. We leverage certain third-party providers and our internal Incident Response Team to alert us when a cybersecurity event occurs.
Our CISO has served in various information technology and information security roles for over 20 years, including management of information security programs in the Department of Defense, private and public companies, and holds multiple industry certifications in information security. We leverage certain third-party providers and our internal Incident Response Team to alert us when a cybersecurity event occurs.
The Audit Committee annually reviews the strategies, investments and risk related to Columbia's information technology systems, including a review of Columbia's cybersecurity programs, and also receives quarterly updates from our CISO. The Board is informed of cybersecurity events to the extent they may materially impact Columbia or management otherwise believes they should be escalated.
The Audit Committee annually reviews the strategies, investments and risks related to Columbia's information technology systems, including a review of Columbia's cybersecurity programs, and also receives quarterly updates from our CISO. The Board is informed of cybersecurity events to the extent they may materially impact Columbia or management otherwise believes they should be escalated to the Board.
Our risk assessment process related to cybersecurity threats is subject to change in the future as threats may evolve over time. Our Information Security committee oversees this cybersecurity program and consists of senior management, including our CDIO, Chief Financial Officer and Chief Administrative Officer and General Counsel.
Our risk assessment process related to cybersecurity threats is subject to change in the future as threats may evolve over time. COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 17 Table of Contents Our Information Security committee oversees this cybersecurity program and consists of senior management, including Mr. Swanson and our Chief Administrative Officer and General Counsel.
The enterprise risk management program then monitors the risks identified and mitigation efforts underway through periodic meetings with senior management. Our enterprise risk management program addresses risks facing Columbia from cybersecurity threats impacting our internal systems and/or systems supported by third-party software providers.
The enterprise risk management program then monitors the risks identified and mitigation efforts underway through periodic meetings with senior management. Our enterprise risk management program addresses risks facing Columbia from cybersecurity threats impacting our internal systems and/or systems supported by third-party software providers. On January 6, 2025, Skip Potter, Executive Vice President, Chief Digital Information Officer, departed the Company.
Removed
Our Chief Digital Information Officer ("CDIO") and Chief Information Security Officer ("CISO") are responsible for identifying, assessing and managing these risks. Our CDIO has served in various information technology and digital engineering roles for nearly 30 years. See Item 1 in this Annual Report on Form 10-K for further discussion of our CDIO's background.
Added
Jim Swanson, Executive Vice President and Chief Financial Officer, is overseeing the digital technology department at the Company in an interim capacity. Our Chief Information Security Officer ("CISO") reports to Mr. Swanson and is responsible for identifying, assessing and managing risks facing the Company from cybersecurity threats impacting our internal systems and/or systems supported by third-party providers.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed1 unchanged
Biggest changeWe also have several leases globally for showrooms, office space, warehouse facilities, storage space, vehicles, and equipment, among other things. Refer to Note 9 in Part II, Item 8 of this Annual Report on Form 10-K for further lease-related disclosures.
Biggest changeRefer to Note 8 in Part II, Item 8 of this Annual Report on Form 10-K for further lease-related disclosures. COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 18 Table of Contents
Distribution Center Owned London, Ontario Canadian Operations and Distribution Center Owned Geneva, Switzerland Europe Headquarters Leased Strasbourg, France Europe Administrative Operations Owned Cambrai, France Europe Distribution Center Owned Shanghai, China China Headquarters Leased Tokyo, Japan Japan Headquarters Leased Seoul, Korea Korea Headquarters Leased (1) Corporate Headquarters is an approximate 30-acre site consisting of over 10 buildings, which includes the Columbia and SOREL brands' headquarters and centrally-managed departmental functions, including consumer digital technology, certain supply chain functions, finance, human resources and legal.
Distribution Center Owned London, Ontario Canadian Operations and Distribution Center Owned Geneva, Switzerland Europe Headquarters Leased Strasbourg, France Europe Administrative Operations Owned Cambrai, France Europe Distribution Center Owned Shanghai, China China Headquarters Leased Tokyo, Japan Japan Headquarters Leased Seoul, Korea Korea Headquarters Leased (1) Corporate Headquarters is an approximate 30-acre site, which includes the Columbia and SOREL brands' headquarters and centrally-managed departmental functions, including information technology, certain supply chain functions, finance, human resources and legal.
In addition, as of December 31, 2023, we directly operated approximately 450 reta il stores and 34 temporary clearance locations. The vast majority of our retail stores are leased under a variety of arrangements, including long-term, short-term, and variable-payment leases. Our temporary clearance locations are leased on a short-term basis.
In addition, as of December 31, 2024, we sold our products in over 550 retail stores, including 28 temporary clearance locations. The vast majority of our retail stores are leased under a variety of arrangements, including long-term, short-term, and variable-payment leases. Our temporary clearance locations are leased on a short-term basis.
Added
We also have several leases globally for showrooms, office space, warehouse facilities, storage space, vehicles, and equipment, among other things. We believe that the Company's principal properties are in good condition and are suitable and adequate to support our business requirements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following is a summary of our common stock repurchases, excluding excise tax, during the quarter ended December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2023 through October 31, 2023 200,706 $ 72.04 200,706 $ 370.3 November 1, 2023 through November 30, 2023 335,411 $ 74.32 335,411 $ 345.3 December 1, 2023 through December 31, 2023 — $ — — $ — Total 536,117 $ 73.47 536,117 $ 345.3 ITEM 6. [Reserved] Not applicable.
Biggest changeThe following is a summary of our common stock repurchases, excluding excise tax, during the quarter ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) October 1, 2024 through October 31, 2024 67,770 $ 79.77 67,770 $ 709.1 November 1, 2024 through November 30, 2024 977,800 $ 83.34 977,800 $ 627.6 December 1, 2024 through December 31, 2024 — $ — — $ 627.6 Total 1,045,570 $ 83.10 1,045,570 $ 627.6
The graph and table below assume that $100 was invested on December 31, 2018, and that any dividends were reinvested. Historical stock price performance should not be relied on as indicative of future stock price performance.
The graph and table below assume that $100 was invested on December 31, 2019, and that any dividends were reinvested. Historical stock price performance should not be relied on as indicative of future stock price performance.
PERFORMANCE GRAPH The line graph below compares the cumulative total shareholder return of our common stock with the cumulative total return of the Russell 1000 Index and Russell 1000 Clothing and Accessories Index for the period beginning December 31, 2018 and ending December 31, 2023.
PERFORMANCE GRAPH The line graph below compares the cumulative total shareholder return of our common stock with the cumulative total return of the Russell 1000 Index and Russell 1000 Clothing and Accessories Index for the period beginning December 31, 2019 and ending December 31, 2024.
HOLDERS As of February 9, 2024, we had 247 shareholders of record, although we have a much larger number of beneficial owners, whose shares of record are held by banks, brokers and other financial institutions.
HOLDERS As of February 14, 2025, we had 240 shareholders of record, although we have a much larger number of beneficial owners, whose shares of record are held by banks, brokers and other financial institutions.
Our Board of Directors approved a regular quarterly cash dividend of $0.30 per share, payable on March 22, 2024 to shareholders of record on March 8, 2024.
Our Board of Directors approved a regular quarterly cash dividend of $0.30 per share, payable on March 21, 2025 to shareholders of record on March 10, 2025.
Under this program as of December 31, 2023, we had repurchased 34.1 million shares at an aggregate purchase price of $1,654.7 million, and had $345.3 million remaining available, excluding excise tax.
Under this program as of December 31, 2024, we had repurchased 38.0 million shares at an aggregate purchase price of $1,972.4 million, and had $627.6 million remaining available under the share repurchase program, excluding excise tax.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 19 Table of Contents Total Return Analysis Year Ended December 31, 2018 2019 2020 2021 2022 2023 Columbia Sportswear Company $ 100.00 $ 120.35 $ 105.34 $ 118.64 $ 108.23 $ 99.79 Russell 1000 Index $ 100.00 $ 131.43 $ 158.98 $ 201.03 $ 162.58 $ 205.72 Russell 1000 Clothing and Accessories Index $ 100.00 $ 134.10 $ 144.76 $ 160.46 $ 111.99 $ 143.67 PURCHASES OF EQUITY SECURITIES BY THE ISSUER Since the inception of our share repurchase program in 2004 through December 31, 2023, our Board of Directors has authorized the repurchase of $2.0 billion of our common stock, excluding excise tax.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 20 Table of Contents Total Return Analysis Year Ended December 31, 2019 2020 2021 2022 2023 2024 Columbia Sportswear Company $ 100.00 $ 87.53 $ 98.58 $ 89.93 $ 82.92 $ 88.78 Russell 1000 Index $ 100.00 $ 120.96 $ 152.96 $ 123.71 $ 156.53 $ 194.89 Russell 1000 Clothing and Accessories Index $ 100.00 $ 107.95 $ 119.66 $ 83.51 $ 107.14 $ 99.47 PURCHASES OF EQUITY SECURITIES BY THE ISSUER Since the inception of our share repurchase program in 2004 through December 31, 2024, our Board of Directors has authorized the repurchase of $2.6 billion of our common stock, excluding excise tax.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSG&A expenses increased primarily due to the following factors: • higher omni-channel expenses of $46.2 million, primarily reflecting higher DTC expenses, including personnel expenses and costs associated with new stores and temporary clearance locations; • higher supply chain expenses of $31.0 million, reflecting increased global distribution center expenses resulting from elevated inventory levels, including higher warehousing and fulfillment expenses, as well as third-party logistics transition-related costs; and • higher information technology related expenses, reflecting increased personnel expenses to support digital strategies.
Biggest changeSG&A expenses are summarized in the following table: Year Ended December 31, (in thousands, except for percentages and basis points) 2024 2023 Change Selling, general and administrative expenses $ 1,443,906 $ 1,416,313 $ 27,593 2 % Selling, general and administrative expenses as percent of net sales 42.9 % 40.6 % 230 bps SG&A expenses increased primarily due to the following factors: • higher omni-channel expenses of $40.5 million, reflecting higher DTC brick-and-mortar expenses, including costs associated with new stores and temporary clearance locations and personnel expenses; • higher incentive compensation, reflecting higher performance against target as compared to 2023; partially offset by • lower supply chain expenses of $28.7 million, reflecting decreased global distribution center expenses resulting from more normalized inventory levels and supply chain optimization efforts; and • lower demand creation expenses, primarily reflecting decreased net sales.
These estimates are based on 1) historical rates of product returns and claims; and 2) events and circumstances that indicate changes to such historical rates, such as our customers' inventory positions and their anticipated sell-through rates. However, actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates.
These estimates are based on 1) historical rates of product returns and claims; and 2) events and circumstances that indicate changes to such historical rates are warranted, such as our customers' inventory positions and their anticipated sell-through rates. However, actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates.
OVERVIEW As a global leader in designing, developing, marketing, and distributing outdoor, active and lifestyle products, our mission is to connect active people with their passions. We manage our product line in two major categories: apparel, accessories, and equipment products and footwear products. We provide our products through our four brands: Columbia, SOREL, Mountain Hardwear, and prAna.
OVERVIEW As a global leader in designing, developing, marketing, and distributing outdoor, active and lifestyle products, our mission is to connect active people with their passions. We provide our products through our four brands: Columbia, SOREL, Mountain Hardwear, and prAna; and two major product categories: apparel, accessories and equipment products and footwear products.
Our working capital management goals include maintaining an optimal level of inventory necessary to deliver goods on time to our customers and our retail stores to satisfy end consumer demand, alleviating manufacturing capacity constraints, and driving efficiencies to minimize the cycle time from the purchase of inventory from our suppliers to the collection of accounts receivable balances from our customers.
Our working capital management goals include maintaining an optimal level of inventory necessary to deliver goods on time to our customers and to satisfy end consumer demand, alleviating manufacturing capacity constraints, and driving efficiencies to minimize the cycle time from the purchase of inventory from our suppliers to the collection of accounts receivable balances from our customers.
We believe older season inventories represent a manageable portion of our total inventory mix. We have planned 2024 capital expenditures of approximately $60 to $80 million. This includes investments in our DTC operations, including new stores and digital and supply chain capabilities to support our strategic priorities.
We believe older season inventories represent a manageable portion of our total inventory mix. We have planned 2025 capital expenditures of approximately $60 to $80 million. This includes investments in our DTC operations, including new stores and supply chain and digital capabilities to support our strategic priorities.
Apparel, accessories, and equipment products are provided by our Columbia, Mountain Hardwear and prAna brands. Footwear products are provided by our Columbia and SOREL brands. We sell our products in more than 100 countries and operate in four geographic segments: U.S., LAAP, EMEA, and Canada.
Apparel, accessories and equipment products are provided by our Columbia, Mountain Hardwear and prAna brands. Footwear products are provided by our Columbia and SOREL brands. We sell our products in more than 110 countries and operate in four geographic segments: U.S., LAAP, EMEA, and Canada.
In addition, refer to Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2022 for our discussion and analysis comparing financial condition and results of operations from 2022 to 2021.
In addition, refer to Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2023 for our discussion and analysis comparing financial condition and results of operations from 2023 to 2022.
We evaluate our inventory on hand to identify excess, close-out or slow-moving inventory by contemplating our 1) purchasing plans; 2) sales forecasts; 3) historical liquidation experience; and 4) the level and composition of inventory from current and prior seasons that remains unsold and establish provisions as necessary to properly reflect inventory value at the lower of cost or net realizable value.
We evaluate our inventory on hand to identify excess, close-out or slow-moving inventory by contemplating our purchasing plans, sales forecasts, historical liquidation experience, and the level and composition of inventory from current and prior seasons that remains unsold and establish provisions as necessary to properly reflect inventory value at the lower of cost or net realizable value.
Non-GAAP Financial Measure To supplement financial information reported in accordance with accounting principles generally accepted in the United States ("GAAP"), we disclose constant-currency net sales information, which is a non-GAAP financial measure, to provide a framework to assess how the business performed excluding the effects of changes in foreign currency exchange rates against the United States dollar between comparable reporting periods.
Non-GAAP Financial Measure To supplement financial information reported in accordance with accounting principles generally accepted in the U.S. ("GAAP"), we disclose constant-currency net sales information, which is a non-GAAP financial measure, to provide a framework to assess how the business performed excluding the effects of changes in foreign currency exchange rates against the U.S. dollar between comparable reporting periods.
Our actual capital expenditures may differ from the planned amounts depending on factors such as the timing of system implementations and new store openings and related construction as well as the availability of capital assets from suppliers. Our long-term goal is to maintain a strong balance sheet and a disciplined approach to capital allocation.
Our actual capital expenditures may differ from the planned amounts depending on factors such as the timing of system implementations and new store openings and related construction. Our long-term goal is to maintain a strong balance sheet and a disciplined approach to capital allocation.
The most significant variable affecting these reserve balances is sales levels. As a percentage of Net sales , the sales reserves balances were 3.0% as of December 31, 2023 compared to 3.3% as of December 31, 2022. The reserve for returns from customers or consumers is the component of our sales related reserves most susceptible to estimation uncertainty.
The most significant variable affecting these reserve balances is sales levels. As a percentage of Net sales , the sales reserves balances were 2.9% as of December 31, 2024 compared to 3.0% as of December 31, 2023. The reserve for returns from customers or consumers is the component of our sales-related reserves most susceptible to estimation uncertainty.
When we give our customers the right to return products or provide other accommodations such as chargebacks and markdowns, we estimate the expected sales returns and miscellaneous claims from customers and record sales reserves to reduce Net sales. As of December 31, 2023, our sales-related reserves were $103.9 million compared to $115.4 million as of December 31, 2022.
When we give our customers the right to return products or provide other accommodations such as chargebacks and markdowns, we estimate the expected sales returns and miscellaneous claims from customers and record sales reserves to reduce Net sales. As of December 31, 2024, our sales-related reserves were $96.9 million compared to $103.9 million as of December 31, 2023.
As of December 31, 2023, the carrying value of indefinite-lived intangible assets was $79.2 million, of which $51.8 million was attributed to prAna's trademark. In our 2023 impairment test, the fair value of prAna's trademark exceeded its carrying value by approximately 10% as of the measurement date and, therefore, no impairment was recognized.
At December 31, 2024, the carrying value of indefinite-lived intangible assets was $79.2 million, of which $51.8 million was attributed to prAna's trademark. In our 2024 impairment test, the fair value of prAna's trademark exceeded its carrying value by approximately 33% as of the measurement date and, therefore, no impairment was recognized.
We are focused on four areas of cost reduction and realignment, including: • operational cost savings; • organizational cost savings; • operating model improvements; and • indirect, or non-inventory, spending.
In 2024, we focused on four areas of cost reduction and realignment, including: • operational cost savings; • organizational cost savings; • operating model improvements; and • indirect, or non-inventory, spending.
We calculate constant-currency net sales by translating net sales in foreign currencies for the current period into United States dollars at the exchange rates that were in effect during the comparable period of the prior year.
We calculate constant-currency net sales by translating net sales in foreign currencies for the current period into U.S. dollars at the exchange rates that were in effect during the comparable period of the prior year.
As part of our evaluation, we performed a sensitivity analysis on the trademark impairment model. A 100 basis point decline in the compound annual growth rate for net sales assumed over the first five years would reduce the excess of fair value over the carrying amount to approximately 6%.
As part of our evaluation, we performed a sensitivity analysis on the trademark impairment model. A 300 basis point decline in the compound annual growth rate for net sales assumed over the first eight years would reduce the excess of fair value over the carrying amount to approximately 12%.
Separately, a 100 basis point increase in the assumed discount rate would reduce the excess of the fair value over the carrying value to approximately 2%. A separate 50 basis point decline in the assumed royalty rate would reduce the excess of fair value over the carrying amount to zero.
Separately, a 100 basis point increase in the assumed discount rate would reduce the excess of the fair value over the carrying value to approximately 22%. A separate 50 basis point decline in the assumed royalty rate would reduce the excess of fair value over the carrying amount to approximately 21%.
Long-Lived Assets Long-lived assets, which include property, plant and equipment, lease right-of-use ("ROU") assets, capitalized implementation costs for cloud computing arrangements, and intangible assets with finite lives are measured for impairment only when events or circumstances indicate the carrying value may not be recoverable. Our retail fleet long‐lived assets are evaluated at the retail location level.
Long-Lived Assets Long-lived assets, which include property, plant and equipment, lease right-of-use ("ROU") assets, and capitalized implementation costs for cloud computing arrangements are evaluated for impairment only when events or circumstances indicate the carrying value may not be recoverable. Our retail store fleet long‐lived assets are generally evaluated at the retail location level.
The level of estimated excess inventory as of December 31, 2023 decreased reflecting the use of our outlet stores and temporary clearance locations to profitably clear excess merchandise.
The level of estimated excess inventory as of December 31, 2024 decreased, reflecting the use of our outlet stores and temporary clearance locations to profitably sell excess merchandise.
For the year ended December 31, 2023, our effective income tax rate was primarily impacted by a non-recurring benefit related to a foreign currency loss resulting from an intercompany transaction and a non-recurring foreign tax benefit.
For the year ended December 31, 2023, our effective income tax rate included a non-recurring benefit related to a foreign currency loss resulting from an intercompany transaction and a non-recurring foreign tax benefit.
There was no balance outstanding under the facility. COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 28 Table of Contents Other Sources As of December 31, 2023, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$106.7 million. There was no balance outstanding under these facilities.
There was no balance outstanding under the facility. COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 30 Table of Contents Other Sources As of December 31, 2024, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$101.8 million. There were no balances outstanding under these facilities.
Indefinite-Lived Intangible Assets and Goodwill We review and test our intangible assets with indefinite lives and goodwill for impairment in the fourth quarter of each year and when events or changes in circumstances indicate that it is more likely than not that the fair value of the asset or reporting unit is less than its carrying amount.
Indefinite-Lived Intangible Assets and Goodwill COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 32 Table of Contents We review and test our intangible assets with indefinite lives and goodwill for impairment in the fourth quarter of each year and when events or changes in circumstances indicate that it is more likely than not that the fair value of the asset or reporting unit is less than its carrying amount.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 20 Table of Contents We are investing in our strategic priorities to: • accelerate profitable growth; • create iconic products that are differentiated, functional and innovative; • drive brand engagement through increased, focused demand creation investments; • enhance consumer experiences by investing in capabilities to delight and retain consumers; • amplify marketplace excellence, with digitally-led, omni-channel, global distribution; and • empower talent that is driven by our core values through a diverse and inclusive workplace.
In addition, we are committed to investing in our strategic priorities with a renewed emphasis to: • accelerate profitable growth; • create iconic products that are differentiated, functional and innovative; • drive brand engagement through increased, focused demand creation investments; • enhance consumer experiences by investing in capabilities to delight and retain consumers; • amplify marketplace excellence, with digitally-led, omni-channel, global distribution; and • empower talent that is driven by our core values through a diverse and inclusive workplace.
For 2023, net cash used in financing activities primarily consisted of repurchases of common stock of $184.0 million and dividend payments to our shareholders of $73.4 million. For 2022, net cash used in financing activities primarily consisted of repurchases of common stock of $287.4 million and dividend payments to our shareholders of $75.1 million.
For 2024, net cash used in financing activities primarily consisted of repurchases of common stock of $317.8 million and dividend payments to our shareholders of $69.7 million. For 2023, net cash used in financing activities primarily consisted of repurchases of common stock of $184.0 million and dividend payments to our shareholders of $73.4 million.
If actual or expected future returns and claims are significantly different than the sales reserves established, we record an adjustment to Net sales in the period in which such determination was made.
If actual or expected future returns and claims are significantly different than the sales reserves established, we record an adjustment to Net sales in the period in which such determination was made. Excess, Close-Out and Slow-Moving Inventory We make ongoing estimates of potential excess, close-out or slow-moving inventory.
The preparation of these financial statements requires us to make various COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 29 Table of Contents estimates and judgments that affect reported amounts of assets, liabilities, sales, cost of sales, and expenses and related disclosure of contingent assets and liabilities.
The preparation of these financial statements requires us to make various estimates and judgments that affect reported amounts of assets, liabilities, sales, cost of sales, and expenses and related disclosure of contingent assets and liabilities.
Changes in tax law or our interpretation of tax laws and the resolution of current and future tax audits could significantly affect the amounts provided for Income tax expense in our Consolidated Statements of Operations.
Changes in tax law or our COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 33 Table of Contents interpretation of tax laws and the resolution of current and future tax audits could significantly affect the amounts provided for Income tax expense in our Consolidated Statements of Operations.
For 2022, net cash provided by investing activities consisted of $131.2 million in net sales and maturities of short-term investments partially offset by $58.5 million in cash used for capital expenditures. Net cash used in financing activities was $254.8 million for 2023 compared to $360.8 million for 2022.
For 2023, net cash used in investing activities consisted of $528.5 million in cash used for purchases of short-term investments and $54.6 million for capital expenditures, partially offset by $121.3 million in cash provided by sales and maturities of short-term investments. Net cash used in financing activities was $386.2 million for 2024 compared to $254.8 million for 2023.
Sources of Liquidity Cash and cash equivalents and short-term investments As of December 31, 2023, we had cash and cash equivalents of $350.3 million and short-term investments of $414.2 million, compared to $430.2 million and $0.7 million, respectively, as of December 31, 2022.
Sources of Liquidity Cash and cash equivalents and short-term investments As of December 31, 2024, we had cash and cash equivalents of $531.9 million and short-term investments of $283.6 million, compared to $350.3 million and $414.2 million, respectively, as of December 31, 2023.
Impairment of Goodwill and Intangible Assets. For the year ended December 31, 2023, we recognized a $25.0 million impairment charge related to goodwill attributable to the prAna reporting unit resulting from our annual fourth quarter impairment testing.
Impairment of Goodwill. For the year ended December 31, 2024, there were no impairment charges recorded for goodwill. For the year ended December 31, 2023, we recognized $25.0 million of impairment charges related to goodwill attributable to the prAna reporting unit resulting from our annual fourth quarter impairment testing.
We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential effect on our financial statements, so we consider these to be our critical accounting policies and estimates.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 31 Table of Contents We believe that the estimates, assumptions and judgments involved in the accounting policies described below have the greatest potential effect on our financial statements, so we consider these to be our critical accounting policies and estimates.
Heightened Geopolitical Risk | We sell our products in more than 100 countries and our ability to sell in certain markets may be impacted by ongoing geopolitical tensions. We believe these tensions will remain elevated and have manifested, and will continue to manifest, themselves in certain regions where we operate.
Business Environment and Trends Heightened Geopolitical Risk | We sell our products in more than 110 countries and our ability to sell, import into and produce in certain markets may be impacted by ongoing geopolitical tensions. We believe these tensions will remain elevated, and will continue to manifest themselves in certain regions where we operate. Changing U.S.
Interest income, net is summarized in the following table: Year Ended December 31, (in millions, except for percentages) 2023 2022 Change Interest income, net $ 13.7 $ 2.7 $ 11.0 407 % Interest income, net as a percent of net sales 0.4 % 0.1 % Interest income, net increased primarily reflecting higher yields on increased levels of cash, cash equivalents and short-term investments.
Interest income, net is summarized in the following table: Year Ended December 31, (in thousands, except for percentages) 2024 2023 Change Interest income, net $ 27,703 $ 13,687 $ 14,016 102 % Interest income, net as a percent of net sales 0.8 % 0.4 % Interest income, net, increased primarily reflecting higher yields on increased levels of cash, cash equivalents and short-term investments.
Provisions are established when necessary in the period in which we make COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 30 Table of Contents such a determination. As of December 31, 2023, our inventory provisions reduced gross inventory by $23.3 million compared to $29.4 million as of December 31, 2022.
Provisions are established when necessary in the period in which we make such a determination. As of December 31, 2024, our inventory provisions reduced gross inventory by $20.4 million compared to $23.3 million as of December 31, 2023.
For the years ended December 31, 2023 and 2022, impairment charges from underperforming retail stores were not material. Further declines in projected future performance may adversely affect the recovery of retail locations assets.
During 2024, we tested certain long-lived assets consisting of property, plant, and equipment and lease ROU assets for impairment at certain underperforming retail locations. For the years ended December 31, 2024 and 2023, impairment charges from underperforming retail stores were not material. Further declines in projected future performance may adversely affect the recovery of retail location assets.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 31 Table of Contents Income Taxes We make assumptions, judgments and estimates to determine our current provision for income taxes, our deferred tax assets and liabilities and our uncertain tax positions.
Income Taxes We make assumptions, judgments and estimates to determine our current provision for income taxes, our deferred tax assets and liabilities and our uncertain tax positions.
We were in compliance with all associated covenants and there was no balance outstanding under the facility. International Credit Facility As of December 31, 2023, our European subsidiary had available an unsecured, committed line of credit, which is guaranteed by the Company and provides for borrowings up to €4.4 million (approximately US$4.9 million).
Domestic Credit Facility As of December 31, 2024, we had available an unsecured, committed revolving credit facility, which provides for borrowings up to $500.0 million. We were in compliance with all associated covenants and there was no balance outstanding under the facility.
Ultimately, we expect our investments to enable market share capture across our brand portfolio, expand gross margin, improve selling, general and administrative expense efficiency, and drive improved operating margin over the long-term. Profit Improvement Program As part of our strategic priorities, we are implementing a multi-year profit improvement program to accelerate profitable growth and improve the efficiency of our operations.
Ultimately, we expect our investments to enable market share capture across our brand portfolio, expand gross margin, improve selling, general and administrative expense efficiency, and drive improved operating margin over the long-term.
Domestic Credit Facility Refer to Note 7 in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding the domestic credit facility. As of December 31, 2023, we had available an unsecured, committed revolving credit facility, which provides for borrowings up to $500.0 million.
Refer to Note 6 in Part II, Item 8 of this Annual Report on Form 10-K for further information regarding our domestic credit facility. International Credit Facility As of December 31, 2024, our European subsidiary had available an unsecured, committed line of credit, which is guaranteed by the Company and provides for borrowings up to €4.4 million (approximately US$4.6 million).
As of December 31, 2023, our inventory balance decreased to $746.3 million, compared to $1,028.5 million as of December 31, 2022, driven by a meaningful reduction of purchases of Spring 2023 and Fall 2023 inventory, as well as the use of our outlet stores and temporary clearance locations to profitably clear excess merchandise.
As of December 31, 2024, our inventory balance decreased to $690.5 million, compared to $746.3 million as of December 31, 2023, driven by a reduction in current season and carryover inventory resulting from lower inventory buys, as well as the use of our outlet stores and temporary clearance locations to profitably sell excess merchandise.
(2) Refer to Income Taxes in Note 10 in Part II, Item 8 of this Annual Report on Form 10-K. CRITICAL ACCOUNTING ESTIMATES Management's discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP.
CRITICAL ACCOUNTING ESTIMATES Management's discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with GAAP.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 22 Table of Contents Results of Operations — Consolidated The following table presents the items in our Consolidated Statements of Operations, both in dollars and as a percentage of net sales: Year Ended December 31, (in millions, except for percentage of net sales and per share amounts) 2023 2022 Net sales $ 3,487.2 100.0 % $ 3,464.2 100.0 % Cost of sales 1,757.3 50.4 % 1,753.1 50.6 % Gross profit 1,729.9 49.6 % 1,711.1 49.4 % Selling, general and administrative expenses 1,416.3 40.6 % 1,304.4 37.7 % Impairment of goodwill and intangible assets 25.0 0.7 % 35.6 1.1 % Net licensing income 21.7 0.6 % 22.0 0.7 % Operating income 310.3 8.9 % 393.1 11.3 % Interest income, net 13.7 0.4 % 2.7 0.1 % Other non-operating income, net 2.2 0.1 % 1.6 0.1 % Income before income tax 326.2 9.4 % 397.4 11.5 % Income tax expense 74.8 2.1 % 86.0 2.5 % Net income $ 251.4 7.3 % $ 311.4 9.0 % Diluted earnings per share $ 4.09 $ 4.95 COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 23 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Net Sales.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 24 Table of Contents Results of Operations — Consolidated The following table presents the items in our Consolidated Statements of Operations, both in dollars and as a percentage of net sales: Year Ended December 31, (in thousands, except for percentage of net sales and per share amounts) 2024 2023 Net sales $ 3,368,582 100.0 % $ 3,487,203 100.0 % Cost of sales 1,677,497 49.8 % 1,757,271 50.4 % Gross profit 1,691,085 50.2 % 1,729,932 49.6 % Selling, general and administrative expenses 1,443,906 42.9 % 1,416,313 40.6 % Impairment of goodwill — — % 25,000 0.7 % Net licensing income 23,562 0.7 % 21,665 0.6 % Operating income 270,741 8.0 % 310,284 8.9 % Interest income, net 27,703 0.8 % 13,687 0.4 % Other non-operating income (expense), net (257) — % 2,221 0.1 % Income before income tax 298,187 8.8 % 326,192 9.4 % Income tax expense 74,914 2.2 % 74,792 2.1 % Net income $ 223,273 6.6 % $ 251,400 7.3 % Diluted earnings per share $ 3.82 $ 4.09 COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 25 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net Sales.
When such an indicator occurs, we evaluate retail location long‐lived assets for impairment by comparing the undiscounted future cash flow expected to be generated by the location to the location long‐lived asset’s carrying amount. If the carrying amount of an asset exceeds the estimated undiscounted future cash flow, an analysis is performed to estimate the fair value of the asset.
When such an indicator occurs, we evaluate the retail location long‐lived asset or asset group for impairment by comparing the undiscounted future cash flows expected to be generated by the location to the location long‐lived asset group’s carrying amount.
EMEA SG&A expenses increased as a percentage of net sales to 27.1% in 2023 compared to 26.1% in 2022. Canada Canada operating income increased $2.6 million to $55.6 million, or 21.7% of net sales, in 2023 from $53.0 million, or 21.2% of net sales in 2022. The increase primarily resulted from increased net sales.
EMEA segment SG&A expenses and other segment items increased in total and as a percentage of net sales to 28.1% in 2024 compared to 26.8% in 2023. Canada Canada segment operating income decreased $7.8 million to $47.8 million, or 21.0% of net sales, in 2024 from $55.6 million, or 21.7% of net sales, in 2023.
In 2022, we determined that the prAna brand’s trademark was impaired and we recognized an $18.7 million impairment charge for the year ended December 31, 2022. In the impairment test for goodwill, we compare the estimated fair value of the reporting unit with the carrying amount of that reporting unit.
In our 2023 impairment test, we determined that the prAna brand's trademark was not impaired. In our 2022 impairment test, we determined that the prAna brand's trademark was impaired and we recognized a $18.7 million impairment charge for the year ended December 31, 2022.
Management regularly discusses with our Audit Committee each of our critical accounting estimates, the development and selection of these accounting estimates, and the disclosure about each estimate in this Annual Report on Form 10-K.
Our critical accounting policies and estimates relate to sales reserves, excess, close-out and slow-moving inventory, impairment of long-lived assets, intangible assets and goodwill, and income taxes. Management regularly discusses with our Audit Committee each of our critical accounting estimates, the development and selection of these accounting estimates, and the disclosure about each estimate in this Annual Report on Form 10-K.
In our 2023 impairment test, we determined that prAna goodwill was impaired and we recognized a $25.0 million impairment charge for the year ended December 31, 2023, reducing the carrying value of prAna's goodwill to $12.3 million.
In our 2023 and 2022 impairment tests, we determined that prAna goodwill was impaired and we recognized a $25.0 million and $16.9 million impairment charge for the years ended December 31, 2023 and December 31, 2022, respectively.
Results of Operations — Segment Segment operating income includes net sales, cost of sales, SG&A expenses, and net licensing income for each of our four reportable geographic segments.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 27 Table of Contents Results of Operations — Segment Segment operating income includes net sales, cost of sales, segment SG&A expenses, and other segment items for each of our four reportable segments.
The following table presents our estimated significant contractual commitments that will require use of funds: Year Ended December 31, (in millions) 2024 2025 2026 2027 2028 Thereafter Total Inventory purchase obligations $ 343.4 $ — $ — $ — $ — $ — $ 343.4 Operating lease obligations (1) 86.6 81.9 74.3 63.1 55.0 106.3 467.2 TCJA transition tax obligations (2) 10.6 13.3 — — — — 23.9 (1) Refer to Operating Leases in Note 9 in Part II, Item 8 of this Annual Report on Form 10-K.
Other cash commitments The following table presents our estimated significant contractual commitments that will require use of funds: Year Ended December 31, (in thousands) 2025 2026 2027 2028 2029 Thereafter Total Inventory purchase obligations $ 473,029 $ — $ — $ — $ — $ — $ 473,029 Operating lease obligations (1) 94,523 91,054 79,911 70,783 53,899 133,955 524,125 Tax Cuts and Jobs Act transition tax obligations 13,281 — — — — — 13,281 (1) Refer to Operating Leases in Note 8 in Part II, Item 8 of this Annual Report on Form 10-K.
U.S. operating income decreased $104.1 million to $415.7 million, or 18.5% of net sales, in 2023 from $519.8 million, or 22.6% of net sales, in 2022. The decrease was driven primarily by decreased net sales and increased SG&A expenses. U.S. net sales decreased $60.8 million, or 3%, in 2023, compared to 2022.
U.S. segment operating income decreased $59.0 million to $356.7 million, or 17.2% of net sales, in 2024 from $415.7 million, or 18.5% of net sales, in 2023. The decrease was driven primarily by decreased net sales and gross profit, partially offset by lower segment SG&A expenses and other segment items.
Gross profit is summarized in the following table: Year Ended December 31, (in millions, except for percentages and basis points) 2023 2022 Change Gross profit $ 1,729.9 $ 1,711.1 $ 18.8 1 % Gross margin 49.6 % 49.4 % 20 bps Gross margin expanded primarily due to the following factors: • an approximate 240 bps increase related to lower inbound freight costs; partially offset by • unfavorable channel profitability reflecting lower DTC product margins and lower wholesale margins.
Gross profit is summarized in the following table: Year Ended December 31, (in thousands, except for percentages and basis points) 2024 2023 Change Gross profit $ 1,691,085 $ 1,729,932 $ (38,847) (2) % Gross margin 50.2 % 49.6 % 60 bps Gross margin expanded primarily due to the following factors: • favorable inbound freight costs; and • favorable region and channel net sales mix; partially offset by • unfavorable decrease in channel profitability reflecting higher clearance and promotional activity.
LIQUIDITY AND CAPITAL RESOURCES Including cash, cash equivalents, short-term investments and available committed credit lines, we had approximately $1.25 billion in total liquidity as of December 31, 2023. Our liquidity may be affected by the general seasonal trends common to the industry.
Unallocated Corporate Expenses Unallocated corporate expenses decreased by $7.5 million to $314.3 million in 2024 from $321.8 million in 2023. LIQUIDITY AND CAPITAL RESOURCES Our primary sources of liquidity include cash, cash equivalents, short-term investments, and available committed credit lines. Our liquidity may be affected by the general seasonal trends common to the industry.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 27 Table of Contents Cash Flow Activities Cash flows are summarized in the following table: Year Ended December 31, (in millions) 2023 2022 Change Net cash provided by (used in): Operating activities $ 636.3 $ (25.2) $ 661.5 Investing activities (461.8) 72.7 (534.5) Financing activities (254.8) (360.8) 106.0 Net effect of exchange rate changes on cash 0.4 (19.8) 20.2 Net decrease in cash and cash equivalents $ (79.9) $ (333.1) $ 253.2 The change in cash flows provided by operating activities was driven by a $713.5 million increase in cash provided by changes in assets and liabilities, partially offset by a $52.0 million decrease in cash provided by net income and non-cash adjustments.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 29 Table of Contents Cash Flow Activities Cash flows are summarized in the following table: Year Ended December 31, (in thousands) 2024 2023 Change Net cash provided by (used in): Operating activities $ 491,042 $ 636,297 $ (145,255) Investing activities 87,334 (461,819) 549,153 Financing activities (386,239) (254,789) (131,450) Net effect of exchange rate changes on cash (10,587) 389 (10,976) Net increase (decrease) in cash and cash equivalents $ 181,550 $ (79,922) $ 261,472 The change in cash flows provided by operating activities was driven by a $86.1 million decrease in cash provided by changes in assets and liabilities, as well as a $59.2 million decrease in cash provided by net income and non-cash adjustments.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Net sales by geographic segment are summarized in the following table: Year Ended December 31, (in millions, except for percentage changes) Reported Net Sales 2023 Adjust for Foreign Currency Translation Constant-currency Net Sales 2023 (1) Reported Net Sales 2022 Reported Net Sales % Change Constant-currency Net Sales % Change (1) U.S. $ 2,241.4 $ — $ 2,241.4 $ 2,302.2 (3)% (3)% LAAP 519.8 22.0 541.8 473.9 10% 14% EMEA 469.2 (10.7) 458.5 438.6 7% 5% Canada 256.8 8.7 265.5 249.5 3% 6% $ 3,487.2 $ 20.0 $ 3,507.2 $ 3,464.2 1% 1% (1) Constant-currency net sales is a non-GAAP financial measure.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net sales by reportable segment are summarized in the following table: Year Ended December 31, (in thousands, except for percentage changes) Reported Net Sales 2024 Adjust for Foreign Currency Translation Constant-currency Net Sales 2024 (1) Reported Net Sales 2023 Reported Net Sales % Change Constant-currency Net Sales % Change (1) U.S. 2,068,228 — 2,068,228 2,241,437 (8)% (8)% LAAP 560,706 13,715 574,421 519,754 8% 11% EMEA 511,778 (5,300) 506,478 469,237 9% 8% Canada 227,870 2,332 230,202 256,775 (11)% (10)% $ 3,368,582 $ 10,747 $ 3,379,329 $ 3,487,203 (3)% (3)% (1) Constant-currency net sales is a non-GAAP financial measure.
LAAP LAAP operating income increased $14.8 million to $61.8 million, or 11.9% of net sales, in 2023 from $47.0 million, or 9.9% of net sales, in 2022. The increase was driven primarily by increased net sales. LAAP net sales increased $45.9 million, or 10% (14% constant-currency), in 2023, compared to 2022.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 28 Table of Contents LAAP LAAP segment operating income increased $15.2 million to $77.0 million, or 13.7% of net sales, in 2024 from $61.8 million, or 11.9% of net sales, in 2023. The increase was driven primarily by increased net sales and gross profit.
If the carrying amount of the reporting unit exceeds its estimated fair value, we calculate an impairment as the excess of carrying amount over the estimate of fair value. We estimate the fair value of our reporting units using a combination of discounted cash flow analysis and market-based valuation methods, as appropriate.
We estimate the fair value of our reporting units using a combination of discounted cash flow analysis and market-based valuation methods, as appropriate. At December 31, 2024, the carrying value of goodwill was $26.7 million, of which $12.3 million was attributed to the prAna reporting unit.
In addition, these PFAS matters may result in a more promotional environment in 2024 as retailers move through merchandise containing PFAS. RESULTS OF OPERATIONS The following discussion of our results of operations and liquidity and capital resources should be read in conjunction with Part II, Item 8 of this Annual Report on Form 10-K.
In 2024, over 60% of our net sales and over 90% of o ur operating income were realized in the second half of the year. RESULTS OF OPERATIONS The following discussion of our results of operations and liquidity and capital resources should be read in conjunction with Part II, Item 8 of this Annual Report on Form 10-K.
LAAP SG&A expenses decreased as a percentage of net sales to 44.4% in 2023 compared to 46.0% in 2022. EMEA EMEA operating income increased $18.8 million to $99.0 million, or 21.1% of net sales, in 2023 from $80.2 million, or 18.3% of net sales, in 2022. The increase was driven primarily by increased net sales and gross margin.
EMEA EMEA segment operating income increased $4.5 million to $103.5 million, or 20.2% of net sales, in 2024 from $98.9 million, or 21.1% of net sales, in 2023. The increase was driven primarily by increased net sales and gross profit.
The $188.3 million increase in cash provided by Accounts receivable was primarily driven by higher fourth quarter 2022 wholesale sales collected in 2023 compared to the same period in the prior year.
The $135.6 million decrease in cash provided by Accounts receivable reflected cash provided of $123.8 million for the year ended December 31, 2023, primarily driven by a higher portion of fourth quarter wholesale sales collected in 2023 compared to the same period in 2022, as well as cash used of $11.8 million for the year ended December 31, 2024, primarily driven by a lower portion of fourth quarter wholesale sales collected in 2024 as compared to the same period in 2023.
Net cash used in investing activities was $461.8 million for 2023, compared to $72.7 million of cash provided by investing activities for 2022. For 2023, net cash used in investing activities consisted of $407.2 million in cash used for net purchases of short-term investments, as well as $54.6 million in cash used for capital expenditures.
Net cash provided by investing activities was $87.3 million for 2024, compared to $461.8 million of cash used in investing activities for 2023.
Our products are marketed on a seasonal basis, and our sales are weighted substantially toward the third and fourth quarters, while our operating costs are more equally distributed throughout the year. In 2023, nearly 60% of our net sales and nearly 80% of our operating income were realized in the second half of the year.
Seasonality | Our business is affected by the general seasonal trends common to the industry, including seasonal weather and discretionary consumer shopping and spending patterns. Our products are marketed on a seasonal basis, and our sales are weighted substantially toward the third and fourth quarters, while our operating costs are more equally distributed throughout the year.
The most significant comparative changes in assets and liabilities included Inventories , and to a lesser extent, Accounts Receivable, Accounts Payable and Accrued liabilities . The $683.7 million increase in cash provided by Inventories reflected a decrease in inventory as we curtailed inventory purchases to compensate for elevated inventories exiting 2022 and liquidated excess inventory levels throughout 2023.
The most significant comparative changes in assets and liabilities included Inventories , Accounts receivable and Accounts payable. The $244.7 million decrease in cash provided by Inventories was primarily driven by inventory liquidation efforts throughout 2023 and 2024.
Net sales by brand, product category and channel are summarized in the following table: Year Ended December 31, (in millions, except for percentages) Reported Net Sales 2023 Adjust for Foreign Currency Translation Constant-currency Net Sales 2023 (1) Reported Net Sales 2022 Reported Net Sales % Change Constant-currency Net Sales % Change (1) Brand Net Sales: Columbia $ 2,935.1 $ 19.4 $ 2,954.5 $ 2,864.3 2% 3% SOREL 336.7 (0.3) 336.4 347.3 (3)% (3)% prAna 113.6 0.1 113.7 143.1 (21)% (21)% Mountain Hardwear 101.8 0.8 102.6 109.5 (7)% (6)% Total $ 3,487.2 $ 20.0 $ 3,507.2 $ 3,464.2 1% 1% Product Category Net Sales: Apparel, Accessories and Equipment $ 2,676.6 $ 15.7 $ 2,692.3 $ 2,661.1 1% 1% Footwear 810.6 4.3 814.9 803.1 1% 1% Total $ 3,487.2 $ 20.0 $ 3,507.2 $ 3,464.2 1% 1% Channel Net Sales: Wholesale $ 1,874.0 $ 7.5 $ 1,881.5 $ 1,867.7 —% 1% Direct-to-consumer 1,613.2 12.5 1,625.7 1,596.5 1% 2% Total $ 3,487.2 $ 20.0 $ 3,507.2 $ 3,464.2 1% 1% (1) Constant-currency net sales is a non-GAAP financial measure.
Net sales by brand, product category and channel are summarized in the following table: Year Ended December 31, (in thousands, except for percentages) Reported Net Sales 2024 Adjust for Foreign Currency Translation Constant-currency Net Sales 2024 (1) Reported Net Sales 2023 Reported Net Sales % Change Constant-currency Net Sales % Change (1) Brand Net Sales: Columbia $ 2,917,678 $ 10,521 $ 2,928,199 $ 2,935,145 (1)% —% SOREL 238,266 (257) 238,009 336,688 (29)% (29)% prAna 104,087 6 104,093 113,623 (8)% (8)% Mountain Hardwear 108,551 477 109,028 101,747 7% 7% Total $ 3,368,582 $ 10,747 $ 3,379,329 $ 3,487,203 (3)% (3)% Product Category Net Sales: Apparel, Accessories and Equipment $ 2,687,174 $ 8,048 $ 2,695,222 $ 2,676,597 —% 1% Footwear 681,408 2,699 684,107 810,606 (16)% (16)% Total $ 3,368,582 $ 10,747 $ 3,379,329 $ 3,487,203 (3)% (3)% Channel Net Sales: Wholesale $ 1,734,358 $ 2,062 $ 1,736,420 $ 1,874,003 (7)% (7)% Direct-to-consumer 1,634,224 8,685 1,642,909 1,613,200 1% 2% Total $ 3,368,582 $ 10,747 $ 3,379,329 $ 3,487,203 (3)% (3)% (1) Constant-currency net sales is a non-GAAP financial measure.
Income tax expense and the related effective income tax rate are summarized in the following table: Year Ended December 31, (in millions, except for percentages) 2023 2022 Change Income tax expense $ 74.8 $ 86.0 $ (11.2) (13) % Effective income tax rate 22.9 % 21.6 % Our effective income tax rates for the years ended December 31, 2023 and 2022 were impacted by discrete tax items, which lowered the effective income tax rate in each period.
Income tax expense and the related effective income tax rate are summarized in the following table: Year Ended December 31, (in thousands, except for percentages) 2024 2023 Change Income tax expense $ 74,914 $ 74,792 $ 122 — % Effective income tax rate 25.1 % 22.9 % Income tax expense increased to $74.9 million for the year ended December 31, 2024 from $74.8 million for 2023.
EMEA net sales increased $30.6 million, or 7% (5% constant-currency), in 2023, compared to 2022, driven by increased net sales in our Europe-direct business, partially offset by declines in our EMEA distributor business. Europe-direct net sales increased primarily due to broad-based growth across our DTC and wholesale businesses, including the earlier shipment of Spring 2024 orders compared to prior year.
EMEA net sales increased $42.5 million, or 9% (8% constant-currency), in 2024, compared to 2023, primarily driven by our Europe-direct business. Increased net sales in our Europe-direct business were driven by robust demand within our DTC brick-and-mortar and e-commerce businesses for the year ended December 31, 2024.
COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 24 Table of Contents Gross Profit.
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 26 Table of Contents Selling, General and Administrative Expenses ("SG&A").
These amounts were partially offset by the $126.3 million increase in cash used in Accounts payable primarily resulting from the earlier production of and payment for Spring 2024 and Fall 2024 inventory, as well as the $82.9 million increase in cash used in Accrued liabilities, which was primarily driven by higher sales reserves at the beginning of 2023 compared to 2022 resulting from higher sales in the fourth quarter of 2022.
These amounts were partially offset by the $241.0 million decrease in cash used in Accounts payable, reflecting cash used of $85.9 million for the year ended December 31, 2023, primarily resulting from the earlier production of and payment for Spring 2024 and Fall 2024 inventory, as well as cash provided of $155.0 million for the year ended December 31, 2024, primarily resulting from the timing of inventory receipts and related payments, including a reduction in the use of early payments and extension of payment terms with certain vendors.
LAAP distributor net sales increased due to higher Spring 2023 and Fall 2023 orders compared to the same periods in the prior year, as well as earlier shipment of Spring 2024 orders compared to the shipment of Spring 2023 orders. Decreased Korea net sales reflected challenging market conditions and efforts to reset the business to support long-term growth opportunities.
Increased net sales in our China business reflected continued strong consumer demand, aided by positive outdoor category trends. Increased net sales in our LAAP distributor business reflected growth in our Fall 2024 and Spring 2025 orders as compared to the same period in the prior year.
Increased LAAP net sales were primarily driven by our China and LAAP distributor businesses, partially offset by declines in our Korea business. Increased China net sales reflected higher consumer demand, partially aided by the lapping of prior year government mandated restrictions to prevent the spread of COVID-19.
LAAP net sales increased $41.0 million, or 8% (11% constant-currency), in 2024, compared to 2023. Increased LAAP net sales were primarily driven by our China, LAAP distributor, and, to a lesser extent, our Japan businesses, partially offset by declines in our Korea business.
See "Non-GAAP Financial Measure" above for further information. Overall, global net sales increased, driven by international sales growth in our Columbia brand, primarily from our Europe-direct, China and LAAP distributor businesses. In Europe-direct and China markets, healthy consumer demand drove growth in both our wholesale and DTC businesses throughout the year.
See "Non-GAAP Financial Measure" above for further information. Our global net sales decrease primarily reflected lower wholesale net sales in the U.S. and Canada, partially offset by strength in international markets, as compared to 2023.
SG&A expenses increased as a percentage of net sales to 31.0% in 2023 compared to 27.7% in 2022, primarily driven by increased warehousing and fulfillment expenses resulting from elevated inventory levels and higher DTC expenses reflecting higher personnel and costs associated with new stores and temporary clearance locations.
The increases in brick-and-mortar net sales were primarily driven by temporary clearance locations and new stores for the year ended December 31, 2024. U.S. segment SG&A expenses and other segment items increased as a percentage of net sales to 31.9% in 2024 compared to 30.1% in 2023, primarily driven by fixed SG&A expenses and decreased net sales.
Operating income for each reportable segment and unallocated corporate expenses are summarized in the following table: Year Ended December 31, (in millions) 2023 2022 Change U.S. $ 415.7 $ 519.8 $ (104.1) LAAP 61.8 47.0 14.8 EMEA 99.0 80.2 18.8 Canada 55.6 53.0 2.6 Total segment operating income 632.1 700.0 (67.9) Unallocated corporate expenses (321.8) (306.9) (14.9) Operating income $ 310.3 $ 393.1 $ (82.8) COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 26 Table of Contents U.S.
Segment operating income for each reportable segment and unallocated corporate expenses are summarized in the following table: Year Ended December 31, (in thousands) 2024 2023 Change U.S. $ 356,722 $ 415,731 $ (59,009) LAAP 77,008 61,824 15,184 EMEA 103,486 98,943 4,543 Canada 47,797 55,599 (7,802) Total segment operating income 585,013 632,097 (47,084) Unallocated corporate expenses (314,272) (321,813) 7,541 Operating income $ 270,741 $ 310,284 $ (39,543) U.S.
Canada net sales increased $7.3 million, or 3% (6% constant-currency), in 2023, compared to 2022, driven by increased net sales in our Canada DTC business. Canada SG&A expenses increased as a percentage of net sales to 25.9% in 2023, compared to 25.0% in 2022.
This decrease was primarily driven by lower net sales and gross profit. Canada net sales decreased $28.9 million, or 11% (10% constant-currency), in 2024, compared to 2023, driven primarily by decreased net sales in our Canada wholesale business.
Removed
When the benefits of this program are combined with the cost savings we anticipate to receive from normalized inventory levels, we believe we can reach $125 million to $150 million in annualized savings by 2026. We anticipate these cost savings will ramp up over the course of 2024 and 2025, with the full benefit being realized in 2026.
Added
ACCELERATE Growth Strategy As part of our strategic priorities, in October 2024, we announced the Columbia brand ("Brand") ACCELERATE Growth Strategy. At its core, the ACCELERATE Growth Strategy is intended to elevate the Brand to target a younger and more active consumer.
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In 2024, we anticipate realizing approximately $75 million to $90 million in realized cost savings. Business Environment and Trends Changing U.S. Marketplace | We believe there has been some moderation of the U.S. outdoor market following the exit from the COVID-19 pandemic.
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It is a multi-year initiative centered around several consumer-centric shifts to the Brand, product and marketplace strategies, as well as enhanced ways of working. We believe successful execution of the ACCELERATE Growth Strategy can elevate the Brand and drive profitable growth.
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There are also new entrants into the historical U.S. outdoor market in the form of emerging brands and historically lifestyle and/or active brands. These brands are crossing over as we believe U.S. consumers and customers use more lifestyle products during outdoor activities.
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Through the ACCELERATE Growth Strategy, we will focus on achieving the following objectives: • steward existing consumer segments while focusing on bringing new younger and active consumers into the Brand; • elevate consumers' perception of the Brand; • create product based on a consumer-centric product construct; • enhance the positioning of the Brand in the U.S. marketplace; and • deliver integrated full-funnel marketing.
Removed
Economic Environment Impacting Demand | We believe general economic uncertainty is impacting consumer and wholesale customer behavior and demand. Wholesale customers have been increasingly cautious managing inventory and in placing advance orders. This cautiousness has been most pronounced in the U.S., but we believe that retailer prudence is spreading to other regions, including Canada and Europe.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeINTEREST RATE RISK Our negotiated credit facilities generally charge interest based on a benchmark rate such as the secured overnight financing rate. Fluctuations in short-term interest rates cause interest payments on drawn amounts to increase or decrease. As of December 31, 2023, no balance was outstanding under our credit facilities.
Biggest changeFluctuations in short-term interest rates cause interest payments on drawn amounts to increase or decrease. As of December 31, 2024, no balance was outstanding under our credit facilities. COMMODITY PRICE RISK We are exposed to market risk for the pricing of the raw materials used to manufacture our products. These raw materials are purchased directly by our contract manufacturers.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the normal course of business, our financial position and results of operations are subject to a variety of risks, including risks associated with global financial and capital markets, primarily currency exchange rate risk and, to a lesser extent, interest rate risk.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the normal course of business, our financial position, results of operations, and cash flows are subject to a variety of risks, including risks associated with global financial and capital markets, primarily currency exchange rate risk and, to a lesser extent, interest rate risk.
Additionally, we hedge net balance sheet exposures related primarily to non-functional currency denominated monetary assets and liabilities using foreign currency forward contracts in European euros, Japanese yen, Canadian dollars, Swiss francs, Chinese renminbi, Korean won, British pound sterling, Danish krone, Norwegian kroner, Polish zloty, Swedish krona and Czech koruna.
Additionally, we hedge net balance sheet exposures related primarily to non-functional currency denominated monetary assets and liabilities using foreign currency forward contracts in European euro, Japanese yen, Canadian dollar, Swiss franc, Chinese renminbi, Korean won, British pound sterling, Danish krone, Norwegian krone, Polish zloty, Swedish krona and Czech koruna.
We focus on mitigating changes in functional currency equivalent cash flows resulting from anticipated United States dollar denominated inventory purchases by subsidiaries that use European euros, Canadian dollars, Japanese yen, Chinese renminbi, or Korean won as their functional currency.
We focus on mitigating changes in functional currency equivalent cash flows resulting from anticipated U.S. dollar denominated inventory purchases by subsidiaries that use European euro, Canadian dollar, Japanese yen, Chinese renminbi, or Korean won as their functional currency.
We also mitigate changes in functional currency equivalent cash flows resulting from anticipated non-functional currency denominated sales for subsidiaries that use United States dollars and European euros as their functional currency. We manage this risk primarily by using currency forward contracts.
We also mitigate changes in functional currency equivalent cash flows resulting from anticipated non-functional currency denominated sales for subsidiaries that use U.S. dollar and European euro as their functional currency. We manage this risk primarily by using currency forward contracts.
Non-functional currency denominated monetary assets and liabilities consist of cash and cash equivalents, short-term investments, receivables, payables, deferred income taxes, and intercompany loans and dividends. The net fair value of our derivative contracts was favorable by $2.1 million as of December 31, 2023.
Non-functional currency denominated monetary assets and liabilities consist of cash and cash equivalents, short-term investments, receivables, payables, deferred income taxes, and intercompany loans and dividends. The net fair value of our derivative contracts wa s favorable by $32.0 million as of December 31, 2024.
A 10% unfavorable exchange rate change in the euro, franc, Canadian dollar, yen, renminbi, won, pound sterling, krone, zloty, krona and koruna against the United States dollar would have resulted in the net fair value declining by approximately $74.6 million as of December 31, 2023.
A 10% unfavorable exchange rate change in the euro, franc, Canadian dollar, yen, renminbi, won, pound sterling, krone, zloty, krona and koruna against the U.S. dollar would have resulted in the net fair value declining by approximately $63.5 million as of December 31, 2024.
Changes in fair value of COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 32 Table of Contents derivative contracts resulting from foreign exchange rate fluctuations would be substantially offset by the change in value of the underlying hedged transactions.
Changes in fair value of derivative contracts resulting from foreign exchange rate fluctuations would be substantially offset by the change in value of the underlying hedged transactions. INTEREST RATE RISK Our negotiated credit facilities generally charge interest based on a benchmark rate such as the secured overnight financing rate.
Removed
COMMODITY PRICE RISK We are exposed to market risk for the pricing of the raw materials used to manufacture our products. These raw materials are purchased directly by our contract manufacturers. COLUMBIA SPORTSWEAR COMPANY | 2023 FORM 10-K | 33 Table of Contents
Added
COLUMBIA SPORTSWEAR COMPANY | 2024 FORM 10-K | 34 Table of Contents

Other COLM 10-K year-over-year comparisons