Columbia Sportswear Company COLM is making strategic moves to boost its market presence and profitability. The company’s ACCELERATE strategy aims to attract younger, active consumers by focusing on innovative product lines, brand positioning and an improved retail and e-commerce experience. While these initiatives have contributed to positive sales momentum, challenges such as rising costs, weaker U.S. performance and currency headwinds remain concerns for investors.
ACCELERATE Strategy: COLM’s Path Toward Growth
Columbia Sportswear has launched a new growth strategy called ACCELERATE, designed to elevate the brand and attract younger, more active consumers. This strategy focuses on several consumer-centric shifts, including refining the company’s segmentation framework to better identify growth opportunities. While continuing to serve its loyal customer base with outdoor essentials, the company aims to target the largest and fastest-growing segment of the outdoor market: younger, active consumers. Management is enhancing consumers' perception of the brand through a refreshed creative strategy that brings its unique brand personality to life. The third focus of Columbia Sportswear's strategy is centered around product innovation.
On its last earnings call, management highlighted that it is driving product innovation and brand growth by expanding its premium Titanium product line and launching new collections like the Amaze Puff insulated jacket and Rock Pant for Fall 2025. The company is also enhancing its Omni-MAX footwear collection, offering lightweight, ultra-comfortable performance.
To strengthen brand visibility, COLM is increasing targeted marketing investments to 6.5% of sales in 2025, up from 5.9% in 2024, while collaborating with strategic retail partners to enhance in-store experiences. In its direct-to-consumer (DTC) business, Columbia Sportswear is optimizing Columbia.com for a seamless online shopping experience and expanding its brick-and-mortar footprint with select high-traffic branded stores in North America, reinforcing its premium market positioning.
COLM Faces Challenges in U.S. Market & Rising Costs
Despite growth across several international markets, Columbia Sportswear’s U.S. net sales declined by 1% in the fourth quarter of 2024. The U.S. wholesale business saw a low-single-digit percentage decrease due to a lower Fall 2024 order book and challenging trends in the outdoor category. U.S. DTC net sales also fell by a low-single-digit percentage, with a decline in e-commerce sales partially offset by modest growth in brick-and-mortar stores.
Columbia Sportswear has been battling rising selling, general and administration (SG&A) expenses for a while now. In the fourth quarter, the company’s SG&A expenses were up 6% to $430.6 million from $404.8 million reported in the year-ago quarter. As a percentage of sales, the same increased 110 basis points (bps) to 39.3%. The most significant changes in SG&A expenses were increased DTC and incentive compensation costs. For 2025, SG&A expenses, as a percentage of net sales, are anticipated to be in the range of 43.4-44.1%, up from the 42.9% reported in 2024. The increase in such costs can be attributed to higher marketing spending, elevated incentive compensation and DTC store expansion.
Cost-Saving Initiatives to Protect COLM’s Profitability
In response to these challenges, Columbia Sportswear is working to improve operational efficiency through its multi-year Profit Improvement Program. The company successfully realized $90 million in cost savings in 2024, and management is focused on continuing these efforts. The program is structured around three key areas: operational cost savings by reducing excess inventory, optimizing the supply chain and improving distribution networks. Additionally, Columbia is focusing on organizational cost savings, including workforce reductions and enhancing its operating model by streamlining decision-making and improving efficiency. The company is also cutting non-inventory-related costs through strategic sourcing and vendor rationalization.
Final Words on COLM Stock
While the ACCELERATE strategy has shown promising results, particularly in driving innovation and brand repositioning, the company must navigate the challenges of rising costs, U.S. market weakness and external economic factors. The success of these efforts will largely depend on the company’s ability to continue expanding its international presence, execute cost-saving initiatives effectively and respond to shifts in consumer behavior.
Other Textile – Apparel Stocks
Hanesbrands Inc. HBI continues to showcase resilience in a challenging macroeconomic environment, driven by strategic transformation and cost-saving initiatives. A consumer-centric approach has expanded Hanesbrands’ market share gains, supported by product innovation, digital transformation and retail expansion. Strengthening its supply chain, reducing overhead and upgrading technology have further enhanced Hanesbrands’ profitability.
G-III Apparel Group, Ltd. GIII has been accelerating digital growth and strives to become the best omnichannel organization. G-III Apparel’s commitment to brand building, effective marketing, cost management and market expansion provides a solid foundation for continued growth and profitability. In addition, G-III Apparel’s transformative strategy, expanding its owned brand portfolio and reducing reliance on licensed labels, holds promise.
Ralph Lauren Corporation RL is supported by its "Next Great Chapter: Accelerate Plan," focusing on brand elevation, business expansion and strengthening key city presence. Ralph Lauren’s investments in marketing, digital growth and omnichannel efforts are driving strong performance. Its strategy of offering premium products, personalized promotions and disciplined inventory management is proving successful across retail and wholesale channels. Ralph Lauren’s global brand strategy continues to align with evolving consumer preferences.
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Columbia Sportswear Company (COLM): Free Stock Analysis Report Ralph Lauren Corporation (RL): Free Stock Analysis Report Hanesbrands Inc. (HBI): Free Stock Analysis Report G-III Apparel Group, LTD. (GIII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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