Columbia Sportswear (NASDAQ:COLM) Exceeds Q4 CY2025 Expectations, Stock Soars

Outerwear manufacturer Columbia Sportswear (NASDAQ:COLM) reported Q4 CY2025 results exceeding the market’s revenue expectations, but sales fell by 2.4% year on year to $1.07 billion. Revenue guidance for the full year exceeded analysts’ estimates, but next quarter’s guidance of $753 million was less impressive, coming in 4% below expectations. Its GAAP profit of $1.73 per share was 43% above analysts’ consensus estimates.

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Chairman and Chief Executive Officer Tim Boyle commented, “We’re pleased to have delivered net sales and profitability exceeding our guidance for the fourth quarter driven by better-than-expected demand in the U.S. While our U.S. business remains challenged, I’m encouraged with continued growth internationally combined with early signs of momentum indicating that the Columbia ACCELERATE Growth Strategy is resonating with consumers, including new and enhanced product collections and differentiated marketing.

Company Overview

Originally founded as a hat store in 1938, Columbia Sportswear (NASDAQ:COLM) is a manufacturer of outerwear, sportswear, and footwear designed for outdoor enthusiasts.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Columbia Sportswear grew its sales at a weak 6.3% compounded annual growth rate. This was below our standard for the consumer discretionary sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Columbia Sportswear’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.3% annually.

We can better understand the company’s sales dynamics by analyzing its constant currency revenue, which excludes currency movements that are outside their control and not indicative of demand. Over the last two years, its constant currency sales were flat. Because this number is better than its normal revenue growth, we can see that foreign exchange rates have been a headwind for Columbia Sportswear.

This quarter, Columbia Sportswear’s revenue fell by 2.4% year on year to $1.07 billion but beat Wall Street’s estimates by 3.6%. Company management is currently guiding for a 3.3% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection implies its newer products and services will spur better top-line performance, it is still below the sector average.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Columbia Sportswear’s operating margin has been trending down over the last 12 months and averaged 7.1% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.

In Q4, Columbia Sportswear generated an operating margin profit margin of 10.9%, down 1.6 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Columbia Sportswear’s EPS grew at a weak 15% compounded annual growth rate over the last five years. This performance was better than its flat revenue but doesn’t tell us much about its business quality because its operating margin didn’t improve.

In Q4, Columbia Sportswear reported EPS of $1.73, down from $1.80 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Columbia Sportswear’s full-year EPS of $3.24 to shrink by 5.6%.

Key Takeaways from Columbia Sportswear’s Q4 Results

It was good to see Columbia Sportswear beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. On the other hand, its EPS guidance for next quarter missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, we think this was still a decent quarter with some key metrics above expectations. The stock traded up 5.3% to $60.50 immediately following the results.

Indeed, Columbia Sportswear had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).