In This Article:
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.