Columbia’s Tariff Plans Includes Absorbing Some Costs as Company Emphasizes Value as Competitive Advantage
Columbia Sportswear has a 2025 game plan in place against the backdrop of tariff increases, but 2026 is the big question mark.
“Our industry has never faced a period where the rules and regulations around trade with the United States are simply unknown and unknowable,” Columbia’s chairman, president and CEO Timothy P. Boyle told investors in an earnings conference call Thursday.
Despite the uncertainties, Boyle said the company is well-positioned to handle the impact from the 10 percent universal tariff increase. He said that even before the April 2 announcement of reciprocal tariffs, the outdoor sports apparel and footwear company was already making changes to its inventory mix, including accelerating shipments during the 90-day tariff pause.
And while he noted that “well over 90 percent of all apparel and footwear” is imported in the U.S. and already heavily taxed under legacy trade laws, the CEO also emphasized that it has very little direct exposure on products from China.
Under U.S. President Donald Trump’s tariff plan, duties on some items from China — which are not part of the 90-day pause — can run as high as 145 percent. Boyle said that China remains a strategically important country for Columbia, and the company plans to lean into production creation and manufacturing in China for its China-direct business and for global markets outside the U.S.
Boyle said the company for years “has been moving from China” for multiple reasons, including that the country represents the “least compelling sourcing operation for the products that we sell.” Currently the intake of goods into the U.S. from China is in the low-single-digits, which the CEO said will be reduced further.
The bulk of the Fall ’25 product has been ordered and sold, and Boyle said Columbia will rationalize inventory buys going forward to reduce the risk of excess inventory. While there’s been no meaningful change to its fall order book, the CEO said he expects retailers will be cautious with their inventory intake.
For now, at least for the universal 10 percent tariff increase, Boyle said Columbia plans to absorb most of those increases, but said it is already evaluating different strategies to offset the impact of higher U.S. tariffs for 2026. “We have a team of experts exploring possibilities to mitigate the impact of increased tariffs, including redesign, redevelop, resource and reprice products, among other mitigation factors,” the CEO said.
One interesting point Boyle made is the expectation that Columbia’s “exceptional value” will be a competitive advantage as prices rise for U.S. consumers. He explained that the company potentially could take market share from many small competitors and retail customers that source private-label goods from China.
Boyle noted that the U.S. market is expected to be challenging in the back half of the year. For product still to arrive for Fall 2025, current tariff rates as of May 1 would add between $40 million to $45 million to the cost of sales as the underlying inventory is sold, he said.
While the company was on track to deliver on full-year financial targets prior to the tariff increases, Boyle said Columbia is now withdrawing its full-year 2025 outlook given the uncertainty of tariff rates and the impact on product costs and consumer demand. For the second quarter, it expects net sales to grow 1 percent to 5 percent year-over-year, he said.
For the first quarter ended March 31, net income was essentially flat at $42.2 million, or 75 cents a diluted share, versus $42.3 million, or 71 cents, a year ago. Net sales rose 1.1 percent to $778.5 million from $770 million. The company said wholesale net sales gained 2 percent, while direct-to-consumer was flat.
Boyle said that during the quarter, the company’s Columbia brand launched the Omni-Max Konos Featherweight, its lightest shoe designed to perform on the trail and in the city with adaptive cushioning, flexible support and grippy outsole. And at Sorel, ongoing refreshing of the product line included new styles such as the Ona Ave Sneaker and the Roam’n Clog, which Boyle said the the potential to become important product franchises for the brand