COLUMBIA SPORTSWEAR CO

Previous wording

Last year, 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. 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. Through the ACCELERATE Growth Strategy, we will focus on achieving the following objectives:

Current wording

Last year, 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 while maintaining those consumers that have known and trusted Columbia to offer high quality products at an exceptional value. 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. Through the ACCELERATE Growth Strategy, we will focus on achieving the following objectives:

Previous wording

In 2024, our Profit Improvement Program delivered approximately $90 million in realized cost savings, net of approximately $3 million of severance costs. In 2025, in response to ongoing SG&A expense and operating profit pressures, we have initiated a review of our cost structure as we pursue additional cost savings, beyond the previously stated $125 to $150 million target. On a cumulative basis, actions executed in 2024 and planned for 2025 are intended to yield annualized cost savings exceeding $150 million. Our review of the Company's cost structure is ongoing, as we seek additional savings and respond to tariff-induced pressures on profitability. These actions are intended to lower the Company's SG&A expenses as a percentage of consolidated net sales and to increase the Company's operating margin, over time.

Current wording

In 2024, our Profit Improvement Program resulted in approximately $90 million of annualized cost savings. In early 2025, in response to ongoing SG&A expense and operating profit pressures, we initiated a review of our cost structure to pursue additional cost savings, beyond the previously stated $125 to $150 million target. On a cumulative basis, actions executed in 2024 and through the first half of 2025 yield annualized cost savings exceeding $150 million. Despite achieving our target, we continue to pursue profit improvement opportunities. Our Profit Improvement Program is intended to lower the Company's SG&A expenses as a percentage of consolidated net sales and to increase the Company's operating margin, over time.

Previous wording

Tariffs Uncertainty | We are headquartered in the U.S. and are subject to the laws and regulations governing companies operating in the U.S. In April 2025, the U.S. presidential administration announced an incremental tariff of 10 percent on products imported into the U.S. from most countries, with the potential for these incremental tariffs to move much higher. These incremental tariffs are in addition to the product-based tariffs the Company already pays for its imported goods into the U.S. These actions, and the potential for retaliatory actions by other countries and their consumers, have led to significant volatility and uncertainty in global markets. We originally planned for Vietnam, Bangladesh, Indonesia, and India to represent approximately 44 percent, 22 percent, 11 percent, and 10 percent, respectively, of our finished goods imports into the U.S. in 2025. Additionally, we originally planned for China to represent a low-single-digit percent of our finished goods imports into the U.S. in 2025. These percentages were based on our original plan and will likely change based on our tariff mitigation strategies. While we have very little direct exposure to the new U.S. tariffs on products from China, China remains a strategically important country for us, and we intend to continue investing in product creation capabilities in China and remain committed to manufacturing in China to support our China direct business as well as other international markets.

Current wording

Tariffs Uncertainty | We are headquartered in the U.S. and are subject to the laws and regulations governing companies operating in the U.S. The U.S. presidential administration has announced incremental tariffs on products imported into the U.S. from most countries. These incremental tariffs are in addition to the product-based tariffs the Company already pays for its imported goods into the U.S. These actions, and the potential for retaliatory actions by other countries and their consumers, have led to significant volatility and uncertainty in global markets. We expect Vietnam, Bangladesh, Indonesia, and India to represent approximately 42 percent, 26 percent, 11 percent, and 9 percent, respectively, of our finished goods imports into the U.S. in 2025. Additionally, we expect for China to represent a minimal percent of our finished goods imports into the U.S. in 2025. While we have very little direct exposure to the new U.S. tariffs on products from China, China remains a strategically important country for us, and we intend to continue investing in product creation capabilities in China and remain committed to manufacturing in China to support our China direct business as well as other international markets. Additional information about the potential expense related to these incremental tariffs can be found in Part II, Item 5 under "Tariff Expense" of this Quarterly Report on Form 10-Q.

Previous wording

While the final scope and application of these incremental tariffs remain uncertain at this time, higher tariffs on U.S. imports are already adversely impacting our U.S. product input costs. We expect these incremental tariffs may also impact demand for our products as consumers weigh discretionary spending. While we are currently continuing to import products into the U.S. to meet delivery deadlines and take advantage of the 90-day tariff pause, decisions across the industry could potentially lead to broader supply chain disruptions. We expect our inventories to also be impacted by a reduction in consumer and customer demand and are rationalizing Fall 2025 and Spring 2026 inventory buys, while seeking to preserve our strategic sourcing relationships, in order to reduce the risk of excess inventory.

Current wording

Higher tariffs on U.S. imports are already adversely impacting our U.S. product input costs. We expect these incremental tariffs may also impact demand for our products as consumers weigh discretionary spending. We expect our inventories to also be impacted by a reduction in consumer and customer demand, and have rationalized Fall 2025 inventory buys and are evaluating Spring 2026 inventory plans, while seeking to preserve our strategic sourcing relationships, in order to reduce the risk of holding excess inventory.

Previous wording

For Fall 2025, we are focused on maximizing our marketplace opportunity. We are working with our wholesale partners to deliver value to consumers and keep inventory and wholesale partner margins healthy. As a result, at this point in time, we expect to absorb much of the incremental tariff cost related to Fall 2025 in 2025 and early in 2026 as the costs are realized. For 2026, we are contemplating strategies to offset the impact of higher U.S. tariffs on our business. Our team of experts is exploring possibilities to mitigate the impact of increased tariffs including to re-design, re-develop, re-resource and re-price products, among other mitigation tactics. Our tariff mitigation strategy will evolve in response to trade policy changes.

Current wording

For Fall 2025, we are focused on maximizing our marketplace opportunity. We are working with our wholesale partners to deliver value to consumers and keep inventory and wholesale partner margins healthy. As a result, at this point in time, we expect to absorb much of the incremental tariff cost related to Fall 2025 as the costs are realized. For 2026, we are implementing strategies to offset the impact of higher U.S. tariffs on our business. Our goal is to offset higher tariffs over time through a combination of actions including price increases, vendor negotiations, SG&A expense efficiencies and other mitigation tactics. We intend to balance these actions with our overall growth strategy, seeking to minimize the impact to consumer demand and maximize our market share potential.

Previous wording

Evolving North America Strategy | Over the past year, U.S. consumer demand for traditional outdoor apparel and footwear brands softened and remains lackluster. This weakness can be attributed to several factors, including a highly competitive environment as many brands have shifted their strategies and new brands have entered the marketplace to capitalize on the emergence of casual and lifestyle trends. In response to marketplace trends and to drive profitable growth, the Columbia brand created the ACCELERATE Growth Strategy, to retain our historical value-oriented consumers while attracting younger and more active consumers to the Columbia brand. As part of the Columbia brand ACCELERATE Growth Strategy, we are approaching the North America marketplace with an updated omni-channel perspective and evaluating how, when, and where we utilize promotions across all channels, creating new product assortments and enhancing our marketing to attract these younger and more active consumers.

Current wording

Evolving North America Strategy | Over the past year, U.S. consumer demand for many traditional outdoor apparel and footwear brands has softened. This weakness can be attributed to several factors, including a highly competitive environment as many brands have shifted their strategies and new brands have entered the marketplace to capitalize on the emergence of casual and lifestyle trends. In response to these trends and to drive profitable growth, the Columbia brand initiated the ACCELERATE Growth Strategy, to retain our historical value-oriented consumers while attracting younger and more active consumers to the Columbia brand. As part of the Columbia brand ACCELERATE Growth Strategy, we are approaching the North America marketplace with an updated omni-channel perspective and evaluating how, when, and where we utilize promotions across all channels, creating new product assortments and enhancing our marketing to attract these younger and more active consumers.

Previous wording

During 2024, we shifted our marketing strategies for the Columbia brand's U.S. direct-to-consumer ("DTC") e-commerce business to become less promotional, in order for Columbia.com to represent the best expression of the Brand. In our DTC brick-and-mortar business, we have opened a small number of branded stores in high-traffic shopping malls in North America. These new branded stores feature elevated product assortments that showcase Columbia’s apparel and footwear innovations. These stores join the hundreds of Columbia branded stores that raise the image of the Brand in important international markets. Within our U.S. wholesale business, we are implementing pricing, promotional and segmentation strategies that are also intended to elevate the positioning of the Brand in the marketplace.

Current wording

opened a small number of branded stores in high-traffic shopping malls in North America, featuring elevated product assortments that showcase Columbia’s apparel and footwear innovations. Within our U.S. wholesale business, we are implementing pricing, promotional and segmentation strategies that are also intended to elevate the positioning of the Brand in the marketplace while continuing to serve our core consumer base that is focused primarily on value. To capture demand associated with value-oriented consumers, we have increasingly relied on our fleet of DTC brick-and-mortar outlet stores.

Previous wording

International Trends | We haven’t seen a meaningful change in trends in most of our international businesses, which were quite healthy in the first quarter. Across our LAAP and EMEA markets, our product offerings, marketing activations and marketplace strategies, are working to create a more premium Columbia brand experience. However, it is not possible to predict the extent to which U.S. tariff actions will impact international economic growth and consumer demand for our products globally.

Current wording

International Trends | We have not seen a meaningful change in trends in the majority of our international businesses, which were quite healthy in the first half of 2025. Across our LAAP and EMEA markets, our product offerings, marketing activations and marketplace strategies, are working to create a more premium Columbia brand experience. However, it is not possible to predict the extent to which U.S. tariff actions will impact international economic growth and consumer demand for our products globally.

Previous wording

•higher omni-channel expenses, reflecting higher DTC brick-and-mortar expenses associated with new stores; and

Current wording

•higher omni-channel expenses of $12.7 million, reflecting higher DTC brick-and-mortar expenses associated with new stores, partially offset by temporary clearance location closures;

Previous wording

•higher demand creation expenses, reflecting our increased investment in demand creation in line with our ACCELERATE Growth Strategy.

Current wording

•higher demand creation expenses, reflecting our increased investment in demand creation in line with our ACCELERATE Growth Strategy; and

Previous wording

Our global net sales increase was driven by growth within our LAAP and EMEA regions, partially offset by declines in Canada and the U.S., as compared to the same period in 2024. The growth in our LAAP and EMEA net sales was largely driven by the strength of our Columbia brand within our wholesale business across many markets. The strength in our Columbia brand was attributable to the execution of our business strategies, as well as to the benefit of certain trends and/or factors favorably impacting the outdoor apparel and footwear sector. The declines in Canada and the U.S. were primarily driven by retailer cautiousness and increased competition within the outdoor lifestyle category, coupled with a difficult macroeconomic environment as global economic uncertainty weighs on consumer sentiment, particularly in the U.S.

Current wording

Our global net sales increase was driven by growth within our EMEA and LAAP regions, partially offset by declines in the U.S. and Canada, as compared to the same period in 2024. The growth in our EMEA and LAAP net sales was largely driven by increased net sales of our Columbia brand across both wholesale and DTC channels in most markets. We attribute the international strength of the Columbia brand to the execution of our business strategies and brand positioning, as well as to the benefit of certain trends and/or factors favorably impacting the outdoor apparel and footwear sector.

Previous wording

LAAP segment operating income increased $4.5 million to $26.3 million, or 17.3% of net sales, for the first quarter of 2025 from $21.8 million, or 15.7% of net sales, for the comparable period in 2024. The increase was driven primarily by increased net sales and gross profit. LAAP net sales increased $13.6 million, or 10% (14% constant-currency), for the first quarter of 2025, compared to the same period in 2024, primarily driven by increased net sales in our China, LAAP distributor, and Japan businesses, partially offset by declines in our Korea business. The growth in our China business reflected continued strong consumer demand which we believe was attributable to the execution of our marketplace strategies, including premium product offerings and marketing activations. The growth was further aided by positive outdoor category trends as compared to the same period in 2024. The growth in our LAAP distributor business was driven by double-digit growth in our Spring 2025 orders as compared to the same period in 2024. The growth in our Japan business was driven by strong consumer demand for late season winter products across all channels, as compared to the same period in 2024. The declines in our Korea business reflected unfavorable effects from foreign currency fluctuation, which more than offset constant-currency net sales growth resulting from consumer demand for late season winter products. LAAP segment SG&A expenses decreased as a percentage of net sales to 34.9% for the first quarter of 2025, compared to 36.2% for the same period in 2024, primarily driven by increased net sales. In total, LAAP segment SG&A expenses increased 5.7% for the three months ended March 31, 2025 as compared to the same period in 2024.

Current wording

LAAP operating income increased $0.9 million to $7.0 million, or 6.3% of net sales, for the second quarter of 2025 from $6.1 million, or 6.1% of net sales, for the comparable period in 2024. LAAP net sales increased 13% (12% constant-currency), for the second quarter of 2025, compared to the same period in 2024, primarily driven by our China, LAAP distributor and Japan businesses, partially offset by a decline in our Korea business. The growth in our China business was driven by robust demand across all channels, which we believe was attributable to the execution of our marketplace strategies, including premium product offerings and unique marketing activations. The growth was further aided by positive outdoor category trends as compared to the same period in the prior year. The growth in our LAAP distributor business was driven by growth in our Fall 2025 distributor orders as compared to the same period in the prior year. The growth in our Japan business was driven by healthy demand across all channels, which we believe was attributable to the execution of our marketplace strategies, as well as the effect of increased inbound international tourism. The decline in our Korea business reflected unfavorable effects from foreign currency fluctuation, which more than offset constant-currency net sales growth within our Korea wholesale business, which reflected a shift of Fall 2025 shipments into the second quarter of 2025, partially offset by a decline in our Korea DTC business. LAAP segment SG&A expenses decreased as a percentage of net sales to 39.8% for the second quarter of 2025, compared to 40.9% for the same period in 2024, driven by fixed SG&A expense leverage on increased net sales. In total, LAAP segment SG&A expenses increased 9.9% for the three months ended June 30, 2025, as compared to the same period in 2024.

Previous wording

EMEA segment operating income decreased $0.2 million to $19.0 million, or 17.7% of net sales, for the first quarter of 2025 from $19.1 million, or 18.3% of net sales, for the comparable period in 2024. The decrease was driven primarily by increased segment SG&A expenses. EMEA net sales increased $3.0 million, or 3% (7% constant-currency), for the first quarter of 2025, compared to the same period in 2024, primarily driven by our Europe-direct business, partially offset by a decline in our EMEA distributor business. The growth in our Europe-direct business was primarily driven by robust demand within our DTC brick-and-mortar businesses that we believe was attributable to the execution of our marketplace strategies, including marketing activations and elevating the in-store consumer experience. The decline in our EMEA distributor business was driven by a shift of Spring 2025 shipments out of the first quarter of 2025 into the second quarter of 2025, partially offset by growth in our Spring 2025 orders as compared to the same period in 2024. EMEA segment SG&A expenses increased as a percentage of net sales to 29.9% for the first quarter of 2025, compared to 27.6% for the same period in 2024.

Current wording

EMEA operating income increased $7.2 million to $21.6 million, or 16.6% of net sales, for the second quarter of 2025 from $14.4 million, or 13.9% of net sales, for the comparable period in 2024. The increase was driven primarily by increased net sales and gross profit, partially offset by increased segment SG&A expenses. EMEA net sales increased $26.6 million, or 26% (24% constant-currency), for the second quarter of 2025, compared to the same period in 2024, primarily driven by our EMEA distributor and Europe-direct businesses. The growth in our EMEA distributor business was primarily driven by growth in our Fall 2025 distributor orders, as well as a shift of Fall 2025 shipments out of the third quarter of 2025 into the second quarter of 2025, as compared to the same period in 2024. The growth in our Europe-direct businesses was driven by robust demand across all channels, which we believe was attributable to the execution of our marketplace strategies, including marketing activations and elevating the online and in-store customer experience. EMEA segment SG&A expenses decreased as a percentage of net sales to 22.9% for the second quarter of 2025, compared to 23.3% in 2024, driven by fixed SG&A expense leverage on increased net sales. In total, EMEA segment SG&A expenses increased 23.3% for the three months ended June 30, 2025, as compared to the same period in 2024.

Previous wording

Unallocated corporate expenses decreased by $6.7 million to $73.7 million for the first quarter of 2025 from $80.4 million for the same period in 2024, driven by lower personnel expenses.

Current wording

Unallocated corporate expenses decreased by $0.1 million to $67.6 million in the second quarter of 2025, from $67.7 million for the same period in 2024.

Previous wording

Canada segment operating income decreased $2.2 million to $9.0 million, or 18.8% of net sales, for the first quarter of 2025 from $11.2 million, or 21.3% of net sales, for the comparable period in 2024. The decrease was primarily driven by lower net sales and gross profit combined with increased segment SG&A expenses. Canada net sales decreased $4.8 million, or 9% (2% constant-currency), for the first quarter of 2025, compared to the same period in 2024, driven by decreased net sales in our Canada wholesale and DTC businesses. The declines in our wholesale and DTC businesses resulted from retailer cautiousness. Canada segment SG&A expenses increased as a percentage of net sales to 24.3% for the first quarter of 2025, compared to 19.8% for the same period in 2024.

Current wording

Canada segment operating income decreased $4.1 million to $7.0 million, or 9.4% of net sales, for the six months ended June 30, 2025 from $11.1 million, or 14.1% of net sales, for the comparable period in 2024. The decrease was primarily driven by lower net sales and gross profit combined with increased segment SG&A expenses. Canada net sales decreased $4.2 million, or 5% (0% constant-currency), for the six months ended June 30, 2025, compared to the same period in 2024, driven by decreased net sales in our Canada DTC and wholesale businesses. Canada segment SG&A expenses increased as a percentage of net sales to 30.3% for the six months ended June 30, 2025, compared to 25.2% for the same period in 2024, primarily driven by fixed SG&A expense deleverage on decreased net sales. In total, Canada segment SG&A expenses increased 14.1% for the six months ended June 30, 2025, as compared to the same period in 2024.

Previous wording

Our primary sources of liquidity include cash, cash equivalents, short-term investments, and available committed credit lines. Our liquidity is affected by the general seasonal trends common to the industry. 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 cash and cash equivalents and short-term investments balances generally are at their lowest level just prior to the start of the U.S. holiday season and increase during the fourth quarter from collection of wholesale business receivables and fourth quarter DTC sales. This trough cash position is impacted by the amount of product we order from our contract manufacturers in anticipation of customer demand and is more heavily impacted in advance of periods of expected high demand. We expect that our cash position will be impacted by incremental tariff costs for U.S. product in the third and fourth quarter of 2025 in a meaningful way. To the extent necessary in the third and fourth quarter of 2025, we have a $500 million committed credit facility on which we can draw until we receive fourth quarter cash receipts.

Current wording

Our primary sources of liquidity include cash, cash equivalents, short-term investments, and available committed credit lines. Our liquidity is affected by the general seasonal trends common to the industry. 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 cash and cash equivalents and short-term investments balances generally are at their lowest level just prior to the start of the U.S. holiday season and increase during the fourth quarter from collection of wholesale business receivables and fourth quarter DTC sales. This trough cash position is impacted by the amount of product we order from our contract manufacturers in anticipation of customer demand and is more heavily impacted in advance of periods of expected high demand. We expect that our cash position will be impacted by incremental tariff costs for U.S. product in the third and fourth quarters of 2025. While we currently project having adequate liquidity to meet our working capital needs in the third quarter, we have a $500.0 million committed credit facility on which we can draw, should it be needed, until we receive cash receipts in the fourth quarter.

Previous wording

The change in cash flows used in operating activities was driven by a $142.0 million decrease in cash provided by changes in assets and liabilities, as well as a $3.2 million increase in cash provided by net income and non-cash adjustments. The most significant comparative changes in assets and liabilities included Inventories, Accounts payableand Accrued Liabilities. The $60.1 million decrease in cash provided by Inventories reflected cash provided of $131.7 million for the three months ended March 31, 2024 as we liquidated excess inventory levels, as compared to cash provided of $71.6 million for the three months ended March 31, 2025 as we replenished inventory levels to align inventory supply with anticipated seasonal demand. The $40.3 million increase in cash used in Accounts Payablewas primarily driven by the timing of inventory receipts, including higher in-season inventory, and increased related payments for the three months ended March 31, 2025 as compared to March 31, 2024. The $22.0 million increase in cash used in Accrued liabilities primarily reflected a decrease in our sales returns reserve for specific wholesale customers as compared to March 31, 2024.

Current wording

The change in cash flows used in operating activities for the six months ended June 30, 2025 was primarily driven by a $181.2 million decrease in cash provided by changes in assets and liabilities. The most significant comparative changes in assets and liabilities included Inventories, Accounts Payable, and Accounts receivable. A $129.3 million increase in cash used in Inventoriesand $56.9 million increase in cash provided by Accounts payable were primarily driven by the strategic timing of inventory receipts and payments as we proactively seek to mitigate the impact of potential further incremental tariffs. A $55.2 million decrease in cash provided by Accounts receivable reflected lower wholesale sales collected in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024.

Previous wording

Net cash used in investing activities was $61.4 million for the three months ended March 31, 2025, compared to $37.1 million of cash provided by investing activities for the three months ended March 31, 2024. The decrease in cash provided by investing was primarily driven by higher purchases of short-term investments in the first quarter of fiscal 2025, as compared to the first quarter of fiscal 2024.

Current wording

Net cash provided by investing activities was $110.6 million for the six months ended June 30, 2025, compared to $30.0 million of cash provided by investing activities for the six months ended June 30, 2024. The increase in cash provided by investing was primarily driven by lower purchases of short-term investments for the six months ended June 30, 2025, as compared to the same period in 2024.

Previous wording

Net cash used in financing activities was $118.6 million for the three months ended March 31, 2025 compared to $71.3 million for the three months ended March 31, 2024. The increase in cash used in financing in the first quarter of fiscal 2025 was primarily driven by higher share repurchases of common stock, as compared to the first quarter of fiscal 2024.

Current wording

Net cash used in financing activities was $165.3 million for the six months ended June 30, 2025, compared to $139.0 million for the six months ended June 30, 2024. The increase in cash used in financing was primarily driven by higher share repurchases of common stock for the six months ended June 30, 2025, as compared to the same period in 2024.

Previous wording

As of March 31, 2025, we had cash and cash equivalents of $323.3 million and short-term investments of $335.1 million, compared to $531.9 million and $283.6 million, respectively, as of December 31, 2024 and $418.5 million and $369.3 million, respectively, as of March 31, 2024.

Current wording

As of June 30, 2025, we had cash and cash equivalents of $427.8 million and short-term investments of $151.2 million, compared to $531.9 million and $283.6 million, respectively, as of December 31, 2024 and $341.8 million and $369.3 million, respectively, as of June 30, 2024.

Previous wording

Further, as of March 31, 2025, 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$4.8 million). There was no balance outstanding under the facility.

Current wording

Further, as of June 30, 2025, our European subsidiary had available an unsecured, committed line of credit, which is guaranteed by the Company and provides for borrowings up to €5.0 million (approximately US$5.9 million). There was no balance outstanding under the facility.

Previous wording

As of March 31, 2025, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$98.9 million. There were no balances outstanding under these facilities.

Current wording

As of June 30, 2025, 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.

Previous wording

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. Inventory balances may be elevated in advance of periods of expected high demand. As of March 31, 2025, our inventory balance increased to $623.7 million, compared to $607.4 million as of March 31, 2024, as we replenished inventory levels to align inventory supply with anticipated seasonal demand, as compared to the same period in 2024 which saw inventory levels decrease as we liquidated excess inventory levels. We believe older season inventories represent a manageable portion of our total inventory mix.

Current wording

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. Inventory balances may be elevated in advance of periods of expected high demand. As of June 30, 2025, our inventory balance increased to $926.9 million, compared to $823.6 million as of June 30, 2024, as we accelerated the production and receipt of Fall 2025 inventory, to the extent possible, to mitigate the impact of potential further incremental tariffs, as compared to the same period in 2024. We believe older season inventories represent a manageable portion of our total inventory mix.

Previous wording

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. 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.

Current wording

We have planned full-year 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. 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.

Previous wording

Our inventory purchase obligations were $708.6 million as of March 31, 2025, compared to $473.0 million and $675.0 million as of December 31, 2024 and March 31, 2024, respectively.

Current wording

Our inventory purchase obligations were $315.9 million as of June 30, 2025, compared to $473.0 million and $450.9 million as of December 31, 2024 and June 30, 2024, respectively.

Previous wording

used in developing and selecting these estimates, the trends in and amounts of these estimates, specific matters affecting the amount of and changes in these estimates, and any other relevant matters related to these estimates, including significant issues concerning accounting principles and financial statement presentation.

Current wording

Management regularly discusses with our audit committee our critical accounting estimates and the development and selection of these accounting estimates. These discussions typically occur at our quarterly audit committee meetings and include the basis and methodology used in developing and selecting these estimates, the trends in and amounts of these estimates, specific matters affecting the amount of and changes in these estimates, and any other relevant matters related to these estimates, including significant issues concerning accounting principles and financial statement presentation.