COLUMBIA SPORTSWEAR CO

Previous wording

As a global leader in designing, developing, marketing, and distributing outdoor, active and lifestyle products, our mission is to connect active people with their passions. We provide our products through our four brands: Columbia, SOREL, Mountain Hardwear, and prAna; and two major product categories consisting of apparel, accessories and equipment products, and footwear products. Apparel, accessories and equipment products are provided by our Columbia, Mountain Hardwear and prAna brands. Footwear products are provided by our Columbia and SOREL brands. We sell our products in 122 countries and operate in four geographic segments: U.S., LAAP, EMEA, and Canada.

Current wording

As a global leader in designing, developing, marketing, and distributing outdoor, active and lifestyle products, our mission is to connect active people with their passions. We provide our products through our four brands: Columbia, SOREL, Mountain Hardwear, and prAna; and two major product categories consisting of apparel, accessories and equipment products, and footwear products. Apparel, accessories and equipment products are provided by our Columbia, Mountain Hardwear and prAna brands. Footwear products are provided by our Columbia and SOREL brands. We sell our products in over 105 countries and operate in four geographic segments: U.S., LAAP, EMEA, and Canada.

Previous wording

ACCELERATE is a growth strategy intended to elevate the Columbia brand (the "Brand") by targeting 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 effort centered around several consumer-centric shifts to the Brand, product and marketplace strategies, as well as enhanced ways of working.

Current wording

ACCELERATE is a growth strategy intended to elevate the Columbia brand (the "Brand") by targeting a younger and more active consumer while maintaining those consumers who have known and trusted Columbia to offer high-quality products at an exceptional value. It is a multi-year effort centered around several consumer-centric shifts to the Brand, product and marketplace strategies, as well as enhanced ways of working.

Previous wording

To further the ACCELERATE Growth Strategy, the Columbia brand is sharpening its focus on areas that leverage our authenticity and heritage in outdoor performance and lifestyle. We believe successful operationalization of the ACCELERATE Growth Strategy can elevate the Brand and drive profitable growth.

Current wording

To further the ACCELERATE Growth Strategy, the Columbia brand is sharpening its focus on areas that leverage our authenticity and heritage in outdoor performance and lifestyle, while elevating credibility, relevance and style. We believe successful execution of the ACCELERATE Growth Strategy can elevate the Brand and drive profitable growth over time.

Previous wording

•steward existing consumer segments while focusing on bringing new younger and active consumers into the Brand;

Current wording

•steward existing consumer segments while focusing on bringing new younger, active consumers into the Brand;

Previous wording

The Columbia brand in the U.S. |The Columbia brand in the U.S. has been under pressure due to numerous factors, including brand perception, changes in consumer trends, and an increasingly competitive environment. While product functionality, quality and value remain important elements for consideration for some consumers, other consumers have increasingly shifted their preferences to also incorporate versatility and style for everyday wear. Athletic, athleisure, emerging outdoor, and other brands have capitalized on this casualization and style trend in the historical outdoor space. The Columbia brand's ACCELERATE Growth Strategy is intended to overcome certain of these headwinds and elevate the consumers' perception of the Brand to bring younger and more active consumers into the Brand, all while continuing to serve historical value-oriented consumers and to fuel sustainable long-term growth.

Current wording

The Columbia brand in the U.S. |The Columbia brand in the U.S. has been under pressure due to numerous factors. While product functionality, quality and value remain important elements for consideration for many consumers, others have increasingly shifted their preferences to also incorporate versatility and style for everyday wear. Athletic, athleisure, emerging outdoor, and other brands have capitalized on this casualization and style trend in the historical outdoor space. The Columbia brand's ACCELERATE Growth Strategy is intended to overcome certain of these headwinds and elevate the consumers' perception of the Brand to bring younger and more active consumers into the Brand, all while continuing to serve historical value-oriented consumers and to fuel sustainable long-term growth.

Previous wording

To elevate consumers’ perception of the Columbia brand, in 2025, the Brand launched a new Brand marketing campaign, Engineered for Whatever, coupled with increased investment in demand creation, which we expect to maintain in seasons to come. Additionally, the Brand released new products designed with a younger, more active consumer in mind, and re-launched the U.S. Columbia.com website. These improvements, among others, are expected to elevate consumers' perception of the Columbia brand over time with the focus on younger and more active consumers becoming more pervasive and sustained within the Brand. The foundational shifts of the ACCELERATE Growth Strategy are starting to show tangible signs of traction with our target consumers. That said, we know it will take more time and work to bring the newness, innovation and elevated style to our product portfolio, marketing and distribution at the level we need in order to continue shifting consumers' perception of the Columbia brand in the U.S.

Current wording

The foundational shifts of the ACCELERATE Growth Strategy are continuing to show tangible signs of traction with our target consumers, reflecting progress across the Columbia brand, product, marketing and marketplace initiatives. Recent improvements in business performance are evident in the Columbia brand's U.S. direct-to-consumer ("DTC") e-commerce business, which we believe is attributable to the execution of the ACCELERATE Growth Strategy, including the Engineered for Whatever marketing campaign, upgrade of the U.S. Columbia.com website, execution of marketing strategies, and enhancements to apparel and footwear product offerings. That said, we know it will take more time and work to bring the newness, innovation and elevated style to our product portfolio, marketing and distribution at the level we need to continue shifting and sustaining consumers' perception of the Columbia brand in the U.S.

Previous wording

U.S. Tariffs |On March 4, 2026, the CIT issued a ruling that importers that paid tariffs under IEEPA are due refunds and directed the CBP to begin the refund process for all importers who were subject to IEEPA duties. During the second quarter of 2026, we began receiving refunds of IEEPA tariffs, with the majority of cash owed received in June 2026. As of June 30, 2026, we received refunds of approximately $78 million for IEEPA tariffs previously paid, including interest. Of this amount, $62 million was recognized in earnings, including a benefit of $60 million recognized in cost of sales and $2 million recognized as interest income, and $15 million was recognized as a reduction to inventory. The future period benefit to gross margin of the $15 million is expected to be largely offset by anticipated accommodations to certain third-party factory partners. We absorbed much of the impact of IEEPA tariff costs related to Fall 2025 as the costs were realized.

Current wording

U.S. Tariffs |On March 4, 2026, the CIT issued a ruling that importers that paid tariffs under IEEPA are due refunds and directed the CBP to begin the refund process for all importers who were subject to IEEPA duties. As of September 30, 2026, we received refunds of approximately $79 million for IEEPA tariffs previously paid, including interest, representing the majority of the refunds owed to us. Of this amount, for the nine months ended September 30, 2026, $58 million was recognized in earnings, including a benefit of $55 million recognized in cost of sales, net of accommodations to our factory partners, and $2.5 million recognized as interest income. Tariff refunds of $8 million remain deferred in inventory, which we expect to be recognized as a future benefit to gross margin as the associated inventory is sold in the fourth quarter of 2026. We absorbed much of the impact of IEEPA tariff costs related to Fall 2025 as the costs were realized.

Previous wording

Geopolitical Uncertainty | We sell our products in 122 countries, and our ability to sell, import into and produce in certain markets is impacted by ongoing geopolitical tensions. The current domestic and international political environment, including volatile trade relations and heightened military action and diplomacy in the Middle East, have contributed to uncertainty surrounding the future state of the global economy.

Current wording

Geopolitical Uncertainty | We sell our products in over 105 countries, and our ability to sell in, import into and produce in certain markets is impacted by ongoing geopolitical tensions. The current domestic and international political environment, including volatile trade relations and heightened conflicts in the Middle East, has contributed to uncertainty surrounding the future state of the global economy.

Previous wording

Macroeconomic Headwinds and Supply Chain Disruptions |The current global macroeconomic and geopolitical environment is creating a complex and challenging retail environment, which has, and may continue to have a negative impact on consumer and customer behavior and demand for our products.

Current wording

Macroeconomic Headwinds and Supply Chain Disruptions |The current global macroeconomic and geopolitical environment continues to create a complex and challenging retail environment, as well as heightened risk across international supply chains.

Previous wording

The conflict in the Middle East, which broke out in late February 2026, has contributed to macroeconomic headwinds, including volatility in energy and transportation costs, and heightened risk across international supply chains. These conditions have, and may continue to, put pressure on discretionary spending and consumer sentiment, which could impact consumer demand in the second half of 2026, as well as contribute to declines of consumer traffic at retail, including our direct-to-consumer ("DTC") brick-and-mortar ("B&M") business. The ongoing conflict in the Middle East has also led to order cancellations and reductions of forecasted orders for our Middle East distributor markets.

Current wording

Macroeconomic conditions, including volatility in energy and transportation costs, elevated interest rates and ongoing inflation, have put, and may continue to put, pressure on discretionary spending and consumer sentiment. These conditions could impact consumer demand in the fourth quarter of 2026 and into 2027 and contribute to continued declines in consumer traffic at physical retail locations, including our DTC brick-and-mortar ("B&M") stores.

Previous wording

To supplement financial information reported in accordance with U.S. GAAP, we disclose constant-currency net sales information, which is a non-GAAP financial measure, to provide a framework to assess how the business performed excluding the effects of changes in foreign currency exchange rates against the U.S. dollar between comparable reporting periods. We calculate constant-currency net sales by translating net sales in foreign currencies for the current period into U.S. dollars at the exchange rates that were in effect during the comparable period of the prior year. Management believes that this non-GAAP financial measure reflects an additional and useful way of viewing an aspect of our operations that, when viewed in conjunction with our GAAP results, provides a more comprehensive understanding of our business and operations. In particular, investors may find the non-GAAP measure useful by reviewing our net sales results without the volatility of foreign currency exchange rates. This non-GAAP financial measure also facilitates management's internal comparisons to our historical net sales results and comparisons to competitors' net sales results. Constant-currency financial measures should be viewed in addition to, and not in lieu of or superior to, our financial measures calculated in accordance with GAAP.

Current wording

To supplement financial information reported in accordance with U.S. GAAP, we disclose constant-currency net sales information, which is a non-GAAP financial measure, to provide a framework to assess how the business performed excluding the effects of changes in foreign currency exchange rates against the U.S. dollar between comparable reporting periods. We calculate constant-currency net sales by translating net sales in foreign currencies for the current period into U.S. dollars at the exchange rates that were in effect during the comparable period of the prior year. Management believes that this non-GAAP financial measure reflects an additional and useful way of

Previous wording

Our effective income tax rate decreased primarily due to a change in the geographic mix of earnings in the three months ended June 30, 2026, and our effective tax rate in the three months ended June 30, 2025 was favorably impacted by a tax benefit related to foreign currency losses.

Current wording

Our effective income tax rate decreased primarily due to a change in the geographic mix of earnings for the three months ended September 30, 2026, and our effective income tax rate for the three months ended September 30, 2025 was impacted by non-deductible impairment charges.

Previous wording

Our global net sales increased, reflecting growth of the Columbia brand across most of our international markets, led by our international distributor and DTC e-commerce businesses, partially offset by continued softness in the U.S., primarily in the Columbia and SOREL brands across channels within those brands.

Current wording

Our global net sales increased, primarily reflecting growth of the Columbia brand across most of our international markets, led by our Europe-direct, China and international distributor businesses, partially offset by declines in the U.S.

Previous wording

•higher omni-channel expenses of $18.6 million, reflecting higher DTC B&M expenses associated with new stores globally, the impact of variable expenses, and impairment charges related to underperforming retail stores; partially offset by

Current wording

•higher omni-channel expenses of $21.0 million, reflecting higher DTC B&M expenses, including the impact of variable expenses and new stores; largely offset by

Previous wording

•lower expenses in targeted areas of the business resulting from our Profit Improvement Program actions taken last year.

Current wording

•lower expenses in targeted areas of the business resulting from prior-year actions taken under our Profit Improvement Program and disciplined expense management in the current year.

Previous wording

Interest income, net, decreased, primarily reflecting lower yields on decreased levels of cash, cash equivalents and short-term investments in the U.S., partially offset by interest received from the recovery of IEEPA tariffs previously paid.

Current wording

Interest income, net, decreased, primarily reflecting lower yields on decreased levels of cash, cash equivalents and short-term investments in the U.S., partially offset by interest on the IEEPA tariff refunds previously received.

Previous wording

Income Tax Expense (Benefit). Income tax expense (benefit) and the related effective income tax rate are summarized in the following table:

Current wording

Income Tax Expense. Income tax expense and the related effective income tax rate are summarized in the following table:

Previous wording

Our effective income tax rate increased primarily due to a change in the geographic mix of earnings in the six months ended June 30, 2026, and our effective tax rate in the six months ended June 30, 2025 was favorably impacted by a tax benefit related to foreign currency losses.

Current wording

Our effective income tax rate increased primarily due to a change in the geographic mix of earnings for the nine months ended September 30, 2026, and our effective income tax rate for the nine months ended September 30, 2025 was favorably impacted by a tax benefit related to foreign currency losses, partially offset by the impact of non-deductible impairment charges.

Previous wording

Diluted Earnings (Loss) Per Share. Diluted earnings (loss) per share is summarized in the following table:

Current wording

Diluted Earnings Per Share. Diluted earnings per share is summarized in the following table:

Previous wording

U.S. segment operating income increased $50.7 million to $68.0 million, or 21.3% of net sales, for the second quarter of 2026 from $17.3 million, or 5.2% of net sales, for the comparable period in 2025. The increase in U.S. segment operating income was driven primarily by the recovery of IEEPA tariffs previously paid, partially offset by decreased net sales.

Current wording

U.S. segment operating income increased $4.4 million to $101.5 million, or 18.8% of net sales, for the third quarter of 2026 from $97.1 million, or 17.8% of net sales, for the comparable period in 2025. The increase in U.S. segment operating income was primarily driven by decreased segment SG&A expenses, partially offset by decreased net sales and gross margin contraction.

Previous wording

LAAP net sales increased $13.6 million, or 12% (13% constant-currency), for the second quarter of 2026, compared to the same period in 2025, with growth across all LAAP markets, led by our LAAP distributor and China businesses. The growth in LAAP distributor net sales was driven by healthy growth of Fall 2026 distributor orders, as well as a shift of Fall 2026 shipments into the second quarter of 2026, as compared to the same period in the prior year. The growth in China net sales was driven by solid DTC e-commerce demand, which we believe was attributable to the execution of our marketplace strategies, and favorable effects from foreign currency fluctuations, which more than offset constant-currency softness in our DTC B&M business amid a weakening macroeconomic environment and increased marketplace competition.

Current wording

LAAP net sales increased $16.1 million, or 11% (10% constant-currency), for the third quarter of 2026, compared to the same period in 2025, driven by growth in our China, Korea, and Japan businesses, partially offset by a modest decline in our LAAP distributor business. The growth in China net sales was driven by demand across all channels, which we believe reflected the execution of our marketplace strategies amid an increasingly promotional and competitive marketplace. The growth in Korea net sales was primarily driven by our wholesale business, reflecting robust growth of Fall 2026 wholesale orders as compared to the prior year, which we believe was attributable to the execution of our marketplace strategies. The growth in Japan net sales was driven by healthy demand for fall season products across channels. The modest decline in LAAP distributor net sales reflected a shift of increased Fall 2026 shipments into the second quarter of 2026, as compared to the same period in the prior year.

Previous wording

LAAP segment gross margin expanded to 52.7% for the second quarter of 2026 from 52.0% for the comparable period in 2025, driven primarily by a decrease in inventory reserve provisions, partially offset by unfavorable region and channel mix. LAAP segment SG&A expenses decreased as a percentage of net sales to 36.7% for the second quarter of 2026, compared to 39.8% for the same period in 2025, driven primarily by fixed SG&A leverage on increased net sales. In total, LAAP segment SG&A expenses increased 3% for the second quarter of 2026, as compared to the same period in 2025.

Current wording

LAAP segment gross margin contracted to 53.3% for the third quarter of 2026 from 53.8% for the comparable period in 2025. LAAP segment SG&A expenses decreased as a percentage of net sales to 33.6% for the third quarter of 2026, compared to 35.1% for the same period in 2025, driven primarily by fixed SG&A leverage on increased net sales. In total, LAAP segment SG&A expenses increased 7% for the third quarter of 2026, as compared to the same period in 2025.

Previous wording

EMEA net sales increased $12.6 million, or 10% (8% constant-currency), for the second quarter of 2026, compared to the same period in 2025, with growth across our Europe-direct and EMEA distributor businesses. The growth in Europe-direct net sales was fueled by strong wholesale and DTC B&M performance which we believe was attributable to the execution of our marketplace strategies. The growth in Europe-direct's DTC B&M business was driven by contributions from new stores, as well as increased productivity from existing stores, aided by strategic promotional activity amid traffic headwinds, as compared to the same period in 2025. The growth in EMEA distributor net sales was driven by healthy growth of Fall 2026 distributor orders, which more than offset a shift in timing of shipments out of the second quarter of 2026, as compared to the same period in 2025.

Current wording

EMEA net sales increased $10.8 million, or 7% (7% constant-currency), for the third quarter of 2026, compared to the same period in 2025, driven by robust growth within our Europe-direct DTC and EMEA distributor businesses, partially offset by a decline in our Europe-direct wholesale business. The growth in Europe-direct DTC net sales was fueled by strong DTC B&M performance, reflecting increased productivity from existing stores, which was partially driven by strategic promotional activity amid a challenging macroeconomic environment and hot weather contributing to traffic headwinds, as well as contributions from new stores. We believe Europe-direct DTC net sales growth was also attributable to the execution of our marketplace strategies. The decline in Europe-direct wholesale net sales was driven by Fall 2026 supply chain delays that impacted our ability to timely fulfill orders. The growth in EMEA distributor net sales was driven by a shift of increased Fall 2026 shipments into the third quarter of 2026, as compared to the same period in 2025.

Previous wording

Canada segment operating loss increased $1.1 million to $3.0 million, or 12.0% of net sales, for the second quarter of 2026 from $2.0 million, or 7.2% of net sales, for the comparable period in 2025.

Current wording

Canada segment operating income increased $1.1 million to $23.9 million, or 27.5% of net sales, for the third quarter of 2026 from $22.8 million, or 25.7% of net sales, for the comparable period in 2025.

Previous wording

Canada net sales decreased $2.0 million, or 7% (9% constant-currency), for the second quarter of 2026, compared to the same period in 2025, driven primarily by our Canada wholesale business, which reflected unfavorable shifts in timing of shipments and, to a lesser extent, lower Spring 2026 wholesale orders, partially offset by growth in our Canada DTC business, led by growth in DTC e-commerce.

Current wording

Canada net sales decreased $1.9 million, or 2% (0% constant-currency), for the third quarter of 2026, compared to the same period in 2025, driven by our Canada wholesale business, which reflected a shift in the shipment of Fall 2026 orders into the fourth quarter of 2026, partially offset by growth in our Canada DTC business. The growth in our Canada DTC business was led by strong DTC e-commerce performance, which we believe is attributable to the execution of the ACCELERATE Growth Strategy.

Previous wording

Canada segment gross margin expanded to 49.8% for the second quarter of 2026 from 48.1% for the comparable period in 2025, driven primarily by favorable channel mix with a higher portion of DTC net sales, which generally carry higher gross margins than wholesale net sales, as well as favorable other costs, including lower inbound freight costs, partially offset by unfavorable foreign exchange hedge rates. Canada segment SG&A expenses increased as a percentage of net sales to 48.3% for the second quarter of 2026, compared to 41.0% for the same period in 2025, driven primarily by fixed SG&A deleverage on decreased net sales. In total, Canada segment SG&A expenses increased 9% for the second quarter of 2026, as compared to the same period in 2025, driven primarily by higher DTC expenses, including impairment charges related to underperforming retail stores.

Current wording

Canada segment gross margin expanded to 50.3% for the third quarter of 2026 from 47.4% for the comparable period in 2025, driven primarily by favorable channel profitability across channels, which reflected a higher proportion of full price sales, a decrease in warranty reserve provisions, and favorable effects from foreign exchange hedge rates. Canada segment SG&A expenses increased as a percentage of net sales to 18.1% for the third quarter of 2026, compared to 17.2% for the same period in 2025, driven primarily by fixed SG&A deleverage on decreased net sales. In total, Canada segment SG&A expenses increased 3% for the third quarter of 2026, as compared to the same period in 2025.

Previous wording

Segment operating income (loss) for each reportable segment and unallocated corporate expenses are summarized in the following table:

Current wording

Segment operating income for each reportable segment and unallocated corporate expenses are summarized in the following table:

Previous wording

U.S. segment operating income increased $33.7 million to $117.0 million, or 15.8% of net sales, for the six months ended June 30, 2026 from $83.3 million, or 10.3% of net sales, for the comparable period in 2025. The increase in U.S. segment operating income was driven primarily by the recovery of IEEPA tariffs previously paid, partially offset by decreased net sales.

Current wording

U.S. segment operating income increased $38.2 million to $218.5 million, or 17.0% of net sales, for the nine months ended September 30, 2026 from $180.3 million, or 13.3% of net sales, for the comparable period in 2025. The increase in U.S. segment operating income was primarily driven by the current-period benefit of IEEPA tariff refunds previously received, net of accommodations to our factory partners, as well as decreased segment SG&A expenses, partially offset by decreased net sales.

Previous wording

U.S. net sales decreased $63.8 million, or 8%, for the six months ended June 30, 2026, compared to the same period in 2025, driven by declines in our U.S. wholesale and DTC businesses. We attribute the decline in our U.S. business to a combination of ongoing challenges as we seek to elevate the Columbia brand in the U.S. marketplace and external factors, including geopolitical uncertainty and a difficult macroeconomic environment weighing on consumer sentiment. In addition, results were impacted by inventory supply constraints during the first quarter 2026 resulting from our decision to curtail Fall 2025 inventory purchases as a precautionary measure following prior-year U.S. tariff announcements. Decreased U.S. wholesale net sales primarily reflected lower Spring 2026 wholesale orders in response to weak sell-through performance during the Spring 2025 season. The decline in our U.S. DTC business included decreases within our U.S. DTC e-commerce and brick-and-mortar businesses. The decline in our U.S. DTC brick-and-mortar business was impacted by store closures and decreased productivity from existing stores, including the impact of decreased traffic. As of June 30, 2026, our U.S. business operated 169 retail stores, compared to 171 retail stores for the comparable period in 2025. The underlying business trends within our U.S. business remain under pressure.

Current wording

macroeconomic environment weighing on consumer sentiment. In addition, results were impacted by inventory supply constraints during the first quarter 2026 resulting from our decision to curtail Fall 2025 inventory purchases as a precautionary measure following prior-year U.S. tariff announcements. Decreased U.S. wholesale net sales primarily reflected lower Spring 2026 wholesale orders and a shift in the shipment timing of increased Fall 2026 wholesale orders, with a higher proportion expected to ship in the fourth quarter of 2026 as compared to the same period in 2025. The decline in our U.S. DTC business included decreases within our U.S. DTC e-commerce and B&M businesses. The decline in our U.S. DTC e-commerce business was partially offset by improving performance over the last six months of the current period, which we believe was attributable to the execution of our ACCELERATE Growth Strategy, including execution of our marketing initiatives, as well as elevated product offerings and marketing assets. The decline in our U.S. DTC B&M business was impacted by store closures, while productivity from existing stores was relatively flat despite the impact of decreased traffic. As of September 30, 2026, our U.S. business operated 169 retail stores, compared to 172 retail stores for the comparable period in 2025.

Previous wording

U.S. segment gross margin expanded to 68.0% for the second quarter of 2026 from 50.5% for the comparable period in 2025, driven primarily by an approximate 1,875 bps benefit from the recovery of IEEPA tariffs previously paid, partially offset by an unfavorable decrease in channel profitability resulting from increased promotional activity. U.S. segment SG&A expenses increased as a percentage of net sales to 41.8% for the second quarter of 2026, compared to 40.1% for the same period in 2025, driven primarily by fixed SG&A expense deleverage on decreased net sales. In total, U.S. segment SG&A expenses were relatively flat as compared to the same period in 2025, driven primarily by higher DTC expenses, including impairment charges related to underperforming retail stores, offset by lower other expenses.

Current wording

U.S. segment gross margin expanded to 53.2% for the nine months ended September 30, 2026 from 49.6% for the comparable period in 2025, primarily driven by an approximate 430 basis point current-period benefit of IEEPA tariff refunds received in the second quarter of 2026, net of accommodations to our factory partners, partially offset by the impact of incremental U.S. tariffs. U.S. segment SG&A expenses were relatively flat as a percentage of net sales as compared to the same period in 2025. In total, U.S. segment SG&A expenses decreased 5% for the nine months ended September 30, 2026, as compared to the same period in 2025, primarily driven by lower demand creation expenses, reflecting a shift in timing of planned spend as compared to the prior year.

Previous wording

LAAP net sales increased $21.6 million, or 8% (8% constant-currency), for the six months ended June 30, 2026, compared to the same period in 2025, driven primarily by growth in our China, LAAP distributor and Korea businesses, partially offset by a decline in our Japan business. The growth in China net sales was driven by our China wholesale and DTC e-commerce businesses, as well as favorable effects from foreign currency fluctuations, which more than offset constant-currency softness in our DTC B&M business amid a weakening macroeconomic environment and increased marketplace competition. We believe the growth in our China wholesale and DTC e-commerce businesses was aided by the execution of our marketplace strategies. The growth in LAAP distributor net sales was driven by strong growth of Spring and Fall 2026 distributor orders and, to a lesser extent, a shift in timing of shipments into the first six months of 2026, as compared to the same period in 2025. The growth in Korea was led by the wholesale business, which we believe was attributable to the execution of our marketplace strategies and resilient outdoor category trends, despite a weakening macroeconomic environment, as compared to the same period in 2025. The decline in Japan net sales reflected unfavorable effects from foreign currency fluctuations, which more than offset constant-currency net sales growth within our wholesale and DTC e-commerce businesses, partially offset by declines in our DTC B&M business, compared to the same period in 2025.

Current wording

LAAP net sales increased $37.7 million, or 9% (9% constant-currency), for the nine months ended September 30, 2026, compared to the same period in 2025, driven by growth in our China, LAAP distributor and Korea businesses, partially offset by a decline in our Japan business. The growth in China net sales was driven by our China wholesale business and favorable effects from foreign currency translation. The China DTC business also increased, reflecting healthy growth in our DTC e-commerce business and a modest increase in our DTC B&M business. We believe the growth in our China business was aided by the execution of our marketplace strategies amid an increasingly promotional and competitive marketplace. The growth in LAAP distributor net sales was driven by strong growth of Fall and Spring 2026 distributor orders, as compared to the same period in 2025. The increase in Korea net sales was led by robust demand in our Korea wholesale business, which we believe was attributable to the execution of our marketplace strategies and resilient outdoor category trends, despite a challenging macroeconomic environment, as compared to the same period in 2025. The decline in Japan net sales reflected unfavorable effects from foreign currency translation, which more than offset constant-currency net sales growth within our Japan wholesale and DTC businesses, compared to the same period in 2025.

Previous wording

LAAP segment gross margin expanded to 55.1% for the six months ended June 30, 2026 from 54.5% for the comparable period in 2025, driven primarily by a decrease in inventory reserve provisions, partially offset by unfavorable region and channel mix. LAAP segment SG&A expenses decreased as a percentage of net sales to 36.0% for the six months ended June 30, 2026, compared to 37.0% for the same period in 2025, primarily driven by fixed SG&A leverage on increased net sales. In total, LAAP segment SG&A expenses increased 5% for the six months ended June 30, 2026, as compared to the same period in 2025.

Current wording

LAAP segment gross margin was relatively flat as compared to the same period in 2025. LAAP segment SG&A expenses decreased as a percentage of net sales to 35.1% for the nine months ended September 30, 2026, compared to 36.3% for the same period in 2025, primarily driven by fixed SG&A leverage on increased net sales. In total, LAAP segment SG&A expenses increased 6% for the nine months ended September 30, 2026, as compared to the same period in 2025.

Previous wording

EMEA net sales increased $50.4 million, or 21% (14% constant-currency), for the six months ended June 30, 2026, compared to the same period in 2025, with growth across our Europe-direct and EMEA distributor businesses. The growth in Europe-direct net sales was fueled by strong wholesale and DTC B&M performance, which we believe was attributable to the execution of our marketplace strategies. The growth in Europe-direct's DTC B&M business was driven by increased productivity from existing stores, partially reflecting strategic promotional activity amid second quarter traffic headwinds, as well as contributions from new stores, as compared to the same period in 2025. The growth in EMEA distributor net sales was driven by healthy growth of Spring and Fall 2026 distributor orders, which more than offset a shift in timing of shipments out of the second quarter of 2026, as compared to the same period in 2025.

Current wording

EMEA net sales increased $61.2 million, or 15% (11% constant-currency), for the nine months ended September 30, 2026, compared to the same period in 2025, with growth across our Europe-direct and EMEA distributor businesses, which we believe was attributable to the execution of our marketplace strategies. The Europe-direct DTC B&M business drove particularly strong growth throughout the period, reflecting increased productivity from existing stores, partially reflecting strategic promotional activity amid a challenging macroeconomic environment, as well as contributions from new stores. The growth in EMEA distributor net sales was driven by healthy growth of Fall and Spring 2026 distributor orders, as compared to the same period in 2025.

Previous wording

EMEA segment gross margin expanded to 47.3% for the six months ended June 30, 2026 from 46.6% for the comparable period in 2025, driven primarily by favorable channel and region mix. EMEA segment SG&A expenses increased as a percentage of net sales to 27.1% for the six months ended June 30, 2026, compared to 26.0% for the same period in 2025, primarily driven by higher DTC B&M expenses, including personnel and rent expenses, as well as variable expenses from higher DTC sales. In total, EMEA segment SG&A expenses increased 26% for the six months ended June 30, 2026, as compared to the same period in 2025.

Current wording

EMEA segment gross margin expanded to 48.9% for the nine months ended September 30, 2026 from 47.9% for the comparable period in 2025, driven primarily by favorable channel and region mix. EMEA segment SG&A expenses increased as a percentage of net sales to 27.0% for the nine months ended September 30, 2026, compared to 25.3% for the same period in 2025, primarily driven by higher DTC B&M expenses, including variable expenses from higher DTC sales and the impact of new stores. In total, EMEA segment SG&A expenses increased 23% for the nine months ended September 30, 2026, as compared to the same period in 2025.

Previous wording

expenses increased as a percentage of net sales to 32.3% for the six months ended June 30, 2026, compared to 30.3% for the same period in 2025. In total, Canada segment SG&A expenses increased 8% for the six months ended June 30, 2026, as compared to the same period in 2025.

Current wording

Canada segment gross margin expanded to 49.5% for the nine months ended September 30, 2026 from 48.6% for the comparable period in 2025, driven primarily by favorable channel profitability and channel mix. Canada segment SG&A expenses increased as a percentage of net sales to 24.8% for the nine months ended September 30, 2026, compared to 23.2% for the same period in 2025, driven primarily by fixed SG&A deleverage on decreased net sales. In total, Canada segment SG&A expenses increased 6% for the nine months ended September 30, 2026, as compared to the same period in 2025.

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. Our cash position is also impacted by our capital allocation approach. In addition, our cash position is impacted by incremental tariff costs for U.S. product, which may fluctuate based on changes in trade policies. While we currently project having adequate liquidity to meet our short-term and long-term working capital needs, 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. Refer to "Sources of Liquidity" below for further information regarding our domestic credit facility.

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 inventory we order from our contract manufacturers in anticipation of customer demand and is more heavily impacted in advance of periods of expected high demand. Our cash position is also impacted by our capital allocation approach. In addition, our cash position is impacted by incremental tariff costs for U.S. product, which may fluctuate based on changes in trade policies. While we currently project having adequate liquidity to meet our short-term and long-term working capital needs, 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. Refer to "Sources of Liquidity" below for further information regarding our domestic credit facility.

Previous wording

The change in cash flows provided by investing activities for the six months ended June 30, 2026 was primarily driven by lower purchases of short-term investments, as compared to the same period in 2025.

Current wording

The change in cash flows provided by investing activities for the nine months ended September 30, 2026 was primarily driven by lower purchases of short-term investments, partially offset by lower proceeds from sales and maturities of short-term investments, as compared to the same period in 2025.

Previous wording

The change in cash flows used in financing activities for the six months ended June 30, 2026 was primarily driven by higher share repurchases of common stock, as compared to the same period in 2025.

Current wording

The change in cash flows used in financing activities for the nine months ended September 30, 2026 was primarily driven by higher share repurchases of common stock, as compared to the same period in 2025.

Previous wording

As of June 30, 2026, we had cash and cash equivalents of $532.3 million and short-term investments of $92.3 million, compared to $442.0 million and $348.8 million, respectively, as of December 31, 2025.

Current wording

As of September 30, 2026, we had cash and cash equivalents of $216.9 million and short-term investments of $12.7 million, compared to $442.0 million and $348.8 million, respectively, as of December 31, 2025.

Previous wording

As of June 30, 2026, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$78.1 million. There were no balances outstanding under these facilities.

Current wording

As of September 30, 2026, collectively, our international subsidiaries had unsecured, uncommitted lines of credit, credit facilities and overdraft facilities, providing for borrowings up to approximately US$78.2 million. There were no balances outstanding under these facilities.