Columbia Sportswear shares slipped 0.7% to $57.21 at the latest close. The company’s latest filing describes a far more dramatic move inside the business: gross profit jumped 21% in the three months ended June 30, even though revenue rose only 1.5%.
That unusual spread turned a $23.6 million operating loss into $30.9 million of operating income. Net income moved from a $10.2 million loss to $26.6 million. The headline improvement is real, but the filing attributes the margin expansion primarily to tariff recovery.
Management says the tariff recovery added roughly 980 basis points to gross margin, which reached 58.3% from 49.1% a year earlier. The same disclosure says heavier promotions in direct-to-consumer stores hurt channel profitability.
"Gross margin expanded primarily due to an approximate 980 bps benefit from the recovery of IEEPA tariffs previously paid, partially offset by an unfavorable decrease in channel profitability resulting from increased promotional activity within DTC B&M."
Columbia Sportswear, Form 10-Q, Aug. 6, 2026
In plain English, Columbia kept more of each sales dollar partly because it recovered money previously paid out under the tariff regime. Revenue was up by less than $10 million.
The expense line adds another complication. Selling, general and administrative costs rose 2%, with the company citing $11.5 million of higher omni-channel expenses, including store impairments and the effect of new stores. Profit-improvement actions taken last year offset some of that spending, but SG&A still consumed 54.1% of sales, up from 53.8%.
Cash generation also improved, though the six-month figures carry the same tariff imprint. Operating cash flow turned positive at $37.5 million from a $62.9 million use of cash a year earlier, and the company said the change was primarily driven by the recovery of approximately $78 million in IEEPA tariffs.
"The change in cash flows provided by operating activities for the six months ended June 30, 2026 was primarily driven by the recovery of approximately $78 million of IEEPA tariffs previously paid, as compared to the same period in 2025."
Columbia Sportswear, Form 10-Q, Aug. 6, 2026
That matters for the balance sheet. Cash rose to $532.3 million, while inventory fell 5.6% and receivables fell 6.6% versus the comparable period. The business ended the latest reported period with more cash and fewer dollars tied up in those two working-capital accounts, but the operating-cash improvement is not a clean read on the underlying sales engine because the tariff recovery is explicitly included.
Columbia’s own annual results provide a little context: revenue was $3.5 billion in 2023 and $3.4 billion in 2025, while operating margin declined to 6.1% in 2025 from 8.9% in 2023. The latest three months therefore show a sharp margin rebound against a still-slow revenue path, rather than a broad-based sales surge.
Columbia’s next quarterly report will provide the next reported comparison for gross margin, promotional activity, and any further IEEPA tariff recovery. Columbia generated slightly more revenue, while the reported profit surge includes a tariff recovery.