Columbia lifts FY26 outlook as tariff refunds and DTC offset US wholesale lag

Columbia Sportswear has raised its full-year FY26 guidance to net sales of $3.46bn–$3.50bn, lifting the bottom end from $3.43bn, after third-quarter operating income climbed to $109.6m from $67.4m a year earlier.

Diluted EPS guidance moved up too: the company now projects $4.65–$4.90 for the year, versus a previous floor of $4.45. Management maintained its expectation of gross margin expansion to 52.1%–52.3% of net sales, a forecast supported by tariff refunds claimed under the International Emergency Economic Powers Act (IEEPA) — the 1977 statute the Trump administration used to impose reciprocal tariffs, refunds of which are now flowing through to apparel suppliers' P&Ls.

For sourcing teams, the numbers that matter most sit inside those margins. Here's what the quarter actually did.

What happened in Q3?

Net sales reached $962.6m, up 2% year on year, with international markets and direct-to-consumer (DTC, the brand's own retail and e-commerce channel) offsetting a decline in US wholesale revenue.

The US shortfall came from later shipments of Fall 2026 wholesale orders — a timing shift, not lost volume, and a portion of it actually shipped earlier than expected late in the period. Improved DTC trends partially covered the gap.

Gross margin slipped 20 basis points to 49.8%, which the company attributed to support provided to factory partners. Read that plainly: Columbia is sharing a slice of its margin with vendors absorbing tariff costs, and it shows in the quarterly number even as the full-year margin outlook holds.

Operating income of $109.6m equalled 11.4% of net sales, up from 7.1% a year earlier. Net income rose to $84.7m, or $1.66 per diluted share, against $52.0m, or $0.95, in the prior-year quarter — which was itself depressed by impairment charges.

Chairman and CEO Tim Boyle said: "We're pleased to have delivered net sales and EPS growth exceeding our guidance for the third quarter. These results primarily reflected a portion of delayed Fall '26 wholesale orders shipping earlier-than-expected, improved trends in our US DTC business, and the continued momentum of our international business, despite challenging global macroeconomic conditions."

How big is the IEEPA refund effect?

For the first nine months of FY26, net sales came in at $2.36bn, a 1% increase on the prior year. Nine-month gross margin expanded 220 basis points to 52.3% of net sales, up from 50.1% — and roughly 230 basis points of that gain came from previously received IEEPA tariff refunds.

Strip the refunds out and the underlying margin story flattens considerably. After allowances paid back to factory partners, the IEEPA refunds added $0.85 to nine-month diluted EPS, which landed at $2.82 versus $1.53 for the comparable 2025 period, on net income of $145.6m versus $84.1m.

That $0.85 is the line suppliers should track. It confirms refund dollars are being split between Columbia's shareholders and the factories that initially absorbed the tariff burden — a model other brands importing under IEEPA-tariffed lines are watching closely while refund litigation and claims processes run their course.

Is the ACCELERATE strategy working?

The company framed the quarter as early proof of its ACCELERATE Growth Strategy, which targets product innovation, digital enhancements, and expansion of US DTC e-commerce to capture younger consumers.

Boyle was measured on the environment: "The operating environment remains challenging and uncertain, and we will continue working to elevate the Columbia brand and improve consumer perceptions in the US. That said, we are increasingly confident that the Columbia brand ACCELERATE Growth Strategy is gaining traction and putting us on the right track to return to healthy, sustainable growth over the longer term."

The caveat is real. US wholesale remains the soft spot in the mix, international is carrying growth, and the brand itself admits US consumer perception needs work — all while macro conditions stay, in Boyle's word, uncertain.

What's the sourcing decision?

Two moves follow from this report. If you supply Columbia's US wholesale channel, plan for continued order-timing volatility — Fall 26 shipments slipped and then pulled forward within a single quarter, so capacity planning needs that flexibility built in. And if you're a vendor owed IEEPA refunds, the disclosed partner allowances confirm these negotiations are live, quantified money — worth pressing while the refunds are still landing.