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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_______to_______
 —————————————————————
Commission file number 000-23939
 —————————————————————

COLUMBIA SPORTSWEAR COMPANY
(Exact name of registrant as specified in its charter) 
Oregon93-0498284
(State or other jurisdiction of incorporation or organization)(IRS Employer Identification Number)
14375 Northwest Science Park Drive, Portland Oregon 97229
(Address of principal executive offices and zip code)
(503) 985-4000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockCOLMThe NASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.YesNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
YesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
No
The number of shares outstanding of the registrant's common stock on October 20, 2023 was 60,507,773.


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TABLE OF CONTENTS
Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 5.Other Information
Item 6.

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q

SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements often use words such as "will", "anticipate", "estimate", "expect", "should", "may" and other words and terms of similar meaning or reference future dates. Forward-looking statements include any statements related to our expectations regarding the effectiveness of our investments, future performance or market position, the promotional environment, storage and processing capacity, inventory levels, inventory carrying costs, shipping timing, consumer spending and preferences, freight charges, scale efficiencies, inflationary pressures, foreign currency translation, the geopolitical environment, consumer behaviors and expectations, the regulatory environment, the impact of seasonal trends, materiality of legal matters, risk management strategies, capital expenditures, our short and long-term cash needs and our ability to meet those needs, amortization expenses, and maturities of liabilities.

These forward-looking statements, and others we make from time to time expressed in good faith, are believed to have a reasonable basis; however, each forward-looking statement involves risks and uncertainties. Many factors may cause actual results to differ materially from projected results in forward-looking statements, including the risks described in Part II, Item 1A of this Quarterly Report on Form 10-Q. Forward-looking statements are inherently less reliable than historical information. Except as required by law, we do not undertake any duty to update forward-looking statements after the date they are made or to conform them to actual results or to changes in circumstances or to reflect changes in events, circumstances or expectations. New factors emerge from time to time and it is not possible for us to predict or assess the effects of all such factors or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement.

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | i

PART I — FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands)September 30,
2023
December 31,
2022
September 30,
2022
ASSETS
Current Assets:
Cash and cash equivalents$213,282 $430,241 $159,221 
Short-term investments1,474 722 972 
Accounts receivable, net of allowance of $6,659, $5,443 and $5,822, respectively
686,821 547,561 600,457 
Inventories885,163 1,028,545 1,056,905 
Prepaid expenses and other current assets96,016 129,872 142,055 
Total current assets1,882,756 2,136,941 1,959,610 
Property, plant and equipment, net of accumulated depreciation of $653,545, $623,911 and $608,522, respectively
283,095 291,214 287,338 
Operating lease right-of-use assets339,538 324,409 328,893 
Intangible assets, net80,321 81,558 100,672 
Goodwill51,694 51,694 68,594 
Deferred income taxes89,801 94,162 76,899 
Other non-current assets71,738 71,568 68,146 
Total assets$2,798,943 $3,051,546 $2,890,152 
LIABILITIES AND EQUITY
Current Liabilities:
Short-term borrowings$ $ $4,441 
Accounts payable162,222 322,472 336,782 
Accrued liabilities283,799 328,759 279,226 
Operating lease liabilities72,685 68,685 65,866 
Income taxes payable7,254 18,802 10,341 
Total current liabilities525,960 738,718 696,656 
Non-current operating lease liabilities323,508 310,625 314,565 
Income taxes payable24,218 33,251 33,215 
Deferred income taxes 143  
Other long-term liabilities29,946 33,020 30,913 
Total liabilities903,632 1,115,757 1,075,349 
Commitments and contingencies (Note 4)
Shareholders' Equity:
Preferred stock; 10,000 shares authorized; none issued and outstanding
   
Common stock (no par value); 250,000 shares authorized; 60,526, 62,139 and 62,105 issued and outstanding, respectively
 12,692 5,803 
Retained earnings1,942,709 1,953,734 1,846,570 
Accumulated other comprehensive income (loss)(47,398)(30,637)(37,570)
Total shareholders' equity1,895,311 1,935,789 1,814,803 
Total liabilities and shareholders' equity$2,798,943 $3,051,546 $2,890,152 

See accompanying notes to unaudited condensed consolidated financial statements.
COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 1

Notes to unaudited Condensed Consolidated Financial Statements
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended September 30,
Nine Months Ended September 30,
(in thousands, except per share amounts)2023202220232022
Net sales$985,683 $955,059 $2,427,209 $2,294,632 
Cost of sales505,486 496,564 1,233,467 1,173,530 
Gross profit480,197 458,495 1,193,742 1,121,102 
Selling, general and administrative expenses351,563 318,957 1,011,490 899,301 
Net licensing income5,920 5,723 14,958 15,899 
Operating income134,554 145,261 197,210 237,700 
Interest income, net1,870 765 8,659 1,659 
Other non-operating income (expense), net(311)(269)354 (1,660)
Income before income tax136,113 145,757 206,223 237,699 
Income tax expense32,605 34,007 48,163 51,949 
Net income$103,508 $111,750 $158,060 $185,750 
Earnings per share:
Basic$1.70 $1.80 $2.57 $2.95 
Diluted$1.70 $1.80 $2.56 $2.94 
Weighted average shares outstanding:
Basic60,84462,09861,57562,967
Diluted60,93262,21061,77563,178

See accompanying notes to unaudited condensed consolidated financial statements.
COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 2

Notes to unaudited Condensed Consolidated Financial Statements
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

Three Months Ended September 30,
Nine Months Ended September 30,
(in thousands)2023202220232022
Net income$103,508 $111,750 $158,060 $185,750 
Other comprehensive income (loss):
Change in derivative transactions (net of tax effects of $(960), $(4,856), $1,139, and $(9,944), respectively)
3,593 14,221 (2,554)27,938 
Foreign currency translation adjustments (net of tax effects of $325, $126, $282 and $1,123, respectively)
(9,659)(30,058)(14,207)(61,132)
Other comprehensive income (loss)(6,066)(15,837)(16,761)(33,194)
Comprehensive income$97,442 $95,913 $141,299 $152,556 

See accompanying notes to unaudited condensed consolidated financial statements.
COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 3

Notes to unaudited Condensed Consolidated Financial Statements
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended September 30,
(in thousands)20232022
Cash flows from operating activities:
Net income$158,060 $185,750 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, amortization, and non-cash lease expense93,365 86,569 
Provision for uncollectible accounts receivable2,010 (1,745)
Loss on disposal or impairment of property, plant and equipment, and right-of-use assets568 2,455 
Deferred income taxes4,236 1,712 
Stock-based compensation17,026 16,071 
Changes in operating assets and liabilities:
Accounts receivable(146,139)(129,251)
Inventories135,417 (443,194)
Prepaid expenses and other current assets26,809 (27,535)
Other assets(3,106)2,260 
Accounts payable(152,168)63,868 
Accrued liabilities(42,251)(18,409)
Income taxes payable(20,434)(14,299)
Operating lease assets and liabilities(49,322)(49,159)
Other liabilities(1,897)(3,182)
Net cash provided by (used in) operating activities22,174 (328,089)
Cash flows from investing activities:
Purchases of short-term investments(117,877)(44,876)
Sales and maturities of short-term investments120,747 175,827 
Capital expenditures(41,355)(42,489)
Net cash provided by (used in) investing activities(38,485)88,462 
Cash flows from financing activities:
Proceeds from credit facilities837 12,660 
Repayments on credit facilities(837)(8,133)
Payment of line of credit issuance fees (604)
Proceeds from issuance of common stock related to stock-based compensation7,081 4,598 
Tax payments related to stock-based compensation(4,620)(4,178)
Repurchase of common stock(144,633)(287,443)
Cash dividends paid(55,379)(56,556)
Net cash used in financing activities(197,551)(339,656)
Net effect of exchange rate changes on cash(3,097)(24,900)
Net decrease in cash and cash equivalents(216,959)(604,183)
Cash and cash equivalents, beginning of period430,241 763,404 
Cash and cash equivalents, end of period$213,282 $159,221 
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes$66,580 $59,584 
Supplemental disclosures of non-cash investing and financing activities:
Property, plant and equipment acquired through increase in liabilities$5,389 $7,502 

See accompanying notes to unaudited condensed consolidated financial statements.
COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 4

Notes to unaudited Condensed Consolidated Financial Statements
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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

(in thousands, except per share amounts)Common StockRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Shares
Outstanding
Amount
Balance, June 30, 2023
61,358 $ $1,915,990 $(41,332)$1,874,658 
Net income— — 103,508 — 103,508 
Other comprehensive income (loss)— — — (6,066)(6,066)
Cash dividends ($0.30 per share)
— — (18,280)— (18,280)
Issuance of common stock related to stock-based compensation, net
55 2,237 — — 2,237 
Stock-based compensation expense— 5,818 — — 5,818 
Repurchase of common stock(887)(7,435)(58,509)— (65,944)
Excise taxes related to repurchase of common stock— (620)— — (620)
Balance, September 30, 2023
60,526 $ $1,942,709 $(47,398)$1,895,311 

(in thousands, except per share amounts)Common StockRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Shares
Outstanding
Amount
Balance, June 30, 2022
62,091 $ $1,753,450 $(21,733)$1,731,717 
Net income— — 111,750 — 111,750 
Other comprehensive income (loss)— — — (15,837)(15,837)
Cash dividends ($0.30 per share)
— — (18,630)— (18,630)
Issuance of common stock related to stock-based compensation, net
14 368 — — 368 
Stock-based compensation expense— 5,435 — — 5,435 
Balance, September 30, 2022
62,105 $5,803 $1,846,570 $(37,570)$1,814,803 

(in thousands, except per share amounts)Common StockRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Shares
Outstanding
Amount
Balance, December 31, 2022
62,139 $12,692 $1,953,734 $(30,637)$1,935,789 
Net income— — 158,060 — 158,060 
Other comprehensive income (loss)— — — (16,761)(16,761)
Cash dividends ($0.90 per share)
— — (55,379)— (55,379)
Issuance of common stock related to stock-based compensation, net
228 2,461 — — 2,461 
Stock-based compensation expense— 17,026 — — 17,026 
Repurchase of common stock(1,841)(30,928)(113,706)— (144,634)
Excise taxes related to repurchase of common stock— (1,251)— — (1,251)
Balance, September 30, 2023
60,526 $ $1,942,709 $(47,398)$1,895,311 

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 5

Notes to unaudited Condensed Consolidated Financial Statements
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(in thousands, except per share amounts)Common StockRetained EarningsAccumulated Other Comprehensive Income (Loss)Total
Shares
Outstanding
Amount
Balance, December 31, 2021
65,164 $ $1,993,628 $(4,376)$1,989,252 
Net income— — 185,750 — 185,750 
Other comprehensive income (loss)— — — (33,194)(33,194)
Cash dividends ($0.90 per share)
— — (56,556)— (56,556)
Issuance of common stock related to stock-based compensation, net
176 420 — — 420 
Stock-based compensation expense— 16,071 — — 16,071 
Repurchase of common stock(3,235)(10,688)(276,252)— (286,940)
Balance, September 30, 2022
62,105 $5,803 $1,846,570 $(37,570)$1,814,803 
See accompanying notes to unaudited condensed consolidated financial statements.
COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 6

Notes to unaudited Condensed Consolidated Financial Statements
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTEPAGE
Note 1Basis of Presentation and Organization
Note 2Revenues
Note 3Intangible Assets, Net and Goodwill
Note 4Commitments and Contingencies
Note 5Shareholders' Equity
Note 6Stock-Based Compensation
Note 7Earnings Per Share
Note 8Accumulated Other Comprehensive Income (Loss)
Note 9Segment Information
Note 10Financial Instruments and Risk Management
Note 11Fair Value Measures

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 7

Notes to unaudited Condensed Consolidated Financial Statements
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NOTE 1 — BASIS OF PRESENTATION AND ORGANIZATION

The accompanying unaudited condensed consolidated financial statements have been prepared by the management of Columbia Sportswear Company (together with its wholly owned subsidiaries, the "Company") and, in the opinion of management, include all normal recurring material adjustments necessary to present fairly the Company's financial position as of September 30, 2023, December 31, 2022 and September 30, 2022, the results of operations for the three and nine months ended September 30, 2023 and 2022, and cash flows for the nine months ended September 30, 2023 and 2022. The December 31, 2022 financial information was derived from the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. A significant part of the Company's business is of a seasonal nature; therefore, results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of results to be expected for other quarterly periods or for the full year.

Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The Company, however, believes that the disclosures contained in this report comply with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, for a Quarterly Report on Form 10-Q and are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

PRINCIPLES OF CONSOLIDATION

The unaudited condensed consolidated financial statements include the accounts of the Company. All significant intercompany balances and transactions have been eliminated in consolidation.

ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions. The Company's significant estimates relate to sales reserves, allowance for uncollectible accounts receivable, excess, close-out and slow-moving inventory, impairment of long-lived assets, intangible assets and goodwill, and income taxes.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

None.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

None.

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 8

Notes to unaudited Condensed Consolidated Financial Statements
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NOTE 2 — REVENUES

DISAGGREGATED REVENUE

As disclosed below in Note 9, the Company has four geographic reportable segments: United States ("U.S."), Latin America and Asia Pacific ("LAAP"), Europe, Middle East and Africa ("EMEA") and Canada.

The following tables disaggregate the Company's reportable segment Net sales by product category and channel, which the Company believes provides a meaningful depiction of how the nature, timing, and uncertainty of Net sales are affected by economic factors:

Three Months Ended September 30, 2023
(in thousands)
U.S.LAAPEMEACanadaTotal
Product category net sales
Apparel, Accessories and Equipment$487,596 $88,362 $85,051 $70,656 $731,665 
Footwear147,817 26,995 44,300 34,906 254,018 
Total$635,413 $115,357 $129,351 $105,562 $985,683 
Channel net sales
Wholesale$391,892 $75,814 $110,608 $86,046 $664,360 
Direct-to-consumer243,521 39,543 18,743 19,516 321,323 
Total$635,413 $115,357 $129,351 $105,562 $985,683 

Three Months Ended September 30, 2022
(in thousands)
U.S.LAAPEMEACanadaTotal
Product category net sales
Apparel, Accessories and Equipment$473,066 $84,769 $112,817 $55,690 $726,342 
Footwear134,008 30,559 40,713 23,437 228,717 
Total$607,074 $115,328 $153,530 $79,127 $955,059 
Channel net sales
Wholesale$368,040 $76,829 $139,027 $61,133 $645,029 
Direct-to-consumer239,034 38,499 14,503 17,994 310,030 
Total$607,074 $115,328 $153,530 $79,127 $955,059 

Nine Months Ended September 30, 2023
(in thousands)
U.S.LAAPEMEACanadaTotal
Product category net sales
Apparel, Accessories and Equipment$1,229,049 $257,445 $229,279 $137,459 $1,853,232 
Footwear322,948 87,654 109,215 54,160 573,977 
Total$1,551,997 $345,099 $338,494 $191,619 $2,427,209 
Channel net sales
Wholesale$836,594 $188,639 $282,820 $137,077 $1,445,130 
Direct-to-consumer715,403 156,460 55,674 54,542 982,079 
Total$1,551,997 $345,099 $338,494 $191,619 $2,427,209 

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 9

Notes to unaudited Condensed Consolidated Financial Statements
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Nine Months Ended September 30, 2022
(in thousands)
U.S.LAAPEMEACanadaTotal
Product category net sales
Apparel, Accessories and Equipment$1,206,886 $225,073 $213,628 $115,016 $1,760,603 
Footwear314,567 84,823 92,161 42,478 534,029 
Total$1,521,453 $309,896 $305,789 $157,494 $2,294,632 
Channel net sales
Wholesale$817,429 $165,075 $261,580 $109,065 $1,353,149 
Direct-to-consumer704,024 144,821 44,209 48,429 941,483 
Total$1,521,453 $309,896 $305,789 $157,494 $2,294,632 

PERFORMANCE OBLIGATIONS

For the three and nine months ended September 30, 2023 and 2022, Net sales recognized from performance obligations related to prior periods were not material. Net sales expected to be recognized in any future period related to remaining performance obligations is not material.

CONTRACT BALANCES

As of September 30, 2023, December 31, 2022 and September 30, 2022, the Company did not have contract assets and had an immaterial amount of contract liabilities included in Accrued liabilities on the unaudited Condensed Consolidated Balance Sheets.

NOTE 3 — INTANGIBLE ASSETS, NET AND GOODWILL

INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

(in thousands)
September 30, 2023December 31, 2022September 30, 2022
Intangible assets with definite lives:
Patents and purchased technology$14,198 $14,198 $14,198 
Customer relationships23,000 23,000 23,000 
Gross carrying amount37,198 37,198 37,198 
Accumulated amortization:
Patents and purchased technology(14,198)(14,198)(14,198)
Customer relationships(21,900)(20,663)(20,249)
Accumulated amortization(36,098)(34,861)(34,447)
Net carrying amount1,100 2,337 2,751 
Intangible assets with indefinite lives79,221 79,221 97,921 
Intangible assets, net$80,321 $81,558 $100,672 

Amortization expense for intangible assets subject to amortization was $0.4 million for the three months ended September 30, 2023 and 2022, and was $1.2 million for the nine months ended September 30, 2023 and 2022.

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 10

Notes to unaudited Condensed Consolidated Financial Statements
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The following table presents the remaining estimated annual amortization expense of intangible assets with definite lives for the years 2023 through 2028:

(in thousands)
2023$413 
2024$687 
2025 and thereafter$ 

GOODWILL

There have been no changes to the Company's goodwill as described in Note 6 in Part II, Item 8 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

NOTE 4 — COMMITMENTS AND CONTINGENCIES

LITIGATION

The Company is involved in litigation and various legal matters arising in the normal course of business, including matters related to employment, retail, intellectual property, contractual agreements, and various regulatory compliance activities. Management has considered facts related to legal and regulatory matters and opinions of counsel handling these matters, and does not believe the ultimate resolution of these proceedings will have a material adverse effect on the Company's financial position, results of operations or cash flows.

NOTE 5 — SHAREHOLDERS' EQUITY

Since the inception of the Company's stock repurchase plan in 2004 through September 30, 2023, the Company's Board of Directors has authorized the repurchase of $2.0 billion of the Company's common stock, excluding excise tax. Shares of the Company's common stock may be purchased in the open market or through privately negotiated transactions, subject to market conditions, and generally settle subsequent to the trade date. The repurchase program does not obligate the Company to acquire any specific number of shares or to acquire shares over any specified period of time.

Under this program as of September 30, 2023, the Company had repurchased 33.5 million shares at an aggregate purchase price of $1,615.3 million and had $384.7 million remaining available, excluding excise tax. During the three and nine months ended September 30, 2023, the Company repurchased an aggregate of $65.9 million and $144.6 million, respectively, of common stock under this program, excluding excise tax.

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 11

Notes to unaudited Condensed Consolidated Financial Statements
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NOTE 6 — STOCK-BASED COMPENSATION

The Company's Stock Incentive Plan allows for grants of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, and other stock-based or cash-based awards. The Company uses original issuance shares to satisfy share-based payments.

STOCK-BASED COMPENSATION EXPENSE

Stock-based compensation expense consisted of the following:

Three Months Ended September 30,
Nine Months Ended September 30,
(in thousands)2023202220232022
Stock options$2,083 $2,018 $6,019 $5,853 
Restricted stock units3,735 3,417 11,007 10,218 
Total$5,818 $5,435 $17,026 $16,071 

STOCK OPTIONS

During the nine months ended September 30, 2023, the Company granted a total of 499,440 stock options at a weighted average grant date fair value of $22.61 per option. As of September 30, 2023, unrecognized costs related to outstanding stock options totaled $14.9 million, before any related tax benefit. These unrecognized costs related to stock options are expected to be recognized over a weighted average remaining period of 2.28 years.

RESTRICTED STOCK UNITS

During the nine months ended September 30, 2023, the Company granted 286,951 restricted stock units at a weighted average grant date fair value of $82.55 per restricted stock unit. As of September 30, 2023, unrecognized costs related to outstanding restricted stock units totaled $28.7 million, before any related tax benefit. These unrecognized costs related to restricted stock units are expected to be recognized over a weighted average remaining period of 2.58 years.

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 12

Notes to unaudited Condensed Consolidated Financial Statements
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NOTE 7 — EARNINGS PER SHARE

Earnings per share ("EPS") is presented on both a basic and diluted basis. Basic EPS is based on the weighted average number of common shares outstanding. Diluted EPS reflects the potential dilution that could occur if outstanding securities or other contracts to issue common stock were exercised or converted into common stock.

A reconciliation of the common shares used in the denominator for computing basic and diluted EPS is as follows:

Three Months Ended September 30,
Nine Months Ended September 30,
(in thousands, except per share amounts)
2023202220232022
Weighted average common shares outstanding, used in computing basic earnings per share
60,844 62,098 61,575 62,967 
Effect of dilutive stock options and restricted stock units88 112 200 211 
Weighted average common shares outstanding, used in computing diluted earnings per share
60,932 62,210 61,775 63,178 
Earnings per share:
Basic$1.70 $1.80 $2.57 $2.95 
Diluted$1.70 $1.80 $2.56 $2.94 
Anti-dilutive common shares (1)
2,266 2,175 1,989 1,738 
(1) Common stock related to stock options and service-based restricted stock units, and performance-based restricted stock were outstanding but were excluded from the computation of diluted EPS because their effect would be anti-dilutive under the treasury stock method or because the shares were subject to performance conditions that had not been met.

NOTE 8 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) on the unaudited Condensed Consolidated Balance Sheets is net of applicable taxes, and consists of unrealized gains and losses on available-for-sale securities, unrealized gains and losses on certain derivative transactions and foreign currency translation adjustments.

The following tables set forth the changes in Accumulated other comprehensive income (loss):

(in thousands)Derivative transactionsForeign currency
 translation
adjustments
Total
Balance as of June 30, 2023
$15,643 $(56,975)$(41,332)
Other comprehensive income (loss) before reclassifications9,876 (9,659)217 
Amounts reclassified from accumulated other comprehensive income (loss) (1)
(6,283) (6,283)
Net other comprehensive income (loss) during the period3,593 (9,659)(6,066)
Balance as of September 30, 2023
$19,236 $(66,634)$(47,398)
(1) Amounts reclassified are recorded in Net sales, Cost of sales, or Other non-operating income (expense), net on the unaudited Condensed Consolidated Statements of Operations. Refer to Note 10 for further information regarding reclassifications.

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 13

Notes to unaudited Condensed Consolidated Financial Statements
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(in thousands)Derivative transactionsForeign currency
 translation
adjustments
Total
Balance as of June 30, 2022
$23,631 $(45,364)$(21,733)
Other comprehensive income (loss) before reclassifications17,191 (30,058)(12,867)
Amounts reclassified from accumulated other comprehensive income (loss) (1)
(2,970) (2,970)
Net other comprehensive income (loss) during the period14,221 (30,058)(15,837)
Balance as of September 30, 2022
$37,852 $(75,422)$(37,570)
(1) Amounts reclassified are recorded in Net sales, Cost of sales, or Other non-operating income (expense), net on the unaudited Condensed Consolidated Statements of Operations. Refer to Note 10 for further information regarding reclassifications.

(in thousands)Derivative transactionsForeign currency
 translation
adjustments
Total
Balance as of December 31, 2022
$21,790 $(52,427)$(30,637)
Other comprehensive income (loss) before reclassifications10,602 (14,207)(3,605)
Amounts reclassified from accumulated other comprehensive income (loss) (1)
(13,156) (13,156)
Net other comprehensive income (loss) during the period(2,554)(14,207)(16,761)
Balance as of September 30, 2023
$19,236 $(66,634)$(47,398)
(1) Amounts reclassified are recorded in Net sales, Cost of sales, or Other non-operating income (expense), net on the unaudited Condensed Consolidated Statements of Operations. Refer to Note 10 for further information regarding reclassifications.

(in thousands)Available-for-
sale securities
Derivative transactionsForeign currency
 translation
adjustments
Total
Balance as of December 31, 2021
$ $9,914 $(14,290)$(4,376)
Other comprehensive income (loss) before reclassifications(451)31,780 (61,132)(29,803)
Amounts reclassified from accumulated other comprehensive income (loss) (1)
451 (3,842) (3,391)
Net other comprehensive income (loss) during the period 27,938 (61,132)(33,194)
Balance as of September 30, 2022
$ $37,852 $(75,422)$(37,570)
(1) Amounts reclassified are recorded in Net sales, Cost of sales, or Other non-operating income (expense), net on the unaudited Condensed Consolidated Statements of Operations. Refer to Note 10 for further information regarding reclassifications.

NOTE 9 — SEGMENT INFORMATION

The Company has four reportable geographic segments: U.S., LAAP, EMEA, and Canada, which are reflective of the Company's internal organization, management and oversight structure. Each geographic segment operates predominantly in one industry: the design, development, marketing, and distribution of outdoor, active and lifestyle products, including apparel, footwear, accessories, and equipment. Intersegment net sales and intersegment profits, which are recorded at a negotiated mark-up and eliminated in consolidation, are not material. Unallocated corporate expenses consist of expenses incurred by centrally-managed departmental functions, including consumer digital technology, certain supply chain functions, finance, human resources and legal, as well as executive compensation, unallocated benefit program expense, and other miscellaneous costs.

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 14

Notes to unaudited Condensed Consolidated Financial Statements
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The following tables present financial information for the Company's reportable segments:

Three Months Ended September 30,
Nine Months Ended September 30,
(in thousands)
2023202220232022
Net sales to unrelated entities:
U.S.$635,413 $607,074 $1,551,997 $1,521,453 
LAAP115,357 115,328 345,099 309,896 
EMEA129,351 153,530 338,494 305,789 
Canada105,562 79,127 191,619 157,494 
$985,683 $955,059 $2,427,209 $2,294,632 
Segment operating income:
U.S.$131,602 $145,268 $268,260 $325,790 
LAAP14,509 11,771 36,932 21,712 
EMEA34,241 35,567 69,636 51,036 
Canada30,150 20,237 41,065 31,913 
Total segment operating income210,502 212,843 415,893 430,451 
Unallocated corporate expenses(75,948)(67,582)(218,683)(192,751)
Interest income, net1,870 765 8,659 1,659 
Other non-operating income (expense), net(311)(269)354 (1,660)
Income before income tax$136,113 $145,757 $206,223 $237,699 

CONCENTRATIONS

The Company had one customer that accounted for approximately 11.6% and 13.8% of Accounts receivable, net as of September 30, 2023 and December 31, 2022, respectively. The Company did not have any customer that accounted for 10% or more of Accounts receivable, net as of September 30, 2022. The Company did not have any customers that accounted for 10% or more of Net sales for the three and nine months ended September 30, 2023 and September 30, 2022.

NOTE 10 — FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

In the normal course of business, the Company's financial position, results of operations and cash flows are routinely subject to a variety of risks. These risks include risks associated with financial markets, primarily currency exchange rate risk and, to a lesser extent, interest rate risk and equity market risk. The Company regularly assesses these risks and has established policies and business practices designed to mitigate them. The Company does not engage in speculative trading in any financial market.

The Company actively manages the risk of changes in functional currency equivalent cash flows resulting from anticipated non-functional currency denominated purchases and sales. Subsidiaries that use European euros, Canadian dollars, Japanese yen, Chinese renminbi, or Korean won as their functional currency are primarily exposed to changes in functional currency equivalent cash flows from anticipated United States dollar inventory purchases. Subsidiaries that use United States dollars and euros as their functional currency also have non-functional currency denominated sales for which the Company hedges the Canadian dollar and British pound sterling. The Company seeks to manage these risks by using currency forward contracts formally designated and effective as cash flow hedges. Hedge effectiveness is generally determined by evaluating the ability of a hedging instrument's cumulative change in fair value to offset the cumulative change in the present value of expected cash flows on the underlying exposures. Time value components ("forward points") for forward contracts are included in the fair value of the cash flow hedge. These costs or benefits will be included in Accumulated other comprehensive income (loss) until the underlying hedge transaction is recognized in either Net sales or Cost of sales, at which time, the forward points will also be recognized as a component of Net income.

The Company also uses currency forward contracts not formally designated as hedges to manage the consolidated currency exchange rate risk associated with the remeasurement of non-functional currency denominated monetary assets and liabilities by subsidiaries that use United States dollars, euros, Canadian dollars, yen, renminbi, or won as their functional currency. Non-functional currency denominated
COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 15

Notes to unaudited Condensed Consolidated Financial Statements
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monetary assets and liabilities consists of cash and cash equivalents, short-term investments, receivables, payables, deferred income taxes, and intercompany loans and dividends. The gains and losses generated on these currency forward contracts not formally designated as hedges are expected to be largely offset in Other non-operating income (expense), net by the gains and losses generated from the remeasurement of the non-functional currency denominated monetary assets and liabilities.

The following table presents the gross notional amount of outstanding derivative instruments:

(in thousands)September 30, 2023December 31, 2022September 30, 2022
Derivative instruments designated as cash flow hedges:
Currency forward contracts$548,424 $514,365 $459,189 
Derivative instruments not designated as hedges:
Currency forward contracts$477,843 $448,838 $287,825 

As of September 30, 2023, $16.8 million of deferred net gains on both outstanding and matured derivatives recorded in Accumulated other comprehensive income (loss) are expected to be reclassified to Net income during the next twelve months as a result of underlying hedged transactions also being recorded in Net sales, Cost of sales, or Other non-operating income (expense), net in the unaudited Condensed Consolidated Statements of Operations. When outstanding derivative contracts mature, actual amounts ultimately reclassified to Net sales, Cost of sales, or Other non-operating income (expense), net in the unaudited Condensed Consolidated Statements of Operations are dependent on United States dollar exchange rates in effect against the euro, pound sterling, renminbi, Canadian dollar, won, and yen as well as the euro exchange rate in effect against the pound sterling.

As of September 30, 2023, the Company's derivative contracts had a remaining maturity of less than three years. The maximum net exposure to any single counterparty, which is generally limited to the aggregate unrealized gain of all contracts with that counterparty, was $7.5 million as of September 30, 2023. All of the Company's derivative counterparties have credit ratings that are investment grade or higher. The Company is a party to master netting arrangements that contain features that allow counterparties to net settle amounts arising from multiple separate derivative transactions or net settle in the case of certain triggering events such as a bankruptcy or major default of one of the counterparties to the transaction. The Company has not pledged assets or posted collateral as a requirement for entering into or maintaining derivative positions.

COLUMBIA SPORTSWEAR COMPANY | Q3 2023 FORM 10-Q | 16