Columbia Sportswear Company (COLM)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 50.20% | 49.61% | 49.39% | 51.58% | 48.93% |
| Operating profit margin | 8.04% | 8.90% | 11.35% | 14.41% | 5.48% |
| Pretax margin | 8.85% | 9.35% | 11.47% | 14.44% | 5.58% |
| Net profit margin | 6.63% | 7.21% | 8.99% | 11.33% | 4.32% |
The profitability ratios of Columbia Sportswear Company exhibited variations over the period from December 31, 2020, to December 31, 2024.
Gross profit margin, which measures the profitability of the company's core business activities, improved from 48.93% in 2020 to 50.20% in 2024. This indicates that the company was able to effectively manage its cost of goods sold and generate more gross profit from its revenue over the years.
Operating profit margin reflects the company's ability to control its operating expenses relative to its revenue. It increased significantly from 5.48% in 2020 to 14.41% in 2021 but then gradually decreased to 8.04% by 2024. This suggests that while the company experienced a period of strong operational efficiency in 2021, its ability to control operating expenses weakened in the subsequent years.
Pretax margin measures the company's ability to generate profits before accounting for taxes. It followed a similar trend to the operating profit margin, increasing from 5.58% in 2020 to 14.44% in 2021, before declining to 8.85% in 2024. This indicates that while the company had a strong performance in generating profits before taxes in 2021, this metric declined in the later years.
Finally, the net profit margin, which indicates the overall profitability after all expenses are considered, decreased from 4.32% in 2020 to 6.63% in 2024. This suggests that although the company was able to maintain a positive net profit margin throughout the period, there was a decreasing trend in its overall profitability over the years.
In summary, Columbia Sportswear Company experienced fluctuations in its profitability ratios during the period under review, with improvements in gross profit margin but declines in operating, pretax, and net profit margins towards the latter years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.10% | 10.56% | 12.88% | 14.69% | 4.83% |
| Return on assets (ROA) | 7.50% | 8.55% | 10.21% | 11.55% | 3.81% |
| Return on total capital | 0.00% | 16.01% | 22.19% | 22.65% | 7.48% |
| Return on equity (ROE) | 12.54% | 12.97% | 16.09% | 17.80% | 5.89% |
Columbia Sportswear Company's profitability ratios have shown a general positive trend over the past five years.
1. Operating return on assets (Operating ROA): This ratio indicates the company's operating efficiency in generating profits from its assets. Columbia Sportswear's Operating ROA has significantly improved from 4.83% in 2020 to 14.69% in 2021, showing a strong performance. Subsequently, the ratio slightly decreased to 12.88% in 2022 and further to 10.56% in 2023. In 2024, Operating ROA declined to 9.10%, indicating a reduction in profit generation relative to the company's asset base.
2. Return on assets (ROA): ROA measures the company's overall efficiency in utilizing its assets to generate profits. Columbia Sportswear's ROA has also demonstrated a similar positive trajectory, increasing from 3.81% in 2020 to 11.55% in 2021. However, the ratio decreased in the subsequent years to 10.21% in 2022, 8.55% in 2023, and 7.50% in 2024, suggesting a decline in overall asset efficiency.
3. Return on total capital: This ratio assesses the profitability of the company relative to the total capital invested. Columbia Sportswear experienced a substantial growth in Return on Total Capital, surging from 7.48% in 2020 to 22.65% in 2021 and maintaining a high level at 22.19% in 2022. However, there was a sharp decline to 16.01% in 2023, and the ratio dropped significantly to 0.00% in 2024, indicating a potential issue in capital utilization efficiency.
4. Return on equity (ROE): ROE reflects the company's ability to generate profits from shareholders' equity. Columbia Sportswear's ROE also exhibited a positive trend during the period under review, rising from 5.89% in 2020 to 17.80% in 2021. Subsequently, the ratio slightly declined to 16.09% in 2022, and further to 12.97% in 2023. In 2024, ROE remained relatively stable at 12.54%, indicating sustainable returns for shareholders.
Overall, while Columbia Sportswear Company's profitability ratios have shown improvements in certain years, there are also instances of decline, particularly in the most recent year. It is crucial for the company to analyze the causes behind these fluctuations and take appropriate measures to ensure sustainable profitability in the future.