Columbia Sportswear has agreed to pay $200 million to settle a shareholder lawsuit alleging the company misrepresented its financial outlook. Investors claimed Columbia downplayed the impact of rising sales at discount retailers and inventory buildup, leading to unrealistically optimistic profit forecasts.
The lawsuit centered on Columbia’s communications over several quarters suggesting healthy margins, while privately, executives were reportedly growing concerned about growing off-price competition and heavier markdowns to move excess inventory. Plaintiffs argued this disparity led to inflated stock prices until the company finally issued a surprise profit warning that triggered a sharp stock drop.
Rather than proceed through a protracted legal battle, Columbia opted to negotiate a settlement—still denying any wrongdoing. The agreement includes no admission of liability but brings financial closure for both parties. Management said the settlement allows the company to focus fully on restoring investor confidence and adapting its pricing, inventory, and retail strategies.