Good day, everyone, and welcome to the Columbia Sportswear Company annual meeting. Now, I'll turn the call over to your host, Chairman and Chief Executive Officer, Tim Boyle. Please go ahead, Tim.
Thank you. Good afternoon, thanks for joining us for Columbia Sportswear Company's 2026 annual meeting of shareholders. The meeting is now called to order. I am Chairman and Chief Executive Officer, Tim Boyle. We will start today's meeting by considering the matters described in our proxy statement. I will open the meeting up for questions relating to meeting matters. You will be afforded the opportunity to vote your shares if you have not already done so. We will close the voting after the question and answer session at the end of the meeting. Following the close of business of the meeting, I will provide a few quick reviews of our 2025 financial results. Portions of this meeting, in particular the business update, may contain forward-looking statements regarding Columbia's business opportunities and anticipated results of operations.
Please bear in mind that forward-looking information is subject to many risks and uncertainties, that actual results may differ materially from what is projected. Many of these risks and uncertainties are described in Columbia's most recent quarterly report on Form 10-Q and subsequent filings with the SEC. In the bottom right side of your screen, you should see relevant materials for today's meetings, including our 2025 annual report, our 2026 proxy statement, a copy of the rules of conduct and procedures for this meeting. We're fortunate to have members of the board of directors and management team attending the virtual meeting today, including board members Stephen Babson, John Culver, Charlie Denson, Kevin Mansell, and Malia Wasson.
Co-presidents Peter Bragdon and Joe Boyle, Executive Vice President, Chief Administrative Officer, and General Counsel Richelle Luther, Executive Vice President and Chief Financial Officer Jim Swanson, and Corporate Secretary, Chrissy Mecklenborg, who will record the minutes of this meeting. I'd also like to recognize Andy Livingston and Lana Smith with Deloitte & Touche, our independent registered public accounting firm, and John Thomas with Perkins Coie, the company's external legal counsel. I will now review voting formalities. I have obtained an affidavit of distribution from Broadridge Financial Solutions, Incorporated, confirming that notice of this meeting, together with the related proxy materials and notice of internet availability of proxy materials, were mailed commencing on April 24, 2026, to all shareholders of record as of the close of business on April 6, 2026. The record date for this meeting. I ask that such affidavit be filed with the meeting minutes.
Also as required under Oregon corporate law, a link to the registered shareholder list is available on the meeting portal. Kevin Chow has been appointed as the Inspector of Elections for the meeting and is participating today. He has taken and signed an Oath of Inspector of Elections that will also be filed with the meeting minutes. As of the record date, April 6th, 2026, 51,140,792 shares of our common stock were issued and outstanding and able to be voted at the meeting. This is the only authorized class of voting security of the company. Mr. Chow has confirmed that we have received approximately 97% of votes by proxy, which constitutes a quorum. Therefore, the meeting is duly constituted, and we may proceed with business. Matters to be considered. Our items of business today are, one, elect 10 members of the company's board of directors.
Two. Ratify the selection of the company's independent registered public accounting firm for 2026. Three. Conduct a shareholder advisory vote on executive compensation. Four. Approve the company's, the Columbia Sportswear Company amended and restated 2020 Stock Incentive Plan, and Five. A shareholder proposal regarding proxy access. The first item of business is the election of 10 directors to serve until the next annual meeting or until their successors are elected and qualified. The experience and qualifications of each of our nominees are described in our most recent proxy statement, which is easily accessible on the meeting portal. The board has recommended the following slate of nominees: Timothy Boyle, Stephen Babson, Andy Bryant, John Culver, Charles Denson, Kevin Mansell, Ronald Nelson, Christiana Smith Shi, Sabrina Simmons, Malia Wasson.
Our board recommends that shareholders vote for all of these nominees, and I hereby move that each of the foregoing nominees be elected as directors to serve until the next annual meeting or until their successors are elected and qualified. The second item of business is to ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2026. Our board recommends that shareholders vote for such ratification. I hereby move that the appointment of Deloitte & Touche as the company's independent registered public accounting firm for 2026 be ratified. The third item of business is to approve, by non-binding vote, the compensation of our named executive officers as disclosed in the company's proxy statement in accordance with SEC rules. Our board recommends a vote for approval by non-binding vote of executive compensation.
I hereby move that the compensation of the company's named executive officers, as disclosed in the company's proxy statement in accordance with SEC rules, be approved. The Talent and Compensation Committee and the board are committed to excellence in the design and effectiveness of Columbia's Executive Compensation Program. This program is designed to attract, retain, and motivate highly talented executive officers and to align executive officer and shareholder financial interests. We believe this program also encourages prudent risk-taking in order to achieve long-term shareholder objectives. Columbia believes that its executive compensation program, which includes long-term equity awards as a significant component of an executive officer's overall compensation opportunity, satisfies this goal and is strongly aligned with the long-term interests of its shareholders.
Although this vote is advisory and non-binding, the board and Talent and Compensation Committee, which is responsible for designing and administering Columbia's executive compensation program, value the opinions expressed by shareholders. The board and Talent and Compensation Committee will consider the outcome of the vote when making future compensation policies and decisions for named executive officers. The fourth item on today's agenda is to approve the Columbia Sportswear Company amended and restated 2020 Stock Incentive Plan. On April 11th, 2026, our board unanimously approved the Columbia Sportswear Company amended and restated 2020 Stock Incentive Plan, subject to approval by our shareholders at the annual meeting. The primary purpose of the amended plan is to increase the share reserve under the current plan by 4.5 million shares of the company's common stock from 4.5 million shares to 9 million shares.
The amended and restated 2020 Stock Incentive Plan will be effective immediately following the annual meeting if it's approved by our shareholders. If the amended and restated 2020 Stock Plan is not approved by our shareholders, the current plan will remain in effect in accordance with its terms, but our future ability to issue equity awards will be limited, which could affect our ability to attract and retain talented individuals important to the success of our business. Our board recommends that shareholders vote for approval of the amended and restated 2020 Stock Incentive Plan. The fifth item of business is a shareholder proposal regarding proxy access submitted by Myra K. Young. James McRitchie will be presenting the proposal as Ms. Young's representative. Operator, please play the pre-recorded audio presentation.
Proxy access is a mainstream governance practice that gives substantial long-term shareholders an orderly way to nominate a limited number of directors on the company's proxy card. It offers accountability, not control. Governance influence at Columbia is unusually concentrated. Free Float Analytics rates our CEO as exercising approximately 73% of board influence. It classifies the board as totalitarian. Whether you agree or not, the underlying concern is legitimate. Some directors have served for decades. The company rejects both term limits and mandatory retirement ages. Succession planning increasingly involves the Boyle family. Recent sales are flat. Gross margins and operating income are down. But the company has been able to prop up stock prices through repurchases. These factors raise reasonable questions about board independence, refreshment, and oversight. Without proxy access, shareholders seeking even modest board changes must wage a contest, expensive for both sides.
Proxy access allows long-term shareholders to place a limited number of nominees on the company proxy for all to evaluate. The company argues the proposal lacks detail, but shareholder proposals are limited to 500 words. The board is free to specify the bylaw provision, just as hundreds of companies have done before. This proposal provides a constructive mechanism for board evaluation before dissatisfaction escalates into confrontation. Vote for proposal number 5, proxy access. Thank you.
Thank you. Our board unanimously recommends that shareholders vote against this proposal. I now declare the polls open to vote on the five motions at hand. If you have previously voted over the internet, phone, or mail, you do not need to take any action. If you have previously voted and wish to change your vote, please do so before the polls close. Once the polls close, we will announce our preliminary results. If you wish to vote during the meeting, you should be able to do so by clicking on the link on the right-hand side of the screen in the meeting portal. Also, you should be able to see a text box on the meeting portal where you may submit questions. Please see the rules of conduct and procedures in the right-hand side of the screen for more information about questions that will be answered at this meeting.
Please go ahead and start to submit questions at this time. We will wait three minutes for any questions to be submitted. Now I'd like to discuss the questions we've received via the web portal. Matt Tucker, senior director of investor relations, will summarize the questions. Please be reminded that the rules of conduct and procedures posted on the web portal will govern this session. Go ahead, Matt.
Thanks, Tim. We received three questions via the web portal. The first question is how long will the polls remain open after the last proposal is presented? As Tim stated at the beginning of the meeting, the polls will close after the Q&A session. They will be closing momentarily, so please get your votes in if you haven't already. Another question we received pertains to recent business performance, which Tim will address with a business overview at the end of this meeting. The third question we received pertains to passes to the Columbia employee store for shareholders attending this meeting. If you are a shareholder interested in receiving a pass to the employee store, please email us at investorrelations@columbia.com. That's investorrelations@columbia.com. That will conclude our Q&A session. With that, I will turn the meeting back over to Tim.
Thanks to everyone on the call for listening today and for your questions. Now that everyone has had the opportunity to vote, I now declare the polls for the 2026 Columbia Sportswear Company annual shareholder meeting closed. I understand that the votes have been counted and the preliminary tabulation overseen by the Inspector of Elections has been delivered to the company. The preliminary tabulation report indicates that Item one, all of the nominees for the board of directors named in the proxy statement have been elected to serve until the next annual meeting or until their successors are elected and qualified. Item two, the appointment of the independent registered public accounting firm has passed. Item three, the advisory vote on executive compensation has passed. Item four, the amended and restated Stock Incentive Plan has been approved. Item five, the shareholder proposal for proxy access has failed.
Confirmed results will be reported on a current report on Form 8-K filed with the SEC within the next four days. You've now heard the results of the voting. This completes the business to be conducted at the meeting. Since there are no other matters to properly come before the meeting, I will now formally adjourn the meeting and turn to providing an overview of our 2025 business highlights and financial performance. Overall, 2025 net sales increased 1% year-over-year to $3.4 billion, reflecting continued strong momentum across most international markets, partly offset by ongoing headwinds in North America. The impact of new tariffs, brand impairments, and increased marketing spend contributed to operating margin contraction and a decline in earnings. While our 2025 financial performance was short of my personal growth and profitability goals, we also made progress in many areas.
Highlights from 2025 include international sales growth, which was strong and broad-based, reflecting wholesale and DTC growth. The launch of Columbia Brand Accelerate Growth Strategy is beginning to attract younger consumers into the brand with new product collections such as the Amaze Puff, which was a standout success in the fall 2025 season. The Amaze collection will continue to scale in coming seasons alongside additional new products and collections launched under the Accelerate Strategy. Within marketing, the Engineered for Whatever campaign, launched in August, drove robust consumer engagement with key activations such as Expedition Impossible. That energy and activity has continued into 2026, with more exciting campaigns and activations to come. The Accelerate Growth Strategy is a multi-year evolution that will continue to build momentum in the seasons ahead.
We're encouraged by the initial signs of progress we're seeing under this strategy, including a return to growth in the U.S. within our current fall 2026 order book, driven by some of our newer and more premium products targeting younger, dynamic, active consumers. We also took several actions in 2025 to maintain our strong financial position and deliver shareholder value. To better align our cost structure with current sales level, we expanded on the Profit Improvement Plan that we implemented in 2024, executing actions to generate an additional $60 million in annualized cost savings in 2025, bringing the two-year total to $150 million in annualized savings. We exited the year with healthy inventory position, with inventory essentially flat year-over-year on a dollar basis and down 11% in terms of units.
We returned meaningful cash to shareholders with $201 million in share repurchases and $66 million in dividends paid while maintaining our fortress balance sheet. We exited the year with $791 million in cash and short-term investments and no debt. We are currently operating in a highly dynamic and uncertain business environment. In times like these, strong companies emerge even stronger, and Columbia Sportswear's strength is rooted in our fortress balance sheet, our amazing portfolio of brands, and our incredible global team of employees. While we have more work to do to fully achieve our vision and our company's tremendous potential, I'm confident that we have the right strategy and competitive advantages to navigate the current environments and unlock our significant long-term growth opportunities. That concludes my remarks. I want to thank you again for joining us. We appreciate your continued support.
That concludes our meeting today. You may now disconnect.