Amer Sports reported sales of €461.1 million for the second quarter, representing increases of 23 percent in euros and 9 percent increase in local currencies. The currency-neutral sales increase was driven by double-digit growth in outdoor. Europe was the weakest region. Excluding the acquisition of Louisville Slugger, an American baseball brand bought in April this year, quarterly sales rose by 7 percent.
By geographical region, the Americas registered a sales increase of 35 percent sales, or 12 percent in local currencies, rising to €224.7 million. Sales in the Asia-Pacific grew by 27 percent, or 13 percent in local currencies, up to €68.4 million. The Europe/Middle East/Africa (EMEA) region posted an 8 percent sales increase to €168.0 million, or 6 percent up in local currencies.
Sales increased in the outdoor segment by 20 percent, or 13 percent in local currencies, reaching €209.7 million. Footwear sales of €86.4 million were 23 percent higher than in the year-ago period, or 13 percent higher in local currencies, and the increase was broad-based. Apparel sales grew by 18 percent, or 10 percent in local currencies, to €41.3 million, with growth across all channels and driven by Arc'teryx.
Amer Sports Consolidated Income Statement | |||
(Million Euros, Quarter ended June 30) | |||
2015 | 2014 | % Change | |
Winter and Outdoor | 209.7 | 174.8 | 20.0 |
Ball Sports | 169.4 | 136.2 | 24.4 |
Fitness | 82.0 | 65.1 | 26.0 |
NET SALES | 461.1 | 376.1 | 22.6 |
Cost of Goods Sold | 257.6 | 211.1 | 22.0 |
Licence Income | 1.5 | 1.0 | 50.0 |
Other Operating Income | 0.8 | 2.6 | -69.2 |
R&D Expenses | 17.0 | 17.7 | -4.0 |
Selling & Marketing | 156.7 | 129.3 | 21.2 |
Admin. and Other Expenses | 41.1 | 39.2 | 4.8 |
Net Interest Expense | 7.4 | 7.9 | -6.3 |
Pre-Tax | (25.0) | (26.7) | -6.4 |
Tax | 7.0 | 7.6 | -7.9 |
NET LOSS | 18.0 | 19.1 | -5.8 |
Euro/Share, Diluted | (0.16) | (0.16) | 0.0 |
Softgoods revenues were particularly buoyant in the direct-to-consumer channel, where the Salomon brand has the lion's share. They went up by 45 percent in corporate stores and 60 percent via e-commerce. The recently divested Bonfire and Nikita brands had sales of €9.8 million.
With the outdoor segment, sports instruments, led by Suunto, registered a sales increase of 20 percent to €33.7 million, and they were up by 11 percent in local currencies. Led by Mavic, cycling sales grew slightly, from €31.1 million to €31.7 million in the current second quarter. Sales of winter sports equipment, mainly under the Salomon and Atomic brands, grew by 60 percent to €16.6 million, but pre-orders for the coming season were off by 3 percent against the previous year.
The ball sports unit, which is represented mainly by Wilson, saw sales increase by 24 percent, or 7 percent in local currencies, up to €169.4 million. the acquisition of Louisville Slugger helped to boost gorwth in team sports sales to 44 percent in euros and 19 percent currency-neutral. Golf and tennis went up by 11 percent to €88.2 million, with performance racquets growing double-digit and lower-end racquets declining. Ball Sports sales were off by 6 percent in EMEA to €30.1 million and up by 39 percent in the Americas and by 11 percent in Asia-Pacific.
Led by Precor, fitness grew by 26 percent, or 6 percent in local currencies, going up to €82.0 million. EMEA sales were up by 19 percent to €18.8 million, while the Americas and Asia-Pacific recorded increases of 25 percent and 40 percent, respectively.
The operating result of the entire group before interest and tax (Ebit) was a loss of €9.0 million excluding non-recurring items of €6.6 million, as compared to a loss of €17.6 million in the April-June quarter of 2014. In the outdoor segment, which represents 45 percent of Amer's total revenues, operating losses declined to €18.7 million in this relatively small quarter from €22.0 million in the year-ago period.
The net result of the group was a loss of €18 million, down from a loss of €19.1 million in the second quarter of 2014. The gross margin expanded to 44.1 percent from 43.9 percent in April-June 2014. The company continued to drive profit improvement especially in ball sports, where it kept shifting its product mix toward higher margin products, such as performance tennis racquets.
Through the first half of the year, Amer Sports' consolidated sales totaled €1,037.0 million, up from €877.6 million in the first half of 2014, representing increases of 18 percent in euros and 7 percent in local currencies. The gross margin inflated to 45.1 percent from 44.1 percent in the January-June 2014 . The group generated Ebit of €24.6 million before non-recurring items during the six-month period, compared with 3.0 million in the first six months of 2014. Net losses were down sharply to €1.1 million from €15.3 million.
The Finnish sporting goods group left the financial outlook unchanged. Sales in local currencies and the Ebit margin are both expected to improve, despite challenging market conditions.
