Amer Sports, the group that acquired Salomon last October, narrowed its net loss for the 2nd quarter as sales increased in its ski and team sports segments, while its Wilson division continued to suffer from the sluggishness of the golf market.
On a comparable basis, sales for the quarter were up by 6 percent to €321.8 million, an increase of 5 percent in local currencies. The net loss in this usually weak quarter amounted to €10.9 million, down from €11.1 million for the same period last year.
Driven by a 12 percent hike in its footwear and apparel sales, Salomon saw its turnover rise by 7 percent to €76.4 million for the quarter. Its cycling business, Mavic, posted a 5 percent sales increase, while Salomon’s winter sports equipment sales remained flat in this off-quarter. Judging from the orders in hand, winter sports sales are likely to go up for the upcoming season. Salomon’s losses before interest and tax (EBIT) narrowed to €17.9 million for the quarter, compared with €23.3 million at the same time last year.
As for Atomic, its sales were down by 28 percent for the quarter to €5.6 million, partly due to the loss of the distribution deal for ASICS in Austria. Since the beginning of the year this has entailed a loss of sales equivalent to €7.2 million, dragging Atomic’s overall sales tally down by 15 percent for the first half. Excluding this factor, Atomic sales would have been up by 7 percent for the half-year period and prospects are strong for the full year. Orders are up in boots and cross-country equipment, but alpine skis and snowboarding equipment may remain at last year’s strong level.
The Wilson brand enjoyed a sales rise of 6 percent for the quarter to €159.5 million. The growth was fuelled by a 13 percent sales increase in team sports, with strong contributions from all product groups. Racquet sports kept the pace with a sales rise of 12 percent, but the golf business continued on its downward slide, with a drop of 13 percent for the quarter.
This was partly attributed to Wilson’s strategy to concentrate on large customers in the USA, but the drop of the last quarter was less dramatic than the 17 percent plunge suffered in the first one. In local currencies golf sales have been falling by 20 percent since the beginning of the year. Wilson’s disappointing golf sales have put pressure on its operating profit (EBIT), which managed a 6 percent rise to €17.2 million for the quarter but fell by 2 percent in for the half-year.
At Precor, sales rose by 9 percent to €59.3 million for the quarter, as the company benefited from higher demand from fitness clubs. EBIT was hit by one-off warranty expenses, which pushed it down by 11 percent to €4.1 million.
Suunto’s sales rose by 13 percent to €21 million for the quarter, driven by higher sales of diving instruments, while water sports suits declined. Since the beginning of the year Suunto wristop computers have been leading the way with a sales increase of 14 percent. EBIT jumped by 147 percent for the Suunto business to €3.7 million for the quarter, but this was chiefly due to the payment of insurance claims for the loss of sales margins after a fire at a supplier’s premises last year.
The Amer Sports group predicts full-year sales of €1.8 billion, which would represent an increase of nearly 4 percent compared with last year for the world’s largest sports equipment company. The Finnish group predicts more substantial rises in earnings over the next two years, once the measures taken at Salomon begin to yield convincing improvements.