The falling U.S. dollar and the uncertain American economy have hurt Amer Sports, which reported a 4.9 percent decline in consolidated net sales to €363.0 million in the first quarter; in local currencies, it would have been a 2 percent sales increase. The bottom line improved, ending up in a 53 percent decline in the net loss to €5.2 million.
For the full year, the parent company of Wilson, Salomon, Atomic, Precor and Suunto, is still aiming for a 5 percent increase in net sales in local currencies, with an operating profit (EBIT) of €100 million to €130 million, but much will depend from retailers’ orders of ski products for the next season.
In the three months ended March 31, the company’s overall EBIT improved to zero compared with a loss of €7.8 million the year before. Amer credits mainly its winter sports equipment segment, which recovered from a disastrous start of the year in 2007 with a 22 percent sales increase in local currencies and better results.
Sales of Atomic and Salomon alpine skis were strongest in Central Europe, but the cross-country ski market in the Nordic countries remained “extremely challenging.” The first quarter is not crucial in this sector, however, and at €37.3 million, the turnover it generated was still 35 percent below the level of the first three months of 2006.
The overall winter and outdoor division grew its sales by 12 percent (15 percent in currency-neutral terms) to €162.0 million, but it suffered a loss of €14.6 million. Sales of apparel and footwear rose by 17 percent to €70.6 million, with strong performance for Salomon’s new Wings line of running shoes. Cycling products (Mavic) were up by 11 percent to €33.5 million, or by 13 percent in local currencies. Sales of sports instruments (Suunto) were down by 4 percent to €20.6 million, but they were flat in terms of local currencies and they are expected to pick up with the introduction of new products.
The operating loss of the division was reduced to €14.6 million in the quarter, compared with the €34.4 million loss of the year-ago period. The group is still expecting annual cost savings of €20 million from the reorganized production of Atomic and Salomon ski products, starting in 2009. Some 400 workers will lose their jobs in the process, and negotiations with them are due to be completed in the second quarter.
Sales of ball sports products (Wilson tennis, golf and team sports) decreased by 12 percent to €144.0 million, a 4 percent decrease in local currency. The division’s EBIT went down by 21 percent to €15.7 million, with a 12 percent currency-neutral drop. All product categories recorded declines, led by golf with a 21 percent sales decrease partly due to the closure of a golf ball factory and to a move to a licensing mode in Japan. Racquet sports sales were off by 4 percent to €62.6 million, or by 3 percent in local currencies. Total segment sales rose by 8 percent in the Europe, Middle East and Africa (EMEA) region in constant currencies, but fell by 5 percent in the Americas.
The fitness segment saw a 23 percent decrease (13 percent in local currencies) to €57.0 million, due mainly to slowing demand in the USA for its home fitness products, but sales to health clubs continued to thrive in North America and the EMEA thanks to the introduction of Precor’s new Adaptive Motion Trainer. The EBIT of the division declined by 63 percent to €3.7 million.
Geographically, Amer saw growth of 12 percent in sales to €157.7 million in the EMEA, but they dropped by 16 percent in terms of euros to €173.1 million in the Americas and by 5 percent to 32.2 million in the Asia-Pacific market.
At the request of Novator, which has become a significant shareholder in the group, a new extraordinary general meeting will be held on June 4 to elect a new board of directors.
