In a new report, the rating agencies Moody’s and S&P reveal that Amer Sports’ revenues fell by 36 percent in the second quarter and by 22 percent in the first half, hampered by the impact of the pandemic. Ebitda showed a loss of €26 million for the first half, against a profit of €34 million last year. The softgoods category fared the best, with declines of 10 percent in footwear and 15 percent in apparel for the first half. A highlight was direct-to-consumer online sales in China, which surged by 75 percent.

The agencies believe that this partly owned subsidiary of Anta Sports Products has adequate liquidity to operate through the year. Moody’s assigned a B3 rating to the company’s new €100 million guaranteed senior secured term loan due 2026, which adds to its existing €1.7 billion loan due 2026. It also noted that Amer Sports has been able to keep gross margins virtually flat. In addition, Amer rebounded in June, with sales down by just 16 percent, which led Moody’s and S&P to forecast that third and fourth quarter revenues will be down by 15 and 9 percent, respectively.

S&P highlighted the effects of the company’s implementation of its €400 million programs to cut operating expenses and supply costs. However, it has reservations about Amer’s equipment business as it anticipates that the winter sports business could suffer from a reduction in ski holidays.

The rating agencies noted that the company remains highly leveraged as a result of the Anta-led buyout. But the outlook on the debt remains negative because of the uncertainty surrounding the pandemic. Other strengths for Amer are strong brand names and the prospect of developing the DTC channel in China, especially with the Arc’teryx brand.