The largest brand in Amer Sports’ Technical Apparel segment, Arc’teryx, spearheaded the group’s better-than-expected Q2 results and helped to push its stock price up more than 10 percent yesterday. With the results, the Salomon and Wilson parent lifted its full-year sales and adjusted operating margin guidance.
Upgraded FY forecast
Amer Sports is now forecasting FY revenue growth of 15 to 17 percent sales growth, bolstered by a 30 percent sales increase in Technical Apparel, mid-to-high-single-digit revenue expansion in its Outdoor Performance segment, and a low-to-mid-single-digit sales uptick in the Ball & Racquet segment. The annual adjusted gross margin is now pegged at 54.5 percent, and the full-year adjusted operating margin is now forecast to hit the high end of 10.5 to 11.0 percent.
Technical Apparel will pave that growth with a 20 percent adjusted operating margin for the FY, followed by a high-single-digit rate for Outdoor Performance and a single-digit rate for Ball & Racquet.
In Q2 ended June 30, the group’s operating loss was $8.5 million against a profit of $7.5 million. The adjusted operating profit increased by 40 percent year-over-year to $29 million. The net loss, helped by a nearly $52.0 million tax benefit, was $1.8 million versus a net loss of $97.0 million in the year-ago period. Gross margin improved by 230 basis points to 55.5 percent from 53.2 percent.
| Amer Sports - Income | |||
|---|---|---|---|
| Quarter ended June 30 ($ million) | |||
| 2024 | 2023 | Change | |
| Revenue | 993.8 | 856.8 | 16.0% |
| Cost of goods sold | 442.5 | 400.2 | 10.6% |
| Gross profit | 551.3 | 456.6 | 20.7% |
| SG&A expenses | 560.2 | 445.3 | 25.8% |
| Impairment losses | 1.2 | 4.7 | -74.5% |
| Other operating income | 1.6 | 0.9 | 77.8% |
| Operating profit | -8.5 | 7.5 | – |
| Finance income | 2.5 | 1.8 | 38.9% |
| Finance cost | 47.7 | 101.1 | -52.8% |
| Net finance cost | 45.2 | 99.3 | -54.5% |
| Pre-tax | -53.7 | -91.8 | 41.5% |
| Tax | -51.9 | 5.2 | – |
| Net income | -1.8 | -97.0 | 98.1% |
| Diluted EPS | -0.01 | -0.25 | 96.0% |
| Source: Amer Sports | |||
China and Asia-Pacific shine
Total Q2 revenues rose 16 percent to $993.8 million from $856.8 million, bolstered by 38 percent constant currency growth for Technical Apparel to $407 million. Greater China paced regional growth with a sales increase of 54 percent, followed by 45 percent for Asia Pacific. Both EMEA and Americas’ revenues inched up by 1 percent in Q2.
Arc’teryx enjoyed “healthy” growth in all regions, channels and categories, led by footwear, women’s and hardshell jackets. The brand’s footwear business has increased to 10 percent of its revenues from 6 percent.
Meanwhile, the Outdoor Performance segment saw its constant-currency sales rise by 13 percent to $304 million in Q2 from the Salomon, Atomic and Armada brands. The business will name a permanent CEO over the next 12 months.
Amer believes its higher-margin Salomon footwear and apparel business has significant, double-digit growth potential in the global sneaker market over the long term. In Q2, that business showed strong traction in APAC and Greater China, where Salomon introduced an outdoor sneakers category targeting younger consumers. There are now 136 owned and licensed Salomon stores in China, with plans for 200 by year-end and eventually 200 more in tier 1 and tier 2 cities. There are also plans to open 1 or 2 New York City stores for the brand after a Salomon pop-up shop debuts in October.
| Amer Sports - Revenue | |||
|---|---|---|---|
| Quarter ended June 30 ($ million) | |||
| 2024 | 2023 | Change | |
| Regions | |||
| EMEA | 232 | 230 | 0.9% |
| Americas | 368 | 366 | 0.5% |
| Greater China | 289 | 188 | 53.7% |
| Asia-Pacific | 106 | 73 | 45.2% |
| Total | 994 | 857 | 16.0% |
| Channels | |||
| Wholesale | 545 | 536 | 1.7% |
| DTC | 449 | 321 | 39.9% |
| Total | 994 | 857 | 16.0% |
| Segments | |||
| Technical Apparel | 407 | 303 | 34.3% |
| Outdoor Performance | 304 | 274 | 10.9% |
| Ball & Racquet Sports | 283 | 280 | 1.1% |
| Total | 994 | 857 | 16.0% |
| Source: Amer Sports | |||
Ball & Racquet Sports with 2% growth
In its Ball & Racquet Sports segment, Amer Sports’ Q2 constant-currency sales rose by 2 percent to $283 million, fueled by improved retail sell-in. The company is pleased with its Tennis 360 strategy, sparking the expansion of Wilson Tennis 360 shops in China, new key product launches and the return of Roger Federer, who will have a collection of premium racquets, bags and accessories. Wilson is also launching its first female-specific tennis shoe called the Intrigue.
