Thirty-four days after raising $1.365 billion in an NYSE IPO, Amer Sports conducted its first earnings call as a public company yesterday. While the Arc’teryx, Salomon and Wilson parent delivered Q4 revenues some $20 million above expectations, the quarterly loss was wider than expected. Amre’s shares finished the trading day down by 5.1 percent to $16.45 a share, a price that was 23 percent higher than its IPO opening price.
Looking ahead, the group forecasted mid-teens revenue growth, an adjusted gross margin of 53.5 to 54.0 percent, and an adjusted operating margin of 10.5 to 11.0 percent for FY24. From a segment perspective, technical apparel is projected to pace sales and margin development with a revenue increase above 20 percent and an operating margin of slightly above 20.0 percent. Senior management told analysts that it remains pleased with technical apparel’s balanced growth in China and North America and the segment’s underlying DTC strengths as it develops a responsible growth path for the business. There are already plans to open 30 Arc’teryx stores in 2024, with half set to open in North America, including flagship locations in Toronto and New York City. Recently, a 1,860-sqm flagship debuted in Shanghai, China.
Elsewhere in FY24, Amer Sports, which benefitted from strong traffic and conversion trends in its stores and websites in Q4, expects its Outdoor Performance business to grow at a high-single-digit rate with a corresponding high-single-digit adjusted operating margin. The company says it continues to invest in the segment, particularly in North America and sees strength in its footwear part of the business.
Ball & Racquet Sports, meanwhile, are forecast to generate low-to-mid-single-digit revenue growth this fiscal year and a mid-single-digit adjusted operating margin. Amer said last year’s 14 percent segment growth rate, which included a lot of pipeline fill, is “not a sustainable number” for FY24 but is optimistic about product launches in tennis and baseball, including the Blade tennis racquet. In the bat market, Wilson is reverting to one-year product launches this year.
The group turned a $59.8 million operating profit in Q4 ended Dec. 31 on a 9.7 percent increase in revenues to $1,315.0 million. Wholesale revenues slipped by 4 percent to $759 million, but up by 37 percent in DTC to $556 million with the retail component increasing by 45 percent to $284 million.
Gross margin increased by 180 basis points to 52.0 percent from 50.2 percent, and the net loss improved by 36 percent year-over-year to a loss of $94.9 million against a loss of $148.3 million. Regionally, EMEA sales fell by 1 percent to $452 million; Greater China sales jumped by 45 percent to $246 million; Americas’ sales increased by 5 percent to $500 million; and Asia Pacific sales lifted 22 percent higher at $117 million. Category-wise, Technical Apparel was the big gainer, rising by 26 percent to $550 million. Meanwhile, Outdoor Performance sales increased by 2 percent to $523 million, and Ball & Racquet Sports sales bounced 3 percent lower to $242 million.
For FY23, the group reported an operating profit of $302.5 million against $50.6 million in the year-ago period and improved its annual net loss by 17 percent to a loss of $208.8 million against a loss of $252.7 million in FY22. Yearly gross margin grew by 240 basis points to 52.1 percent as annual sales expanded by 23 percent to $4.37 billion. Sales were up by double-digits across all regions, led by a 61 percent gain in Greater China to $841 million. Asia Pacific sales rose by 40 percent to $350 million with EMEA up 14 percent to $1,450 million and Americas’ revenues improved by 15 percent to $1,727 million. DTC paced channel growth, up by 49 percent to $1,559 million. Wholesale revenues increased by 12 percent to $2.81 billion. Among the segments, Technical Apparel led the development with 45 percent growth to $1,593 million. Meanwhile, Outdoor Performance annual sales increased by 18 percent to $1,668 million, and Ball & Racquet Sports rose by 7 percent to $1,108 million.
