Despite continued growth in its relatively small softgoods business, Amer Sports reported a 5 percent drop in sales to €410.6 million for the period ended Sept. 30, accompanied by a 12 percent decline in net income to €28.8 million. The gross margin dropped by 1.3 percentage points to 41.7 percent.
Sales in Europe, the Middle East and Africa (EMEA) were down by 1 percent to €204.0 million and were up by 5 percent in Asia-Pacific to €43.0 million. With heavy exposure in the U.S. commercial fitness market and weakness in U.S. winter sports and ball sports, sales in the Americas declined by 12 percent to €163.6 million.
The parent of Wilson, Salomon, Atomic, Precor and Suunto said it had seen little improvement in the outlook and maintains its forecast for a decline in operating profit (Ebit) for the year, as improvements from last year’s restructuring of the winter sports business will be more than offset by weakness in other businesses. Amer also confirmed that it was considering the sale of Mavic. It plans to maintain its focus on keeping costs low, saying that it doesn’t expect a quick rebound of the sporting goods market.
The winter sports business registered a 2 percent sales decline in the latest quarter to €262.4 million and Ebit for the unit fell by 4 percent to €44.1 million in a seasonally key quarter. Winter sports equipment, which includes Salomon and Atomic, had a 7 percent decline in sales to €119.6 million. Amer noted that, while orders are considerably down in North America, the overall order book is flat due to strength in Central Europe and Scandinavia for cross-country ski items and accessories.
Amer believes that its winter sports equipment operations will be profitable for the full year. There is a trend to sell more of these types of products at ski resorts and other locations closer to the mountains rather than in urban areas, and this is pushing back order dates. The tendency toward renting equipment instead of buying it is another factor.
The company’s apparel/footwear group had a 6 percent increase in sales to €99.3 million up by 7 percent in constant currencies. While the U.S. remained depressed, sales in Europe have been strong, especially for Salomon footwear. The Mavic cycling business had a 9 percent decline in sales to €21.5 million, and also hurt the group’s profitability because of a recall of its R-SYS wheel. The OEM business is expected to remain stagnant going forward.
Suunto was flat at €22.0 million. Diving instruments didn’t perform well in the U.S., but Amer expects this business to pick up a little.
Wilson’s sales decreased by 7 percent to €103.4 million and had the same decline in local currencies. Ebit declined by 7 percent to €21.3 million. Racquet sport sales were off by 7 percent to €52.8 million, in large part because Wilson will be bringing out a considerably revamped product line next year. Team sports sales dropped by 6 percent to €35.8 million amid general weakness; and golf sales were down by 7 percent to €14.8 million. Weakness in the U.S. market was a major factor in the quarter in all three businesses. Wilson’s sales in the EMEA were also generally down, but Asia-Pacific showed growth as Wilson’s penetration in China improved.
Precor’s Ebit fell by half to €1.4 million on a 19 percent sales decline to €135.2 million. The currency-neutral decline was 20 percent, and sales are now running at about half the peak achieved by the brand in 2007, Amer said. The bright spots were Precor’s new AMT elliptical trainer and its selectorized strength system, but the overall market remains weak for high-end fitness equipment in both the commercial and home sectors. Precor will get some manufacturing efficiencies next year when it replaces its strength training facility in California with a new plant in North Carolina.
