Amer Sports, Inc. posted sales and profits ahead of its guidance on Tuesday morning, with growth largely driven by its Arc’teryx brand.
The newly public Finnish company, which owns the Salomon, Arc’Teryx, Wilson, Peak Performance and Atomic brands, reported a 13 percent revenue increase in Q1 to $1.2 billion. Net income was $7 million, down from $19 million in Q1 the prior year. Diluted earnings per share was 1 cent compared to $5 cents the prior year. Adjusted gross profit margin grew 110 basis points to 54.3 percent in Q1, a jump largely driven by the technical apparel group and the high profit Arc’teryx brand.
Amer was looking for revenue growth between 6 and 8 percent, with an adjusted gross margin of 53.5 percent and diluted EPS between a loss of 1 pent per share and earnings of 2 cents per share.
Watch on FN
Amer Sports chief executive officer James Zheng said the company, which listed on the New York Stock Exchange in February, is seeing strong momentum that will likely carry through 2024.
“Our transformation to a brand-direct business model four years ago continues to fuel profitable growth today, and our high-performance technical products are resonating with consumers globally,” Zheng said. “We are gaining share in the premium sports and outdoor market and are well positioned to deliver another great year in 2024.”
By brand segment, revenues for technical apparel, which includes Arc’teryx and Peak Performance, were up 44 percent year-over-year to $510 million. The outdoor performance segment, which includes the company’s Salomon brand, saw revenues grow 6 percent to $400 million. The Ball & Racquet category, which includes the challenged Wilson brand, experienced a 14 percent year-over-year decline in sales to $273 million.
Amer Sports’ chief financial officer Andrew Page said in a statement that while the company faced “difficult comparisons for our wholesale businesses” in the first quarter, the growth led by Arc’teryx has allowed the company to “deliver great business performance and strong returns for shareholders, while reinvesting in our key opportunities.”
Amer slightly raised part of its guidance for the full year of 2024. The company still expects revenues to increase in the mid-teens, with an adjusted gross margin of about 54 percent, compared to a prior outlook of between 53.5 and 54 percent. Diluted EPS is still expected to be in the range of 30 cents to 40 cents. The Technical Apparel category is now expected to achieve revenue growth of over 25 percent, compared to a prior outlook of 20 percent. Outdoor Performance is shooting for mid-to-high single-digit revenue gains and Ball & Racquet predicts low-to-mid-single digit revenue increases.
For the second quarter, Amer projects revenues to grow 10 percent, with gross margin of 54 percent. Diluted EPS is expected to be between a loss of 4 cents per share and a loss of 8 cents per share.
Arc’teryx kicked off the spring 2024 season with a new focus on footwear, which includes a new shoe line designed and created in house, as opposed to relying on resources from Salomon, which it had done previously. Arc’teryx opened a footwear office in Portland, Ore. in 2022 and expanded its footwear team to 12 people, up from just four last year.
