Amer Sports, Inc. ((AS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Amer Sports, Inc. was marked by a predominantly positive sentiment, underscored by impressive revenue growth and an optimistic outlook. Despite facing some challenges, such as a fireworks incident in China and distribution issues in the U.S. for Salomon, the company maintained a strong overall momentum, highlighting successful brand performance across key segments.
Strong Overall Revenue Growth
Amer Sports reported a remarkable 30% increase in sales for Q3, showcasing double-digit growth across all segments and regions. Notably, the Asia Pacific region saw a 54% rise, with China alone contributing a 47% increase, reflecting the company’s robust market presence and strategic initiatives in these areas.
Salomon Footwear and Technical Apparel Performance
The Outdoor Performance segment was led by Salomon footwear, which experienced strong demand, particularly in Asia. Additionally, the Technical Apparel segment saw a 31% revenue increase, driven by the success of the Arc’teryx brand, further solidifying Amer Sports’ position in the market.
Increased Operating Margins and EPS
Amer Sports achieved a significant improvement in its financial metrics, with the adjusted operating margin increasing by 130 basis points to 15.7% in Q3. Furthermore, the adjusted EPS more than doubled, reaching $0.33, indicating strong operational efficiency and profitability.
Direct-to-Consumer Channel Success
The company’s direct-to-consumer sales surged by 51%, spearheaded by Salomon’s performance in Greater China and the APAC region. The omni-channel strategy for Technical Apparel also showed remarkable progress, with a reacceleration to 27% from 15% in the previous quarter.
September Fireworks Incident
An incident involving fireworks in China impacted Arc’teryx’s sales trends at the start of Q4. However, the company has noted a recovery, suggesting resilience and adaptability in managing unforeseen challenges.
Challenges with U.S. Distribution for Salomon
Salomon encountered distribution challenges in the U.S. as it exited certain retail and e-commerce channels. While this posed a hurdle, it did not significantly derail the overall positive trajectory of the brand.
Flat Growth in Baseball Segment
The baseball segment experienced flat growth, with bats showing positive trends but offset by declines in gloves and gear. This highlights the need for strategic adjustments to revitalize this segment.
Inventory Growth Ahead of Sales
Inventories grew by 28% year-over-year, slightly outpacing the 30% sales growth. This indicates a need for careful inventory management to align with sales trends and optimize supply chain efficiency.
Positive Outlook and Raised Guidance
Amer Sports provided robust guidance for fiscal year 2025, raising its full-year revenue growth expectations to 23-24% and adjusting its EPS guidance to $0.88-$0.92. Looking ahead to 2026, the company anticipates revenue growth towards the high end of its long-term algorithm, driven by strong brand positioning and consumer engagement, particularly in the Asia Pacific region.
In summary, Amer Sports’ earnings call painted a picture of strong financial health and strategic growth, with positive sentiment prevailing despite some challenges. The company’s impressive revenue growth, successful brand performance, and optimistic guidance for the future underscore its solid market position and potential for continued success.