Arc’teryx’s Sales Grew 11 percent In 2018

Amer Sports issued its annual report review for 2018 that showed Arc’teryx’s sales grew 11 percent last year to drive growth across Softgoods, a strategic growth priority for the company.

Softgoods’ net sales grew by 10 percent to €1.1 billion. Amer Sports said the target is to deliver a sales CAGR of 10 percent or more to grow the share of softgoods from the current 40 percent of sales to 50 percent in the mid-term. Beyond the gains at Arc’teryx, the growth was boosted by the purchase of Peak Performance, which added €84 million in revenue. Salomon’s softgoods sales declined 5 percent as commercial headwinds in EMEA offset strong growth in D2C and the USA. Amer wrote in its report, “We continued to act decisively to reignite Salomon growth, focusing on the quality of our distribution model.”

Among its other strategic growth priorities, Amer noted:

• Direct to Consumer (D2C) grew organically by 20 percent in 2018 to €330 million. The company’s target is to deliver a sales CAGR of 20 percent to grow the share of D2C from today’s 10 percent to 20 percent in the mid-term. Own retail grew by 15 percent, and e-commerce by 28 percent. By the end of 2018, Amer Sports said it had 364 own retail and partner stores, and 100 e-commerce stores. In addition to the strong D2C growth, Amer Sports said it continued to grow its e-tail sales (+15 percent), and its total modern channel sales reached 30 percent of the company sales.
• China’s sales grew 22 percent to €150 million. Amer Sports’ target is to deliver a CAGR of more than 20 percent to grow the share of China from today’s 6 percent to 10 percent of sales in the mid-term. The key driver in China is softgoods, especially Arc’teryx, and D2C.
• USA sales grew 5 percent. Amer Sports’ target is to deliver a mid-single digit CAGR in the USA. The sales trend re-accelerated in 2018, indicating that the company “had managed to reignite growth in the USA after challenging times with several wholesale customers disappearing from the market.”

Amer further noted that beside the progress in its strategic priorities, highlights in 2018 include its “strong progress in Winter Sports Equipment, which grew again 8 percent, and Baseball, which grew at double-digit rate, both at record-high profitability. Worth highlighting is also Suunto topline, which grew at double-digit level, although profitability was still below target. On the challenges side, Cycling continued to decline, and as communicated at our Capital Markets Day in September, we decided to place the Mavic business under strategic review with the objective to streamline out where-to-play choices.”

The company’s brands include Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson and Precor.

The full report is available here.