In an appropriate end to what has been an arduous year for Amer Sports, the company has slashed its profit outlook for fiscal 2008, citing waning sales in November and December. Weak fourth quarter sales for the Finnish sporting goods manufacturer prompted the company to issue a statement confirming it will not reach its EBIT guidance of 80 million to 90 million ($108 mm to $121 mm) for the year.
Representatives for the company said declining sales are due primarily to softness in Precor fitness products and winter sports equipment, which includes the Atomic, Dynamic, Volant and Oxygen brands.
Management noted that demand for Precor products maintained through October, but has flagged during the past two months due to less-than-favorable market conditions. Because the fourth quarter is seasonally important for Precor, Amer Sports said declining sales have had a more significant impact on full-year results.
The company continues to adjust the Precor cost base to adapt to the prevailing market conditions.
Within the winter sports equipment segment, re-orders have dipped below expectations despite favorable weather conditions that kicked off the ski season. Declining re-orders have been a direct result of general cautiousness among retailers regarding the lagging economy, said management. However, even if re-orders are slower-than-expected, the segments results in 2008 will improve compared with last year as a result of completed “efficiency improving measures.”
For the previous quarter ended September 30, Amer Sports reported a 6% drop in net sales from the year-ago third quarter. Earlier in the year, Amer Sports eliminated 568 jobs, or 8.5% of the companys payroll. That cut included 295 jobs in the Americas.
This marks the third time this year Amer Sports has adjusted profit guidance.
