Amer Group had a breakout quarter in Q1, with currency-neutral sales increasing across all divisions with the exception of Suunto. The divestiture during the quarter of the Tobacco business dropped some additional benefit to the bottom line and now positions the company as a sporting goods pure play.
Total company net sales increased 4.3% in Q1 to 293.4 million ($366.5 mm) for the 2004 first quarter, from sales of 281.2 million ($301.7 mm) in the year-ago period. Currency-neutral sales increased 12.5% for the period.
The Americas made up 59.5% of total company sales, while the EMEA region, which includes Europe, the Middle-East, and Africa, contributed 32.1% of sales. Asia-Pacific was 8.4% of the total. Sales in the Americas grew 3.7% in the Euro reporting currency to 174.5 million ($218.0 mm), EMEA gained 6.3% in Euros to 94.3 million ($117.8 mm) and Asia-Pacific sales inched up 1.7% to 24.6 million ($30.7 mm) when measured in Euro terms.
As indicated on the following chart, sales in local currencies tell a much different story. With almost 60% of the companys business done in the Americas, its interesting to note that sales would have grown 21.5% if measured in U.S. dollars.
Net profit was up 133.6% to 30.6 million ($38.2 mm), or 1.29 ($1.61) per diluted share, from 13.1.6 million ($14.1 mm) or 0.55 (59¢) per diluted share, in Q1 last year. EBIT increased 126.7% to 46.7 million ($58.3 mm) from 20.6 million ($22.1 mm) in the year-ago period.
Excluding a one-time benefit from the sale of the Tobacco business, EBIT would have increased 39.3% to 28.7 million ($35.9 mm). The now year-old reorganization of Wilsons U.S. businesses and “associated adjustment of Wilsons cost structure to correspond to prevailing business”, was also said to have improved the Groups EBIT in the first quarter.
Winter Sports division net sales grew 11.6% to 28.9 million ($36.1 mm) from 25.9 million ($27.8 mm) in Q1 2003. The divisions seasonal EBIT loss widened 41.7% to -5.1 million (-$6.4 mm) versus -3.6 million (-$3.9 mm) in Q1 LY, hurt by a decline in average selling prices and some investment in “strengthening the distribution network, especially in Japan”.
Sales in Winter Sports grew by 30% in the EMEA region and 12% in the Americas. Alpine skis sales grew 11%.
Sports Instruments (Suunto) division net sales declined 6.5% in the quarter to 18.8 million ($23.5 mm) from 20.1 million ($21.6 mm) in the year-ago period. EBIT also declined in the period to 1.8 million, a decrease of 18.2% versus EBIT of 2.2 million in the year-ago period. In local currencies, Suuntos net sales declined by 4%.
Geographically, EMEA sales declined 4% and Americas sales declined 6% in the period. Sales fell due to the declines in Suuntos non-core product groups, including diving and watersports suits. Sales of Suuntos wristop computers grew by 9% and Suuntos diving instruments grew by 2%. Wristop computers and diving instruments accounted for 61% of Suuntos net sales.
Amer Group employed 4,046 people at the end of the period under review compared to 4,085 at the year-end and an average of 4,177 during the period.
