Amer Sports reported that first quarter net sales reached €449.1 million ($614mm) in the first quarter ended March 31, up 12 percent in currency adjusted terms and 20.5 percent in euro terms when compared to the first quarter of 2010.
Sales at its Winter & Outdoor division, which includes the ArcTeryx, Salomon, Atomic, Suunto and Mavic brands, reached €233.5 million ($319.2mm), up 28.5 percent in euros. Revenues rose 10.1 percent at the Ball Sports/Wilson division to €159.0 million ($217.4mm) and Fitness/Precor posted a 24.4 percent gain in revenues to €56.6 million ($77.4mm).
In local currencies, EMEA increased by 16 percent, the Americas by 9 percent and Asia Pacific by 4 percent.
Growth in Asia-Pacific was dampened by the effects of the earthquake and tsunami in Japan, which hit just as the Racquet Sports season there started.
Group EBIT was €25.7 million ($35.0mm), up 170.5 percent in euro terms. In local currencies, increased sales volumes contributed €28.7 million to EBIT growth, while higher gross margins contributed €3.0 million. Operating expenses increased by €14.9 million, driven by increased sales and distribution costs, but declined 280 basis point as a percentage of net sales to 37.9 percent. Net income reached €17.1 million ($23.0mm), compared to €300,000 a year earlier.
Net financial expenses totaled €4.3 million including net interest expenses of €4.5 million. Net foreign exchange gains totaled €200,000. Earnings before taxes totaled €21.4 million and taxes totaled €4.3 million. Earnings per share were €0.13.
Winter and Outdoor
Winter and Outdoor’s net sales in the review period totaled €233.5 million, an increase of 20 percent in local currencies. Net sales growth was driven by Footwear and Apparel. In geographic terms, the strongest growth was in the Americas. EBIT was €9.3 million. In local currencies, increased sales volumes contributed €21.3 million to EBIT growth. Operating expenses increased by €12.4 million due to increased sales and distribution costs.
Winter Sports Equipment net sales totaled €46.9 million, an increase of 6 percent in local currencies. Sales were up in all the main product categories. In regional terms, North America experienced the highest growth rate, fueled by good snow conditions. Footwear net sales totaled €91.1 million, an increase of 34 percent in local currencies. Growth came from hiking and trail running, and was strongest in EMEA. Apparel net sales totaled €38.9 million, an increase of 28 percent in local currencies. Growth occurred in all geographical regions.
Cycling net sales totaled €34.4 million, an increase of 8 percent in local currencies. Sales were up in all the main product categories. The strongest growth was in cycling apparel and shoes. Sports Instruments net sales totaled €22.2 million, an increase of 7 percent in local currencies. Sales of outdoor and training products grew double-digit.
Ball Sports net sales totaled €159.0 million, an increase of 2 percent in local currencies. Growth in the review period was driven by Team Sports. Net sales in EMEA and the Americas increased by 5 percent and 3 percent, respectively. In Asia Pacific, sales declined by 11 percent, driven by the soft tennis market and the aftermath of the earthquake and tsunami in Japan, the region’s largest market.
Racquet Sports net sales totaled €67.1 million, a decrease of 3 percent in local currencies. Racquet Sports was adversely impacted by the earthquake and tsunami in Japan where Wilson has a strong market position. Growth in EMEA offset the sales decline in Asia Pacific. Team Sports net sales totaled €71.3 million, an increase of 9 percent in local currencies. Growth in Team Sports was driven by bats, basketballs and ball gloves, the three largest product categories during the quarter.
Golf net sales totaled €20.6 million, a decrease of 5 percent in local currencies.
Fitness net sales totaled €56.6 million, an increase of 14 percent in local currencies. Sales were up in all geographic regions. The commercial business (clubs and institutions) sales were up by 13 percent in the review period. Consumer business (home use) was up by 21 percent in local currencies. In the North American fitness market, the commercial business started to show some early signs of recovery during 2010 and the market continued to improve through the first quarter of 2011. Fitness EBIT was €3.3 million. In local currencies, increased sales volumes contributed €3.7 million to EBIT growth while higher gross margins contributed €2.0 million. Operating expenses were €1.7 million higher than in the corresponding period last year mainly because of increased sales and distribution costs.
Outlook for 2011
In 2011, Amer Sports expects its net sales to continue to clearly exceed the Group’s long-term financial target of 5 percent annual currency-neutral growth. EBIT margin excluding non-recurring items is expected to improve from the level of 2010, or net sales €1,740 million and EBIT margin excluding non-recurring items of 6.2 percent.
Amer Sports strategic development programs are expected to continue to contribute positively to the Group performance in 2011. The sporting goods market is estimated to continue the recovery started in 2010, with regional and sports specific differences. In Footwear and Apparel, spring/summer pre-orders are indicating that the 2010 strong momentum will continue. Overall, Amer Sports expects its 2011 net sales to increase from 2010 and EBIT to improve.