Amer Sports net sales slipped 1 percent to €315.6 million ($454 mm) for the April through June quarter compared to sales of €317.5 ($405 mm) in the same quarter of 2010. The Finnish maker of sporting goods said that translated to 6 percent growth on a local currency basis.
Except for Racquet Sports and Golf, all business areas exceeded the Groups average growth rate of 6%. Sales rose 14.5 percent to €133.4 million ($192 mm) in Winter and Outdoor, declined 11.4 percent to €136.3 million ($196mm) in Ball Sports/Wilson and slipped 2.5 percent to $45.9 million ($66 mm) in Fitness/Precor. In local currencies, EMEA increased by 10% and the Americas by 7%, and Asia Pacific decreased by 7%.
Group EBIT was -€10.9 million (-$16 mm), an improvement from last years -€16.9 (-$22 mm). In local currencies, increased sales volumes contributed €6.3 million to EBIT growth, partly offset by -€1.9 million due to lower gross margins. The gross margin declined 40 basis points to 42.3% in April-June 2010 due to Racquet Sports. Operating expenses decreased by €2.4 million.
The second quarter is typically a low season for Amer Sports as focus is mostly on order intake, noted Heikki Takala, president and CEO.
In 2011, Amer Sports expects its full-year net sales in local currencies to grow at a similar rate as in the first half of the year and EBIT margin excluding non-recurring items to improve by approximately one percentage point from 2010.
The pre-orders for the fall/winter season are strong and our full-year outlook is solid, he said. Our 6% currency-neutral sales growth in the second quarter was broad-based with highest growth rates in Footwear, Apparel and Cycling. Ball Sports was challenging, with Team Sports growth offset by Racquet Sports and Golf which were adversely impacted by the poor spring weather conditions especially in North-America, and tennis further impacted by the disaster in Japan. Our Fitness business continued to strengthen: sales were up and profitability continued to improve.
The overall higher order book together with earlier production of winter sports equipment to ensure improved customer service resulted in a lower cash flow in the second quarter compared to last year.
Looking forward, raw material cost increases remain a challenge and we are continuing our mitigation actions to safeguard the 2010 gross margin level, Takala said.
