Amer Sports widened its loss in the second quarter as sales inched up 2.1 percent. On the positive, side, strong double-digit growth was seen in its strategic priority areas of apparel, own retail, e-commerce and China.
The company’s brands include Salomon, Wilson, Atomic, Arc’teryx, Mavic, Suunto and Precor.
The loss in the quarter reached €24.0 million against a loss of €14.7 million a year ago. Sales improved 2.1 percent to €487.3 million form €477.4 million.
Gross profit in the quarter increased to €216.8 million from €213.6 million but slipped as a percent of sales to 44.5 percent from 44.7 percent.
EBIT excluding non-recurring items showed a loss of €24.8 million against a loss of €12.1 million in the same period a year ago. Including charges, EBIT showed a loss of €23.8 million against a loss of €12.1 million.
In the six months, sales rose 1.7 percent to €1.15 billion from €1.11 billion. EBIT excluding non-recurring items fell to €13.4 million from €33.9 million in the same period a year ago. The net loss came to €4.5 million against net earnings of €8.5 million.
Among its segments, sales in its Outdoor segment grew 3.2 percent to €238.3 million from €231.0 million and added 3 percent on a currency-neutral basis.
In the Ball Sports segment, sales reached €167.5 million against €165.5 million, up 1.2 percent on a reported basis and flat on a currency-neutral basis.
In its Fitness segment, sales rose 0.7 percent to €81.5 from €80.9 million and was up 1 percent on a currency-neutral basis.
By region, sales in the EMEA were down 2.3 percent to €170.5 million from €174.8 million and declined 2 percent on currency-neutral basis.
Americas’ sales were up 3.6 percent to €238.0 million from €229.8 million and gained 4.2 percent on a currency-neutral basis. In the Asia Pacific region, sales advanced 8.2 percent to €78.8 million from €72.8 million and grew 8 percent currency-neutral.
Heikki Takala, president and CEO, said, “In the second quarter, consumer demand for our brands continued to be high, and we grew at strong double-digit rate in our strategic priority areas Apparel, own retail, e-commerce, and China. Whilst our sell-through in most of the US wholesale market was strong, our sales into the channel were still down as we annualized the 2016 customer bankruptcies with now lower number of physical doors.
“In H1, we continued to pave the way for acceleration in Fitness and Sports Instruments, although the quarterly growth remains uneven. We invested into the company transformation and opened several new retail stores, grew our consumer database, and built further capabilities in e-commerce, own retail, and digital consumer engagement. We also completed our EMEA and North-American Go to Market re-organization into omni-channel model which is now well aligned to the changing consumer shopping habits to enable our future growth.
“In line with our expectations, entering into H2, we see the trading conditions gradually improving. This improvement, coupled with our robust pipeline of brand initiatives and strengthened omni-channel capabilities, is supporting our growth in the second half of the year and beyond. Importantly, we prioritize profitable growth, and continue to drive productivity, enabled by ongoing transformation and restructuring.”
OUTLOOK
In 2017, Amer Sports’ net sales in local currencies are expected to increase from 2016, despite short-term market softness. EBIT excluding non-recurring items is expected to be approximately at the level of 2016.
The growth in 2017 is expected to be biased to the second half of the year. EBIT excluding non-recurring items includes further accelerated investment into the company’s transformation toward omni-channel and digital to win in the fast changing market place. The company will continue to focus on growing the core business and the five prioritized areas: Apparel and Footwear, US, China, Business to Consumer, as well as digitally connected devices and services.
Photo courtesy arc’teryx
