Amer Sports, Inc. (Group), the parent of Arc’teryx, Salomon, Wilson, Peak Performance, Atomic, and Armada, among others, is reporting that the third quarter was “very strong” for the Group across all brands and geographies, by once again by Performance at Arc’teryx.

“Led by Arc’teryx, our unique portfolio of premium technical brands continues to create white space and take market share in sports and outdoor markets around the world,“ company CEO James Zheng offered. “We are executing against our largest growth opportunities in Arc’teryx and Salomon footwear, while our market-leading Ball & Racquet franchise experienced a growth acceleration.”

Third-quarter consolidated revenue increased to $1.35 billion, representing 17 percent growth on both a reported and constant-currency (cc) basis.

Segment Summary

  • Technical Apparel, which primarily includes the Arc’teryx brand business, increased 34 percent (+33 percent cc) year-over-year (y/y) to $520 million in Q3. Omni-comp growth, which reflects year-over-year revenue growth from owned retail stores and e-commerce sites that have been open for at least 13 months, was 20 percent for the third quarter, a sequential decline from the 33 percent growth seen in the second quarter. Third quarter Adjusted operating margin increased 370 basis points y/y to 20.0 percent.
  • Outdoor Performance, primarily comprised of Salomon brand sales, increased 8 percent (+7 percent cc) year-over-year to $534 million for the third quarter. Sequentially, the increase fell short of the double-digit growth reported in the second quarter. Adjusted operating margin decreased 40 basis points y/y to 17.5 percent of sales for the third quarter.
  • Ball & Racquet Sports, primarily comprised of the Wilson Sports business, increased 11 percent y/y to $300 million in the third quarter. The growth trend represents a significant sequential increase from Q2 when sales were up only 1 percent in reported terms and 2 percent in constant-currency terms. Adjusted operating margin increased 600 basis points y/y to 6.9 percent of sales for the quarter.

Income Statement Summary

  • Gross margin increased 420 basis points y/y to 55.2 percent of sales in the third quarter; Adjusted gross margin increased 410 basis points y/y to 55.5 percent of sales.
  • Selling, general and administrative (SG&A) expenses increased 20 percent y/y to $586 million in Q3; Adjusted SG&A expenses increased 23 percent y/y to $572 million for the period.
  • Operating profit increased 69 percent y/y to $177 million in the third quarter; Adjusted operating profit increased 46 percent y/y to $195 million, including a $14 million government subsidy received in the third quarter that had been expected to occur in the fourth quarter.
  • Consolidated operating margin increased 400 basis points y/y to 13.1 percent of sales. Adjusted operating margin increased 280 basis points y/y to 14.4 percent of sales.
  • Net income increased 257 percent to $56 million, or 11 cents per diluted earnings per share; Adjusted net income increased 651 percent to $71 million, or 14 cents diluted earnings per share.

Balance Sheet Summary

  • Cash and equivalents totaled $312 million at quarter end.
  • Year-over-year inventories increased 12 percent at quarter-end.
  • Net debt at quarter-end was $1,987 million at quarter-end.

Leadership Transition
The company announced that Guillaume Meyzenq, Salomon’s chief product officer, was appointed president and CEO, effective January 1, 2025. Michael Hauge Sørensen, Amer Sports’s chief operating officer, has reportedly decided to step down and return to his former role as advisor to Amer’s Board of Directors.

Outlook
“Another quarter of high-teens organic growth accompanied by healthy gross- and operating-margin expansion reflects the combination of great brands and strong execution by our teams around the world. Very strong growth from our highest-margin Arc’teryx franchise combined with improving trends in both Ball & Racquet and Winter Sports Equipment give us the confidence to raise our full-year sales and earnings guidance,“ offered CFO Andrew Page. “As we begin to look beyond this year, we are also confident in our initial 2025 outlook and expect to deliver results consistent with our long-term financial algorithm of low-double-digit to mid-teens annual revenue growth and 30-70+ bps of annual adjusted operating margin expansion driven by gross margin expansion.”

Full Year 2024
Amer Sports is updating guidance for the year ending December 31, 2024. All guidance figures reference adjusted amounts.

  • Reported revenue growth: 16 percent to 17 percent
  • Gross margin: 55.3 percent to 55.5 percent.
  • Operating margin: towards the high-end of 10.5 percent to 11.0 percent.
  • D&A: approximately $270 million, including roughly $120 million of ROU depreciation.
  • Net finance cost: $200 million to $210 million, including approximately $15 million of finance costs in the first quarter 2024 that will not be recurring.
  • Effective tax rate: approximately 37 percent.
  • Fully diluted share count: approximately 500 million.
  • Fully diluted EPS: 43 cents to 45 cents per share.

Technical Apparel
Revenue growth of approximately 34 percent and segment operating margin slightly above 20 percent.

Outdoor Performance
Revenue growth of approximately 8 percent and segment operating margin high-single-digit percent.

Ball & Racquet
Revenue growth of approximately 4 percent and segment operating margin low- to mid-single-digit percent.

2025 Guidance
Amer Sports said it will provide full-year 2025 guidance during its earnings call for the year ended December 31, 2024.

Image courtesy Arc’teryx