Wrapping up a strong year across its brand portfolio in 2024, Amer Sports reported that its Outdoor Performance segment delivered a great quarter led by Salomon footwear and apparel, partially offset by softer trends in Winter Sports Equipment.
Salomon footwear and apparel now represent approximately two-thirds of the Outdoor Performance segment, including the Salomon, Atomic and Armada snow sports equipment brands, up significantly from the 54 percent share in 2022. Unfortunately, that also means the brand’s Winter Sports Equipment business is only one-third of the business today and does not look to be positioned for out-sized growth anytime soon.
Salomon sneakers surpassed $1 billion in sales in 2024, but Amer Sports CEO James Zheng said it is still tiny relative to the $180 billion global sneaker market.
“We believe Salomon sneakers have an authentic and unique market position with technical features designed for the mountain, but also great for everyday use,” said Zheng on a conference call Tuesday, February 25, with analysts. “Our unique style and technical attributes are resonating with consumers at a time when they are more receptive than ever to wearing new sneaker brands. Long term, we expect Salomon softgoods to grow double-digits annually.”
The Outdoor Performance Segment saw revenues increase 13 percent (+14 percent cc) to $594 million in the fourth quarter, said to be mainly driven by very strong performance in Salomon footwear, apparel, bags, and socks.
The Direct-to-Consumer (DTC) channel grew in strong double-digits year-over-year, reportedly driven by new store openings, especially in Asia Pacific, Greater China and the EMEA, as well as e-commerce development in all regions. This growth was said to be partially offset by a decline in Winter Sports Equipment due to soft reorders in Europe resulting from poor snow conditions and a material currency drag due to its large euro exposure.
Outdoor Performance DTC grew 58 percent year-over-year, led by Greater China and APAC, and segment Wholesale improved by 1 percent, from a slight decline last quarter. The Wholesale results were apparently impacted by continued soft Wholesale market conditions in EMEA and North America for Winter Sports Equipment.
Winter Sports Equipment Challenged
In Winter Sports Equipment, Zheng noted in his prepared remarks that the Atomic brand continues to win with both leisure skiers and world-class professionals. “Atomic had great momentum at the World Championships in Austria this month,” he emphasized. “Atomic athletes Mikaela Shiffrin and Breezy Johnson won gold on our iconic Redster skis.”
However, company CFO Andrew Page said 2024 was challenging overall for the Winter Sports Equipment market due to slower trends in North America, where ski equipment sales are rebasing after a strong run through and beyond COVID; this is in addition to cautious orders in the EMEA after two tough snow seasons in Europe.
“However, given our great brands and products and scale advantages, we believe we are taking market share, especially in Atomic,” he suggested. “Our assumption is that the Winter Sports Equipment market will be relatively flat in 2025. In the long term, while the Winter Sports Equipment business will be a slower growth business for us, the industry remains healthy, and we expect this business to grow low-single-digits annually.”
Softgoods Driving Overall Growth
The company said Salomon footwear and apparel accelerated growth in every region, led by Greater China, APAC and the EMEA. According to Zheng’s comments, DTC remained the strongest growth channel for the Salomon brand, and the Sportstyle offering continues to lead footwear growth. He said that Salomon apparel, bags and socks are also experiencing great momentum.
Regionally, Salomon Softgoods are reportedly experiencing great sell-through in Europe. Zheng said the company’s has noticed two new, important trends in Europe worth calling out:
- Salomon performance sneakers are experiencing a demand recovery in Europe.
- Salomon pre-orders have shifted to solid positive growth after negative trends during the last couple years when retailers were relying on at-once orders to chase demand.
“We are increasingly seeing Salomon sneakers sell through very well at retail, which is translating to stronger order books,” he said. “We also opened two new Salomon shops in the quarter in European epicenters London and Milan.”
Footwear is King in U.S. Market
In the U.S., Zheng said the brand continues to lay the groundwork for Salomon footwear’s long-term opportunity.
“Our first U.S. store, a pop-up shop in New York City, continues to perform very well. We are [also] seeing strong early brand buzz with key sneaker retailers across New York City, and we expect to open at least one more Salomon shop in New York this year,” he shared.
“The Wholesale channel will be important to unlock Salomon’s potential in the U.S., and we are beginning to successfully leverage Salomon brand heat to expand our presence with top-tier existing customers, such as Nordstrom and Kith, as well as adding key new retailers, including Shoe Palace and Scheels,” Zheng detailed.
DTC Driving Sales in Asia
In Asia, DTC continues to be Salomon’s critical growth channel. The Salomon “compact shop” format developed in China is reportedly “working very well.” The CEO said these stores generate significantly higher sales-per-square-foot than the industry average.
“We are continuing to expand Salomon shops in Greater China, opening 31 net new Salomon shops in Q4, including both owned stores and partner stores, bringing our total count to 196 in Greater China, Zheng said. He added, “We believe Salomon has the opportunity to grow to several hundred locations over time in just Tier 1 and Tier 2 cities in China. And in 2025, we expect to open about 100 new Salomon shops in Greater China, including partner doors.”
Zheng said the new Salomon flagship in Shanghai has performed very well in the first few months, suggesting that the store represents “pinnacle brand expression” of the brand in China, which “combines footwear and apparel in a comprehensive offering and a highly immersive brand experience.”
Outdoor Performance adjusted operating profit margin expanded 190 basis points from last year’s record performance to 11.1 percent of segment revenues this year, reportedly driven by solid gross margin expansion given the higher mix of footwear, which carries a higher gross margin than Winter Sports Equipment.
This gross margin expansion was partially offset by SG&A deleverage to support growth investments.
Outlook
Looking ahead to the 2025 full year for the Outdoor Performance (Salomon/Atomic/Armada) business, Amer Sports sees low-double-digit revenue growth for the year and an Adjusted operating margin of approximately 9.5 percent of revenue for the Outdoor Performance business in 2025.
Imager courtesy Salomon/Atomic/Amer Sports
