Amer Sports Corporation reported its first quarter under a new name last week, posting currency-neutral increases across all divisions with the exception of the Atomic Winter Sports group. The company had to anniversary big numbers from Q1 last year when currency-neutral sales grew 12.5%. The bottom line took a hit as the EBIT loss in the Winter Sports group widened by roughly 65% versus the year-ago period and both the Precor Fitness Equipment group and the Suunto Sports Instruments group posted declines in their EBIT lines.
Total company net sales increased 2.1% in Q1 to 277.8 million for the 2004 first quarter, from sales of 271.6 million in the year-ago period. Currency-neutral sales increased 5.0% for the period.
Sales in the Americas declined 0.1% in the Euro reporting currency to 174.3 million, while EMEA inched up 0.1% in Euros to 72.6 million and Asia-Pacific sales grew 11.1% to 30.9 million when measured in Euros. As indicated on the following chart, sales in local currencies tell a much different story. Sales would have increased 7.4% if measured in U.S. dollars.
Net profit for the companys ongoing businesses was down 15.0% to 14.2 million, or 0.20 per diluted share, from 16.7 million, or 0.23 per diluted share, in Q1 last year. EBIT declined 21.5% to 21.5 million.
Winter Sports Division net sales declined 8.3% to 26.5 million from 28.9 million in Q1 2004, with most of the decline coming out of the Americas. Sales fell 27% in the Americas and declined 4.0% in EMEA. The divisions EBIT loss widened nearly 65% to (8.4 million) versus (5.1 million) in Q1 last year. Amer said that increased investment in sales and marketing as well as the sales decline in North America were two of the main factors affecting EBIT.
Sports Instruments (Suunto) division net sales rose 6.4% in the quarter to 20.0 million, erasing the sales decline in the year-ago period. Geographically, EMEA sales were up 10% and sales in the Americas rose 5.0% in the period. Sales of Suunto's diving instruments grew by 15% and sales of wristop computers grew by 2.0% during the period. Diving and Watersports Suits grew by 10%. EBIT declined in the period to 1.7 million, a decrease of 5.6%. Sales fell due to the decline of sales of Suuntos non-core product groups which include diving and watersports suits. Wristop computers and diving instruments accounted for 62% of Suuntos net sales.
For the year, Amer Sports comparable net sales in local currencies are expected to grow by 3% to 5% compared with 2004. Earnings per share for 2005 are expected to be 0.90 to 1.05.