Arc’teryx Pushes Amer Sports to Solid Sales Gains in First Quarter as a Public Company, But Loss Is Wider Than Expected
Amer Sports, Inc. reported strong sales on Tuesday morning, largely driven by its flagship Arc’teryx brand and strong sales in Greater China.
The newly public Finnish company, which owns the Salomon, Arc’Teryx, Wilson, Peak Performance and Atomic brands, reported a 10 percent revenue increase in Q4 to $1.32 billion. Net loss narrowed to $94 million from $148 million the prior year. Diluted loss per share was 25 cents, compared to 39 cents the prior year.
Q4 adjusted loss per share was 11 cents, wider than the expected 1 cents per share loss analysts were expecting.
Gross profit margin grew 170 basis points to 52.2 percent in Q4, a jump largely driven by the high profit Arc’teryx brand.
Amer Sports chief executive officer James Zheng said the company, which listed on the New York Stock Exchange in February, is still in early stages of growth.
“We are winning in the premium segment of the sports and outdoor market, which remains healthy and growing,” Zheng said. “Driven by our technical performance products, we believe [our] brands resonate strongly with consumers everywhere, but are still relatively small players on the global stage. Looking forward, our confidence is enhanced by the fact that our highest margin brand, region, channel, and category are growing fastest.”
For the full year of 2023, Amer Sports’ revenue increased 23 percent to $4.37 billion. Revenues in Greater China, which led regional growth, increased 61 percent. APAC sales grew 40 percent, Americas grew 15 percent and EMEA grew 14 percent. The company reported a net loss of $209 million, or 54 cents per share, compared to a loss of $253 million, or 66 cents per share, in 2022.
DTC sales were up almost 50 percent in 2023, largely driven by strong direct sales from Arc’teryx in the Americas and Greater China. Wholesale revenues were up 12 percent in 2023, driven by growth in Greater China and APAC.
By brand segment, revenues for technical apparel, which includes Arc’teryx and Peak Performance, were up 45 percent year-over-year in 2023 to $1.59 billion. The outdoor performance segment, which includes the company’s Salomon brand, saw revenues grow 18 percent year-over-year in 2023 to $1.67 billion. The Ball & Racquet category, which includes the Wilson brand, experienced a 7 percent year-over-year increase in sales to $1.11 billion.
For the full year of 2024, Amer expects revenues to increase in the mid-teens, with an adjusted gross margin of between 53.5 and 54 percent. Diluted EPS is expected to be in the range of 30 cents to 40 cents. The Technical Apparel category is expected to achieve revenue growth of over 20 percent, followed by Outdoor Performance which is shooting for high-single-digit revenue gains, and Ball & Racquet, which predicts low-to-mid-single digit revenue increases.
Building off of Arc’teryx’s momentum, the brand is kicking off the spring 2024 season with a new footwear line designed and created in house, as opposed to relying on resources from Salomon, which it had done previously. Arc’teryx opened a footwear office in Portland, Ore. in 2022 and expanded its footwear team to 12 people, up from just four last year.
For the first quarter, Amer projects revenues to grow between 6 and 8 percent, with an adjusted gross margin of 53.5 percent. Diluted EPS is expected to be between a loss of 1 pent per share and earnings of 2 cents per share.
“Strengthening our balance sheet and deleveraging the business will remain a key focus while balancing investments in key growth drivers,” chief financial officer Andrew Page said in a statement. “We are off to a solid start in 2024 as we continue to enjoy benefits from our business mix shifting toward our high-margin Arc’teryx brand.”