Amer Sports (AS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 17% to $1,354 million, led by Arc'teryx and Ball & Racquet, with strong performance across all segments and geographies, especially Greater China and Asia Pacific.

• Premium technical brands, including Arc'teryx and Salomon, are gaining market share and driving growth and profitability.

• Arc'teryx expanded its store network, opened flagship locations, and launched innovative products such as the MO/GO powered hiking pant.

• Salomon and Wilson brands showed strong momentum, with Salomon expanding its store footprint and Wilson benefiting from Tennis 360 strategy.

• Leadership changes include a new CEO for Salomon and COO transition to advisory role.

Financial highlights

• Adjusted operating margin reached 14.4%, up from 11.6% last year, aided by a $14M government subsidy received earlier than expected.

• Adjusted gross margin increased 410 basis points to 55.5%, driven by favorable mix and lower discounting.

• Adjusted net income was $71M, compared to a net loss of $13M in Q3 2023; adjusted diluted EPS was $0.14, up from $(0.03).

• D2C channel grew 41% year-over-year; store count increased 49% to 453 locations.

• Inventories rose 12% year-over-year, below the 17% sales growth.

Outlook and guidance

• Raised full-year 2024 revenue growth guidance to 16%-17%, with technical apparel up ~34%, outdoor performance ~8%, and ball and racket ~4%.

• Increased full-year adjusted gross margin guidance to 55.3%-55.5%; adjusted operating margin expected at the high end of 10.5%-11%.

• Full-year adjusted diluted EPS now expected at $0.43-$0.45; effective tax rate ~37%.

• 2025 outlook targets low double-digit to mid-teens revenue growth and 30-70+ bps annual operating margin expansion.