Amer Sports (AS) Q1 2025 Earnings Call May 20, 2025 08:00 AM ET Speaker0 Thank you for standing by, and welcome to the Amur Sports First Quarter Fiscal twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer Thank you. I'd now like to turn the call over to Omar Saad, SVP, Capital Markets and Investor Relations. You may begin. Speaker1 Welcome, everyone. Thanks for joining Amherst Sports ...

Group 1 - Amer Sports, Inc. reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.15 per share, and showing an increase from $0.08 per share a year ago, representing an earnings surprise of 80% [1] - The company achieved revenues of $1.47 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.88%, compared to $1.18 billion in the same quarter last year [2] - Amer Sports has outperformed the S&P 500, with shares increasing approximately 12.3% since the beginning of the year, while the S&P 500 gained 1.4% [3] Group 2 - The earnings outlook for Amer Sports will be crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.02 on revenues of $1.15 billion, and for the current fiscal year, it is $0.69 on revenues of $5.95 billion [7] - The Leisure and Recreation Products industry, to which Amer Sports belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges ahead [8]

Core Insights - Amer Sports, Inc. is expected to report quarterly earnings of $0.15 per share, marking an 87.5% increase year-over-year, with revenues projected at $1.38 billion, reflecting a 16.5% year-over-year growth [1] Earnings Projections - Over the last 30 days, the consensus EPS estimate has been revised upward by 2.7%, indicating analysts' reassessment of their initial forecasts [2] - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3] Revenue Estimates - Analysts forecast 'Segment Revenue- Technical Apparel' to reach $637.72 million, a year-over-year increase of 25% [5] - 'Segment Revenue- Outdoor Performance' is estimated at $453.74 million, reflecting a 13.4% year-over-year change [5] - 'Channel Revenues- DTC' is expected to be $626.77 million, indicating a 28.2% increase from the prior year [5] - 'Channel Revenues- Wholesale' is projected at $751.97 million, showing an 8.4% year-over-year change [6] - 'Segment Revenue- Ball & Racquet Sports' is anticipated to reach $287.29 million, a 5.2% increase year-over-year [6] - 'Geographic Revenues- Asia Pacific' is estimated at $152.72 million, reflecting a significant 46.8% year-over-year change [6] - 'Geographic Revenues- Greater China' is projected to be $399.35 million, indicating a 28.8% increase from the prior year [7] - 'Geographic Revenues- EMEA' is expected to reach $376.04 million, a 4.8% year-over-year change [7] - 'Geographic Revenues- Americas' is estimated at $440.88 million, reflecting a 7.5% year-over-year increase [7] Profit Estimates - 'Adjusted Operating Profit- Technical Apparel' is projected to be $146.17 million, compared to $117 million from the previous year [8] - 'Adjusted Operating Profit- Ball & Racquet Sports' is expected to reach $14.33 million, up from $11 million year-over-year [8] - 'Adjusted Operating Profit- Outdoor Performance' is anticipated at $27.12 million, compared to $19 million in the same quarter last year [9] Stock Performance - Over the past month, shares of Amer Sports, Inc. have returned +39.7%, significantly outperforming the Zacks S&P 500 composite's +9% change [10]

Core Insights - The "2025 China Listed Company Brand Value Newcomer List TOP50" was released, showcasing a total brand value of 170.576 billion yuan, with Yamaffin Sports ranking first at 28.332 billion yuan [1][2]. Company Rankings - Yamaffin Sports (AS) leads the list with a brand value of 28.332 billion yuan, followed by Longqi Technology (603341) at 18.681 billion yuan and Chabaidao (HK02555) at 16.530 billion yuan [2]. - The 50th ranked company, Ananda (603350), has a brand value of 0.466 billion yuan [2]. Brand Value Distribution - Among the TOP50, 8 companies have a brand value exceeding 5 billion yuan, totaling 119.496 billion yuan, which accounts for 70.1% of the total brand value [2]. - The remaining 42 companies have a brand value below 5 billion yuan, totaling 51.079 billion yuan, representing 29.9% [2]. Industry Analysis - The TOP50 companies span 18 industries, with the daily consumer goods sector leading at a total brand value of 32.354 billion yuan, making up 19.0% of the total [3]. - The home appliance sector ranks lowest with a total brand value of 0.486 billion yuan, accounting for 0.3% [3]. Industry Tier Classification - The industries can be categorized into three tiers based on brand value: - First tier: Daily consumer goods and catering industries, with a combined brand value of 60.683 billion yuan, representing 35.6% [6]. - Second tier: Six industries including apparel, communication, transportation, equipment, electronics, and automotive, with a combined brand value of 91.934 billion yuan, accounting for 53.9% [6]. - Third tier: Ten industries with individual brand values below 10 billion yuan, totaling 17.960 billion yuan, which is 10.5% [6]. Industry Participation - The equipment industry has the highest number of companies in the TOP50, with 12 entrants, followed by the electronics industry with 11 [9]. - The internet and pharmaceutical industries each have 3 companies represented, while other industries have no more than 2 [9].

Revenue and Expenses - For the years ended December 31, 2024 and 2023, the company generated 72.8% and 69.4% of its revenue in currencies other than U.S. dollars, while 78.1% and 75.4% of its operating expenses were incurred in non-U.S. dollar currencies[555]. - The company recognizes revenue from services mainly upon the delivery of goods, with specific accounting practices for wholesale and direct-to-consumer channels[569][572]. Foreign Currency Exposure - A simultaneous strengthening of 10% in the U.S. dollar against foreign currencies would increase the fair value of net monetary assets and liabilities by $77.4 million and $62.8 million for the years ended December 31, 2024 and 2023, respectively[556]. - As of December 31, 2024 and 2023, 22.7% and 33.1% of the company's assets and 11.4% and 76.2% of its liabilities were subject to foreign currency exposure[556]. Liquidity and Credit Facilities - The company has a five-year revolving credit facility of $710 million, which was not utilized as of December 31, 2024, to assist with short-term liquidity needs[560]. - The average payment time for outstanding sales was approximately 40 days as of December 31, 2024, with the largest 20 customers representing about 33% of total accounts receivable[563]. Innovation and R&D - The company emphasizes innovation through continued investment in research and development at various innovation centers, focusing on meeting the evolving needs of athletes and consumers[564]. Inventory and Impairment - Inventory is carried at the lower of cost and net realizable value, requiring estimates related to future selling prices and customer behavior[575]. - Impairment testing is performed annually for goodwill, with key assumptions including forecasted cash flows and estimated discount rates[578][580]. Share-Based Compensation - Share-based compensation expense is recognized ratably over the requisite service period, with no stock options granted in 2024[583]. - Modifications to employee awards that increase total fair value will be recognized, with incremental fair value calculated based on the difference between modified and original awards[585]. - When modifications occur during the vesting period, the incremental fair value is included in the measurement of recognized services from the modification date until vesting[585]. - If a modification changes a share-based payment from cash-settled to equity-settled, the liability is remeasured and reclassified to equity[585]. Accounting Guidance - The company has adopted new accounting guidance, which is detailed in Note 2 of the audited consolidated financial statements[587].

Investment Rating - The report maintains a "Buy" rating for Amer Sports, indicating a positive outlook for the company's future performance [3][4][6]. Core Insights - Amer Sports reported strong financial performance for FY2024, with revenue reaching $5.183 billion, a year-on-year increase of 18%, and a net profit of $73 million, marking a return to profitability [3][4][6]. - The company expects double-digit revenue growth for FY2025, projecting a revenue increase of 13-15% despite adverse currency impacts [3][4][6]. - The report highlights significant growth in the Direct-to-Consumer (DTC) segment, which is a key driver of revenue, with DTC revenue growing by 42.7% in FY2024 [3][4][6]. Financial Data and Earnings Forecast - Revenue Forecast: - FY2023: $4.368 billion - FY2024: $5.183 billion (18% YoY growth) - FY2025E: $5.958 billion (15% YoY growth) - FY2026E: $6.774 billion - FY2027E: $7.587 billion [3][13] - Net Profit Forecast: - FY2023: -$209 million - FY2024: $73 million - FY2025E: $345 million - FY2026E: $452 million - FY2027E: $679 million [3][13] - Gross Margin: - FY2024: 55.4%, up 3 percentage points YoY - FY2025E: 56.5-57.0% [3][8][13] - Operating Profit Margin: - FY2024: 9.1%, up 2.2 percentage points YoY - FY2025E: 11.5-12.0% [3][10][13] - The report indicates that all three major business segments (Technology Apparel, Outdoor, and Ball Sports) showed positive momentum, with Technology Apparel leading growth with a 36% increase in revenue for FY2024 [3][4][6].

Investment Rating - The report assigns a positive investment rating to Amer Sports, indicating strong growth potential in the leisure goods industry [4]. Core Insights - Amer Sports reported a 23% revenue growth in Q4 2024, reaching $1.64 billion, with significant contributions from Technical Apparel, Outdoor Performance, and Ball & Racquet Sports segments [4][5]. - The company experienced a gross margin increase of 3.7 percentage points to 56.1%, driven by optimized business and product mix, as well as lower discount rates [5]. - For the full year 2024, Amer Sports achieved an 18% revenue growth to $5.18 billion, with notable increases in various segments and a significant reduction in leverage ratio from over 5 times to 1 time [5][11]. Revenue Growth by Segment - **Technical Apparel**: Revenue grew 33% to $750 million, primarily driven by the Arc'teryx brand, with DTC expansion increasing by 44% [6]. - **Outdoor Performance**: Revenue increased 13% to $590 million, benefiting from strong growth in Salomon brand products, particularly in the DTC channel [7]. - **Ball & Racquet Sports**: Revenue accelerated to a 22% growth, reaching $290 million, supported by strong performance in Tennis 360 [8]. Financial Overview - The company reported a net profit increase of 135% to $73 million for the full year, with a significant improvement in operating profit margin [5][11]. - For Q1 2025, revenue is expected to grow by 14%-16%, with a gross margin forecasted between 56.5%-57.0% [11]. - For the full year 2025, revenue growth is projected at 13%-15%, with an expected operating profit margin of 11.5%-12.0% [11]. Store Expansion Plans - Amer Sports plans to open 25-30 new Arc'teryx stores and increase Salomon stores in Greater China by 100 [12].

Investment Rating - The report maintains a "Buy" rating for the company, expecting a relative return of over 20% within the next six months [6]. Core Insights - The company reported a strong performance in FY2024, with revenue reaching $5.183 billion, a 19% increase year-over-year. Adjusted operating profit margin (OPM) was 11.1%, up 1.3 percentage points, and adjusted net profit was $236 million, a 329% increase [2]. - The company is optimistic about its growth prospects for FY2025, projecting a revenue increase of 13-15% and an OPM of 11.5-12%. The net profit is expected to be between $360 million and $390 million [3]. - The brand "Arc'teryx" is leading global expansion, and the company is well-positioned to capture market share in the growing sports and outdoor trends [4]. Summary by Sections Financial Performance - In Q4 FY2024, the company achieved revenue of $1.636 billion, a 24% increase year-over-year. Adjusted OPM was 13.6%, up 3.3 percentage points, with adjusted operating profit of $220 million, a 63% increase, and adjusted net profit of $90 million, a 388% increase [1]. - For the full year FY2024, revenue was $5.183 billion, with functional apparel revenue at $2.194 billion (up 38%), outdoor revenue at $1.836 billion (up 10%), and ball sports revenue at $1.153 billion (up 4%) [2]. Regional Performance - In Q4 FY2024, revenue from Greater China was $380 million, accounting for 23% of total revenue, with a 54% year-over-year increase. Revenue from the U.S. was $580 million, making up 36% of total revenue, with a 15% increase [1]. - For FY2024, Greater China revenue was $1.3 billion (25% of total revenue, up 54%), while U.S. revenue was $1.86 billion (36% of total revenue, up 7%) [2]. Future Guidance - The company expects Q1 FY2025 revenue to increase by 14-16%, with an OPM of 11-11.5% and net profit projected between $78 million and $84 million [3]. - The company anticipates continued strong growth driven by its premium brands and market expansion opportunities [5].

Investment Rating - The report maintains a "Buy" rating for Amer Sports, expecting a relative stock price increase of over 20% within the next six months [6]. Core Insights - Amer Sports reported a strong performance in FY2024, with revenue reaching $5.183 billion, a 19% increase year-over-year. Adjusted operating profit margin (OPM) was 11.1%, up 1.3 percentage points, and adjusted net profit was $236 million, up 329% [2]. - The company anticipates revenue growth of 13-15% for FY2025, with an OPM of 11.5-12% and net profit projected between $360 million and $390 million [3]. - The brand Arc'teryx is leading global expansion, contributing to a positive long-term growth outlook for the company [4]. - The company is well-positioned for strong growth in 2025, driven by robust trends in sports and outdoor activities, alongside an untapped market potential [5]. Summary by Sections Financial Performance - In Q4 FY2024, Amer Sports generated $1.636 billion in revenue, a 24% increase year-over-year. Adjusted OPM was 13.6%, up 3.3 percentage points, with adjusted operating profit of $220 million, a 63% increase, and adjusted net profit of $90 million, up 388% [1]. - For the full year FY2024, revenue was $5.183 billion, with functional apparel revenue at $2.194 billion (up 38%), outdoor revenue at $1.836 billion (up 10%), and ball sports revenue at $1.153 billion (up 4%) [2]. Regional Performance - In Q4 FY2024, revenue from Greater China was $380 million (23% of total), up 54%. Revenue from the U.S. was $580 million (36% of total), up 15%, while EMEA saw an 8% increase [1]. - For FY2024, Greater China revenue was $1.3 billion (25% of total), up 54%, U.S. revenue was $1.86 billion (36% of total), up 7%, and EMEA revenue increased by 4% [2]. Business Segments - The functional apparel segment, including brands like Arc'teryx, showed significant growth, with Q4 revenue of $745 million (up 34%) and a same-store sales growth of 29% [1]. - The outdoor segment, including Salomon, generated $594 million in Q4 revenue, up 14%, while the ball sports and racquet sports segment generated $296 million, up 23% [1].

Amer Sports, Inc. (NYSE:AS) Q4 2024 Earnings Call February 25, 2025 8:00 AM ET Company Participants Omar Saad - Senior Vice President, Capital Markets and Investor Relations James Zheng - Chief Executive Officer Andrew Page - Chief Financial Officer Stuart Haselden - Chief Executive Officer, Arc’teryx Conference Call Participants Lorraine Hutchinson - Bank of America Matthew Boss - JPMorgan Brooke Roach - Goldman Sachs Paul Lejuez - Citi Laurent Vasilescu - BNP Paribas Michael Binetti - Evercore John Kernan ...