Amer Sports(US:AS)2025-11-18 14:02Financial Data and Key Metrics Changes - Amer Sports reported a 30% growth in sales for Q3, with an adjusted operating margin increase of 130 basis points and adjusted EPS more than doubling compared to the previous year [5][22][24] - Adjusted gross margin increased by 240 basis points to 57.9%, driven by favorable channel, geographic, product, and brand mix [23][34] - Adjusted net income for Q3 was $185 million, compared to $71 million in the prior year, with adjusted diluted EPS rising to $0.33 from $0.14 [24][40] Business Line Data and Key Metrics Changes - Technical apparel revenues increased by 31% to $683 million, led by Arc'teryx, with direct-to-consumer growth of 46% [25][29] - Outdoor performance segment revenues rose by 36% to $724 million, driven by strong performance in Salomon footwear and apparel [29][34] - Ball and racket segment revenue increased by 16% to $350 million, with soft goods more than doubling in growth [35][36] Market Data and Key Metrics Changes - Regional growth was led by Asia-Pacific, which increased by 54%, followed by China at 47%, EMEA at 23%, and the Americas at 18% [22][23] - Salomon footwear saw strong demand across all regions, particularly in Asia, with significant growth in both sports style and performance products [13][15] - The company experienced double-digit revenue growth across all four regions in Q3, with momentum continuing into Q4 [6][22] Company Strategy and Development Direction - Amer Sports aims to leverage its unique portfolio of premium brands to capture market share in the sports and outdoor sectors [7][8] - The company is focusing on expanding its direct-to-consumer channels and optimizing its retail footprint, particularly in Greater China and North America [28][30] - The strategy includes opening new flagship stores and enhancing brand presence in key metro markets [15][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong brand performance and market demand [7][20] - The company anticipates continued momentum into 2026, with revenue growth expected towards the high end of its long-term algorithm [43][44] - Management addressed the impact of the September fireworks incident, noting a temporary dip in sales that has since rebounded [8][47] Other Important Information - Corporate expenses increased to $38 million from $23 million in the prior year, reflecting ongoing investments in growth [24] - The company plans to open approximately 25 net new Arc'teryx stores for the full year, with a focus on optimizing store quality and productivity [26][27] - Amer Sports expects to generate solid operating cash flow growth for the full year of 2025 compared to 2024 levels [39] Q&A Session Summary Question: Impact of the fireworks incident on sales in China - Management noted that Arc'teryx's sales trends were softer at the beginning of Q4 but have since rebounded as weather has cooled [47][48] Question: Confidence in guiding 2026 revenue growth - Management expressed confidence in achieving mid-teens growth in 2026, supported by a solid foundation built in 2025 [50][51] Question: Update on Salomon's U.S. market penetration - Management highlighted the importance of the epicenter strategy and the need to build fundamentals in the U.S. market [62][66] Question: Long-term opportunity for Tennis 360 stores - Management discussed the growth of Tennis 360 stores in North America, focusing on southern states and expanding into new markets [77][78] Question: Margin expansion drivers for next year - Management indicated that margin expansion will primarily be driven by gross margin improvements and strategic investments in SG&A [81][82]