Amer Sports, Inc. ((AS)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Amer Sports, Inc. reflected a positive outlook, buoyed by impressive sales growth, margin expansion, and effective debt reduction strategies. Despite these successes, the company acknowledged challenges in specific segments, such as Winter Sports Equipment, and potential impacts from tariffs.
Record Sales and Margin Expansion
Amer Sports reported record sales, achieving a 23% growth in Q4 and an 18% growth for the year, culminating in $5.2 billion in revenue. The adjusted operating margin also saw a significant expansion, increasing by over 300 basis points in Q4 and 130 basis points for the year to reach 11.1%, marking new records for the company.
Strong Performance Across Key Brands
Key brands under Amer Sports demonstrated robust performance. Arc’teryx achieved over $2 billion in sales in 2024 with a 29% omni-channel growth in Q4. Salomon sneakers surpassed $1 billion in sales, and Wilson reclaimed the top spot in the U.S. market share for Performance Racquets.
Growth in Greater China and APAC
The Greater China and APAC regions delivered impressive growth, with sales increasing by 54% and 52% respectively in Q4. The opening of numerous new stores in these areas significantly contributed to the company’s revenue growth.
Significant Cash Flow and Debt Reduction
Amer Sports generated $425 million in operating cash flow for 2024 and successfully reduced its net debt to $600 million by the end of the year, substantially lowering its leverage.
Challenges in Winter Sports Equipment
The Winter Sports Equipment segment faced challenges due to poor snow conditions in Europe and a market rebasing in North America, resulting in a flat growth outlook for 2025.
High Effective Tax Rate
The company reported a relatively high adjusted effective tax rate of 42% in Q4. However, efforts are underway to reduce this rate in the future.
Exposure to Potential Tariffs
Amer Sports is facing potential impacts from new tariffs on imports from China, Vietnam, Canada, and Mexico, with the Ball & Racquet segment being particularly vulnerable.
Forward-Looking Guidance
Amer Sports provided robust guidance for 2025, anticipating a group revenue growth of 13% to 15% for the full year, with an adjusted gross margin between 56.5% and 57%. The adjusted operating profit margin is projected at 11.5% to 12%, focusing on the low end due to macroeconomic uncertainties such as FX and tariffs. Specific growth expectations include approximately 20% for Technical Apparel, low-double digit growth for Outdoor Performance, and low to mid-single digit growth for Ball & Racquet. The company also plans capital expenditures of around $300 million to support new store expansions and other investments.
In conclusion, Amer Sports, Inc. has demonstrated strong financial performance with record sales and margin expansion, despite facing challenges in certain segments and potential tariff impacts. The company’s forward-looking guidance suggests continued growth and strategic investments, positioning it well for future success.