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Amer Sports Reports Second Quarter 2024, Company Raises Full Year Guidance
With a strong financial performance with sales, adjusted margins and EPS above expectations, Arc’teryx continues exceptional growth and profitability. At a brand level double-digit growth in Salomon soft goods continues, notably in footwear, was a standout performer.
CEO James Zheng commented, “I am very pleased by our financial and operational performance in the second quarter of 2024. Our unique portfolio of premium technical brands is taking share in sports and outdoor markets all around the world. Led by our flagship Arc’teryx brand, we well exceeded our own high expectations on all key financial metrics, positioning us to deliver another strong year in 2024.”
SECOND QUARTER 2024 RESULTS
For the second quarter of 2024, compared to the second quarter of 2023:
Revenue increased 16% to $994 million, or increased 18% on a constant currency basis 1. Revenues by segment: Technical Apparel increased 34% to $407 million, or increased 38% on a constant currency basis. This reflects an omni-comp 2 growth of 26%
Outdoor Performance increased 11% to $304 million, or increased 13% on a constant currency basis
Ball & Racquet Sports increased 1% to 283 million, or increased 2% on a constant currency basis
Gross margin increased 220 basis points to 55.5%; Adjusted gross margin increased 200 basis points to 55.8%. Selling, general and administrative expenses increased 26% to $560 million; Adjusted selling, general and administrative expenses increased 21% to $526 million.
Operating loss was $9 million compared to operating profit of $8 million for the second quarter 2023. Adjusted operating profit increased 40% to $29 million.
Operating margin decreased 180 basis points to (0.9)%. Adjusted operating margin increased 50 basis points to 2.9%. Adjusted operating margin by segment:
Technical Apparel increased 110 basis points to 14.2%. Outdoor Performance increased 380 basis points to (2.1)%. Ball & Racquet Sports decreased 160 basis points to 1.1%.
Net loss decreased 98% to $4 million, or $(0.01) diluted loss per share; Adjusted net income increased 129% to $25 million, or $0.05 diluted earnings per share.
Balance sheet . Year-over-year inventories increased 2%, below the 16% revenue growth for the quarter and in a healthy position. Net debt 3 was $1,820 million, and cash and equivalents totaled $256 million at quarter end.
OUTLOOK
CFO Andrew Page said, “Our strong financial performance in Q2 reinforces my confidence in our near- and long-term path forward. Organic revenue growth in the high-teens and significant gross- and operating-margin expansion reflects the combination of great brands, strong management execution, and a disciplined approach to expenses and working capital. These outstanding results give us the confidence to raise our full-year sales and earnings guidance.”
FULL-YEAR 2024
Amer Sports is updating guidance for the year ending December 31, 2024 (all guidance figures reference adjusted amounts):
Reported revenue growth: 15 – 17%
Gross margin: approximately 54.5%
Operating margin: toward high-end of 10.5 – 11.0%
D&A: approximately $250 million, including approximately $110 million of ROU depreciation
Net finance cost: $200 – $220 million, including approximately $15 million of finance costs in the first quarter 2024 that won’t be recurring
Effective tax rate: approximately 38%
Fully diluted share count: 500 million
Fully diluted EPS: $0.40 – $0.44
Technical Apparel: greater than 30% revenue growth; segment operating margin slightly above 20%
Outdoor Performance: mid-to-high-single-digit revenue growth; segment operating margin high-single digit %. Ball & Racquet: low-to-mid single-digit revenue growth, and low-to-mid single-digit segment operating margin
THIRD QUARTER 2024
Amer Sports is providing the following guidance for the third quarter ending September 30, 2024, all guidance figures reference adjusted amounts
Reported revenue growth: 12 – 13% Gross margin: approximately 54.0%
Operating margin: 11.0 – 12.0%
