HELSINKI - Amer Sports Inc. (NYSE: AS) reported first-quarter earnings that fell short of Wall Street expectations, causing its shares to tumble 4.3%.
The company posted adjusted earnings per share (EPS) of $0.08, missing the analyst consensus of $0.11. Despite the earnings shortfall, the company's revenue increased by 13% to $1.2 billion, led by strong performance in its Technical Apparel Segment.
The Helsinki-based sports equipment company experienced robust growth in its flagship Arc'teryx brand, contributing to a significant increase in the Technical Apparel segment, which surged 44% year-over-year (YoY). This growth was particularly pronounced in the Asia Pacific and the Americas regions. Amer Sports also reported a substantial gross margin expansion, attributed to a strategic shift toward its highest-margin brands and sales channels.
CEO James Zheng expressed confidence in the company's brand-direct business model and its position in the premium sports and outdoor market. CFO Andrew Page highlighted the impact of the Arc'teryx brand on the company's growth and profitability profile, emphasizing the ability to deliver shareholder value while investing in growth opportunities.
Despite the positive revenue trends, Amer Sports' adjusted operating margin for the first quarter decreased to 11.0% from 13.4% in the prior-year period, primarily due to higher selling, general, and administrative expenses. The company also used proceeds from its initial public offering to pay down $1.4 billion in debt, ending the quarter with $1.7 billion in net debt.
Looking ahead, Amer Sports provided full-year 2024 guidance, anticipating mid-teens percentage revenue growth and an operating margin between 10.5% and 11.0%. The company expects to achieve the higher end of its previous full-year adjusted EPS guidance range of $0.30 to $0.40, despite a $0.03 to $0.04 negative impact from non-recurring finance costs incurred in the first quarter.
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