Amer Sports Reports First Quarter 2024 Financial Results, Company Updates Full Year Guidance
- First quarter revenue, adjusted operating margin, and adjusted diluted EPS above guidance
-
First quarter revenue increased 13% year-over-year to
$1.2 billion led by the Technical Apparel Segment - Strong gross margin expansion reflecting mix shift toward highest-margin brands, channels, and regions
- Flagship Arc’teryx brand continues to generate best-in-class financial performance
-
IPO proceeds used to pay down
$1.4 billion of debt; ended 1Q with$1.7 billion of net debt1
1 Net debt is defined as loans from financial institutions and related parties less cash and cash equivalents
CEO
CFO
FIRST QUARTER 2024 RESULTS
Revenue
increased 13% to
At the
On a reported basis, gross margin for the first quarter of 2024 was 54.0%. SG&A expense was
Adjusted gross profit margin rose 110 basis points to 54.3% compared to 53.2% for the first quarter 2023, primarily driven by favorable segment revenue mix shift towards Technical Apparel, which is the highest gross margin segment in the Group. Lower logistics costs also drove gross margin expansion, which were partially offset by higher raw material costs and higher product discounts as compared to prior year.
Adjusted SG&A expenses as a percentage of revenues increased 420 basis points on slower sales growth and represented 43.7% of revenues for the first quarter 2024. Key areas of expense growth include variable costs related to the higher mix of DTC sales, as well as key investments to support growth, including IT infrastructure investments and new store openings.
Adjusted operating margin
decreased 240 bps from 13.4% in the first quarter 2023 to 11.0% in the first quarter 2024, above previous guidance of 9.0–10.0%. Adjusted net finance cost was
Adjusted net income
for the first quarter 2024 was
Balance sheet
. Year-over-year inventories were up 6%, below the 13% revenue growth for the quarter and in a healthy position. Net debt was
SEGMENT RESULTS
Technical Apparel. In the first quarter 2024, revenue increased 44% year-over-year to
Outdoor Performance. Revenue increased 6% to
Ball &
OUTLOOK
CFO
FULL-YEAR 2024
- Reported revenue growth: Mid-teens %
- Gross margin: approximately 54.0%
- Operating margin: 10.5% - 11.0%
-
D&A: approximately
$250 million , including approximately$110 million of ROU depreciation -
Net finance cost:
$215 -$225 million , including approximately$30 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: toward the high end of the previous guidance range of
$0.30 to$0.40 , including a$0.03 -$0.04 negative impact to EPS from non-recurring finance costs in 1Q24 - Technical Apparel: >25% revenue growth; segment operating margin slightly above 20%
-
Outdoor Performance: mid-to-high-single-digit revenue growth; segment operating margin high-single digit %. Note: ENVE contributed approximately
$25 million of annual sales to the Outdoor Performance segment. - Ball & Racquet: low-to-mid single-digit revenue growth, and low-to-mid single-digit segment operating margin
SECOND QUARTER 2024
-
Approximately 10%, including the impact of the disposition of ENVE on
May 1, 2024 - Gross margin: approximately 54.0%
- Operating margin: approximately 0.0%
-
Net finance cost:
$45 -$50 million - Effective tax rate: approximately 38%
- Fully diluted share count: 510 million
-
Fully diluted EPS:
$(0.04) to$(0.08)
Other than with respect to revenue,
CONFERENCE CALL INFORMATION
The Company's conference call to review the results for the first quarter 2024 will be webcast live today,
ABOUT
With over 11,400 employees globally, Amer Sports’ purpose is to elevate the world through sport. Our vision is to be the global leader in premium sports and outdoor brands. With corporate offices in
NON-IFRS MEASURES
Adjusted gross profit margin, adjusted SG&A expenses, adjusted operating profit margin, adjusted EBITDA, adjusted net (loss) income, and adjusted diluted (loss) income per share are financial measures that are not defined under IFRS. Adjusted gross profit margin is calculated as adjusted gross profit divided by revenue. Adjusted gross profit is calculated as gross profit excluding amortization related to certain purchase price adjustments (PPA) in connection with the acquisition and delisting of
The Company believes that these non IFRS measures, when taken together with its financial results presented in accordance with IFRS, provide meaningful supplemental information regarding its operating performance and facilitate internal comparisons of its historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, adjusted EBITDA and adjusted net income (loss) are helpful to investors as they are measures used by management in assessing the health of the business and evaluating operating performance, as well as for internal planning and forecasting purposes. Non-IFRS financial measures however are subject to inherent limitations, may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as an alternative to IFRS measures. The supplemental tables below provide reconciliations of each non-IFRS financial measure presented to its most directly comparable IFRS financial measure.
FORWARD LOOKING STATEMENTS
This press release includes estimates, projections, statements relating to the business plans, objectives, and expected operating results of the Company that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. In many cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “target,” “outlook,” “believes,” “intends,” “estimates,” “predicts,” “potential” or the negative of these terms or other comparable terminology. These forward looking statements include, without limitation, guidance and outlook statements, our long-term targets and algorithm, statements regarding our ability to meet environmental, social and governance goals, expectations regarding industry trends and the size and growth rates of addressable markets, and statements regarding our business plan and our growth strategies. These statements are based on management’s current expectations but they involve a number of risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of factors relating to, without limitation: the strength of our brands; changes in market trends and consumer preferences; intense competition that our products, services and experiences face; harm to our reputation that could adversely impact our ability to attract and retain consumers and wholesale partners, employees, brand ambassadors, partners, and other stakeholders; reliance on technical innovation and high-quality products; general economic and business conditions worldwide, including due to inflationary pressures; the strength of our relationships with and the financial condition of our third-party suppliers, manufacturers, wholesale partners and consumers; ability to expand our DTC channel, including our expansion and success of our owned retail stores and e-commerce platform; our plans to innovate, expand our product offerings and successfully implement our growth strategies that may not be successful, and implementation of these plans that may direct divert our operational, managerial and administrative resources; our international operations, including any related to political uncertainty and geopolitical tensions; our and our wholesale partners’ ability to accurately forecast demand for our products and our ability to manage manufacturing decisions; our third party suppliers, manufacturers and other partners, including their financial stability and our ability to find suitable partners to implement our growth strategy; the cost of raw materials and our reliance on third-party manufacturers; our distribution system and ability to deliver our brands’ products to our wholesale partners and consumers; climate change and sustainability or ESG-related matters, or legal, regulatory or market responses thereto; changes to trade policies, tariffs, import/export regulations, anti-competition regulations and other regulations in
Source:
CONSOLIDATED STATEMENT OF INCOME | ||||||||
For the Three Months Ended |
||||||||
(Unaudited; $ in millions, except per share information) | ||||||||
Three Months Ended |
||||||||
2024 |
|
2023 |
||||||
Revenue |
$ |
1,182.9 |
|
$ |
1,050.3 |
|
||
Cost of goods sold |
|
(544.4 |
) |
|
(495.4 |
) |
||
Gross profit |
|
638.5 |
|
|
554.9 |
|
||
Selling, general and administrative expenses |
|
(534.2 |
) |
|
(422.4 |
) |
||
Impairment losses |
|
(1.3 |
) |
|
(2.8 |
) |
||
Other operating income |
|
6.0 |
|
|
0.7 |
|
||
Operating profit |
|
109.0 |
|
|
130.4 |
|
||
Finance income |
|
2.7 |
|
|
1.3 |
|
||
Finance cost |
|
(82.3 |
) |
|
(86.1 |
) |
||
Loss on debt extinguishment |
|
(14.3 |
) |
|
- |
|
||
Net finance cost |
|
(93.9 |
) |
|
(84.8 |
) |
||
Income before tax |
|
15.1 |
|
|
45.6 |
|
||
Income tax expense |
|
(8.2 |
) |
|
(26.6 |
) |
||
Net income |
$ |
6.9 |
|
$ |
19.0 |
|
||
Income attributable to: | ||||||||
Equity holders of the Company |
$ |
5.1 |
|
$ |
19.0 |
|
||
Non-controlling interests |
$ |
1.8 |
|
$ |
- |
|
||
Earnings per share | ||||||||
Basic earnings per share |
$ |
0.01 |
|
$ |
0.05 |
|
||
Diluted earnings per share |
$ |
0.01 |
|
$ |
0.05 |
|
||
Weighted-average number of ordinary shares | ||||||||
Basic |
|
463,422,683 |
|
|
384,499,607 |
|
||
Diluted |
|
466,345,776 |
|
|
384,499,607 |
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||||||||
As of |
||||||||
(Unaudited; $ in millions) | ||||||||
|
|
|
||||||
($ in millions) |
2024 |
|
2023 |
|||||
ASSETS | ||||||||
NON-CURRENT ASSETS | ||||||||
Intangible assets |
$ |
2,713.1 |
|
$ |
2,748.7 |
|
||
|
|
2,253.7 |
|
|
2,270.0 |
|
||
Property, plant and equipment |
|
450.9 |
|
|
441.9 |
|
||
Right-of-use assets |
|
348.1 |
|
|
317.1 |
|
||
Non-current financial assets |
|
9.1 |
|
|
9.2 |
|
||
Other non-current assets |
|
69.6 |
|
|
73.5 |
|
||
Deferred tax assets |
|
160.3 |
|
|
161.7 |
|
||
TOTAL NON-CURRENT ASSETS |
|
6,004.8 |
|
|
6,022.1 |
|
||
CURRENT ASSETS | ||||||||
Inventories |
|
1,100.6 |
|
|
1,099.6 |
|
||
Accounts receivable, net |
|
560.4 |
|
|
599.8 |
|
||
Prepaid expenses and other receivables |
|
164.7 |
|
|
162.3 |
|
||
Current tax assets |
|
6.7 |
|
|
6.6 |
|
||
Cash and cash equivalents |
|
337.3 |
|
|
483.4 |
|
||
TOTAL CURRENT ASSETS |
|
2,169.7 |
|
|
2,351.7 |
|
||
TOTAL ASSETS |
|
8,174.5 |
|
|
8,373.8 |
|
||
SHAREHOLDERS' EQUITY (DEFICIT) AND LIABILITIES | ||||||||
EQUITY (DEFICIT) | ||||||||
Share capital |
|
16.9 |
|
|
642.2 |
|
||
Share premium |
|
2,133.4 |
|
|
- |
|
||
Capital reserve |
|
2,789.2 |
|
|
227.2 |
|
||
Cash flow hedge reserve |
|
6.6 |
|
|
(10.6 |
) |
||
Accumulated deficit and other |
|
(925.6 |
) |
|
(1,019.0 |
) |
||
Equity (deficit) attributable to equity holders of the parent company |
|
4,020.5 |
|
|
(160.2 |
) |
||
Non-controlling interests |
|
5.2 |
|
|
3.4 |
|
||
TOTAL EQUITY (DEFICIT) |
|
4,025.7 |
|
|
(156.8 |
) |
||
LIABILITIES | ||||||||
LONG-TERM LIABILITIES | ||||||||
Lease liabilities |
|
280.0 |
|
|
250.4 |
|
||
Loans from financial institutions |
|
2,021.0 |
|
|
1,863.4 |
|
||
Loans from related parties |
|
- |
|
|
4,077.0 |
|
||
Defined benefit pension liabilities |
|
19.1 |
|
|
23.9 |
|
||
Other liabilities |
|
20.6 |
|
|
29.4 |
|
||
Provisions |
|
5.7 |
|
|
5.5 |
|
||
Long-term tax liabilities |
|
31.4 |
|
|
32.1 |
|
||
Deferred tax liabilities |
|
664.8 |
|
|
675.0 |
|
||
TOTAL LONG-TERM LIABILITIES |
|
3,042.6 |
|
|
6,956.7 |
|
||
CURRENT LIABILITIES | ||||||||
Interest-bearing liabilities |
|
6.2 |
|
|
381.0 |
|
||
Lease liabilities |
|
93.7 |
|
|
89.4 |
|
||
Accounts payable |
|
387.4 |
|
|
426.5 |
|
||
Other liabilities |
|
532.8 |
|
|
567.5 |
|
||
Provisions |
|
28.8 |
|
|
29.9 |
|
||
Current tax liabilities |
|
57.3 |
|
|
79.6 |
|
||
TOTAL CURRENT LIABILITIES |
|
1,106.2 |
|
|
1,573.9 |
|
||
TOTAL LIABILITIES |
|
4,148.8 |
|
|
8,530.6 |
|
||
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) AND LIABILITIES |
$ |
8,174.5 |
|
$ |
8,373.8 |
|
GEOGRAPHIC REVENUES | |||||||||
For the Three Months Ended |
|||||||||
(Unaudited; $ in millions) | |||||||||
Three Months Ended |
|||||||||
($ in millions) |
2024 |
2023 |
% Change |
||||||
Geographic Revenues | |||||||||
EMEA |
$ |
359 |
$ |
357 |
1 |
% |
|||
|
|
410 |
|
410 |
(0 |
%) |
|||
|
|
310 |
|
205 |
51 |
% |
|||
|
|
104 |
|
78 |
34 |
% |
|||
Total |
$ |
1,183 |
$ |
1,050 |
13 |
% |
|||
(1) Consists of mainland |
|||||||||
(2) Excludes Greater China. | |||||||||
CHANNEL REVENUES | |||||||||
For the Three Months Ended |
|||||||||
(Unaudited; $ in millions) | |||||||||
Three Months Ended |
|||||||||
($ in millions) |
2024 |
|
2023 |
|
% Change |
||||
Channel Revenues | |||||||||
Wholesale |
$ |
694 |
$ |
703 |
(1 |
%) |
|||
DTC |
|
489 |
|
347 |
41 |
% |
|||
Total |
$ |
1,183 |
$ |
1,050 |
13 |
% |
SEGMENT REVENUES | |||||||||
For the Three Months Ended |
|||||||||
(Unaudited; $ in millions) | |||||||||
Three Months Ended |
|||||||||
($ in millions) |
2024 |
|
2023 |
|
% Change |
||||
Segment Revenue | |||||||||
Technical Apparel |
$ |
510 |
$ |
355 |
44 |
% |
|||
Outdoor Performance |
|
400 |
|
377 |
6 |
% |
|||
Ball & |
|
273 |
|
318 |
(14 |
%) |
|||
Total |
$ |
1,183 |
$ |
1,050 |
13 |
% |
SEGMENT ADJUSTED OPERATING PROFIT | ||||||||||||||
For the Three Months Ended |
||||||||||||||
(Unaudited; $ in millions) | ||||||||||||||
Three Months Ended |
||||||||||||||
($ in millions) |
2024 |
|
% of Segment
|
|
2023 |
|
% of Segment
|
|||||||
Segment Adjusted Operating Profit | ||||||||||||||
Technical Apparel |
$ |
117 |
|
23.0 |
% |
$ |
83 |
|
23.4 |
% |
||||
Outdoor Performance |
|
19 |
|
4.8 |
% |
|
31 |
|
8.2 |
% |
||||
Ball & |
|
11 |
|
4.0 |
% |
|
46 |
|
14.4 |
% |
||||
Reconciliation (1) |
|
(17 |
) |
NM |
|
(19 |
) |
NM |
||||||
Total |
$ |
130 |
|
11.0 |
% |
$ |
141 |
|
13.5 |
% |
||||
(1) Includes corporate expenses, which have not been allocated to the reportable segments. | ||||||||||||||
(2) The operating profit (loss) for the Reconciliation is not presented as it is not a meaningful metric (NM). |
TECHNICAL APPAREL DTC OPERATING DATA | |||||||||
For the Three Months Ended |
|||||||||
(Unaudited) | |||||||||
Three Months Ended |
|
|
|||||||
($ in millions) |
2024 |
|
2023 |
|
% Change |
||||
Store count (1) | |||||||||
Arc'teryx |
146 |
|
130 |
|
12 |
% |
|||
Peak Performance |
44 |
|
41 |
|
7 |
% |
|||
Total |
190 |
|
171 |
|
11 |
% |
|||
Omni comp |
36 |
% |
61 |
% |
|||||
(1) Reflects the number of Technical Apparel owned retail stores open at the end of the fiscal period | |||||||||
(2) Omni comp reflects year over year revenue growth from owned retail stores and e-commerce sites that have been open at least 13 months |
ADJUSTED GROSS PROFIT RECONCILIATION | ||||||
For the Three Months Ended |
||||||
(Unaudited; $ in millions) | ||||||
Three Months Ended |
||||||
($ in millions) |
2024 |
|
2023 |
|||
Gross profit |
$ |
638 |
$ |
555 |
||
PPA |
|
4 |
|
4 |
||
Restructuring expenses |
|
- |
|
- |
||
Adjusted gross profit |
$ |
642 |
$ |
559 |
ADJUSTED SG&A RECONCILIATION | ||||||
For the Three Months Ended |
||||||
(Unaudited; $ in millions) | ||||||
Three Months Ended |
||||||
($ in millions) |
2024 |
|
2023 |
|||
Selling, general and administrative expenses |
$ |
534 |
$ |
422 |
||
Restructuring expenses |
|
1 |
|
- |
||
PPA |
|
7 |
|
7 |
||
Expenses related to transaction activities |
|
6 |
|
0 |
||
Expenses related to certain legal proceedings |
|
- |
|
- |
||
Share-based payments |
|
3 |
|
- |
||
Adjusted SG&A expenses |
$ |
517 |
$ |
415 |
ADJUSTED OPERATING PROFIT RECONCILIATION(1) | ||||||||
For the Three Months Ended |
||||||||
(Unaudited; $ in millions) | ||||||||
Three Months Ended |
||||||||
($ in millions) |
2024 |
|
2023 |
|||||
Income before tax |
$ |
15 |
|
$ |
46 |
|
||
PPA |
|
11 |
|
|
11 |
|
||
Restructuring expenses |
|
1 |
|
|
- |
|
||
Impairment related to goodwill and intangible assets |
|
- |
|
|
- |
|
||
Expenses related to transaction activities (2) |
|
24 |
|
|
0 |
|
||
Expenses related to certain legal proceedings |
|
- |
|
|
- |
|
||
Share-based payments |
|
3 |
|
|
- |
|
||
Finance costs |
|
65 |
|
|
86 |
|
||
Loss on debt extinguishment |
|
14 |
|
|
- |
|
||
Finance income |
|
(3 |
) |
|
(1 |
) |
||
Adjusted operating profit |
$ |
130 |
|
$ |
141 |
|
||
(1) The presented figures and percentages are subject to rounding adjustments, which may cause discrepancies between the sum of the individual figures and the presented aggregated column and row totals. |
||||||||
(2) Includes approximately |
ADJUSTED NET INCOME RECONCILIATION | ||||||||
For the Three Months Ended |
||||||||
(Unaudited; $ in millions, except per share information) | ||||||||
Three Months Ended |
||||||||
($ in millions) |
2024 |
|
2023 |
|||||
Net income attributable to equity holders |
$ |
5 |
|
$ |
19 |
|
||
PPA |
|
11 |
|
|
11 |
|
||
Restructuring expenses |
|
1 |
|
|
- |
|
||
Impairment losses on goodwill and intangible assets |
|
- |
|
|
- |
|
||
Expenses related to transaction activities |
|
24 |
|
|
0 |
|
||
Expenses related to certain legal proceedings |
|
- |
|
|
- |
|
||
Share-based payments |
|
3 |
|
|
- |
|
||
Income tax expense |
|
(5 |
) |
|
(3 |
) |
||
Adjusted net income |
$ |
39 |
|
$ |
27 |
|
||
Adjusted total diluted income per share |
$ |
0.08 |
|
$ |
0.07 |
|
EBITDA, ADJUSTED EBITDA, AND ADJUSTED EBITDA MARGIN RECONCILIATION(1) | ||||||||
For the Three Months Ended |
||||||||
(Unaudited; $ in millions) | ||||||||
Three Months Ended |
||||||||
($ in millions) |
2024 |
|
2023 |
|||||
Revenue |
$ |
1,183 |
|
$ |
1,050 |
|
||
Net income attributable to equity holders |
$ |
5 |
|
$ |
19 |
|
||
Net income attributable to non-controlling interests |
|
2 |
|
|
- |
|
||
Income tax expense |
|
8 |
|
|
27 |
|
||
Finance cost (2) |
|
82 |
|
|
86 |
|
||
Loss on debt extinguishment |
|
14 |
|
|
- |
|
||
Depreciation and amortization (3) |
|
63 |
|
|
52 |
|
||
Finance income |
|
(3 |
) |
|
(1 |
) |
||
EBITDA |
$ |
171 |
|
$ |
182 |
|
||
Restructuring expenses |
|
1 |
|
|
- |
|
||
Impairment losses on goodwill and intangible assets |
|
- |
|
|
- |
|
||
Expenses related to transaction activities |
|
6 |
|
|
0 |
|
||
Expenses related to certain legal proceedings |
|
- |
|
|
- |
|
||
Share-based payments |
|
3 |
|
|
- |
|
||
Adjusted EBITDA |
$ |
182 |
|
$ |
183 |
|
||
Net income margin |
|
0.4 |
% |
|
1.8 |
% |
||
Adjusted EBITDA Margin |
|
15.3 |
% |
|
17.4 |
% |
||
(1) The presented figures and percentages are subject to rounding adjustments, which may cause discrepancies between the sum of the individual figures and the presented aggregated column and row totals. | ||||||||
(2) Total interest expense on lease liabilities under IFRS 16, Leases was |
||||||||
(3) Depreciation and amortization includes amortization expense for right-of-use assets capitalized under IFRS 16, Leases of |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240521237182/en/
Investor Relations:
Vice President, Finance and Investor Relations
omar.saad@amersports.com
Media:
Anu Sirkiä
Senior Vice President, Communications
anu.sirkia@amersports.com
Source: