Amer Sports, Inc. (AS) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates strong financial performance, with significant year-over-year increases in revenue, gross margin, net income, and EPS. The raised guidance for revenue growth and margins, along with optimistic growth outlooks for key segments and brands, further supports a positive sentiment. The Q&A reveals strong momentum for Salomon and Arc'teryx, and strategic investments are expected to yield long-term growth. Despite some concerns about margin impacts and unclear management responses, the overall sentiment is strongly positive, suggesting a likely stock price increase over the next two weeks.
Key Financial Performance
Revenue $6.6 billion in 2025, a 27% year-over-year growth. This growth was driven by double-digit increases across all segments, regions, and channels, with significant contributions from Arc'teryx and Salomon brands.
Adjusted Operating Margin 12.8% in 2025, an increase of 170 basis points year-over-year. This expansion was attributed to strong revenue growth and operational efficiencies.
Gross Sales (Q4) 28% year-over-year growth in Q4 2025. This was led by Technical Apparel and Outdoor Performance segments, with all four regions achieving double-digit revenue growth.
Adjusted Operating Margin (Q4) 12.5%, a decline of 110 basis points year-over-year. The decline was due to accelerated SG&A investments, particularly for Salomon.
Technical Apparel Revenue (Q4) $1 billion, a 34% year-over-year increase. Growth was driven by Arc'teryx, with strong contributions from wholesale (37% growth) and DTC (34% growth).
Outdoor Performance Revenue (Q4) $764 million, a 29% year-over-year increase. Growth was led by Salomon footwear and apparel, as well as Winter Sports Equipment.
Ball & Racquet Revenue (Q4) $337 million, a 14% year-over-year increase. Growth was driven by Softgoods, Baseball, and Golf categories.
Adjusted Gross Margin (Q4) 57.8%, an increase of 140 basis points year-over-year. This was driven by positive segment, regional, and channel mix shifts.
Adjusted Net Income (Q4) $176 million, compared to $90 million in the prior year period. This increase was driven by strong sales and profitability.
Adjusted Diluted EPS (Q4) $0.31, compared to $0.17 in the prior year period. This reflects the overall improved financial performance.
Operating Cash Flow (2025) $730 million, compared to $425 million in 2024. This increase was driven by strong profit growth and disciplined working capital management.
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Operating Highlights
Arc'teryx and Salomon: Arc'teryx brand led growth with strong performance in Technical Apparel and Outdoor Performance. Salomon surpassed $2 billion in sales, driven by footwear and apparel.
Women's and Footwear Categories: Arc'teryx women's category grew 40% in Q4, with strong performance in ski and insulation products. Footwear grew nearly 40%, led by Norvan LD 4 trail shoes and Kopec Gore-Tex hiking shoes.
New Product Launches: Arc'teryx plans new shoe launches for 2026. Salomon introduced XT-Whisper and GRVL franchises, driving growth in Sportstyle and Performance categories.
Regional Growth: All four regions achieved double-digit revenue growth, with Asia Pacific leading at 53%, followed by Greater China at 42%.
Expansion in Greater China and EMEA: Salomon opened 33 new stores in Greater China and expanded in EMEA with new stores in Milan and London.
North America Expansion: Salomon and Arc'teryx expanded their direct-to-consumer footprint in North America, including new stores in New York and other key cities.
Revenue and Margin Growth: Amer Sports achieved 27% revenue growth to $6.6 billion in 2025, with adjusted operating margin expansion to 12.8%.
SG&A Investments: Increased SG&A investments to support Salomon's growth, impacting Q4 operating margin.
Inventory Management: Inventory growth of 33% year-over-year, attributed to earlier receipt of merchandise and increased use of ocean shipping.
Focus on Premium Brands: Emphasis on premium innovation-driven brands like Arc'teryx and Salomon for long-term growth.
Epicenter Strategy: Salomon's strategy to open flagship stores in key cities like Paris, New York, and Shanghai to elevate brand presence.
Leadership Changes: New leadership appointments, including Avery Baker as Chief Brand Officer for Arc'teryx and Carrie Ask as CEO of Wilson.
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Risk or Challenges
Adjusted Operating Margin Decline: The adjusted operating margin declined by 110 basis points in Q4 due to accelerated SG&A investments to support growth opportunities, particularly for Salomon. This indicates a potential risk of profitability being impacted by high investment levels.
SG&A Expense Deleveraging: Adjusted SG&A expense as a percentage of revenues increased by 220 basis points in Q4, driven by higher investments in Outdoor Performance and Ball & Racquet segments. This could strain financial performance if revenue growth does not offset these costs.
Inventory Growth: Inventories grew 33% year-over-year, slightly exceeding the 27% sales growth. This could lead to potential risks of overstocking or inventory obsolescence if demand does not meet expectations.
Weather Conditions Impacting Winter Sports: Lower snow levels in certain regions affected Winter Sports Equipment sales, posing a risk to revenue from this segment in unfavorable weather conditions.
Higher Corporate Expenses: Corporate expenses increased significantly, driven by higher share-based compensation and reallocation of costs. This could impact overall profitability if not managed effectively.
Tax Rate Increase: The effective tax rate is expected to increase to 28% in 2026, up from 27% in 2025, due to higher taxable income in high-tax jurisdictions. This could reduce net income.
Salomon Investment Risks: Accelerated investments in Salomon, including marketing, retail expansion, and talent acquisition, could strain short-term profitability despite long-term growth potential.
Economic and Tariff Risks: Guidance assumes current tariff rates remain unchanged. Any changes in tariffs could impact costs and profitability.
Supply Chain and Logistics: Higher goods-in-transit and increased use of ocean shipping for Arc'teryx merchandise could lead to potential delays or increased logistics costs.
Regional Growth Dependence: Strong growth in Asia Pacific and Greater China is a key driver of revenue. Any economic or geopolitical issues in these regions could adversely impact performance.
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Guidance & Outlook
Revenue Growth: For the full year 2026, Amer Sports expects reported group revenue growth between 16% and 18%, with a 200 basis point benefit from favorable FX impact at current exchange rates. For Q1 2026, the company expects reported revenue growth in the range of 22% to 24%, with a 500 basis point benefit from favorable FX impact.
Adjusted Gross Margin: Amer Sports anticipates a group adjusted gross margin of approximately 59% for the full year 2026, driven by mix shift benefits. For Q1 2026, the adjusted gross margin is expected to be approximately 59%.
Adjusted Operating Margin: The company expects an adjusted operating margin of 13.1% to 13.3% for the full year 2026, with a focus on long-term profitable growth. For Q1 2026, the adjusted operating profit margin is expected to be 14% to 14.5%.
Adjusted Diluted EPS: Amer Sports projects adjusted diluted EPS of $1.10 to $1.15 for the full year 2026. For Q1 2026, adjusted diluted earnings per share are expected to be $0.28 to $0.30.
Capital Expenditures: CapEx is expected to be approximately $400 million in 2026, up from $310 million in 2025, driven by investments in IT infrastructure and retail expansion.
Segment Growth: For 2026, Technical Apparel is expected to grow 18% to 20%, Outdoor Performance is expected to grow 18% to 20%, and Ball & Racquet is expected to grow 7% to 9%.
Segment Margins: For 2026, Technical Apparel is expected to achieve an adjusted operating margin of approximately 22%, Outdoor Performance is expected to achieve a margin of 14.5% to 14.8%, and Ball & Racquet is expected to achieve a margin of 4.7% to 5%.
Store Expansion: Amer Sports plans to open 25 to 30 net new Arc'teryx stores in 2026, with the largest number in North America and China. Salomon plans to open approximately 35 net stores in Greater China and 7 to 10 new shops in the U.S. Wilson plans to open approximately 30 Tennis 360 shops in China.
Inventory Growth: Inventory growth rates are expected to normalize beginning in the second half of 2026, as the company cycles improved in-stock positions and higher use of ocean freight.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What factors should be considered for the fourth quarter gross margin, and were there any one-time impacts?
A:The fourth quarter gross margin is affected by the performance of Winter Sports Equipment, which is a lower gross margin business. Additionally, the cost optimization program initiated in 2023 impacted margins, with its effects seen in the back half of 2024 and anniversaried in 2025. There were no specific one-time impacts mentioned.
Q:What are the details of the Salomon investments in Q4 and their impact on operating margin guidance?
A:Salomon investments in Q4 were made to capitalize on the brand's strong momentum. These included marketing campaigns, retail expansion (e.g., 30 stores in China, a store in Los Angeles), and talent acquisition (e.g., hiring Heikki Salonen). These investments contributed to the operating margin guidance being at the lower end of the long-term algorithm for 2026. However, the company expects SG&A leverage in the long term.
Q:What is the outlook for Salomon's growth and its impact on the company's algorithm?
A:Salomon's growth is expected to be incremental to the company's algorithm, with investments being opportunistic and aimed at long-term growth. The company remains committed to maintaining its earnings algorithm of 30-50 basis points improvement while supporting growth momentum.
Q:What is the current momentum for the Salomon brand and Arc'teryx entering 2026?
A:Salomon has strong momentum across all regions, with significant growth in China, Europe, and the U.S. Arc'teryx also shows strong momentum, particularly in North America, and is expected to achieve 18-20% growth for the full year.
Q:What are the wholesale expansion opportunities for Salomon and Arc'teryx in the U.S.?
A:Salomon is focusing on an omnichannel strategy, partnering with key players like REI and JD Sport, and expanding door-by-door in the U.S. Arc'teryx is expanding wholesale for footwear, Veilance, and women's categories, targeting specialty run accounts and premium high-end retailers.
Q:What is the regional growth outlook for Salomon in 2026, and how much growth is expected from new versus existing distribution partners?
A:Salomon expects growth across all regions, with strong momentum in Asia Pacific, Greater China, EMEA, and North America. Growth will come from both existing and new distribution partners, with a focus on expanding into the sneaker market and building distribution in the U.S.
Q:What is the cadence of investments and margin outlook for 2026?
A:Investments made in Q4 2025 will impact Q1 2026 margins due to a tough comparison with Q1 2025, which had pull-forward effects. However, the company expects to scale investments and achieve SG&A leverage in the back half of 2026, providing visibility into fiscal 2027.
Q:How are women's and footwear categories performing for Arc'teryx, and what is the outlook?
A:Both categories grew 40% in Q4. Women's growth was driven by new products like the Clarkia and Leutia pants, while footwear growth was led by the Norvan LD 4 and Kopec hike shoe. Arc'teryx expects women's to exceed 30% of total sales by 2030 and sees footwear as a key growth pillar.
Q:What is the company's position on tariffs and their impact?
A:Tariffs have a modest impact on Arc'teryx and the group overall. The company is confident in managing tariff scenarios due to its low U.S. exposure, strong brand portfolio, and pricing power. Ball & Racket and Winter Sports Equipment are the most impacted segments.
Q:What are the expectations for capital structure and cash usage going forward?
A:The company plans to allocate cash towards high-return growth investments, pay down inefficient debt, and maintain a low leverage position close to zero.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing the specific structural changes in the algorithm and the exact pacing of SG&A leverage in the back half of 2026. Additionally, there was limited detail on the proportion of growth expected from new versus existing distribution partners for Salomon in 2026.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
APAC Celine
Amer Sports
America North
America order
Arcteryx Chief
Arcteryx Peak
Arcteryx Veilance
Arcteryx brand
Armada Atomic
Asia North
Atom SV
Atomic brand
Avery enterprise
Bookings participation
Brand Officer
Brand success
CEO Wilson
CEO suite
Carrie
GRVL
Games
Group
Head
Paris London
ReBIRD
Wilson Softgoods
brand digit
brand profitability
digit omni
epicenter
newness
player
return
showroom
ski
toe
AS Transcript
Amer Sports, Inc. (AS) Q4 2025 Earnings Call Transcript
Positive2-24
The earnings call summary indicates strong financial performance, with significant year-over-year increases in revenue, gross margin, net income, and EPS. The raised guidance for revenue growth and margins, along with optimistic growth outlooks for key segments and brands, further supports a positive sentiment. The Q&A reveals strong momentum for Salomon and Arc'teryx, and strategic investments are expected to yield long-term growth. Despite some concerns about margin impacts and unclear management responses, the overall sentiment is strongly positive, suggesting a likely stock price increase over the next two weeks.
Amer Sports, Inc. (AS) Q3 2025 Earnings Call Transcript
Positive11-18
The earnings call summary and Q&A indicate strong revenue growth, improved margin guidance, and optimistic expansion plans, especially in China and North America. Although management was vague about specific store growth numbers, the overall sentiment is positive with raised guidance across multiple metrics, strong regional performance, and strategic investments in growth areas like footwear and new stores. These factors suggest a likely positive stock price movement.
Amer Sports, Inc. (AS) Q2 2025 Earnings Call Transcript
Positive8-19
The earnings call reveals strong financial performance with significant growth in key areas such as DTC and regional sales, particularly in Asia Pacific. The raised revenue and EPS guidance, coupled with a 250 basis point increase in gross margin, reflect optimism. The Q&A section supports this with positive momentum in Salomon and Arc'teryx, robust inventory, and strategic growth plans. Despite some vague responses on margins, the overall sentiment is bolstered by strong earnings, optimistic guidance, and effective market strategies, suggesting a strong positive stock price reaction.
Amer Sports, Inc. (NYSE:AS) Q1 2025 Earnings Call Transcript
Positive5-21
The earnings call highlights strong financial performance, with significant increases in revenue, operating margin, and net income. The Q&A session reveals confidence in sustainable growth, particularly in Salomon's expansion and the premium outdoor segment. The raised guidance for Salomon and strategic moves in China further support a positive outlook. While management avoided specifics on long-term targets, the overall sentiment remains optimistic, with no major concerns raised. The market is likely to respond positively, with potential stock price increase in the range of 2% to 8%.
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