Amer Sports, Inc. (AS) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance with significant revenue growth across key segments, improved net income, and EPS. The Q&A section reflects management's confidence in future growth, driven by product innovation and strategic investments. Despite some inventory growth concerns, the overall outlook remains optimistic with positive guidance and strong market momentum, particularly in China. This suggests a likely positive stock price movement in the short term.
Key Financial Performance
Sales Growth 32% sales growth year-over-year, driven by strong performance across all segments, geographies, and channels. Reasons include exceptional Salomon Softgoods growth, strong Arc'teryx omni-comp, and solid Wilson Tennis 360 growth.
Adjusted Operating Margin 160 basis points increase year-over-year, expanding from 15.8% to 17.4%. Reasons include strong gross margin expansion and leveraging higher sales growth against fixed costs.
Adjusted Gross Margin 200 basis points increase year-over-year to 60%. Reasons include favorable channel, geographic, product, and brand mix.
Direct-to-Consumer (D2C) Revenue 45% growth year-over-year, led by Salomon and Arc'teryx. D2C represented approximately 50% of revenue in Q1.
Wholesale Revenue 21% growth year-over-year, led by Salomon.
Regional Growth - Asia Pacific 53% growth year-over-year, with China growing 45%. Reasons include strong demand and expansion in Greater China and APAC.
Technical Apparel Revenue 33% increase year-over-year to $885 million, led by Arc'teryx. Reasons include 41% D2C expansion and 19% omni-comp growth.
Outdoor Performance Revenue 42% increase year-over-year to $714 million, driven by Salomon footwear, apparel, and bags. Reasons include strong D2C growth (57%) and wholesale growth (34%).
Ball & Racquet Revenue 13% increase year-over-year to $347 million, driven by Softgoods and Racquet Sports. Reasons include strong momentum in Tennis 360 globally.
Adjusted Net Income $218 million, up from $148 million year-over-year. Reasons include strong profit growth and disciplined working capital management.
Adjusted Diluted Earnings Per Share (EPS) $0.38, up from $0.27 year-over-year. Reasons include strong sales and margin expansion.
Inventory Growth 33% increase year-over-year, slightly higher than sales growth. Reasons include earlier receipt of seasonal merchandise, higher goods in transit, FX translations, and acquisition-related inventory.
Operating Cash Flow $172 million, up from $164 million year-over-year. Reasons include strong profit growth and disciplined working capital management.
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Operating Highlights
Arc'teryx: Delivered strong growth across regions, channels, and categories, with a 19% omni-comp and exceptional performance in women's category. Introduced new designs and expanded feminine color palettes. Launched new footwear styles like the Sylan 2 trail run racing shoe.
Salomon: Achieved significant growth in footwear, apparel, and accessories. Launched new running shoes like S/LAB Phantasm 3 and Aero Glide 4. Expanded distribution in North America and Asia, including new stores in Greater China, Japan, and Korea.
Wilson Tennis 360: Continued strong growth in softgoods and racquet sports. Launched Blade V10 racket, which received positive market feedback. Expanded presence in retail locations like DICK'S Sporting Goods.
Geographic Expansion: Strong double-digit revenue growth across all regions, led by Asia Pacific (53%) and China (45%). Expanded retail presence in Greater China, Japan, Korea, and North America.
Epicenter Strategy: Focused on opening flagship stores in key cities like New York, Los Angeles, and Beijing to elevate brand presence and awareness.
Direct-to-Consumer (D2C) Growth: D2C sales grew 45%, driven by Salomon and Arc'teryx. D2C now represents approximately 50% of revenue.
Inventory Management: Improved inventory positions with earlier receipt of seasonal merchandise and increased use of ocean freight.
Brand Investments: Increased investments in marketing, retail expansion, and talent acquisition for brands like Salomon and Wilson Tennis 360.
Sustainability Initiatives: Arc'teryx's ReBIRD program saw triple-digit growth in trade-in activities, promoting circularity.
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Risk or Challenges
Middle East Conflict: The ongoing Middle East conflict could create logistical and cost headwinds, particularly if oil prices remain elevated for an extended period.
Higher Corporate Expenses: Corporate expenses increased significantly, driven by higher IT, personnel, and deferred compensation costs, which could impact profitability.
Inventory Growth: Inventory levels increased by 33% year-over-year, slightly outpacing sales growth, which could lead to potential overstocking or inefficiencies.
Tariff Costs: Higher IEEPA tariff rates remain in place, potentially impacting costs and profitability.
Ball & Racquet Segment Margin Decline: The Ball & Racquet segment experienced a 370 basis point decline in adjusted operating profit margin due to higher SG&A expenses and increased gross tariff and freight costs.
Supply Chain and Logistics: Potential logistical challenges and cost increases could arise from the Middle East conflict and elevated oil prices.
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Guidance & Outlook
Revenue Growth Guidance: Amer Sports has raised its 2026 revenue growth guidance from 16%-18% to 20%-22%, including a 200-250 basis point benefit from favorable FX impact.
Segment Revenue Growth: Technical Apparel revenue growth guidance increased from 18%-20% to 22%-24%. Outdoor Performance revenue growth guidance increased from 18%-20% to 22%-24%. Ball & Racquet revenue growth guidance increased from 7%-9% to 10%-12%.
Adjusted Gross Margin: Full-year adjusted gross margin guidance raised from approximately 59% to a range of 59%-59.5%.
Adjusted Operating Profit Margin: Full-year adjusted operating profit margin guidance raised from 13.1%-13.3% to 13.4%-13.7%. Outdoor Performance adjusted operating margin guidance increased from 14.5%-14.8% to 15.0%-15.5%.
Adjusted Diluted EPS: Adjusted diluted EPS guidance raised to $1.18-$1.23 from $1.10-$1.15.
CapEx: Capital expenditures for 2026 are expected to be approximately $400 million, primarily for retail expansion and IT infrastructure investments.
Q2 2026 Revenue Growth: Expected reported revenue growth for Q2 2026 is 22%-24%, including a 200-250 basis point benefit from favorable FX impact.
Q2 2026 Adjusted Gross Margin: Expected adjusted gross margin for Q2 2026 is approximately 59.5%.
Q2 2026 Adjusted Operating Profit Margin: Expected adjusted operating profit margin for Q2 2026 is 6%-7%.
Q2 2026 Adjusted Diluted EPS: Expected adjusted diluted EPS for Q2 2026 is $0.08-$0.10 per share.
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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 is driving the confidence in the second quarter revenue guidance of 20%-22% growth?
A:Andrew Page explained that the confidence is based on current trends, a differentiated product portfolio with premium innovation, and strong consumer prioritization of health and outdoor activities. The company is also well into the second quarter and has observed positive trends.
Q:What is the road map for Salomon's distribution in the U.S. running specialty channel?
A:Guillaume Meyzenq stated that Salomon is investing heavily in running and GRVL running, with a cautious door-by-door partnership approach. The brand is focusing on training, events, and sell-through support, with strong confidence in the strategy.
Q:Has there been any moderation in global regions due to geopolitical factors, and what are the real-time trends in China?
A:Jie Zheng noted that there has been no moderation in global regions, and momentum remains strong across all brands and regions. In China, the business benefited from the late Chinese New Year and continues to see strong momentum, especially after Labor Day.
Q:What are the drivers of Arc'teryx's omni-comp acceleration in the first quarter?
A:Stuart Haselden attributed the acceleration to healthy traffic-driven comps, brand awareness efforts, strong guest acquisition and retention, growing average spend per guest, and maturing store productivity. These trends have extended into the second quarter.
Q:Are there any limitations for Salomon's wholesale expansion in the Americas, particularly with big box accounts like DICK'S Sporting Goods?
A:Guillaume Meyzenq explained that Salomon focuses on consumer demand and is cautious with big box accounts. The strategy involves building awareness in key cities and working door-by-door. The brand is accelerating its playbook with partners like JD Sports and Foot Locker.
Q:What is the progress of Arc'teryx in the U.S., particularly in women's categories?
A:Stuart Haselden reported strong momentum in the U.S., with brand awareness improving and potential for 200 stores in North America. Women's sales grew over 40% in Q1, reaching nearly 25% of total revenue, with a goal of 30% by 2030. The brand is transforming into a balanced dual-gender brand.
Q:Why is there less improvement in Salomon's profitability for the rest of the year despite strong growth?
A:Andrew Page stated that the guidance reflects responsible planning, sourcing constraints, and investments in brand building, infrastructure, and global campaigns. The company is balancing growth with supply constraints and long-term investments.
Q:How is Salomon managing the mix between Sportstyle and Performance categories?
A:Guillaume Meyzenq emphasized that Salomon's success in Sportstyle is rooted in its core authenticity and leadership in performance categories like trail running. The brand is investing in road running and GRVL running to maintain a balanced portfolio.
Q:What are the tariff assumptions for Q2 and the rest of the year?
A:Andrew Page clarified that the guidance does not include changes in tariffs since the Supreme Court ruling. Any tariff refunds received are minimal and do not significantly impact guidance. The company has not booked contingent gains for future refunds.
Q:What changed in the second half guidance by region or brand?
A:Andrew Page did not provide specific details but stated that the biggest driver of the updated guidance is the visibility gained from Q1 results and trends observed into Q2.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on changes in the second half guidance by region or brand, stating only that it was based on visibility from Q1 results and trends into Q2.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Academies
Amer Sports
Arcteryx brand
Equipment franchise
GRVL
Mountain
Open
ReBIRD
Relations Capital
Salomon Softgoods
Salomon sneaker
Sports Group
Technical Apparel
Wilson Softgoods
XT
acceleration North
affinity
awareness distribution
brand digit
brand profitability
brand share
consumer brand
demand Salomon
engagement
epicenter city
head toe
market world
marketplace
momentum portfolio
offering brand
player
racket
sneaker offering
team
trail shoe
version
AS Transcript
Amer Sports, Inc. (AS) Q1 2026 Earnings Call Transcript
Positive5-19
The earnings call highlights strong financial performance with significant revenue growth across key segments, improved net income, and EPS. The Q&A section reflects management's confidence in future growth, driven by product innovation and strategic investments. Despite some inventory growth concerns, the overall outlook remains optimistic with positive guidance and strong market momentum, particularly in China. This suggests a likely positive stock price movement in the short term.
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.
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