Amer Sports Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 20, 2025
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Operator

Thank you for standing by, and welcome to the Amur Sports First Quarter Fiscal twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer Thank you. I'd now like to turn the call over to Omar Saad, SVP, Capital Markets and Investor Relations. You may begin.

Omar Saad
Omar Saad
Vice President of Finance & Investor Relations at Amer Sports

Welcome, everyone. Thanks for joining Amherst Sports earnings call for the first quarter of fiscal year twenty twenty five. Earlier this morning, we announced our financial results for the quarter ended 03/31/2025, and the release can be found on our IR website, investors.amirsports.com. A quick reminder to everyone that today's call will contain forward looking statements within the meaning of the federal securities laws. These forward looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially.

Omar Saad
Omar Saad
Vice President of Finance & Investor Relations at Amer Sports

Please see the Safe Harbor statement in our earnings release and SEC filings. We will also discuss certain non IFRS financial measures. Please refer to our earnings release for important information regarding such non IFRS financial measures, including reconciliations to the most comparable IFRS financial measures. We'll begin with prepared remarks from our CEO, James Zhang and CFO, Andrew Page, followed by a Q and A until approximately 9AM Eastern. James will cover key operational and brand highlights, then Andrew will provide a financial review at both the group and segment level and also walk through our guidance for the second quarter and full year 2025.

Omar Saad
Omar Saad
Vice President of Finance & Investor Relations at Amer Sports

Arcterix CEO, Stuart Hazelton will also join for the Q and A session. With that, I'll turn the call over to James.

James Zheng
James Zheng
CEO at Amer Sports

Thanks, Omar. Amherst Sports began 2025 with a great performance in the first quarter, delivering sales adjusted margin and EPS well above expectations. We generate 23% sales growth or 26% ex currency, And we also expanded our adjusted operating margin by nearly 500 basis points. Our performance was led by strong growth and the profitability in both technical apparel and outdoor performance, as well as solid sales and margin results in ball and racket. In addition to the continued broad based trends from our flagship brands, Akeris, I'd like to highlight this growing momentum behind the Solomon sneakers.

James Zheng
James Zheng
CEO at Amer Sports

We are really starting to see consumers all around the world, responsive to their unique performance and the styles attributes. Furthermore, our market leading Hagrid equipment franchises delivered better than expected results for both winter sports equipment and the Wilson ball and racket. Although we are off to a great start in 2025, given macro uncertainties related to The U. S. Tariffs, we are operating our business with discipline and the flexibility.

James Zheng
James Zheng
CEO at Amer Sports

Andrew will provide a more detailed discuss of our tariff exposure, mitigation strategies and the financial impacts. But I'd like to emphasize that I believe we are very well positioned to manage through a wide range of tariff scenarios given our premium brands with pricing power, secular growth trends and a relatively low U. S. Revenue exposure. Looking near and the long term, we believe Amherst Sports is a uniquely positioned company within the global sports and outdoor space.

James Zheng
James Zheng
CEO at Amer Sports

Several factors give me confidence for the rest of this year and the well beyond. First, we own and operate a unique portfolio of premium outdoor and sports brands. Each one is empowered by our technical innovation and is positioned at the pinnacle of its segment. Our brands have high conversion and satisfaction, but are still small players with long to grow. Second, Bacteriax is a breakout growth story with great growth and profitability for outdoor industry driven by its disruptive direct to consumer models and the unique competitive position.

James Zheng
James Zheng
CEO at Amer Sports

It's still very underpenetrated globally and still has a tremendous long term growth opportunity. Third, we believe Salomon's sneakers have unique performance and the design attributes, and the brand is experiencing accelerating momentum globally, but still has small market share of the global sneaker market. Sports, Worsen and our winter sports equipment brands have authentic heritage, premium positioning, higher performance products and the leading market positions. These high market share brands will deliver slower long term growth in their core equipment business, but they still have large soft goods potential, especially worse than Tennis three sixty. And the fifth, we believe we have a very strong differentiate platform in Gui China, where we continue to deliver best in class performance with great momentum across all three big brands.

James Zheng
James Zheng
CEO at Amer Sports

Before I turn over to Andrew, allow me to briefly recap key brand highlights from our three segments. Starting with technical apparel, which is led by our fastest growing and the largest brand Arcterix. Arcterix delivered another great quarter with strong growth across all regions, channels and the categories, especially footwear and the women's, which continue to grow faster than the brand overall. We are encouraged to see the technical apparel momentum continue in the direct to consumer channel, where we generate a plus 19% Omnicom in quarter one. Importantly, our direct to consumer growth was driven by strong performance in both stores and online.

James Zheng
James Zheng
CEO at Amer Sports

We believe Arcterix stores are very differentiated from both our product and experience perspective, and they continue to be critical to our strategy, especially how we engage with local consumers and the community. Arterix net new store openings were flat in quarter one as four openings were offset by the closure of four legacy locations as part of our ongoing strategy to optimize the quality and the productivity of our store fleet. Key new store locations this quarter include two stores in China, One in Georgetown, Washington DC, as well as our new Chamonix location, which is our first Mountain Town store in Europe and has attracted great consumer interest since day one. Our tariff store expansion strategy includes a mix of different formats ranging from multilevel large scale our flagship stores to small format, very distinct Mountain Town shops. For 2025, we plan to open approximately 25 net new Akeri stores globally, which incorporates a similar level of gross openings as in 2024, partially offset by the closure of certain outlets and other suboptimal locations.

James Zheng
James Zheng
CEO at Amer Sports

We are focused on positioning Akash for sustainable long duration growth and developing a high quality store network is critical to our success and the much more important chasing fast paced new store expansion. For example, in Greater China, we will continue to focus on optimizing our tariffs retail footprint rather than pushing new store expansion. This year, we will have net store closure in China, including closing some legacy partner stores, but we'll grow our own store count, continue to open larger format, high quality locations. We expect to grow revenue strong double digit, driven by comp store growth and the replacing small less productive stores with large format high quality locations. In Beijing, we will soon open a brand store within the Peninsula Hotel.

James Zheng
James Zheng
CEO at Amer Sports

And we have plans to open two more shops at other Peninsula locations later this year. We are very excited that Actaris will be the first sports brand to sit alongside traditional luxurious brands inside of this iconic hotel chain. We also recently opened another mountain town store in Banff, a popular mountain destination in Canada. And it's a great addition to our small but growing portfolio of authentic mountain town locations, including Chamoran, Shangri La and the Whistler. Community engagement continues to be a key part of our strategy to raise brand awareness.

James Zheng
James Zheng
CEO at Amer Sports

In March, we host our first ever Achilles Academy in California at the Mammoth Mountain. The event drove thousands of participants, achieved the record breaking rebirth sales, created a 6,000,000 media impressions, and saw a direct lift in sales in our tariff stores in the Los Angeles areas as well as e commerce. Shifting to product, footwear continued to be Arcterix's fastest growing category in quarter one. As consumers continue to respond positively to what we believe is the best line of technical performance footwear designed for mountains. This spring, we launched the Northern LD4, an elevation of the popular silhouette made for long distance mountain running.

James Zheng
James Zheng
CEO at Amer Sports

We also launched a Vertex Speed, which is a mountain running shoe designed to climb through technical vertical terrain. Looking forward, Arcterus has an exciting pipeline for shoe launch in the second half of twenty twenty five. We believe footwear will become a sizable and profitable growth avenue for Arcterus both in own retail, e commerce and in certain wholesale accounts over time. We have now structured the footwear as a separate business unit with a dedicated P and L and the team focused on the category. Women's also continued great momentum in quarter one with double digit growth across all regions and channels, outperforming the rest of the brand in every region.

James Zheng
James Zheng
CEO at Amer Sports

We see a big opportunity to serve women in the outdoor differently through pinnacle design and the performance. A great example of our design focused on women's is the Clark Hair brand, which has been explosive growth in quarter one stocking out quickly. We are seeing rising brand awareness and affinity with women in The US and the Europe as we have improved fit style and function. Reverb also continues to be one of our priority strategies, which we believe will truly separate us from the marketplace. Our products are long lived and the beautiful repair.

James Zheng
James Zheng
CEO at Amer Sports

We experienced especially strong consumer engagement in all of our locations with the river center. At the end of quarter one, we had 25 reverse service centers globally. Lastly, Valens, which we view as the city expression of Arteris, like footwear. Valens also now has its own P and L and the management team. Our new Valens leadership is sharply focused on developing the best products, merchandising, marketing and a good to market strategies to drive Valens long term growth opportunity.

James Zheng
James Zheng
CEO at Amer Sports

For the first time, Valens was present at Fashion Week in Paris, where the brand was positioned alongside the luxury players and received a very positive feedback from buyers, industry and the media. Moving to the Outdoor Performance segment, which delivered an excellent quarter led by Solomon footwear and apparel. Winter sports equipment results were also better than expected. Global brand momentum behind Solomon sneakers is accelerating. Not only is the Solomon footwear franchise continue to grow very well in China and APAC, it's now also starting to impress in both The US and Europe.

James Zheng
James Zheng
CEO at Amer Sports

Our brand awareness has doubled the past couple of years, and we are now seeing very strong momentum in both sports style and our performance lines. Solomon's sneakers surpassed 1,000,000,000 US dollars of sales in 02/2024, but it's still tiny relatively to the US180 billion dollars global sneaker market. We believe Salomon's sneakers have an authentic and a unique market position with technical features designed for athletes on a variety of talents, but also great for everyday use. Our unique style and the technical attributes are resonating with consumers at a time when they are more receptive than ever to wearing new sneaker brands. Long term, we expect Solomon soft goods to grow strong double digits annually.

James Zheng
James Zheng
CEO at Amer Sports

In Q1, Solomon footwear and apparel continued its very strong growth in Greater China and APAC, where America accelerate and EMEA continued its solid growth. Direct to consumer remained the fastest growing channel for the brand and the sports style offering continues to lead footwear growth. In addition to shoes, Salomon apparel, bags and socks are also experiencing great momentum. A key brand highlight in quarter one was our first ever global footwear launch with XC Whisper, a new addition to our sports style offering. This global synchronized launch has been a massive success and was welcomed with excitement by customers around the global.

James Zheng
James Zheng
CEO at Amer Sports

We did XT Whisper collaborations with Kiss and Sandy Liang in The US and have been great results from our Whisper Go campaign in China. On the performance side, we have been very pleased with the launch of the low running shoe AeroGlide three, one of the best footwear launch in Solomon history. AeroGlide three uses a form called Optimum Evo, which we believe represent a disruptive new generation material offering the runner a new level of rebound and the comfort for running on load or trail. We are also very excited by the gravel launch this month, a new line that offers consumers a more versatile than ever running shoe that perform great on various types of steering from pavement to parks and the trails. Originally, Salomon soft goods is continuing to experience great sell through and solid order books in Europe, both for sports style and the performance.

James Zheng
James Zheng
CEO at Amer Sports

Sell through for retailers continues to be strong, which is translating to healthy growth in our books. In Asia, direct to consumer continued to be the critical growth channel for Solomon. Our Solomon complex shop format developed in China works very well. And we believe these stores generate significantly higher sales per square foot versus industry average and continues to improve. We are continuing to expand our complex shop in Greater China, opening 22 net new Solomon shops in quarter one, including both owned store and the partner stores, bringing our total comp to two eighteen.

James Zheng
James Zheng
CEO at Amer Sports

We are on track to reach near 300 Solomon shops in Greater China this year. We believe Solomon has the opportunity to grow to several hundred locations over time in just Tier one and two cities from only eight stores four years ago. Our new Solomon flagship in Shanghai has continued to perform very well in the first few months. We will open a second Shanghai flagship in August, which will be located in the former branch of Concession District, known for its boutique shopping. In The U.

James Zheng
James Zheng
CEO at Amer Sports

S, we continue to lay the groundwork to support significant future growth, and we are seeing more and more signals that the brand is gaining momentum in the world's largest Disney market. Our first U. S. Store in New York City continues to show incredible traction with our consumers. And the brand is seeing strong buzz with key sneak retailers across the city.

James Zheng
James Zheng
CEO at Amer Sports

We plan to open three to four more Solomon shops in the Great New York area this year, as well as continue to expand our presence in key wholesale accounts. Beyond the New York, we also focus on San Francisco and the Los Angeles as epicenter market for Salomon sneakers. In addition to the success of Salomon sneakers, our winter sports equipment brand delivered better than expected end of the ski season with strong sell through at retail, leading to bet at once reorders. Moving to Boll and Racquet highlights. We are pleased that the board and the racket growth trend continue to be solid in quarter one with 12% growth driven by strength in sportswear, racket, sports and the golf.

James Zheng
James Zheng
CEO at Amer Sports

Our Tennis three sixty continues to resonate very well with consumers from performance racket to soft goods, especially in Great China. Wilson's performance racket business continues to shine, including the January launch of the Clash V3, which is up to a solid start. And in pickleball, we are experiencing strong response to our Vespa pedal launch. Western Tennis three sixty soft goods also continues its excellent growth, nearly doubling in Q1 twenty twenty five. We have seen very strong response to the Yintech women's tennis shoe.

James Zheng
James Zheng
CEO at Amer Sports

We also continue to excel in China and will open approximately 50 more Western Tennis three sixty shops in China this year, including both owned and the partner stores, bring the total to almost 100. In North America, the new Tennis three sixty concept store in the Dallas North Park Mall is off to a very good start. This is also true of our tennis footwear and apparel test in 50 DICK'S Sporting Goods locations, where we are selling through better than our competitors. Lastly, we were pleased to see Western Gulf have a solid improvement in sales and the margins in quarter one led by the Standard Power launch this spring, which has received a positive reviews in the Gulf Influencer community. With that, I will turn over to Andrew.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Thanks, James. Before I start, I want to take the time to thank our more than 13,000 ARMOR employees around the world. Our passionate teammates are critical to developing innovative products, engaging with consumers, and building our brands for the long term. And they've done an amazing job navigating the ever changing macro environment with discipline and flexibility. I will discuss tariffs in detail when I provide guidance, but I want to start by saying that we are very confident that our fundamental business momentum, diverse global footprint, clean balance sheet and strong brand portfolio with pricing power will give us significant flexibility and firepower to manage through a variety of tariff scenarios.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Let's go through Q1 results first. Amherst Sports grew 23% in Q1 on a reported basis and 26% in constant currency. The strong group sales performance was led by both technical apparel and outdoor performance, while ball and racket also delivered very solid growth in the quarter. By channel, the group continues to be led by D2C, which grew 39% led by Solomon Footwear in Greater China and APAC. We also saw solid wholesale growth of 12% led by Arcterix.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Regional growth was led by Asia Pacific, which increased 49%, followed by China, which grew 43%. EMEA accelerated to 12% and The Americas also grew 12% in Q1. We continue to achieve very strong growth in Greater China and there are several reasons why we are doing so well there and are also confident in our future growth in this important consumer market. Number one, our brands compete in one of the high quality and fastest growing consumer segments in China, the premium sports and outdoor market. The outdoor trend in China continues to be very robust, attracting younger consumers, female consumers and luxury shoppers.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Additionally, our still small specialized brands are known for their expertise, high quality and technical innovation, which resonates with Chinese shoppers. Third and most important, we have a great team in China. Our deep expertise and unique scalable operating platform gives us a significant competitive advantage across the portfolio. Turning to profitability. Adjusted gross margin increased three thirty basis points to 58% in Q1, primarily driven by favorable channel, geographic and product mix as well as lower discounts compared to prior year.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Going forward, we expect our highest gross margin franchise Arcterix to continue to be the biggest underlying driver of our ongoing gross margin expansion. Adjusted SG and A expense as a percentage of revenues leveraged by 160 basis points and represented 42.6% of revenues in Q1. Both the Technical Apparel and Outdoor Performance segment achieved SG and A leverage on very strong growth. This was partially offset by slight deleverage at Ball and Racket due to the ongoing investment in Tennis three sixty and D2C growth, Driven by both gross margin expansion and SG and A leverage, we generated four ninety basis points increase in our adjusted operating margin from 10.9 last year to 15.8% in Q1 of the current year. Adjusted corporate expenses were $19,000,000 up from $17,000,000 in Q1 of last year.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Depreciation and amortization was $78,000,000 which includes $36,000,000 of ROU depreciation. Adjusted net finance cost in the quarter was $17,000,000 which comprised of $22,000,000 of interest expense partially offset by $5,000,000 of FX gains and other items related to the weakening U. S. Dollar. In the quarter, our adjusted income tax expense was $64,000,000 which equates to an adjusted effective tax rate of 30%, better than expected, primarily due to our over delivery of operating income.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Adjusted net income in Q1 was $148,000,000 compared to $50,000,000 in the prior year period. Adjusted diluted earnings per share was $0.27 compared to adjusted diluted earnings per share of $0.11 last year. Turning to segment results. Technical Apparel revenues increased 28% to $664,000,000 led by Arteryx. Growth was fueled by 31 D2C expansion, including a 19% omni comp, a very good result comparing against a 36% omni comp in the first quarter of last year.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Arteryx D2C momentum continues to be fueled by both new and existing consumers across all regions, channels and product categories. Technical Apparel wholesale revenues grew 22% driven by Arteryx. Although it is a small part of the Technical Apparel segment, it is worth noting that we are making good progress with Peak Performance brand and cleaning up the marketplace in EMEA and The Nordics, shifting to a more full price B2C oriented brand. Peak's healthier core franchise as a solid base for the new president Stefano Secone to lead the brand through the next phase of its journey. Regionally, technical apparel growth was led by Asia Pacific followed by Greater China, The Americas and EMEA.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

All regions grew strong double digits fueled by Arteryx. Technical Apparel adjusted operating margin expanded 110 basis points to 23.8% driven by SG and A leverage, thanks to strong growth. Moving to our Outdoor Performance segment, which saw revenues increase 25% to $5.00 $2,000,000 driven by strong performance in Solomon's soft goods and good results in winter sports equipment. The D2C channel grew very healthy double digits driven by new store openings in Asia Pacific and Greater China as well as solid comps from existing Solomon stores. Outdoor performance growth also benefited from a solid performance in winter sports equipment in Q1 following a slow start to the winter season.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

By channel, Outdoor Performance DTC grew 68% led by Greater China and APAC and wholesale grew 9% from the prior year period. The wholesale results were driven by both Solomon Winter Sports Equipment and Solomon Softgoods. Regionally, outdoor performance growth was led by Greater China and APAC followed by accelerating growth in EMEA. The Americas was roughly flat, but only because of the Envy divestiture in 2024. Solomon's soft goods saw very good growth in The Americas.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

As James alluded to, the popularity of Solomon's footwear is inflecting globally, and we are well positioned to appropriately and fully develop this unique opportunity over time. We believe we have very significant growth in all three major consumer regions and have the right talent and team structures in place to take a more meaningful share of the global sneaker market over time. Our winter sports equipment business finished on a high note as a good end of season snow helped boost retailer sell through and reorders. The Nordic or cross country market remains more challenged, but we were able to move a significant amount of inventory at reasonable discounts, leaving us in a very clean position at the end of the winter. Our assumption is that the winter sports equipment market will grow low single digits in 2025 and over the long term.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

The ski and snowboard industry is healthy and given advanced snowmaking capabilities industry wide as well as the growing attraction of winter mountain vacations, demand for on peak skiing is strong. Winter sports equipment now represents one third of the outdoor performance segment, and the share is shrinking as Solomon's soft goods grows faster. Outdoor Performance adjusted operating profit margin expanded nine ninety basis points from last year to 14.7% in Q1 driven by strong gross margin expansion, to channel, region and product mix as well as favorable product costs. This margin expansion was also driven by SG and A leverage on high growth. Moving to Ball and Racket.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Revenue increased 12% to $3.00 $6,000,000 driven by soft goods, Racket Sports and Golf. The strong growth was also helped by easier comparisons from Q1 last year when Wilson was still going through some liquidations normalized inventory levels. We are pleased with the continued rebound, but we would caution that double digit growth is not sustainable long term and we continue to expect Ball and Racket to grow low to mid single digits long term. By category, the growth was led by soft goods, which now represents 10% of ball and racket sales in our marquee racket sports franchises. We continue to see very strong momentum in Tennis three sixty, especially in North America, Greater China and APAC.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Golf achieved positive growth, thanks to a successful DynaPower product launch as well as improving sales in pro golf clubs. Inflatables and baseball were both roughly flat as baseball bats returned to growth offset by softer ball glove sales. Ball and Racket segment adjusted operating profit margin increased two seventy basis points to 6.6%, primarily driven by higher gross margin thanks to favorable product mix, channel and region mix. We had slight SG and A deleverage due to the continued investment in Tennis three sixty and D2C. Turning to the balance sheet.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

We ended the quarter with $515,000,000 of net debt, down from $591,000,000 at the end of Q4. Using the midpoint of our 2025 adjusted operating profit guidance, our net debt to adjusted EBITDA ratio was approximately 0.5 times at the end of Q1. Following our $1,000,000,000 equity raise and debt pay down last December, our balance sheet is in a healthy position to support our company as we navigate tariff and other external uncertainties. Looking forward, using excess cash to pay down debt, which carries non deductible interest remains a high return usage of excess cash. We also exited the quarter in a solid inventory position, up 15% year over year, well below our 23% sales growth.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Driven by strong profit growth and disciplined working capital management, we generated $164,000,000 of operating cash flow in the first quarter of twenty twenty five. And for the full year of 2025, we expect to generate solid operating cash flow growth from the 2024 levels. Now moving to tariffs and guidance. There are several factors that give me confidence that we are well positioned to manage through a variety of tariff scenarios, both near and long term. First, we have low exposure to The U.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

S, only 26% of revenues, and we enjoy meaningful exposure to high end consumers. Also, the high functional nature of our products creates personal engagement and a strong value equation for consumers. Thirdly, we believe the brands in our portfolio have significant untapped pricing power. The vast majority of our growth the last several years has come from more units and not higher prices. Lastly, our clean balance sheet and strong cash flow dynamics give us the financial flexibility to weather macro challenges as they arise.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Given the upside in the first quarter and our continued operating and financial momentum and despite higher tariffs, we are raising our full year revenue and EPS expectations. This updated guidance assumes the current 30% tariff on goods arriving to The U. S. From China and 10% tariffs on goods coming in from rest of world will stay in place for the remainder of 2025. Given the mitigation strategies we already have underway, we expect the impact to our P and L from higher tariffs to be negligible this year.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Our updated guidance implies slower growth in the second half than in the first half. However, as we've said before, should strong trends continue and better than anticipated demand materialize, we believe we will be well positioned to deliver financial performance ahead of these expectations. Looking beyond 2025, we are confident in our ability to offset the vast majority of higher import tariffs under a wide range of scenarios through pricing, vendor renegotiations and supply chain maneuvers. Since the ultimate tariff outcome is still unknown, we thought it would be helpful to frame our U. S.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Sourcing exposure. In 2024, U. S. Revenues represented 26% of group revenues. Sourcing from China to The US was approximately eight points of the 26.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Vietnam was also eight. Rest of Asia was six, Europe three, and the rest of World 1. By brand, slightly more than half of the tariff exposure is in the ball and racket segment, around 30% in technical apparel and the remainder in outdoor performance. All three segments, including ball and racket, are already implementing and executing measures to offset higher tariffs. In addition to partnering with vendors, retailers also understand the landscape and price increases are being accepted and implemented in the second half for those product categories most affected.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

One last perspective I want to share on tariffs. Even if the higher tariffs had remained in effect for the rest of the year or if they do return, I. E, China at 145% and rest of world at the higher rates from before the ninety day pause, we were only anticipating a $05 impact from tariffs for the full year 2025 EPS after mitigation or approximately 100 basis points annualized. And over time, we believe we will be able to mitigate the majority of even the higher tariff rates. For the full year of 2025, we are raising our expectations for reported group revenue growth from 13% to 15% to 17%.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

We are now assuming 150 basis point drag from unfavorable FX impact at current exchange rates compared to the two fifty point drag incorporated in our prior guidance. We are raising our technical apparel revenue growth guidance from approximately 20% to 20% to 22%. Outdoor performance from low double digits to now mid teens and ball and racket from low to mid single digits previously to mid single digits currently. We are keeping our adjusted gross margin expectations at 56.5% to 57% for the full year. We are maintaining our adjusted operating margin guidance of 11.5% to 12%.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

For the segments, we continue to expect an adjusted operating margin of approximately 21% for technical apparel, approximately 9.5% for outdoor performance and 3% to 4% for ball and racket. You should assume full year net finance costs of approximately $120,000,000 and an effective tax rate of 30% to 32%. Other operating income and non controlling interest will be approximately $10,000,000 each. We now expect adjusted diluted EPS of $0.67 to $0.72 versus our prior guidance of $0.64 to $0.69 which is based on approximately $560,000,000 fully diluted shares. Also, we are assuming D and A of approximately $350,000,000 including approximately $180,000,000 of ROU depreciation.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

CapEx is expected to be approximately $300,000,000 primarily to support new store expansion, ERP optimization and distribution and logistics investments. Turning to the second quarter, we expect reported revenue growth for the group in the range of 16% to 18%. We expect adjusted gross margin to be approximately 57% to 58% in Q2 and adjusted operating profit between 34%. Our net finance cost for the quarter should fall between 25,000,000 and $30,000,000 and the effective tax rate should be 30% to 32%. We expect adjusted diluted EPS of $0 to $02 per share.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

As we've said in the past, should strong trends continue and higher than expected demand materialize, we will be well positioned to deliver financial performance ahead of these expectations. With that, I'll turn it back to the operator for questions.

Operator

Thank you. We will now begin the question and answer session. Your first question comes from the line of Matthew Boss from JPMorgan. Your line is open.

Matt Boss
Matt Boss
Equity Research Analyst at JP Morgan

Thanks and congrats on another great quarter.

James Zheng
James Zheng
CEO at Amer Sports

Thanks, Matthew.

Matt Boss
Matt Boss
Equity Research Analyst at JP Morgan

So

Matt Boss
Matt Boss
Equity Research Analyst at JP Morgan

James, on your broad based strength, as we think about the competitive advantages, could you walk through operating from a portfolio approach in this backdrop and just what that provides? And then brand specific, could you elaborate on momentum at Solomon and white space you see to scale this brand? And Stuart, on Arcterix, any change as we think about the omni comp strength into the second quarter relative to high teens you saw in the first quarter?

James Zheng
James Zheng
CEO at Amer Sports

Okay. Thanks, Matt. Okay. First of all,

James Zheng
James Zheng
CEO at Amer Sports

I will say Amherst Sports is really a unique portfolio company, sporting goods company, on a very unique portfolio brands in the market. So we we are different from other sporting goods companies. So all the brands we own, they all got to distinguish for positioning the markets and with a very strong high technical product pipeline offered to the market to adjust the different different level of the sports participants needs. So I I I think that this kind of a unique proposition give us a very strong competitive edge in the market. And and also, especially on the premium segment, auto set auto categories.

James Zheng
James Zheng
CEO at Amer Sports

We we really see a strong demanding cross border in the world, especially in Asia and China. And the more and more consumers participate in the outdoor activities. And our products, tariffs and settlement really adjust the strong demand from the market. So we we we we we feel very good on the on our overall proposition today in the markets. On the other side, really look at the Solomon in q one result, and we also really happy to see our soft goods business growing from Solomon brands and especially our footwear.

James Zheng
James Zheng
CEO at Amer Sports

Okay? So we created a new category. We call them more modern outdoor sneakers, which really address very special needs in the market. This kind of a unique position help us to attract kind of a new group of the auto lovers. I mean, especially for female younger female consumers groups.

James Zheng
James Zheng
CEO at Amer Sports

So we create the right bus and a very unique on our SNC markets, and we receive a tremendous positive feedback not only from Asia Pacific, but also in Europe and The US at the starting base. And the people are looking for the kind of a kind of a attractive offers we to the market, and they really enjoy the product. We offer to them. We call it real technical products with very nice designs to address the kind of the needs for for the for our consumer for both on the sports activities and also the the lifestyle environment. So I think it's a it's a quite unique position, and we see very we we also see a very strong runway for that. Stuart, you also can comment on some other stuff.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

Yeah. Thanks, James. Yeah. Matt, the comp in the quarter was was really solid, you know, 19 omni comp. That's comparing against a 36% last year.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

That is the highest comparison that we'll have in 2025. Comp comparisons moderate for the balance of the year. And I would just add it was a traffic driven comp. We had really strong solid conversion but the upside is really driven from traffic increases, which we think reflects the momentum of the brand, and, just the the the investments we've made in community and brand marketing, and the expansion of our store fleet. And the brand stores continue to perform well.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

We're seeing expansion in productivity across every region. We're really pleased with how our store is performing. Also pleased with the traction that we're seeing in e commerce. So every every, every signal from the market is positive. And, yeah, we're excited for, you know, what the the balance of the year, looks like.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

The the only thing I would say is in in the first quarter there was a drag on the omni comp as it relates to our outlet sales. Our outlet sales were lower in both China and North America as we had a stronger full price business and we chose to pull back on how much inventory we're pushing through our outlets. We view that as a very positive factor. It speaks to the high quality full price nature of our business that we want to continue to increase.

Matt Boss
Matt Boss
Equity Research Analyst at JP Morgan

It's great color. Best of luck.

Operator

Your next question comes from the line of Brook Roach from Goldman Sachs. Your line is open.

Brooke Roach
Brooke Roach
Vice President - Equity Research at Goldman Sachs

Good morning and thank you for taking our question. It sounds like your confidence in broad based growth for Solomon is growing. Are there any technical reasons that attributed to the outsized growth in 1Q? Or do you believe that the momentum observed in the quarter is sustainable? As you look on a multiyear horizon, what margin profile do you think that this business can achieve? Thank you.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Hey. Thanks, Brooke. It's Andrew. Yeah. I mean, we, you know, we are on track and and doing what we had always set ourselves up to do.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

I mean, you know, to your to to your question around, do we believe it's sustainable. I mean we've raised our guidance for the full year as it relates to Solomon Outdoor Performance. So we're pretty excited about it. We always understood that we had great product. We obviously had to operationalize our commercial go to market strategy, get our teams in place.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

You saw the brand really driving momentum in, in Asia Pac and Greater China, and it's continuing, you know, with both of those regions up over 60%. In Europe, you you continue to see the brand picking up momentum there as well. And it's, you know, outside of not only our performance, but as well as our sports style, and we're doing more with our key strategic partners. We talked about this kind of in in May of last year signing up some key strategic partners that we're able to do more with. And then as you move regionally to to North America, you know, that continues to be our, you know, our less mature market, but we we definitely have the leadership team in place and we are starting to penetrate, you know, key accounts that we'd like to continue to see the brand see the brand continue to grow at.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

But but as we talked about, I mean, our d to c is a leading indicator for what we think that brand can do, and we and the conversion there and the attachment to the consumers is pretty strong. So we're excited about what we see for Solomon footwear.

Brooke Roach
Brooke Roach
Vice President - Equity Research at Goldman Sachs

Great.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Yeah.

Operator

Your next question comes from the line of Laurent Vasilescu from BNP Paribas. Your line is open.

Laurent Vasilescu
Managing Director & Senior Equity Analyst at Exane BNP Paribas

Good morning. Thank you very much for taking my question. I'm going to be the third person to ask about Solomon. You've raised outdoor performance category to grow mid teens for FY 2025. With winter goods, I think, Andrew, I think you said you guided to grow low single digits for this year.

Laurent Vasilescu
Managing Director & Senior Equity Analyst at Exane BNP Paribas

Is it fair to assume that it implies that soft goods can grow 20% this year? And longer term, James, you called out that sneakers Solemn sneakers reached $1,000,000,000 in sales last year. You mentioned it's still tiny relative to the market. Can Solemn sneakers double over the next five years?

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Yeah. So great question. I I appreciate it. You know, we're not necessarily given, you know, specific, long term growth targets. But what I will say is that we have a great product.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

You can see the margin profile of Solomon footwear, Solomon soft goods really starting to inflect. And we talked about the fact that as soft goods within the outdoor performance grows, you're going to see margin accretion, which which you saw a mark strong margin accretion, gross margin, in the first quarter and and even operating margin. And operating margin up almost a thousand points in outdoor performance, two thirds of that was in gross margin, about a third of that SG and A, which continues to speak to the fact that as we over deliver top line, you have this, you know, a really strong effect coming down to the bottom line. You know, the billion dollars that Solomon is, that's a billion dollars on a on a hundred and $80,000,000,000 sneaker market. And and we believe that we have the product, we have the team, and that that can disrupt and and and take meaningful share within this business I mean, within this market.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

So we're excited about it. Again, you'll continue to you know, you saw the margin inflection as we grow that soft goods business, and and and we believe that that margin inflection reflects, the longer term profile that that we can that we will continue to benefit from.

Laurent Vasilescu
Managing Director & Senior Equity Analyst at Exane BNP Paribas

Very helpful. And maybe just a follow-up question on housekeeping for the model. Andrea, you're maintaining your gross margin for the year. But underlying, I think you talked about 100 basis points on an annualized basis, the impact from tariffs. Maybe just unpacking a little bit like under the hood, like what are the moving pieces versus ninety days ago?

Laurent Vasilescu
Managing Director & Senior Equity Analyst at Exane BNP Paribas

Is it like 50 bps from tariffs and then 50 bps just better performance in the overall business?

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Yeah. Thanks for the question. Yeah. Just let me just kind of reiterate some of my some of my prepared remarks on tariff. Our assumptions in for 2025 guidance is that the 30% tariff on China and 10% rest of the world remain in place.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

The burden on our 2025 p and l is negligible. We have, we have after our mitigation initiatives, I I thought it would be, prudent to kind of contextualize, had the higher tariff state in place or things go backwards, I. E, China at a 45%, rest of world at, you know, the 3040%, that would that was that's where the hundred basis point annualized drag would come from. So, and over time, we believe that we, you know, the the levers that I talked about whether it be pricing, re resourcing, vendor management that over time we could neutralize 100 basis point drag. So when you look at our gross margin for the remainder of the year, we obviously we had a strong first quarter.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

There is a meaningful amount of uncertainty still left in the market and we believe that the guidance for the rest of the year is prudent. It's responsible given the uncertainty that's out there. But but like I said, I mean, we felt convicted and confident in our mitigation initiatives. And and from a bottom line perspective, the impact on tariffs based upon where tariffs stand today is negligible.

Laurent Vasilescu
Managing Director & Senior Equity Analyst at Exane BNP Paribas

Thanks a lot.

Operator

Your next question comes from the line of Alex Stratton from Morgan Stanley. Your line is open.

Chad Britnell
Chad Britnell
Equity Research Senior Associate at Morgan Stanley

Hi, thanks for taking the question. This is Chad Brittnell on for Alex. I'd like to touch on ball and racket. My first question is on store growth of 189% in the quarter. What portion of those store openings were in China?

Chad Britnell
Chad Britnell
Equity Research Senior Associate at Morgan Stanley

And how do you think about the sustainability of Wilson store openings beyond 2025 in the region? And then my second question is on ball and racket profitability. You saw a nice improvement in margin in 1Q. What pushes margin back to the mid single digit levels or beyond that you've seen in previous years? Thank you.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Yes. So the store growth related to Ball and Racket is primarily all of that is in mostly all of that is in Asia and Greater China. So that's where you see the store growth. Remember, that is a that's an environment that is very receptive to the mono brand retail format. It works very well.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Our team is very astute at running that and and that's with your that's the store growth that you see. From a profitability perspective, I think what gets us back is, you know, continuing to scale this, our our our investment. We are investing in our Tennis three sixty concept. We believe that we have the authority to play there and we will continue to drive that business. And so what's happening is once you see that reach scale, then you'll start to see the profitability and ball and racket return.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

So yeah. So we're, you we're we're excited about the direction we're going in.

Chad Britnell
Chad Britnell
Equity Research Senior Associate at Morgan Stanley

Great.

Operator

Your next question comes from the line of Michael Binetti from Evercore. Your line is open.

Michael Binetti
Senior Managing Director at Evercore ISI

Thanks for taking our question here. I'll add my congrats on a nice quarter. Maybe, Stuart, just another way to ask you about the omni comps, 19% in Technical Apparel. I know it slowed a little bit from last quarter, but you mentioned the big comparison from a year ago. You mentioned the outlet pullback.

Michael Binetti
Senior Managing Director at Evercore ISI

I'm wondering if you could speak to whether there was any pull forward or change in the cadence of important product launches for the winter and maybe the progression of how you see that comp evolving through the year, including like impactful launch cadence of impactful launches for the brand for the rest of the year? And then I'm just curious on the comment that we're going to close some Arcterix partner stores in China to open larger format. Can you just talk about the strategy there from an ROI standpoint? Obviously, partner doors are probably capital light to run. Maybe just walk us through the opportunity or what the financial prize is for investors as you shift to larger format? Thanks.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

Yes. Thanks Michael. So yes, I think it's a good call out on the product and how it influences just revenue broadly and that's obviously reflected in the Omnicomp. We're very confident in the outlook that we've shared for the year that Andrew described. We've made improvements in our in stock positions across a number of categories.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

But where in particular we've seen a stronger position as we entered the year. We learned a lot from last year. We were really excited to see strong footwear trends in the first quarter. Footwear was up 41% on top of the launch of the three new models last Q1 with the success that we're seeing now and Norvan LD4, which is was up 163 of plan as part of the launch. That's easily our largest footwear model.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

Vertex Speed was also very successful in the first quarter. So that will continue to be an important part of the growth story, leading our product category growth. We'll have a couple of new models launches later in the year that conceal approach shoe and the ballast trail shoe. And the Crag also continues to be a hot model as well. So much better position from a footwear standpoint.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

Where we've seen continued exciting demand, the Gamma franchise in particular, we really haven't found the edge of demand yet for the Gamma. It actually moved up. It's the second largest franchise behind the beta now for us. And so that is exciting to see the momentum in the Gamma. It's a great product.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

It's versatile. It works in many different climates. We think this has a lot of room to continue to expand an importance in our overall assortment. As I said, we're fighting out of stocks in the gamma. We see that as potential into the future.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

And our women's business was up 38% in the first quarter, second behind footwear. We're seeing great momentum there. You heard James mention the success that we saw in the women's pants. The Clarkea pant in particular was up more than double in the first quarter. We're chasing demand there as well.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

So success in our women's strategy. Overall we did see some out of stocks also in the first quarter in certain hard shell jackets that we shouldn't buy enough into. So overall I think our in stock is better this year than last year but opportunities in the areas I just mentioned. Shifting to your other question around partner doors in China, that continues to be an opportunity for us to elevate the execution in China, to move to better locations that better represent the premium nature of the brand, expanding the square footage when we do that. So we see this as a theme of higher quality execution and upside as we convert those from essentially a wholesale to an owned location.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

You get multiple layers of benefit in terms of larger store, more productive, better execution and then just the accounting of going from wholesale to own. So that's a theme that we'll have for the next few years actually in China.

Michael Binetti
Senior Managing Director at Evercore ISI

Okay. Really helpful. Thanks, Lester.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

Thanks, Lester.

Operator

Your next question comes from the line of Jonathan Komp from Baird. Your line is open.

Jonathan Komp
Senior Research Analyst at Robert W. Baird & Co

Yes, good morning. Thank you. Andrew, I want to follow-up on the full year outlook. When you look to the second half and the implied performance, it looks like limited profit growth and a margin decline that's embedded. So I just want to ask how you're embedding your rhythm after a pretty strong start to the year here versus your prudent approach to forecasting and some of the assumptions you made?

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Yeah. Thanks for the question. You know, Jonathan, first quarter was strong. And as I look through as we look through, how we're trending now, know, we can the the trends continue to be strong. That being said, like I I talked about, there's a a meaningful amount of uncertainty out there.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

We believe that focusing on the things that we can control, are is really important. As you know, the macro uncertainties with not only the tariffs, but, what what could go on in the environment. We're focusing on the things that we can control. We believe that we put a guy out there that's really responsible, that puts more things in our control than than the, than the macro. And and and if the macro should turn, you know, sour or some things that that that we are not anticipating out there, we believe that we'll be able to navigate a multiple, multiple scenarios out there.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

So, you know, our guide infers a slowdown. Our guide infers a slowdown in the back half and we believe that that is responsible given the amount of uncertainty that we cannot control.

Jonathan Komp
Senior Research Analyst at Robert W. Baird & Co

Okay. Understood. Thank you. And just one follow-up on Solomon. The wholesale business there I know had been negative for some time and just recently turned positive.

Jonathan Komp
Senior Research Analyst at Robert W. Baird & Co

So just any further color on the visibility you see in wholesale given the accelerating overall growth momentum? Thank you.

James Zheng
James Zheng
CEO at Amer Sports

Yeah. Jonathan, the Sodom wholesale business is mainly driven by our core region, which is Europe. Okay? So it's the last region for our Solomon forward business. And we we we we saw a great momentum also at the beginning of the year in terms of our sales through in the various channels in Europe.

James Zheng
James Zheng
CEO at Amer Sports

Okay? And which give a very strong confidence for our retail partners. So so and the and the reorder also accelerate in the first quarter. So and also our future order booking also see a very positive movement for the second half of the this year. So it's a very encouraging.

James Zheng
James Zheng
CEO at Amer Sports

And and also that kind of a trend, we we believe will carry on because based on our new product offers to the market for both sports style and the sports performance products, it's really resonating, the market trends and also also give out to the good level of confidence for our partners.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Yeah. I would you know, just double down in on that. If you think about sports style as an example, our XT Whisper, sports style was always a a strong franchise. Our XT Whisper was the most successful sports style launch within that franchise. Similarly, our AeroGlide three, this a very, successful launch in our performance category.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

So not only are the, are the strategic relationships and the wholesale relationships getting stronger with the brand in Europe, but also the franchises are resonating extremely well with consumers and giving us momentum and confidence to go forward.

Omar Saad
Omar Saad
Vice President of Finance & Investor Relations at Amer Sports

Yes. Operator, we have time since we went over on the tariff commentary, maybe time for a couple more questions. Thanks.

Operator

Certainly. Your next question comes from the line of Jay Sole from UBS. Your line is open.

Jay Sole
Jay Sole
Managing Director at UBS Group

Great. Thank you so much. Stuart, maybe can you elaborate a little bit on the opportunity in the women's business? James made some comments that, that business was really growing nicely. Can you just maybe talk about, what you've learned in the last ninety days and what kind of potential you see long term for the women's business in Arcterix?

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

Yeah. We really see this as a strong growth driver for our business. We're underpenetrated in women's as we have focused on improving our color, our fit and our choice for our female guests, we're really seeing traction. And the color investment in the first quarter really paid off. We saw a much stronger color presentation and higher sell throughs as a result.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

I mentioned the Clarkeia Pant, which has been a runaway hit for us with our women's assortment and excited to chase that. It really could be exponential growth for us as we crack into a part of the assortment that's really a new ad for us. The Gamma was really successful in women's as well as men's and that's sort of right in our wheelhouse in outerwear and something that we've been able to find a fit and a model design that really appeals to our female guests. And something I would add is, you heard James mention our Mammoth Academy in California. This was a huge success, and we saw 49% of the participants in that were women.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

Over 70% of the content that we generated coming out of that was aimed at our female guests. So there's a lot of momentum not only from a product category standpoint but also just as we're building community and engaging with our female guests. We see this as a huge potential to have a more balanced business. Ultimately, see the potential to see our guests fifty-fifty between men's and women's. So it's something that we feel we have good momentum.

Stuart Haselden
Stuart Haselden
CEO of Arc'teryx at Amer Sports

As I said 38% growth in women's in the quarter, second only to footwear and we expect that to continue.

Jay Sole
Jay Sole
Managing Director at UBS Group

Got it. Thank you so much.

Operator

And that concludes our question and answer session. I'm sorry. We'll have our last question from the line of Paul Lejuez from Citi. Your line is open.

Paul Lejuez
Paul Lejuez
Managing Director at Citi

Hey, thanks guys. Curious if you could talk about your AURs in the Solomon footwear business and just where within that assortment you're seeing the greatest strength and growth. And then second, curious if you saw any air pockets over the last several months in any of the businesses just tied to all the tariff news? If so, which segments, which regions? Thanks.

Omar Saad
Omar Saad
Vice President of Finance & Investor Relations at Amer Sports

Paul, you're coming through a little bit muffled. Can you repeat? The first question was about Solom and AUR. And the second half

Paul Lejuez
Paul Lejuez
Managing Director at Citi

Yeah. Solomon Solomon, Aurora. Just whatever in the assortment you're seeing the greatest strength and growth. Yeah. Yeah.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

With regard to the greatest strength in growth, I mean, we believe that both our performance category and our sports styles category are very strong. From a growth perspective, we continue to see, sports style as the biggest growth driver. Performance is more mature, but sports style is the biggest growth driver. Now what I will say is that the, even within the performance, category, our gravel franchise, which both has a a a, a running and a and a gravel platform, were very, very, very successful launches. So we're super excited about sports style as a category.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

We're super excited about gravel and and and and running as a as a as a performance, within our performance section. You talked about our our average units at at retail and, I mean, we haven't we haven't given that information, but what I will say is that our both our AOV and our and our, you know, ASPs are ticking up with with both of these franchises and going in the right direction.

Omar Saad
Omar Saad
Vice President of Finance & Investor Relations at Amer Sports

And Paul, was a second part to your question related to tariffs. Did I hear that right?

Paul Lejuez
Paul Lejuez
Managing Director at Citi

Yes. Just curious if you saw any air pockets over the last several months in any of your businesses just tied to the whole tariff news.

Omar Saad
Omar Saad
Vice President of Finance & Investor Relations at Amer Sports

No. No. As we said, we continue broad based strength across the portfolio that you saw in the recent quarters and especially this most recent quarter continues so far. So I don't know that we're going to be the leading indicator on the macro, but we haven't seen any air pockets yet.

Paul Lejuez
Paul Lejuez
Managing Director at Citi

Thank you, guys. Good luck.

Andrew Page
Andrew Page
Chief Financial Officer at Amer Sports

Thank you.

Operator

And that concludes our question and answer session. I will now turn the call back over to management for closing remarks.

Omar Saad
Omar Saad
Vice President of Finance & Investor Relations at Amer Sports

Thanks, everyone, for joining. Look forward to reconnecting in ninety days for our second quarter results. Have a great week.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Executives
    • Omar Saad
      Omar Saad
      Vice President of Finance & Investor Relations
    • James Zheng
      James Zheng
      CEO
    • Andrew Page
      Andrew Page
      Chief Financial Officer
    • Stuart Haselden
      Stuart Haselden
      CEO of Arc'teryx
Analysts
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Key Takeaways

  • Amur Sports delivered 23% sales growth in Q1 (26% ex-currency), expanded adjusted operating margin by 490 bps to 15.8%, and reported EPS of $0.27 vs. $0.11 a year ago.
  • The Arc’teryx brand saw 31% DTC growth (19% omni comp), opened about 25 net new stores for 2025, and drove strong traction in footwear (+41%) and women’s apparel (+38%).
  • Salomon sneakers—$1 billion in FY24 sales—remain small vs. the $180 billion market but are accelerating globally, with DTC up 68%, 22 net new shops in Greater China, and new gravel and AeroGlide 3 launches.
  • Ball & racket grew 12% on strength in Tennis 360 soft goods (now 10% of segment), Wilson Clash V3 rackets and pickleball gear, and plans for ~50 additional Tennis 360 stores in China.
  • Despite higher U.S. tariffs (30% from China, 10% RoW), the company expects negligible FY25 P&L impact and has raised full-year guidance to 15–17% revenue growth and $0.67–$0.72 EPS through pricing power and supply-chain mitigation.
AI Generated. May Contain Errors.
Earnings Conference Call
Amer Sports Q1 2025
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