Amer Sports, Inc. (AS) shares are soaring after the company reported better-than-expected second-quarter results. Revenue surged 16% year-over-year (18% on a constant currency basis) to reach $994 million, outpacing the consensus estimate of $948.2 million. Adjusted earnings per share (EPS) of $0.05 also exceeded expectations, beating the consensus loss of $0.06.
The company’s strong performance was driven by growth across its segments. Technical Apparel revenue soared 34% to $407 million, fueled by a 26% increase in omni-channel sales. Outdoor Performance revenue rose 11% year-over-year to $304 million, while Ball & Racquet Sports revenue grew 1% to $283 million.
Amer Sports’ profitability also improved. Adjusted gross margin expanded by 200 basis points year-over-year to 55.8% in the quarter. Adjusted operating profit surged 40% to $29 million, with the margin increasing 50 basis points to 2.9%. The company ended the quarter with $256 million in cash and equivalents.
CEO James Zheng expressed satisfaction with the results, highlighting the success of the company’s premium brands in capturing market share in sports and outdoor markets worldwide. He specifically cited the flagship Arc’teryx brand as a key driver of growth, stating that the company exceeded its own expectations on all key financial metrics.
Looking ahead, Amer Sports is optimistic about its future prospects. The company has raised its full-year 2024 guidance, now expecting adjusted EPS of $0.40-$0.44 (versus the consensus of $0.40) and revenue growth of 15%-17% (compared to the mid-teens growth expected earlier). Amer Sports projects Technical Apparel revenue growth to exceed 30% (previously above 25%), with a segment operating margin slightly above 20%.
For the third quarter, Amer Sports anticipates adjusted EPS of $0.08-$0.10 (versus the $0.14 estimate) and revenue growth of 12%-13%. CFO Andrew Page attributed the company’s strong performance to its brand portfolio, effective management, and disciplined expense control. He expressed confidence in the company’s ability to deliver continued growth and profitability in the coming quarters.
As a result of the positive results and raised guidance, AS shares are trading significantly higher, up 12.2% to $13.86 at the last check on Tuesday.
