Amer Sports' stock falls 6% on wider-than-expected Q4 loss

By James Rogers

Amer Sports reported its first quarterly results since its IPO earlier this year

Shares of Amer Sports Inc. fell 6% in premarket trades Tuesday after the Finnish sportswear company reported its first quarterly results since its February IPO.

The company, which includes the Arc'teryx, Salomon and Wilson brands, reported better-than-expected fourth-quarter revenue, boosted by China, and a wider-than-expected loss. Amer Sports (AS) reported a fourth-quarter net loss of $94 million, or a loss of 25 cents a share, compared with a loss of $148 million, or a loss of 39 cents a share, in the prior year's quarter. The loss per share number reflects the share split that occurred in connection with the company's IPO earlier this year, but does not include additional shares issued in the IPO which occurred after the fourth quarter ended, Amer Sports said, in a statement.

On an adjusted basis, Amer Sports reported a net loss of $41 million, or a loss of 11 cents a share, after net income of $46 million, or 12 cents a share, in the same period last year. Excluding extraordinary items, analysts surveyed by FactSet were looking for a loss of 1 cent a share.

Related: Amer Sports stock ends its first day of trading with a 3% gain over its discounted IPO price

The company's adjusted gross margin was 52.2%, an increase of 170 basis points on the prior year's quarter. Amer Sports said this was driven by its highest gross profit margin business, Arc'teryx, growing faster than its other brands, partially offset by a heavily promotional environment in its Ball & Racquet segment.

Revenue was $1.315 billion, up 10% from the prior year's quarter. However, the company said this was an expected deceleration from the third quarter and year-to-date comparative trends due to a supply chain-related sales shift that occurred from the third quarter into the fourth quarter in 2022. Analysts surveyed by FactSet were looking for revenue of $1.304 billion. Amer Sports said fourth-quarter regional growth was led by Greater China, which increased 45%, and the APAC (Asia-Pacific) region, which increased 22%. The Americas grew mid-single digits led by direct-to-consumer (DTC) strength, offset by a decline in wholesale, the company said.

For the first quarter, Amer Sports expects revenue growth of 6% to 8% and earnings between a 1 cent loss and 2 cents a share, although this includes an 8 cent to 9 cent negative impact from non-recurring finance costs related to the company's refinancing in February. Analysts surveyed by FactSet are looking for earnings of 10 cents a share.

Related: Recent IPO Amer Sports taps high-yield bond market with $600 million deal

For the full year, the company expects revenue growth in the mid-teens and earnings between 30 and 40 cents a share, including an 8-cent to 9-cent negative impact from non-recurring finance costs related to the February refinancing. On an adjusted basis, analysts surveyed by FactSet are looking for full-year earnings of 51 cents a share.

Shares of Amer Sports have risen 29.4% since the company's IPO in February, outpacing the S&P 500 index's SPX 4.6% gain over the same period.

-James Rogers

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03-05-24 0830ET

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