Amer Sports shifts gears: Can Salomon take over from Arc'teryx?

Amer Sports' growth curve is about to switch.

In the second quarter, Amer Sports' revenue increased by 23% year-on-year to $1.236 billion, with a gross margin rising by 2.5 percentage points to 58.5%.

After repaying term loans through equity financing at the end of last year, the interest burden has significantly decreased, with net financial costs reduced by over 50% to $21.9 million.

However, the substantial improvement in profits may mainly be attributed to a $19 million government subsidy received by the company in the second quarter.

This funding supported a significant increase in adjusted operating profit by 130%, reaching $67 million; net profit was $18.2 million, turning from a loss to a profit year-on-year.

As profit pressure eases, the market's focus has begun to shift towards the company's organic growth.

By region, Greater China remains the absolute main contributor to growth, with a year-on-year increase of 42% to $410 million in the second quarter, while the Asia-Pacific region saw a year-on-year growth rate of 45%.

However, the upward momentum of Arc'teryx has weakened.

In the second quarter, the outdoor functional apparel segment where Arc'teryx is located saw revenue growth of 23% to $509 million, a decrease of 5 percentage points compared to the first quarter, with the adjusted operating profit margin dropping by 10 basis points to 13.9%.

Salomon's footwear business has begun to take over from Arc'teryx, becoming an important growth engine for Amer Sports.

In the second quarter, driven by Salomon's footwear business, Amer Sports' mountain outdoor apparel and equipment segment grew by 35% year-on-year to $414 million.

In line with the trend of lightweight outdoor gear, Salomon is currently strategically focusing on fashion-forward consumers and female clientele.

The proportion of female customers for Salomon in China has reached 50%, concentrated in first- and second-tier cities.

This summer, Salomon not only announced Zhao Jinmai as the brand's outdoor fashion ambassador but also opened a three-story flagship store "Salomon Little White Building · Fuyun" covering 479 square meters on Anfu Road in Shanghai.

In the second quarter, Salomon added 16 new stores in China, bringing the total to 234.

For the entire year, Salomon is expected to achieve a net opening of 60 stores in China. Management has also clearly stated: "It is a feasible goal for a single brand to develop hundreds of stores in first- and second-tier cities."

Recent key personnel adjustments have also attracted market attention.

Former Greater China President Yao Jian has been reassigned as President of the JACK WOLFSKIN brand, with his position to be taken over by former CEO of Zhongqiao Sports, Ma Lei.

Ma Lei has extensive experience in retail channel integration, terminal efficiency improvement, and supply chain system construction. His joining is seen as a signal for Amer Sports to strengthen operational efficiency and move towards refined management in Greater China.

Based on the assumption that the 30% tariff on China remains unchanged, Amer Sports has further raised its full-year performance expectations in this financial report, providing a performance growth guidance of 20%-21%.

Among them, the outdoor functional apparel and mountain outdoor equipment departments are expected to see revenue growth of 22%-25%, while the ball and racket equipment departments are expected to grow by 7%-9%