This Retailer Had Blowout Earnings and Lifted its Guidance, Despite Tariffs
ValueWalk | May 21, 2025 01:28AM ET
Amer Sports (NYSE:AS) had a blowout first quarter, posting huge revenue gains and crushing earnings estimates.
In addition, the Helsinki-based sporting goods company, which owns brands like Wilson, Arc’teryx, Salomon, and Louisville Slugger, raised its guidance for fiscal 2025.
Its results and outlook are bucking the trend among many retailers who are facing major challenges due to tariffs on imports.
Amer Sports saw revenue increase 23% to $1.47 billion in the quarter, easily surpassing estimates of $1.38 billion.
Net income skyrocketed to $135 million, or 24 cents per share, up from a mere $5 million in the same quarter a year ago. Adjusted net income was $145 million, up nearly three-fold from $50 million in Q1 of 2024. Adjusted earnings were 27 cents per share, blowing away estimates of 15 cents per share.
“Given macro uncertainty related to U.S. import tariff rates, we are operating our business with discipline and flexibility,” CEO James Zheng said. “We are confident in our position to manage through a variety of tariff outcomes given our premium brands with pricing power, strong secular growth trends, and relatively low U.S. revenue exposure.”
The stock price was soaring after earnings were posted Tuesday morning, rising about 18% to nearly $37 per share, a record high for the stock. Amer Sports stock is now up 33% year-to-date and 133% over the past 12 months.
Revenue Gains Across the Board
As a global company with 10 major brands, Amer Sports has a broad and diversified revenue stream. In the Americas, revenue rose 12% to $465 million, while it jumped 43% in China to $446 million. In Europe, it made $405 million, up 12%, and in Asia-pacific it rose 49% to $157 million.
Its revenue is also split fairly evenly between wholesale ($780 million) and direct-to-consumer ($693 million).
It has three major segments, technical apparel, outdoor performance, and ball and racquet sports. Technical apparel revenue climbed 28% to $664 million, while outdoor performance revenue jumped 25% to $502 million, and ball and racquet ports increased 125 to $306 million. Arc’teryx and Salomon Footwear were the two leading brands in the quarter.
Revenue gains outpaced expenses, which grew 18% in the quarter. As a result, Amer Sports saw improved its margins. The overall operating margin was up 540 basis points to 14.5%. The overall gross margin was 57.8%, up 350 points.
Further, the technical apparel margin increased 110 basis points to 23.8%, while outdoor performance surged 990 basis points to 14.7%, and ball & racquet sports rose 270 basis points to 6.6%.
Raising its Guidance in the Face of Tariffs
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Factoring in 30% tariffs on China and 10% tariffs for the rest of the world, Amer Sports was still able to raise its outlook for 2025.
“Our underlying business momentum, diverse global footprint, clean balance sheet, and strong pricing power positions us well to navigate rising tariffs and associated macro uncertainties,” CFO Andrew Page said. “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.”
Page said the impact of tariffs will be negligible this year, due to the company’s mitigation strategies. Beyond 2025, Page said the company will offset the vast majority of higher import tariffs through pricing, vendor renegotiation, and supply chain maneuvers.”
Amer Sports raised its outlook for revenue to grow 15% to 17%, up from 13% to 15%. Earnings are projected to rise to between 67 cents and 72 cents, up from the previous guidance of 64 cents to 69 cents.
Amer Sports stock is a bit pricey, with earnings having been negligible up until this quarter. Its forward P/E is also high at 47, but its five-year PEG is a more reasonable 0.70.
Amer Stock had a really good run over the past year, topped off by Tuesday’s spike. Investors may want to wait for a better opening.
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