Wilson tennis racket maker Amer Sports beats Q1 estimates on robust demand

Amer Sports

21/05/2024 13:20

May 21 - Amer Sports  AS.N  topped market expectations
for first-quarter revenue and profit on Tuesday, helped by
higher pricing and robust demand for its popular sporting goods
brands in China and the United States.
    The Wilson tennis racket maker also expects full-year
earnings per share at the higher end of its prior forecast range
of 30 cents to 40 cents.
    
    MARKET REACTION 
    Shares have risen 23% from their IPO price of $13, as of
last close. But they fell about 4% in premarket trading after
the company forecast current-quarter loss marginally bigger than
the estimates.
    
    CONTEXT
    Amer Sports benefited from demand for its sporting apparel
brand Salomon, particularly in the direct-to-consumer channel,
as consumers look to purchase fresh styles.
    This comes when retailers in the U.S. are trimming
inventories, leading to weak demand in the wholesale channel for
sporting apparel manufacturers such as Nike  NKE.N  and Under
Armour  UAA.N .
    Amer Sports also saw strong sales for its pricier Arc'teryx
brand, which makes technical apparel such as climbing gear.
    
    WHY IT IS IMPORTANT
    China is the company's largest market, where it has key
suppliers and manufacturing facilities.
    But escalating trade tensions between the world's two
biggest economies could hurt its ability to sell goods
manufactured in China to the U.S.
    
    KEY QUOTE
    "Our transformation to a brand-direct business model four
years ago continues to fuel profitable growth today, and our
high-performance technical products are resonating with
consumers globally," said CEO James Zheng.
    
    BY THE NUMBERS
    The company's first-quarter revenue of $1.18 billion beat
LSEG expectations of $1.13 billion. 
    Excluding items, profit of 8 cents per share also beat
analysts' estimate of 4 cents.
    Revenue in China grew 51%, following 45% growth in the
fourth quarter.
    It forecast second-quarter loss per share to be between 4
cents and 8 cents, while analysts expect a loss of 5 cents.
    

 (Reporting by Juveria Tabassum in Bangalore; Editing by Shilpi
Majumdar)
 ((Juveria.Tabassum@thomsonreuters.com))