The sales and profit picture was mixed at Amer Sports across the brands and the regions in the third quarter ended on Sept. 30. Overall, the group booked a 6.1 percent sales increase to €645.8 million for the period, or by 6.0 percent in local currencies, but net earnings slid by 21.0 percent to €43.3 million due to the reorganization of Wilson, the situation in Russia and other problems.

The gross margin went down by 0.3 percentage points to 44.7 percent. Operating earnings retreated by 16.0 percent to €69.3 million, or 10.7 percent of sales, but would have risen by 6.2 percent to €87.6 million excluding non-recurrent charges.

Amer Sports Consolidated Income Statement

(Million Euros, Third Quarter ended Sept. 30)

 

2014

2013

%
Change

Equipment

150,8

151,6

-0,5

Footwear

117,9

100,0

17,9

Apparel

117,0

105,4

11,0

Cycling

32,4

33,1

-2,1

Sports Instruments

34,1

30,5

11,8

Individual Ball Sports

61,3

65,3

-6,1

Team Sports

51,6

51,4

0,4

Fitness

80,6

71,6

12,6

NET SALES

645,7

608,9

6,0

Cost of Goods Sold

357,3

335,0

6,7

License Income

1,9

1,2

58,3

Other Operating Income

1,0

0,5

100,0

R & D Expenses

18,0

17,4

3,4

Selling & Marketing Expenses

141,2

129,8

8,8

Administrative & Others Expenses

44,6

45,9

-2,8

Net Finance Expense

8,8

6,5

35,4

Pre-Tax

60,5

76,0

-20,4

Tax

17,2

21,2

-18,9

Net Result

43,3

54,8

-21,0

Earnings/Share (Diluted)

0,36

0,47

-23,4

Sales grew by 6 percent in the Americas as well as in the Europe, Middle East and Africa (EMEA) region. They went up by 8 percent in Asia-Pacific. Retail sales went up by 44 percent across the group, and e-commerce jumped by 87 percent, said Amer, without giving out specific numbers.

The Winter & Outdoor category, still the largest within the group, rose by 9 percent to $599 million in the quarter, driven by currency-neutral increases of 14 percent in apparel and 19 percent in footwear. The management indicated that the Russian crisis is hurting its apparel business and the group's gross margins.

In the EMEA, Winter & Outdoor sales grew by 11 percent in constant currencies, compared with growth of 2 percent in the Americas and 10 percent in Asia-Pacific. Global sales of winter sports equipment were flat at €200 million, with alpine skis up slightly and Nordic skis and snowboards down. Sales of cycling products declined by 2 percent, but sports instruments were up 12 percent. A more normal mix is expected in the fourth quarter.

The management pointed to the improved agility of the group's supply chain in the winter sports equipment sector. The situation in Russia and the early phaseout of low-margin products led to a drop in the segment's operating profit to €83.1 million from €87.4 million a year ago.

The re-organization of the Ball Sports segment led to higher gross margins and lower operating costs, producing a positive operating profit of €3.9 million before charges as compared to a loss of €2.1 million. Segment sales were off by 3 percent to €112.9 million, with Individual Ball Sports (tennis and golf) down by 6 percent due to the continuing clean-up of unprofitable product lines.

Amer Sports Net Sales by Region

(Million Euros, Third Quarter ended Sept. 30)

 

2013

2012

%
Change

EMEA

301,6

297,6

1,3

Americas

237,2

236,2

0,4

Asia Pacific

70,1

68,1

2,9

Total

608,9

601,9

1,2

Fitness equipment sales fell by 17 percent in EMEA, but strong growth in the other main regions helped the category to record a 12 percent sales increase to €80.7 million.

The management's outlook remains unchanged, with the group's operating profits improving before extraordinary charges and sales rising by a minimum of 5 percent, in line with the company's longterm forecast.

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