The Amer Sports group achieved record sales and profits last year despite a weak fourth quarter, caused by lackluster market conditions as well as delays in product launches.

The owner of Salomon, Atomic, Wilson and many other brands saw its sales decline by 1 percent to €772.4 million for the last quarter. Its turnover was down by 2 percent in constant currencies and in comparable terms. The company explained that demand remained robust in apparel but deliveries in winter sports equipment peaked earlier in the year. Technical issues caused a delay in the launch of new products in the sports instruments category, under the Suunto brand, and there was a delayed impact from some fitness product launches.

Sales in the outdoor division were down by 2 percent to €490.7 million for the quarter, which was a decline of 3 percent in constant currencies. Even the footwear category saw its turnover dip by 3 percent in constant currencies, because deliveries were arranged earlier to deal with warehousing changes. Apparel sales were up by 10 percent in constant currencies with brands led by Arc'teryx and Salomon, and they would even have moved up by 14 percent without divestments.

In another part of the outdoor division, sales of winter sports equipment under brands such as Salomon and Atomic were off by 8 percent for the quarter. This was blamed on mild winter weather that left inventories in European stores. The sports instruments division was badly affected by the delayed launches, leading to a sales slump of 22 percent for the quarter.

This weakness in the outdoor sector compares with a rise of 3 percent in sales of ball sports products for the quarter but a drop of 5 percent for fitness. Sales in constant currencies dropped in all regions for the quarter, down by 2 percent in Europe, the Middle East and Africa (EMEA), by 1 percent in the Americas and by 6 percent in Asia-Pacific.

The Finnish group's gross profit margin advanced by 0.9 percentage points to 44.7 percent for the quarter but its operating profit before one-off items slipped to €81.3 million, down from €84.0 million. The one-off items accounted for €8.2 million. Heikki Takala, the group's chief executive, said that Amer Sports had implemented short-term expense reductions to deal with the market situation, increasing focus on profit, cash and asset efficiency. In the same context, Amer has proactively expanded the restructuring program launched in August, to reduce its operating expenses by the equivalent of about 1.0 percentage point in operating profit margin in the next two years.

Yet the group still raised its sales by 3 percent to €2,622.1 million for the full year, amounting to a rise of 4 percent in constant currencies. Excluding exchange rate changes, sales moved up by 3 percent in EMEA, 5 percent in the Americas and 4 percent in Asia-Pacific.

Despite its issues in the last quarter, the outdoor category delivered a sales increase of 6 percent to 5 percent to €1,601.8 million for the full year. Footwear managed a comparable sales increase of 8 percent and apparel sales even jumped by 13 percent or 16 percent excluding divestments. The Arc'teryx brand alone raised its sales by 21 percent for the year. Sales of soft goods advanced by 11 percent and reached about €1 billion.

Winter sports equipment sales were hurt by the unstable weather and resulting inventories last year. They were down by 3 percent to €388.5 million, down by 4 percent in constant currencies. However, Takala pointed out that the profitability of the winter sports equipment division continued to improve.

Sales of cycling products, mostly consisting of the Mavic brand, ended the year up 8 percent to €150.2 million. But this was entirely due to the acquisition of Enve Composites, while the relatively tense cycling market caused a comparable sales decline of 7 percent. The delays in the last quarter flattened sales of sports instruments for the year. The entire outdoor division raised its operating profit margin before one-off items to 12.3 percent, up by 1.8 percentage points.

With Wilson and other brands, the ball sports division raised its turnover to €671.1 million for the year, up by 4 percent in euros and in constant currencies, but the increase amounted to just 1 percent in organic terms.

The fitness division and its Precor brand suffered a sales dip of 2 percent to €349.2 million, down by 1 percent in constant currencies for the year

The group's gross profit margin was up by 1.1 percentage point to 46.3 percent for the year and operating profit excluding one-off items amplified by 5 percent to €221.7 million. The operating profit margin as a whole slipped by 0.3 percentage points to 7.8 percent. Amer Sports ended the year with profit of €126.9 million, up by 4.3 percent.

The group has continued to invest in its strategic priorities, such as its own retail business, with the opening of 27 stores for the year. Sales at its directly managed stores reached more than €200 million in 2016, with a network adding up to about 290 physical and 70 online stores. Another priority, the U.S. market delivered sales of more than $1 billion, after a rise of 6 percent last year. China generated a turnover of more than €100 million after a sales increase of 26 percent for the year.

Amer Sports predicts that its sales in constant currencies will be up in 2017, despite short-term market issues. The growth should thus be weighted more heavily toward the second half, when the company expects to take advantage of the delayed launches and improved conditions in the winter sports market, as inventories are getting smaller. The Finnish company will continue to focus on the growth of its core business and five priority items, from apparel and footwear to the U.S. market, China, own retail sales and digitally connected devices and services. More in Sporting Goods Intelligence Europe