The parent company of Salomon, Atomic, Arc'teryx, Wilson, Precor, Suunto and other sports brands managed to raise its total revenues by 7 percent in local currencies during the third quarter ended Sept. 30, driven by increases of 19 percent in apparel, 15 percent in sports instruments, 11 percent for footwear, 10 percent for fitness and team sports, and 8 percent for cycling. However, when translated into euros, the company's reported revenues went up by only 1 percent to €608.9 million.

Amer Sports Consolidated Income Statement

(Million Euros, Third Quarter ended September 30)

 

2013

2012

%
Change

Winter Sports Equipment

151.6

163.7

-7.4

Footwear

100.0

92.9

7.6

Apparel

105.4

95.0

10.9

Cycling

33.1

31.3

5.8

Sports Instruments

30.5

28.1

8.5

Individual Ball Sports

65.3

72.1

-9.4

Team Sports

51.4

49.8

3.2

Fitness

71.6

69

3.8

NET SALES

608.9

601.9

1.2

Gross Profit

273.9

272.9

0.4

EBIT*

82.5

81.3

1.5

Financing Expenses

6.5

6.6

-1.5

Earnings Before Taxes

76.0

74.7

1.7

Net Result

54.8

56.0

-2.1

Earnings/Share

0.47

0.47

0.0

     

*Earnings Before Interest & Taxes

The group's Winter & Outdoor divsion, which includes Salomon, Atomic, Mavic, Suunto and other brands, recorded a 7.4 percent decline in sales to €151.6 million, but its operating profit improved slightly to €87.4 million. In local currencies, sales rose by 7 percent with gains of 3 percent for winter sports equipment, 11 percent for footwear, 19 percent for apparel, 8 percent for cycling and 15 percent for sports instruments.

Winter sports equipment sales fell by 7 percent in euros and by 3 percent in local currencies, but this was due in part to a shift in deliveries to the fourth quarter. Pre-orders for the current season are up from a year ago, as previously reported, and the company is expecting re-orders.

Individual ball sports were another relatively weak area, due to a drop in sales of tennis racquets, which was partly offset by a higher turnover of tennis balls. The new collections of tennis shoes and clothing sold well. The 10 percent increase in team sports was driven by a 28 percent jump for baseball bats.

In the fitness sector, the growth in turnover was particularly strong in the Americas and the Asia-Pacific region. Sales grew by 9 percent in the commercial segment and by 14 percent in home fitness.

Total sales in the Europe, the Middle East and Africa (EMEA) grew at a strong rate of 8 percent, with rises of 4 percent in winter & outdoor and 6 percent in fitness, partly offset by a 2 percent drop in ball sports. While sales went up in the Americas by 4 percent, they jumped by 15 percent in emerging markets. They declined in Russia because of a move to a more scalable warehousing model, but they are expected to be up by a double digit for the full year. Sales were up by a double digit in Japan, but grew only slightly in euros.

The gross margin fell to 45.0 percent from 45.3 percent, as improvements in winter sports and fitness equipment were offset by the negative impact of foreign exchange translations, especially for the Japanese yen, and by extra shipping costs of about €2 million. This was mainly due to a change in the Asian factory mix to respond to improved demand for footwear.

Total operating earnings rose to €82.5 million from €81.3 million, resulting in a relatively stable Ebit margin of 13.5 percent for the quarter, in spite of higher distribution expenses and investments.

The net profit for the period was off to €54.8 million from €56.0 million in the same quarter a year ago.

The management expects sales to meet or surpass the annual 5 percent growth target for the full year, generating a higher operating margin than in 2012 before extraordinary items. It will continue to focus on the development of softgoods, innovative products and marketing, commercial expansion and “operational excellence.”