Amer Sports held its own in terms of sales for the second quarter ended June 30, as its turnover slipped by just 0.1 percent to €284.7 million. Sales fell by 6 percent in constant currencies, however, with fitness and golf again worst affected.
Amer’s gross profit margin continued to shrink, down by 2.9 percentage points to 38.1 percent. The company blamed this on a downward sales mix, as consumers were seeking cheaper products. Earnings before interest and taxes (Ebit) were negative, with a loss of €29.4 million against a loss of €7.8 million for the same quarter last year – although the latter figure came after a gain of €13 million from selling corporate headquarters. Amer’s quarterly net loss reached €23.2 million, compared with a loss of €11.4 million for the same period in 2008.
In reported terms for the quarter, a drop of 15 percent in fitness sales to €42.4 million was offset by gains of 1.9 percent to €106.6 million in winter and outdoor sports, and 3.7 percent to €135.7 million in ball sports. In constant currencies, the winter and outdoor division had stable sales, while ball sports fell by 4 percent and fitness was down by 23 percent.
In winter and outdoor sports, the apparel and footwear category continued to expand, with a sales increase of 25 percent to €49.2 million for the quarter. Led by the Salomon brand, sales in this category were up by 24 percent in constant currencies. However, as they already indicated at the end of the previous quarter, Amer managers said that orders pointed to a slower pace of growth for the second half.
Winter sports equipment sales fell by 31 percent to €11.4 million for the quarter, which is not very relevant for this business. More interestingly, pre-orders are at about the same level as last year, with the Americas remaining poor but the largest European markets showing healthy progress.
Amer’s sports instruments business (Suunto) saw its sales drop by 5 percent to €21.4 million, off by 8 percent in constant currencies. This category was hurt by poor sales in the U.S. generally and in diving worldwide. On the other hand, sales of training and outdoor instruments held up well.
The group’s European sales remained flat in reported terms, but they inched up by 2 percent in constant currencies. Sales in the Americas were stable in reported terms, but they took a hit of 12 percent in constant currencies. As for Asia-Pacific sales, they were up by 6 percent in reported terms but down by 4 percent in constant currencies.
The operating profit (Ebit) for the entire winter and outdoor sports division amounted to a loss of €29.2 million, 9 percent wider than in the second quarter of last year.
For the first half of the year, sales fell by 1.2 percent to €640.0 million, a 7 percent drop on a currency-neutral basis. Ebit was negative at €36.3 million, worse than the negative €7.8 million of last year; again, this figure includes the €13 million gain in 2008 for the sale of headquarters. Earnings before tax were negative €45.3 million against negative €22.1 million last year. The net loss was €34.0 million, against a loss of €16.6 million for the first six months of 2008.
Also, in 2010, Amer will inaugurate a new center for its European operations in Garching, outside Munich, where all national and many international operations will be bundled for all the group’s brands in a single European head office.
The Munich choice came partially from the good location somewhere between the Atomic headquarters in Austria and the Salomon’s headquarters in France (more in SGI Europe).