Amer Sports' Q3 2025: Contradictions in China Sales Recovery, Salomon Expansion, and Arc'teryx Store Growth

Date of Call: September 30, 2025

Financials Results

• Revenue: $1,757M total (Technical apparel $683M; Outdoor performance $724M; Ball & Racquet $350M), up 30% YOY (28% ex-currency)
• EPS: $0.33 adjusted diluted EPS, compared to $0.14 prior year (more than doubled)
• Gross Margin: 57.9%, up 240 bps YOY; benefited ~50 bps from one-time inventory reserve adjustments
• Operating Margin: 15.7%, up 130 bps YOY (14.4% prior year)

Guidance:

• Raising 2025 revenue growth guidance to 21%–24% (approx. 100 bps FX benefit)
• Technical apparel +25%–27%; Outdoor performance +25%–29%; Ball & Racquet +9%–11%
• Adjusted gross margin ~58%; adjusted operating margin ~12.2%–12.7%
• 2025 adjusted diluted EPS $0.88–$0.92; net finance cost $85–90M; effective tax rate 27%–28%
• CapEx ~ $300M; D&A ~$350M; 2026: revenue toward high end of low-double to mid-teens and operating-margin expansion of 30–70+ bps

Business Commentary:

• Strong Financial Performance:
• Amer Sports reported 30% revenue growth for Q3, with an adjusted operating margin expansion of 130 basis points.

• The growth was driven by exceptional performance in Salomon footwear and technical apparel led by Arc'teryx.

• Brand and Regional Performance:

• Arc'teryx experienced 40% growth in its footwear line and strong momentum in North America and Europe, with significant Q3 store openings.

• The brand continues to gain traction in the women's outdoor segment, with key products like the Norvan jacket outperforming.

• Salomon Footwear Expansion:

• 
  Salomon's footwear momentum continued with strong demand in Asia and the U.S., contributing to a 36% revenue increase in the Outdoor Performance segment.

• This growth is attributed to the brand's unique sports style offerings and its global marketing campaigns.

• North America and China Market Growth:

• North America achieved high double-digit revenue growth, led by Tennis 360 and softgoods, while China grew 47%.
• Investments in brand awareness and store expansions in key epicenters contributed to this growth in both regions.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management: "Our strategy is working." Andrew: "we are raising our full year revenue margin and EPS expectations." Multiple comments on strong brand momentum, doubled EPS, margin expansion and raised guidance indicate upbeat outlook and confidence.

Q&A:

• Question from Brook Roche (Goldman Sachs): Have you seen a sales impact in China following the fireworks incident — if so, when do you expect sales to recover? Do you think there could be any longer-term brand repercussions?
  Response: China sales softened early in Q4 post-incident but have rebounded with cooler weather; management expects no lasting brand damage and is focused on consumer engagement and store experience.

• Question from Brook Roche (Goldman Sachs): How did this event impact guidance for Q4?
  Response: Management: no impact — the event did not factor into Q4 guidance.

• Question from Matthew Boss (JPMorgan): Confidence in guiding 2026 to mid-teens growth and can you break down the cadence of Arc'teryx's 27% omni comp and any change in demand heading into holiday/Q4?
  Response: Management is confident in mid-teens 2026 growth; Arc'teryx's 27% omnichannel comp was driven by higher traffic (not markdowns) with broad regional momentum, supporting optimism into Q4.

• Question from Irwin Boruchow (Wells Fargo): Can you provide detail on door growth for Salomon and Arc'teryx and update on Salomon penetration in the U.S.?
  Response: Plan to expand epicenter and shop footprints to build US Salomon penetration; early US traction is evident and the strategy is to scale via curated owned stores, targeted wholesale and media.

• Question from Lorraine Maikis (Bank of America): You're pulling back some distribution which is causing pressure — when will that pressure abate and what's current U.S. awareness for Salomon?
  Response: Distribution reset largely completed; most changes implemented and pressures should abate by end of H1 2026.

• Question from Jay Sole (UBS): Tennis 360 opportunity outside China and recent developments (Dallas, U.S. expansion)?
  Response: Tennis 360 is early but promising outside China with ~14–15 North America stores; focused cluster expansion in southern US and California, early owned stores like Dallas are performing well and partner channels will scale reach.

• Question from Paul Lejuez (Citigroup): For next year's margin guide how much is mix versus within-segment improvement, and can you quantify doors exiting/adding?
  Response: Margin expansion is driven primarily by gross-margin improvement from mix (channel/product); management declined to provide specific door counts.

• Question from Anna Andreeva (Piper Sandler): Americas acceleration color by channel and will Americas be double-digit in 2026; has outlet headwind moderated and when is the anniversary?
  Response: North America acceleration is driven by brand marketing and store expansion (omnichannel); markdowns have reduced and outlet headwinds should moderate as they cycle through H1 2026.

• Question from Jonathan Komp (Baird): Will technical apparel be at least mid-teens in 2026 per the algorithm, and why is Q4 operating-profit guide more conservative after strong YTD profit growth?
  Response: They reaffirm the Investor Day algorithm (brands and group) expecting mid-teens for technical apparel; Q4 guide incorporates first full-quarter tariffs and planned investments, so conservatively modeled though upside remains if demand persists.

• Question from John Kernan (TD Cowen): Why conservatism in outdoor performance margin guidance given recent upside, and commentary on technical apparel margin drivers into Q4/2026?
  Response: Outdoor conservatism reflects planned marketing investments and some timing of shipments; technical apparel margin drag in Q3 was due to timing of government grants, with full-year technical apparel margins expected in the low‑20s.

• Question from Alexandra Straton (Morgan Stanley): China growth acceleration versus peers — why the difference and outlook into Q4/2026?
  Response: Q3 China strength was broad across Salomon, Arc'teryx and Wilson, driven by youth demand and differentiated brand propositions; management is confident this foundation supports strong Q4 and 2026 performance in China.

Contradiction Point 1

Sales Impact and Recovery in China

It involves the impact of a specific incident on sales in China, which is crucial for understanding the company's regional performance and resilience.

Did the fireworks incident impact sales in China? When do you expect sales in China to recover? Are there potential long-term brand repercussions? - Brooke Roche(Goldman Sachs)

20251118-2025 Q3: Arc'teryx China sales trends were softer at the beginning of Q4, but have since rebounded as weather has cooled. - Stuart Haselden(CEO of Arc'teryx)

What is driving the third-quarter momentum supporting the 20% outlook? What are the growth drivers at Salomon and the accelerated back-half opportunity? What trends at Arc'teryx have driven the raised expectations, particularly Q3-to-date vs. Q2, and how does the 15% omni-channel growth compare? - Matthew Boss(JPMorgan)

2025Q2: In China, we saw weaker demand for outdoor categories post June 1, consistent with our expectations. - Jie Zheng(CEO)

Contradiction Point 2

Salomon Store Expansion and Strategy

It highlights differences in the company's strategy and execution for expanding the Salomon brand, which is critical for its growth and market presence.

Could you provide details on store growth for Salomon and Arc'teryx? Could you share updates on Salomon's progress in the U.S.? - Irwin Boruchow(Wells Fargo)

20251118-2025 Q3: In the U.S., focus is on moving from winter sports and outdoors to cities, with good traction in running specialty and performance. - Andrew Page(CFO)

Could you clarify the growth drivers for the Salomon brand post-recent inflection? How should we assess the pace and scale of distribution expansion in the U.S. versus other key international regions across owned and wholesale channels? - Brooke Roach(Goldman Sachs)

2025Q2: Salomon is rapidly expanding globally, with significant growth in China and Asia. In the U.S., it's still in the early stages, with just one store in New York. Plans include opening three to four more stores by the end of the year in New York, Chicago, and Los Angeles. - Jie Zheng(CEO)

Contradiction Point 3

Arc'teryx's Performance in China

It involves differing accounts of Arc'teryx's performance in the Chinese market, which is a key growth area for the company.

Did the fireworks incident in China impact sales? When do you expect sales recovery? Could there be long-term brand impact? - Brook Roche (Goldman Sachs)

20251118-2025 Q3: Arc'teryx China sales trends were softer at the beginning of Q4, but have since rebounded as weather has cooled. - Stuart Haselden(CEO, Arc'teryx)

What are the competitive advantages of Salomon's portfolio strategy and brand scaling opportunities? Also, what are Arc'teryx's omnichannel performance trends and expected Q2 developments? - Matthew Boss (JPMorgan)

2025Q1: Arc'teryx's comp was driven by traffic increases, reflecting brand momentum. Store productivity is expanding in every region. We had a drag from outlet sales, but focus remains on high-quality, full-price business. - Stuart Haselden(Arc'teryx CEO)

Contradiction Point 4

Sales Impact and Recovery in China

It involves differing accounts of the impact and recovery timeline of Arc'teryx sales in China following a fireworks incident, which could affect investor perceptions of regional sales performance and strategic responses.

Have you seen a sales impact in China after the fireworks incident? When do you expect sales to recover? Could there be any long-term brand repercussions? - Brook Roche (Goldman Sachs)

20251118-2025 Q3: Arc'teryx China sales trends were softer at the beginning of Q4, but have since rebounded as weather has cooled. - Stuart Haselden(CEO, Arc'teryx)

What drove the nearly 30% comp acceleration at Arc'teryx in Q4? Have demand trends changed post-holiday for the brand? - Matthew Boss (JPMorgan)

2024Q4: Effective September 13, we suspended sales of all products in China. We regained some sales volume as we started to rotate through inventory in late October. - Stuart Haselden(CEO, Arc'teryx)

Contradiction Point 5

Store Growth and Targets for Arc'teryx

It involves differing statements regarding store growth targets for Arc'teryx, which could impact investor expectations for retail expansion and revenue growth.

Can you provide details on store growth for Salomon and Arc'teryx, and Salomon's progress specifically in the United States? - Irwin Boruchow (Wells Fargo)

20251118-2025 Q3: More details on store growth will be provided later. - Andrew Page(CFO, Amer Sports)

What are the updated long-term store targets for Arc'teryx? Are there updated plans for the number of stores in each geography? - Lorraine Maikis (Bank of America)

2024Q4: We plan to continue opening the same number of stores each year, aiming for 25 to 30 net new stores in 2025. - Stuart Haselden(CEO, Arc'teryx)