Amer Sports, the sporting goods maker backed by Lululemon billionaire Chip Wilson, beat Wall Street expectations with earnings guidance announced on Tuesday. Shares rose as much as 15% in trading as management expects high-profile deals with Roger Federer and Caitlin Clark to reverse the Wilson brand’s recent slump.
Amer Sports owns 10 sporting goods brands, including Salomon and Louisville Slugger. The company said Chinese consumer demand for outdoor apparel maker Arc’teryx, its biggest division, pushed up sales 16 percent in the second quarter ended June 30. The company reported revenue of $994 million and a net loss of $1.8 million, sharply narrowing from the same period a year earlier.
Management also spoke positively about the Wilson brand, best known for its basketballs and tennis equipment. The division suffered double-digit sales losses earlier this year but turned that around in the latest quarter, posting modest growth. The company is pursuing a tennis-focused revival of the brand called Tennis 360, opening branded stores in China and focusing on footwear and apparel. This month, the company also began selling RF, a line of racquets, bags and accessories in partnership with tennis star Federer.
“Roger is a living legend in tennis and this new product line has been received with very enthusiastic response in the market,” CEO Jie Zheng said in a prepared speech to analysts on Tuesday.
There is high hope that basketball sensation Clark will further bolster Wilson. The company noted that her basketball collection, available online, sold out quickly. “Caitlin Clark also increases brand awareness… We expect our Caitlin Clark franchise to gain traction (in the second half of 2024) with the launch to select wholesale accounts,” Zheng added. In the spring, the executive said Clark would be the face of Wilson basketball in both men’s and women’s divisions.
Due to the strong quarterly sales, Amer also increased its sales forecast for the full year. Sales are expected to increase by 16 percent and generate earnings of around 42 cents per share. In May, the company had forecast mid-double-digit sales growth and earnings per share of up to 40 cents.
The news sent Amer shares up as high as $14.25 on the New York Stock Exchange by midday before profit-taking pared the rise to 11 percent. The stock closed Tuesday trading at $13.64, Amer’s highest price in two months.
The profits benefited billionaire shareholder Wilson, who increased his fortune by about $122 million. The executive who founded Lululemon owns nearly 21 percent of the company. Wilson and three Chinese companies, led by Anta Sports, acquired Amer Sports in 2019 for $5.5 billion. The group focused the business primarily on sales in mainland China and took Amer public earlier this year at $13 per share. Based on Tuesday’s closing price, Amer is now worth $6.9 billion.
