Why Recently-Listed Amer Sports Shares Are Diving Today

Amer Sports, Inc. AS shares are trading lower after the company reported worse-than-expected fourth-quarter adjusted EPS results and issued FY24 EPS guidance below estimates.

Revenue rose 10% Y/Y to $1.315 billion, beating the consensus of $1.302 billion. Regional revenue growth was led by Greater China (+45% Y/Y), with three segments experiencing solid growth, and APAC rose by 22%. The Americas’ revenue grew in mid-single digits Y/Y, led by direct-to-consumer (DTC) strength.

By segment, Technical Apparel revenue rose 26% Y/Y to $550 million, aided by 42% DTC growth (including 33% omni-comp growth) and Outdoor revenue grew 2% Y/Y to $523 million aided by strong top-line performance in the segment’s winter sports equipment franchise.

However, Ball & Racquet revenue fell 3% Y/Y to $242 million on declines in U.S. wholesale. Adjusted gross profit margin expanded 170 basis points Y/Y to 52.2%, led by its highest gross profit margin business, Arc’teryx, growing faster than the other brands. 

Adjusted EPS loss of $(0.11) missed the consensus for EPS of $0.01.

Outlook: For the first-quarter FY24, Amer Sports projects revenue growth of 6%-8% and adjusted gross margin of approximately 53.5%. The company expects EPS of $(0.01)-$0.02, including a $0.08-0.09 negative impact from non-recurring finance costs related to refinancing in February, vs. the street view of $0.11.

For FY24, the company expects EPS of $0.30-$0.40, including an $0.08-0.09 negative impact to EPS from non-recurring finance costs (consensus of $0.51).

The company foresees revenue growth in the mid-teens and an adjusted gross margin of 53.5%-54.0%.

CFO Andrew Page said, “And in conjunction with our IPO in early February, we strengthened our capital structure by retiring approximately $4 billion of shareholder loans. We also refinanced the remaining $1.8 billion of third-party loans to more favorable terms and extended maturity to 2031.”

Also Read: Amer Sports Analysts Rally Behind Its Growth Potential, Spotlighting Arc’teryx And China Expansion

Price Action: AS shares are down 8% at $15.95 on the last check Tuesday.

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