Amer Sports (AS) Q1 2025: Direct-to-Consumer Sales Surge 39% as Salomon and Arc'teryx Drive Global Outperformance

2025-05-20 | By EarningsIQ Research

Amer Sports delivered a standout Q1, fueled by technical apparel and outdoor performance brands, while direct-to-consumer sales accelerated across regions. Strategic discipline and pricing power are offsetting tariff risk, with management raising full-year guidance despite macro uncertainty. Momentum in China and the U.S. for Salomon and Arc'teryx, combined with a premium brand portfolio, positions Amer Sports for continued share gains in the global sports and outdoor market.

Summary

• Brand Portfolio Outperformance: Salomon and Arc'teryx captured new consumer segments, driving channel and regional expansion.
• Retail Shift and Margin Accretion: Direct-to-consumer growth and premium mix expanded margins while supporting disciplined store optimization.
• Tariff Resilience Signaled: Mitigation strategies and pricing power are limiting P&L impact, supporting raised guidance.

Performance Analysis

Amer Sports’ Q1 demonstrated robust top-line and bottom-line expansion, underpinned by premium brand momentum and a clear shift toward direct-to-consumer (D2C) channels. Group sales grew at a double-digit pace, with D2C revenue up 39 percent, led by Salomon in Greater China and Asia-Pacific. Technical apparel, anchored by Arc'teryx, delivered 28 percent revenue growth, while outdoor performance (Salomon) rose 25 percent and ball and racket advanced 12 percent. Regional gains were broad-based, with Asia-Pacific and China outpacing other geographies, reflecting Amer Sports’ strategic focus on high-growth consumer markets.

Gross margin expanded 330 basis points to 58 percent, driven by favorable channel mix, reduced discounting, and higher-margin product categories. SG&A leverage further boosted operating margin, which increased by 490 basis points. Inventory discipline was evident, as inventory grew below the sales rate, and operating cash flow was strong. Segment profit margins also improved, particularly in outdoor performance, which saw nearly 1,000 basis points of margin expansion as soft goods outperformed legacy winter sports equipment.

• D2C Channel Acceleration: D2C sales outpaced wholesale, supporting margin gains and deeper consumer engagement.
• China and APAC Lead Growth: Premium brand positioning and local execution drove outsized gains in these regions.
• Margin Expansion: Channel, product, and regional mix, plus lower discounting, contributed to higher group and segment margins.

Amer Sports is capitalizing on secular trends in outdoor activity, premiumization, and global sneaker adoption, with management maintaining a disciplined approach to store expansion and inventory management for sustainable growth.

Executive Commentary

Strategic Positioning

1. Premium Brand Portfolio with Room to Scale

Amer Sports’ core advantage lies in its differentiated, premium brand portfolio—Arc'teryx, Salomon, and Wilson—each with authentic heritage and technical credibility. These brands are positioned at the high end of their categories, with significant white space for growth, especially in underpenetrated markets and segments such as women’s and footwear.

2. Direct-to-Consumer and Store Optimization

The company’s retail strategy prioritizes quality over quantity, focusing on high-productivity store formats and flagship locations while closing less productive or partner-run stores. This shift is evident in China, where own-store expansion and format upgrades are replacing legacy partner doors, supporting higher revenue per square foot and improved brand control.

3. Innovation in Product and Category Expansion

Arc'teryx and Salomon are leveraging technical innovation to expand into adjacent categories—footwear and women’s— which are growing faster than the brands overall. Dedicated business units and new product launches (such as Norvan LD4 and XT Whisper) are fueling this expansion, positioning Amer Sports to capture incremental market share.

4. Tariff Mitigation and Pricing Power

Despite tariff volatility, Amer Sports’ exposure is limited (26 percent of revenue in the U.S.), and the company is executing on mitigation strategies including vendor renegotiation, supply chain maneuvers, and selective price increases. Management’s confidence in pricing power, especially in premium segments, underpins guidance resilience.

5. Geographic Diversification and China Platform

China and Asia-Pacific remain key growth engines, with local teams and scalable operating platforms enabling Amer Sports to outpace peers. The company’s brands resonate with younger, female, and luxury consumers, and the store rollout strategy is tailored to capitalize on these demographics.

Key Considerations

This quarter’s results reinforce Amer Sports’ ability to execute on its multi-brand, multi-channel strategy amidst macro uncertainty. The company’s approach to store optimization, product innovation, and disciplined capital allocation is creating a virtuous cycle of growth and margin expansion.

Key Considerations:

• Salomon’s Global Sneaker Traction: The brand’s $1 billion in sales is a fraction of the $180 billion global sneaker market, with runway for multi-year double-digit growth.
• Women’s and Footwear as Growth Levers: Both categories are outpacing overall brand growth, with dedicated teams and product pipelines accelerating adoption.
• Store Format Upgrades in China: Transitioning from partner to owned stores is driving higher productivity and brand elevation, supporting margin accretion.
• Wholesale Rebound and D2C Mix: Wholesale growth is returning, especially in Europe, while D2C continues to drive higher margins and consumer lifetime value.
• Inventory and Cash Flow Discipline: Inventory growth remains below sales, and operating cash flow is robust, supporting ongoing investment and debt reduction.

Risks

Macroeconomic and tariff uncertainties remain material, with potential for higher tariffs or shifts in consumer sentiment to impact demand or margins. Amer Sports’ exposure to U.S. tariffs is mitigated by pricing power and supply chain flexibility, but a deterioration in global discretionary spending or operational missteps in store transitions could pressure results. Execution risk on scaling D2C and new categories, especially in less mature markets, also warrants monitoring.

Forward Outlook

For Q2 2025, Amer Sports guided to:

• Reported revenue growth of 16 to 18 percent
• Adjusted gross margin of 57 to 58 percent
• Adjusted operating profit margin between 3 and 4 percent
• Adjusted diluted EPS of zero to two cents per share

For full-year 2025, management raised guidance:

• Group revenue growth of 15 to 17 percent (prior: 13 to 15 percent)
• Adjusted diluted EPS of 67 to 72 cents (prior: 64 to 69 cents)
• Segment growth: technical apparel 20 to 22 percent, outdoor performance mid-teens, ball and racket mid-single digits

Management highlighted disciplined guidance in light of macro uncertainty, but reiterated confidence in offsetting tariff impacts and leveraging strong demand trends, particularly in D2C and China.

• Guidance assumes current tariff rates remain for 2025, with negligible P&L impact after mitigation.
• Upside to guidance possible if current trends persist or accelerate.

Takeaways

Amer Sports’ diversified premium brand strategy is yielding outsized growth and margin expansion, with D2C, China, and footwear as key drivers. Tariff headwinds are being actively mitigated, and the company’s flexible operating model supports continued execution in a volatile macro environment.

• Premiumization and D2C Shift: Brand strength and channel mix are driving sustainable margin gains and deeper consumer engagement.
• Geographic and Category Expansion: China, APAC, and women’s/footwear categories are delivering above-market growth, with significant runway ahead.
• Future Watchpoint: Monitor execution on store optimization, D2C scaling, and resilience to macro or tariff shocks as Amer Sports pushes for global category leadership.

Conclusion

Amer Sports enters the rest of 2025 with strong momentum, disciplined execution, and a premium brand portfolio that is resonating globally. Raised guidance and effective risk management signal confidence, but investors should track the pace of D2C expansion, store transitions, and macro impacts on discretionary demand.

Industry Read-Through

Amer Sports’ results reinforce the global shift toward premiumization and direct-to-consumer engagement in the sports and outdoor sector. Brands that combine technical innovation, channel discipline, and localized execution are best positioned to capture outsized growth, particularly in China and among younger, female consumers. Tariff mitigation and pricing power are proving critical differentiators, suggesting that peers with less brand equity or supply chain flexibility may face greater margin risk as trade uncertainty persists.

AS Consumer Discretionary Sporting Goods Direct-to-consumer Premium Brands China Footwear Tariffs