Amer Sports Earnings Call: Growth Now, Margins Later
Amer Sports, Inc. ((AS)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Amer Sports delivered a strikingly upbeat earnings call, underscored by record revenue, expanding margins for the full year, and powerful brand momentum at Arc’teryx, Salomon, and Wilson. Management acknowledged near-term margin pressure from stepped-up spending, but framed higher SG&A and retail investments as deliberate moves to cement long-term growth and reinforce an already solid balance sheet.
Record Revenue and Broad-Based Top-Line Strength
Amer Sports reported full-year 2025 revenue of $6.6 billion, up 27% year over year, with fourth-quarter sales rising 28% or 26% in constant currency. Management emphasized that growth was not isolated, noting double-digit increases across all segments, regions, and channels, which points to healthy underlying demand rather than one-off spikes.
Margin Expansion and Full-Year Earnings Upside
Adjusted operating margin for 2025 expanded to 12.8% from 11.1% a year earlier, a 170-basis-point gain driven by richer product mix and stronger gross margins. Executives highlighted that these gains came even as the company ramped investment, suggesting the business model can support both profit improvement and reinvestment.
Q4 Profitability and EPS Beat Expectations
In the fourth quarter, adjusted gross margin climbed 140 basis points to 57.8%, helping lift adjusted net income to $176 million. Adjusted diluted EPS nearly doubled to $0.31 from $0.17 in the prior-year quarter, indicating stronger earnings power despite heavier spending late in the year.
Arc’teryx Leads Technical Apparel Breakout
Technical apparel, led by Arc’teryx, delivered standout results with Q4 revenue up 34% to $1.0 billion and a 16% omni-channel comparable comp. Footwear and the women’s category both grew about 40%, and Arc’teryx added 15 net new stores in the quarter, with plans for another 25 to 30 net openings in 2026 to capture global demand.
Salomon Crosses $2 Billion and Speeds Up
Salomon’s sales surged 35% in 2025 to more than $2.0 billion, cementing it as a scaled global outdoor brand. Direct-to-consumer outdoor performance revenue grew 55% in Q4, aided by an expanded retail footprint, including 286 stores in Greater China, and a roughly 15-point increase in global brand awareness since 2023.
Wilson and Ball & Racket Show Product Momentum
Ball and racket revenue rose 14% to $337 million, while Wilson softgoods posted very strong double-digit gains and now account for about 15% of the segment. The Wilson Tennis 360 concept expanded to 77 owned and partner shops by year-end, deepening the brand’s presence with players and fans even as profitability remains a work in progress.
Strong Cash Generation and Deleveraged Balance Sheet
Operating cash flow jumped to $730 million in 2025 from $425 million in 2024, reflecting better earnings and working-capital control. Net debt fell to $291 million, or 0.3 times leverage, and management further optimized the capital structure by redeeming $80 million of higher-cost notes after year-end.
Regional Momentum Across Global Markets
All four regions delivered double-digit Q4 growth, led by Asia Pacific at 53% and Greater China at 42%, while EMEA rose 21% and the Americas 18%. Management cited strong Chinese New Year trends and continued traction in key “epicenter” cities worldwide, underscoring Amer’s rising global relevance.
Brand and Marketing Wins on the Global Stage
The company leveraged a strong Olympic presence, outfitting tens of thousands of staff and volunteers and supporting more than 200 athletes who collectively earned dozens of medals. Sub-brands such as Veilance also benefited from heightened consumer and fashion interest, reinforcing Amer’s premium positioning.
Q4 Margin Pressure from Accelerated Investments
Despite solid gross margin gains, Q4 adjusted operating margin slipped 110 basis points to 12.5% as Amer accelerated SG&A investments, particularly at Salomon. Management framed this as a tactical move to capture long-run growth, accepting temporary margin compression while demand and brand strength remain high.
Outdoor Performance Margin Contraction at Salomon
Outdoor performance segment operating margin contracted about 490 basis points in Q4 to 6.2%, driven by stepped-up spending at Salomon. The company is pouring capital into marketing, retail expansion, talent, and incentives, arguing that these moves are necessary to sustain the brand’s rapid top-line trajectory.
Higher SG&A and Corporate Cost Deleverage
Adjusted SG&A rose faster than sales in Q4, deleveraging by 220 basis points to 45.5% of revenue, as Amer leaned into growth investments. Corporate expenses climbed to $40 million from $12 million on higher share-based compensation, and management expects about $225 million in corporate costs for the year after reallocations.
Inventory Levels Tick Above Sales Growth
Year-end inventory increased 33%, slightly above the 27% sales gain, raising some questions around working-capital efficiency. Management attributed the gap to earlier receipts, more goods in transit via ocean freight, currency effects, and the Korea acquisition, and suggested the position remains manageable.
Ball & Racket Profitability Still Lags
While revenue momentum is improving, the ball and racket segment’s adjusted operating margin remained in the red at negative 2.6% in Q4. Heavy SG&A investment behind Wilson softgoods is contributing to the drag, with management signaling that profitability improvement will be gradual as the category scales.
Rising Investment and Cost Base Near Term
Capital expenditure is guided up to roughly $400 million from $310 million in 2025 to support IT and retail buildout, while net finance costs are expected to increase to $105–110 million. A higher effective tax rate near 28% will further pressure net income, underscoring that earnings growth may lag sales growth near term.
Guidance Signals Robust 2026 Growth and Margin Discipline
Amer Sports forecast 2026 revenue growth of 16–18% with about a 200-basis-point FX tailwind, group adjusted gross margin around 59%, and operating margin of 13.1–13.3%. Segment guidance calls for high-teens growth at technical apparel and outdoor performance and high-single-digit growth in ball and racket, while Q1 is expected to start strong with revenue up more than 20% and EPS rising accordingly.
Amer Sports’ earnings call painted the picture of a growth company leaning into its momentum, with Arc’teryx and Salomon at the forefront and Wilson building out its softgoods franchise. While heavier investment and higher financing and tax costs may temper near-term margin gains, strong cash flow, low leverage, and ambitious guidance suggest investors are being asked to trade a bit of today’s margin for more growth tomorrow.
