• Arc'teryx is experiencing strong, balanced growth across all regions, with significant expansion potential. In North America, the store count is expected to increase from around 60 to well over 200, indicating substantial future growth potential. The brand is in the early innings of its growth story. "
• Arc'teryx's strong customer metrics are driving sales increases, including healthy double-digit guest file growth, very strong traffic, and healthy growth in average spend per customer, demonstrating the momentum of the brand and its ability to take market share in every market. "
• Amer Sports sees tremendous growth potential in its soft goods business, combining its three major brands Arc'teryx, Salomon, and Wilson. Salomon's expansion into new categories like outdoor sneakers has seen tremendous success, with plans to open 200 shops in China by the end of the year and expanding into Europe with new stores in Paris, London, and Milan. Wilson's introduction of sportswear (apparel and footwear) is showing promising results, especially in China. "

• The company is facing slow growth in Europe, with overall regional growth expected at only mid-single-digit growth for the year, and particular challenges affecting the Peak Performance brand, which is facing a "level of challenge" in its key Nordic market. "
• The promotional environment in China is difficult, with many brands engaging in heavy discounting due to high inventory levels. While Amer Sports maintains their brands are performing well, the overall market conditions could exert pressure on margins and sales. "
• The company is experiencing supply constraints in key brands like Arc'teryx and Salomon, with management acknowledging they are "encountering level of the short of supply for both brands," which could limit their ability to meet demand and impact sales growth. " "

Amer Sports Q2 2024 Earnings Call Q&A Summary

1. China Growth
   Q: How is China performing across channels?
   A: Both physical retail and e-commerce grew extremely well at around 54% growth. The outdoor segment remains healthy despite a difficult market overall. Arc'teryx and Salomon have minimal discounting in regular shops (0%) with outlets at only 20-25% off, indicating strong brand health. "

2. Arc'teryx Momentum
   Q: How sustainable is Arc'teryx's growth by region?
   A: Growth was balanced across all regions with North America showing good momentum, Asia Pacific growing fastest, and strong growth in China. Management sees this as "early innings" with North America potential for 200+ stores versus current 60 stores. Growth is primarily driven by traffic rather than conversion, indicating healthy brand awareness expansion. "

3. Inventory Management
   Q: What is your inventory position by brand?
   A: Inventory grew only 2% versus 16% revenue growth. All three major brands have healthy inventory positions to support future growth while maintaining discipline. This was intentionally set up as they exited 2023 with a focused approach to inventory management while maintaining responsiveness to high-velocity products. "

4. Revenue Acceleration
   Q: What drives the implied Q4 revenue acceleration?
   A: Q4 is typically their biggest quarter and will have the easiest year-over-year comparison due to last year's promotional environment. There was a $20 million shift from Q3 to Q2 (more than half in Outdoor Performance, remainder in Technical Apparel), adding approximately 2 percentage points to Q2 growth. "

5. Brand Growth Runway
   Q: What market share opportunities exist across brands?
   A: Arc'teryx continues to demonstrate 30%+ growth in premium outdoor segments. Salomon footwear represents a significant opportunity with the introduction of "outdoor sneakers" category that's succeeding in China (expanding to 200 shops by year-end) and now testing in Europe. Wilson maintains strong hard goods leadership while expanding into apparel through Tennis 360. "

6. Macro Environment
   Q: Are you seeing changes in consumer behavior?
   A: The market shows a "bifurcation" with strong division between winners and losers. Companies with technical innovation and strong market positions are taking share. While the broader economy faces challenges, the sports industry is growing at 5-8% CAGR for the next three years, and demand signals remain robust across regions. "

7. Europe Performance
   Q: What's driving slower growth in Europe?
   A: Europe challenges are primarily in Peak Performance brand, while other brands show growth. Salomon is expected to deliver mid-to-high single-digit growth in Europe, Arc'teryx will grow meaningfully but from a small base, and Wilson will maintain low-to-mid single-digit growth. Overall Europe business is projected at mid-single-digit growth for the year. "

8. Salomon DTC Strategy
   Q: What are Salomon's store expansion plans?
   A: Salomon is expanding its DTC channel with 200 dedicated footwear shops in China by year-end (both owned and franchise). After success in China, the model expanded to Japan and Europe with Paris stores outperforming expectations. First North American test will be a New York Soho pop-up in October 2024, with plans for 1-5 permanent stores next year. "