Robert Way/iStock Editorial via Getty Images I published my initial thesis on Amer Sports (NYSE:AS) in March of this year. Back then, I argued that while the company has a wonderful collection of iconic brands, the stock price is simply too expensive. Since then, the stock was down almost 10%. Amer Sports reported Q2 2024 results on August 20th before the bell. Both revenue and earnings beat analyst estimates. Furthermore, management raised guidance for FY 2024. The stock soared more than 10% after earnings ...

Exhibit 99.2 AMER SPORTS, INC. UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS January - June 2024 | --- | --- | |---------------------------------|--------------------------------------| | | | | Domicile: | Cayman Islands | | Address: | Cricket Square, Hutchins Drive | | | P.O. Box 2681 | | | Grand Cayman KY1-1111 | | | Cayman Islands | | Entity registration number: | 358866 | 1 UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME AND LOSS AND OTHER COMPREHENSIVE INCOME AND LOSS | --- ...

Amer Sports shares have surged by more than 20% in the last month. Many investors may not know the name Amer Sports (AS 9.64%), but they likely know the company's famous brands. Amer Sports owns iconic sports and outdoor brands including Wilson tennis rackets and footballs, Atomic and Salomon ski equipment, and Louisville Slugger baseball bats. The company may become more of a household name if it keeps up the performance it announced in the second-quarter report it released today. Strong financial performa ...

Financial Data and Key Metrics - Sales growth of 16% in Q2 (18% on a constant currency basis), driven by strong performance in Technical Apparel and Outdoor Performance segments [4][22] - Adjusted operating margin increased by 50 basis points to 2.9%, exceeding guidance [23] - Adjusted gross margin expanded by 200 basis points to 55.8%, driven by favorable product and channel mix, particularly from Arc'teryx [22] - Greater China region grew 54%, while Asia Pacific grew 45%, with EMEA and Americas growing 1% each [22] - Full-year revenue growth guidance raised to 15%-17%, with adjusted operating margin expected at the high end of 10.5%-11% range [32] Business Line Performance - **Technical Apparel (Arc'teryx)**: Revenue grew 34% to $407M, driven by 39% DTC growth and strong performance in footwear and women's categories [25][10] - **Outdoor Performance (Salomon)**: Revenue increased 11% to $304M, with Salomon footwear and apparel growing double-digits, offset by softer Winter Sports Equipment sales [27][13] - **Ball & Racquet (Wilson)**: Revenue grew 1% to $283M, with Tennis 360 strategy driving growth in apparel and footwear, partially offset by declines in baseball and inflatables [29][17] Market Performance - **Greater China**: Outperformed the market with 54% growth, driven by strong demand for premium outdoor and sports products [7][22] - **Asia Pacific**: Grew 45%, with strong traction in Salomon footwear and Arc'teryx DTC channels [22][14] - **EMEA**: Grew 1%, with new Arc'teryx store openings performing well, but offset by declines in Peak Performance [22][26] - **Americas**: Returned to slight growth with 1% increase, driven by DTC expansion and new product launches [22][17] Strategic Direction and Industry Competition - Arc'teryx is a breakout growth story, leveraging its DTC model and technical innovation to expand into new categories like footwear and women's apparel [5][10] - Salomon is focusing on its footwear and apparel franchise, with plans to expand its DTC footprint, particularly in China and Europe [13][16] - Wilson is executing its Tennis 360 strategy, with new product launches and retail expansion in China driving growth [17][29] - The company is well-positioned to take market share in the premium sports and outdoor market, with strong brand equity and technical innovation [4][6] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong growth and margin expansion, driven by its premium brand portfolio and DTC strategy [4][21] - The company is optimistic about the long-term growth potential in Greater China, despite macroeconomic challenges, due to strong consumer demand for premium outdoor products [7][57] - Management highlighted the importance of technical innovation and community engagement in driving brand awareness and customer loyalty [11][12] Other Key Information - Arc'teryx opened 17 net new brand stores in H1, including 13 in Q2, bringing the total to 125 owned stores globally [8][9] - Salomon opened 27 new stores in Greater China in Q2, with plans to reach 200 owned and licensed stores by the end of 2024 [14][16] - The company is focused on inventory discipline, with inventory growing only 2% year-over-year, compared to 16% sales growth [31][46] Q&A Session Summary Question: Arc'teryx growth sustainability and regional performance [35] - Arc'teryx saw balanced growth across all regions, with strong DTC momentum and traffic driving sales [36] - The brand is still in the early stages of growth, with significant expansion potential in North America, Europe, and Asia Pacific [36][37] Question: Runway for market share capture across brands [39] - Arc'teryx and Salomon have significant growth potential in soft goods, particularly in footwear and apparel, while Wilson continues to lead in its core equipment business [40] Question: Margin trajectory and SG&A leverage [39] - Gross margins are expected to remain strong, with Q3 slightly compressed due to wholesale shipments, while SG&A leverage will improve progressively through the year [41] Question: China market performance and promotional environment [43] - Both physical stores and e-commerce performed well in China, with minimal discounting and strong demand for premium outdoor products [44] Question: Inventory position and growth trends [45] - Inventory grew 2% year-over-year, with disciplined buying and strong sell-through driving lean inventory levels [46][48] Question: Europe market expectations [50] - Europe is expected to grow mid-single-digits, with challenges in Peak Performance offset by growth in Salomon and Arc'teryx [50][51] Question: Salomon DTC strategy and North America expansion [52] - Salomon is expanding its DTC footprint, with plans to open pop-up stores in North America and further test the compact shop model [52][53] Question: Q4 revenue acceleration and timing shifts [54] - Q4 is expected to be the strongest quarter, with no significant timing shifts between Q3 and Q4, following the $20M shift from Q3 to Q2 [54] Question: Macro climate and consumer behavior [56] - The company is seeing a bifurcation in consumer behavior, with strong demand for premium and innovative products, particularly in the sports and outdoor segment [57][58]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook compared to the market index [22][26]. Core Insights - The company reported Q1 2024 revenue of $1.183 billion, a year-on-year increase of 13%, but a net profit of $5.1 million, down 73% year-on-year [1]. - The DTC (Direct-to-Consumer) channel showed significant growth, with revenue reaching $490 million, up 41% year-on-year, while wholesale channel revenue was $690 million, down 1% [4]. - The Greater China market demonstrated remarkable performance, with revenue of $310 million, a 51% increase year-on-year, driven by positive trends in the sports industry and increased consumer health awareness [3]. Financial Performance Summary - Q1 2024 revenue breakdown: EMEA region $360 million (+1% YoY), Americas $410 million (flat YoY), Greater China $310 million (+51% YoY), and Asia Pacific (excluding Greater China) $100 million (+34% YoY) [3]. - The company expects Q2 2024 revenue to grow approximately 10% year-on-year, with a gross profit margin (GPM) around 54% [23]. - The forecast for 2024-2026 projects revenues of $4.956 billion, $5.619 billion, and $6.287 billion, respectively, with net profits turning positive in 2024 at $148 million [18][26]. Market Position and Growth Drivers - The technical apparel segment led revenue growth, with Q1 2024 revenue of $510 million (+44% YoY), while the outdoor performance and ball sports segments saw revenues of $400 million (+6% YoY) and $270 million (-14% YoY), respectively [33]. - The report highlights the strong momentum of the Arc'teryx brand within the technical apparel segment, contributing significantly to overall performance [33]. - The company's multi-brand development strategy is viewed positively for long-term growth potential [26].

Company Overview - Amer Sports is an international sports equipment group that started with tobacco business and expanded into sports through acquisitions, with two IPOs and one tender offer in its history [3] - The company has gone through four stages: tobacco business (1950-1987), focusing on sports (1988-2004), strengthening global influence (2005-2018), and strategic transformation (2019-present) [3][4] - In 2019, a consortium led by Anta Sports acquired all shares of Amer Sports for €4.6 billion, leading to a restructuring and simplification of the business [4] Brand Portfolio - Amer Sports has a well-established brand matrix covering various high-end outdoor scenarios, with three core brands accounting for about 90% of revenue [6] - The three core brands are Arc'teryx, Salomon, and Wilson, with Q1-Q3 2023 revenues of $940M, $950M, and $870M respectively, growing at 65%, 35%, and 10% YoY [6] - Arc'teryx has a strong presence in Greater China, contributing 48% of its revenue, with over 1.7 million members in the region as of September 2023 [10] Financial Performance - Revenue grew at a CAGR of 21% from 2020 to 2023, reaching $4.37 billion in 2023, up 23% YoY [22] - Adjusted EBITDA grew 34.9% to $610 million in 2023, with a CAGR of 25% from 2020 to 2023 [22] - Net loss narrowed to $209 million in 2023 from $253 million in 2022, with profitability expected to turn positive in 2024 after debt repayment [22] Market Position - The global sports equipment market reached $149.5 billion in 2022, with a projected CAGR of 6% from 2023 to 2028 [32] - Asia is the largest market for sports equipment, with a size of $79.5 billion in 2022, expected to reach $116.6 billion by 2028 [39] - China has the largest and fastest-growing sports equipment market, with a size of $34.6 billion in 2022 and a projected CAGR of 7.0% from 2022 to 2028 [39] Growth Drivers - The global sports apparel market was $395.7 billion in 2023, growing 6.3% YoY, with a projected CAGR of 7% from 2024 to 2028 [30] - Increasing per capita spending on sports apparel, rising health awareness post-pandemic, and the trend of athleisure are driving market growth [53] - The global sports market CR10 increased from 39% in 2014 to 45% in 2023, indicating a concentrated and competitive landscape [44] Valuation - Using EV/EBITDA valuation method, the target market cap is $10.1 billion, implying a 26% upside from the current valuation [84] - Comparable companies have an average EV/EBITDA of 16x for 2024, while Amer Sports is currently at 13x [84]

Revenue Channels and Growth - Direct-to-Consumer (DTC) channel accounted for 35.7% of revenue in 2023, up from 29.5% in 2022[349] - Wholesale channel accounted for 64.3% of revenue in 2023, down from 70.5% in 2022[349] - E-commerce grew from 14.5% of revenue in 2022 to 16.4% in 2023[355] - Revenue in Q4 accounted for 30%, 34%, and 33% of total revenue in fiscal years 2023, 2022, and 2021, respectively, driven by higher DTC channel sales and fall/winter collections[361] - Revenue for 2023 increased by $819.6 million, or 23.1%, compared to 2022, driven by strong growth in the Technical Apparel segment and a rebound in Greater China[396] - DTC channel revenue increased by $512.7 million, or 49.0%, to $1,558.8 million in 2023, driven by increased consumer demand and a net opening of 38 owned retail stores[397] - Revenue is primarily derived from the DTC channel, which includes owned retail and e-commerce, and the wholesale channel[496] Geographic Revenue and Expansion - Greater China revenue increased to $841.4 million in 2023, up 60.6% from $523.8 million in 2022[369] - Greater China revenue grew by $317.6 million, or 60.6%, in 2023, driven by increased consumer demand following COVID-19 lockdowns in 2022[398] - Amer Sports plans to expand into North America, Europe, and Greater China[357] Financial Performance - Total revenue for fiscal year 2023 was $4,368.4 million, a 23.1% increase from $3,548.8 million in 2022[369] - Net loss for fiscal year 2023 was $208.8 million, with a net loss margin of 4.8%, improving from a 7.1% net loss margin in 2022[369] - Adjusted EBITDA for fiscal year 2023 was $610.7 million, with an Adjusted EBITDA margin of 14.0%, up from 12.8% in 2022[369] - Gross profit for 2023 increased by $512.5 million, or 29.1%, to $2,276.2 million, with a gross margin of 52.1% compared to 49.7% in 2022[400] - Selling, general and administrative expenses increased by $459.8 million, or 30.2%, to $1,982.5 million in 2023, driven by higher selling and marketing costs and administrative expenses[401] - Operating profit for 2023 increased by $251.9 million, or 497.7%, to $302.5 million, primarily due to lower impairment losses and increased revenue[404] - Finance cost increased by $176.9 million, or 74.8%, to $413.4 million in 2023, driven by higher interest expenses[406] - Income tax expense increased by $55.9 million, or 115.7%, to $104.2 million in 2023, with an effective tax rate of (100)%[407] - Adjusted EBITDA for 2023 was $610.7 million, up from $453.0 million in 2022, with an Adjusted EBITDA Margin of 14.0% compared to 12.8% in 2022[434] - Net loss for 2023 was $208.8 million, an improvement from $252.7 million in 2022, with Adjusted Net Income at $(135.4) million compared to $(29.9) million in 2022[438] Segment Performance - Technical Apparel segment revenue grew to $1,592.8 million in 2023, a 45.4% increase from $1,095.5 million in 2022[369] - Technical Apparel segment revenue increased by $497.3 million, or 45.4%, to $1,592.8 million in 2023[412] - Outdoor Performance segment revenue increased by $251.3 million, or 17.7%, to $1,667.8 million in 2023[412] - Technical Apparel segment revenue grew to $1,592.8 million in 2023, a 45.4% increase from $1,095.5 million in 2022, driven by DTC channel growth of 56.7%[421] - Arc'teryx brand revenue increased to $1,443.5 million in 2023 from $952.6 million in 2022, contributing significantly to the Technical Apparel segment growth[417] - Comparable sales growth for the Technical Apparel segment reached 54.7% in 2023, up from 33.4% in 2022, with a net increase of 15 owned retail stores[418] - Outdoor Performance segment revenue increased by 17.7% to $1,667.8 million in 2023, driven by growth in footwear and performance in Greater China[426] - Ball & Racquet Sports segment revenue grew by 6.9% to $1,107.8 million in 2023, primarily due to growth in inflatable ball sales[429] - Segment Adjusted Operating Profit for Technical Apparel increased by 83.5% to $314.4 million in 2023, driven by gross margin improvement and favorable channel mix[422] Inventory and Supply Chain Management - Inventory management is critical to maintaining premium brand positioning and avoiding missed sales opportunities[360] - The company focuses on diversifying its supplier network and expanding its distribution footprint[358] - Inventory is valued at the lower of cost or net realizable value using the weighted average cost method[502] Foreign Currency and Risk Management - 68.5% of revenue in fiscal year 2023 was generated in non-USD currencies, including 18.7% in euros, 8.4% in Canadian dollars, and 18.2% in RMB[362] - The company manages foreign currency exposure through hedging arrangements, including forward contracts, options, and swaps, primarily for euros, Canadian dollars, and RMB[363] - The company generated 68.5% of its revenue in currencies other than U.S. dollars in 2023, with 77.8% of operating expenses incurred in foreign currencies[482] - A 10% increase in the U.S. dollar against all other foreign currencies would have decreased the company's operating profit by $17.1 million in 2023[482] - 33.1% of the company's assets and 76.2% of its liabilities were subject to foreign currency exposure as of December 31, 2023[483] - The company's foreign currency risk is managed through financing business units in their functional currency and using hedging arrangements, including foreign exchange forward contracts and options[484] - The company is exposed to commodity price risk from materials such as rubber, nylon, polyester, steel, and aluminum, and manages these risks by negotiating prices in advance[485] - A 1% increase in interest rates would have increased net loss by $51.7 million and $52.5 million for the years ended December 31, 2023 and 2022 respectively[488] Cash Flow and Capital Expenditures - Cash and cash equivalents increased by $81.4 million to $483.4 million as of December 31, 2023, compared to $402.0 million in 2022, driven by improved net cash flows from operating activities[443] - Capital expenditures for 2023 were $136.3 million, with a budget of approximately $300 million for 2024, primarily for upgrading the global SAP system and expanding warehousing facilities[444] - Net cash flows from operating activities improved significantly to $199.0 million in 2023, compared to a cash outflow of $91.7 million in 2022, a year-over-year increase of $290.7 million[446][447] - Cash outflows from investing activities increased by $36.2 million to $154.8 million in 2023, mainly due to investments in property, plant, and equipment, including retail store expansion[448] Debt and Financing - The company issued $800 million in 6.750% senior secured notes, maturing on February 16, 2031, with interest payable semi-annually[451] - The company secured new senior secured credit facilities, including a $500 million USD term loan, a €700 million EUR term loan, and a $710 million revolving credit facility[458] - The company has a maximum first lien net leverage ratio requirement of not greater than 5.00:1.00 and an interest coverage ratio of not less than 2.00:1.00, increasing to 2.25:1.00 by December 31, 2025, and further to 2.50:1.00 by December 31, 2026[468] - The company's Senior Credit Facilities included a EUR 315 million revolving facility and a EUR 1.7 billion term loan facility, both of which were repaid and terminated by February 16, 2024[470] - As of December 31, 2023, the company had EUR 4.2 million of borrowings available under the Revolving Facility and no borrowings available under the Term Loan Facility[470] - The company's contractual obligations and commitments as of December 31, 2023, totaled $7,330.4 million, including $2,244.4 million in loans from financial institutions and $4,077.0 million in loans from related parties[477] - The company has $710 million of borrowings available under the New Revolving Credit Facility and no borrowings available under the New Term Loan Facilities as of February 16, 2024[487] Impairment and Restructuring - The company experienced a $77.5 million impairment charge on Suunto's net assets in 2021 and a $5.5 million loss on the disposal of Suunto in 2022[366] - Impairment losses on goodwill and intangible assets were $4.7 million in 2022, with no such losses recorded in 2023[441] - No impairment losses on goodwill and intangible assets with indefinite useful lives were recorded in 2023[507] - Restructuring expenses decreased to $0.5 million in 2023 from $1.5 million in 2022[441] Corporate Governance and Compensation - The company identified a material weakness in internal control over financial reporting and is implementing measures to remediate it, including new IT systems and hiring a Chief Accounting Officer[490] - The company granted share-based compensation to employees under equity compensation plans, with expenses recognized starting in Q4 2023 as the IPO became probable[511] - Aggregate compensation for board members and executive officers in 2023 was $7,495,787, including benefits and indirect compensation[535] - 1,031,226 options were granted to board members and executives in 2023, with a weighted average exercise price of EUR 29.31[535] - Non-employee directors receive an annual cash retainer of $100,000, with additional retainers for committee roles (e.g., $25,000 for audit committee chair)[537] - The lead director receives an additional annual cash retainer of $40,000[537] - Audit committee members receive an annual cash retainer of $10,000 each[537] - Compensation committee chair receives an annual cash retainer of $20,000[537] - Nominating and corporate governance committee chair receives an annual cash retainer of $15,000[537] - Compensation includes fixed and variable components, with cash bonuses based on agreed business targets[534] - Executive officers and senior management receive benefits aligned with market practices in their respective countries[534] - The interim Chief Financial Officer's compensation is included in the aggregate compensation figure for 2023[535] - Each independent non-employee director received an equity grant of RSUs with a grant date fair market value of $175,000 upon IPO completion[538] - The number of ordinary shares underlying the RSU grant is determined by dividing $175,000 by the IPO price[538] - Initial RSU grants will vest on the one-year anniversary of the IPO completion, contingent on continuous service[538] Product and Brand Performance - Salomon's revenue in 2022 was over 60% from footwear[344] - Arc'teryx's Alpha SV jacket is a best-selling "hardshell" jacket in North America[343] - Wilson is the official partner of professional sports leagues including the NBA, WNBA, NFL, US Open, and Roland Garros[345] - The company's innovation centers, including the Wilson Innovation Center and Arc'teryx design centers, focus on consumer-driven product development and sustainability[493] Customer and Partner Relationships - The company offers DTC customers a 14–30 day return policy and provides wholesale partners with volume rebates and performance bonuses[499][500] - The largest single customer accounted for 4% of total accounts receivable, and the 20 largest wholesale partners accounted for 31% of total accounts receivable as of December 31, 2023[489] - The average payment time for outstanding sales was 49 days as of December 31, 2023[489] Retail Expansion - Net store count increased by approximately 85% from January 1, 2019, to over 360 owned retail stores as of December 31, 2023[354]

Investment Rating - The investment rating for Amer Sports is "Buy" with an expected investment return of over 15% in the next 6 months [23]. Core Insights - Amer Sports reported a strong revenue growth of 23% year-on-year to $4.368 billion in 2023, driven by the rapid expansion of its core brands: Arc'teryx, Salomon, and Wilson [2][19]. - The company anticipates a stable growth outlook for 2024, with revenue expected to grow in the mid-teens, supported by ongoing expansion in the Greater China region and DTC (Direct-to-Consumer) channels [22][40]. Revenue Performance and Breakdown - In Q4 2023, Amer Sports achieved revenue of $1.315 billion, a 10% year-on-year increase, with significant contributions from the Greater China region, which saw a 45% growth to $246 million [19][20]. - For the full year 2023, revenue from the Greater China region grew by 61% to $841 million, while the Asia-Pacific region grew by 40% to $350 million [20][24]. - The DTC business experienced a 49% increase in revenue to $1.559 billion, with e-commerce and physical retail growing by 40% and 58%, respectively [26][27]. Performance Guidance - For Q1 2024, revenue is expected to grow by 6-8%, with professional sports category growth projected to exceed 30% [10][22]. - The adjusted gross margin is anticipated to be 53.5%, while the adjusted operating profit margin is expected to be between 9.0% and 10.0% [10][22]. Brand and Product Category Performance - The company operates across three main product categories: professional sports, outdoor sports, and ball sports, with respective revenue contributions of 36.5%, 38.2%, and 25.3% in 2023 [21][33]. - The professional sports category showed the highest growth, with Q4 and full-year revenue increasing by 26% and 45%, respectively [21][33].

Amer Sports, Inc. (NYSE:AS) Q4 2023 Earnings Conference Call March 5, 2024 8:00 PM ET Company Participants Omar Saad - VP, Finance & IR James Zheng - CEO Andrew Page - CFO Stuart Haselden - CEO, Arc’teryx Franco Fogliato - President & CEO, Salomon Joe Dudy - President & CEO, Wilson Conference Call Participants Matthew Boss - JPMorgan Lorraine Hutchinson - Bank of America Brooke Roach - Goldman Sachs Kelly Crago - Citigroup Alex Straton - Morgan Stanley Ike Boruchow - Wells Fargo Michael Binetti - Evercore I ...