Mavic, Salomon and Suunto brand owner, Amer Sports Corporation, has reported its first half results. In an official company release, net sales of €640 million (US$908 million) were posted, which was down from the €648 million reported in H1 2008. In local currencies, net sales decreased by 7%.
Net sales decreased by 14% in the Americas, increased by 2% in EMEA and decreased by 2% in Asia Pacific.
Earnings before interest and taxes (EBIT) were a negative €36.3 million. The weakened results reflect challenging market conditions, particularly in the US. Meanwhile, when comparing against last year, Amer’s results included a 2008 capital gain of €13 million from selling the company’s corporate headquarters building.
According to Roger Talermo, Amer’s President and CEO, "Market conditions in the sporting goods industry during the second quarter remained as difficult as during the start of the year. The US market continued to suffer more than the European market and in general, there is less demand for high-ticket items.”
The breakdown of net sales by business unit was as follows during the January-June period: Apparel and Footwear 49%, Winter Sports Equipment 18%, Cycling 19% and Sports Instruments 14%. The Americas accounted for 22%, EMEA for 67% and Asia Pacific for 11% of net sales.
Amer’s trading second quarter is dominated by the Apparel and Footwear business. In local currencies, Apparel and Footwear sales grew by 20% with growth being driven particularly by the Salomon business. The order book for the fall/winter season is now complete, indicating a slower pace than in the first half of the year. Inventory management continues to improve according to targets.
Bicycle component manufacturer Mavic’s deliveries started to stabilise after a very low start for the year. According to Amer, the capacity constraints in high-end wheels continued to negatively impact both sales and margins. The R-SYS wheelset recall (implemented due to risk of spoke failure) is now almost complete. Amer stated that ‘customer feedback on the execution of the recall has been positive.’ Mavic’s sales declined by 15% in local currencies.
Net sales of Sports Instruments were below last year’s level. In local currencies, sales decreased by 12%. Net sales declined particularly in the US and in the diving category globally. However, the training and outdoor categories were at last year’s level despite the difficult market environment.
During the second quarter, Suunto launched new products in both the sports watch and diving categories. The products have reportedly been well received by the trade. Meanwhile, new cost savings initiatives have been made in order to adjust Suunto’s cost base to current market conditions.
