Arc’teryx Drives Strong Revenue Growth for Parent Company Amer Sports
Amer’s direct-to-consumer revenue grew 40% in the quarter, while revenue in China jumped 54%.
By Kate Robertson
Arc’teryx opened 13 new stores in the quarter, including two in Paris in time for the Olympics, bringing the total to 125. Photo by Robert for stock.adobe.com.
Arc’teryx’s technical apparel continued to drive strong revenue growth at parent company Amer Sports in the second quarter ending June 30.
The Helsinki, Finland-based company reported 16% year-over-year sales growth in the quarter, reaching $994 million. Direct-to-consumer (DTC) revenue was up by 40% to $449 million, and wholesale increased by 2% to $545 million. Revenue in the technical performance category, which includes Arc’teryx and the Peak Performance brand, grew by 34% year-over-year to $407 million.
“Arc’teryx is a breakout growth story with unprecedented growth and profitability for the outdoor industry and is charting new territory with its disruptive DTC model and strong competitive position,” said Amer CEO James Zheng on the company’s Aug. 20 earnings call.
Zheng described the company’s other major brands, Salomon and Wilson, as “healthy.”
“Both Salomon and Wilson have leading market share within their heritage equipment businesses, but still have very small soft goods franchises with large growth opportunities ahead, especially in Salomon footwear,” Zheng said.
Revenue in the company’s outdoor performance category, which includes Salomon, Atomic, and Armada, grew by 11% year-over-year to $304 million.
Revenue in Amer’s ball and racquet sports segment, which includes Wilson, Atec, Evoshield, Louisville Slugger, and Demarini, grew by 1% year-over-year to $283 million.
While revenue from sales in EMEA and the Americas grew slightly, revenue from sales in Greater China grew by 54% year-over-year in the quarter to $289 million. Revenue in Asia Pacific, which excludes China, grew by 45% to $106 million.
“Our brands have high engagement, conversion, and satisfaction with consumers everywhere, but are still relatively small players on the global stage with significant room to grow,” Zheng said.
Arc’teryx Grows Retail Footprint, Women’s and Footwear Sales
Arc’teryx opened 13 new stores in the quarter, including two in Paris in time for the Olympics and one in Toronto, bringing the total to 125. The brand will open its New York flagship in Soho in early September.
Arc’teryx’s footwear line, which includes the often sold-out Kragg, is now 10% of the brand’s total revenues, up from 6%, Zheng said.
“Because of the unique position of Arc’teryx footwear in the market, the strong sales in our DTC channel, and enthusiastic interest from key wholesale accounts, our confidence is growing that footwear will become a very sizeable and profitable growth avenue for the brand both in our stores and brand-relevant wholesale accounts,” he said.
Women’s Softshell and Windshell jackets, such as the Gamma and Squamish hoodies, have helped make women’s more than 20% of the brand’s business. Women’s continues to perform extremely well, growing faster than the brand overall.
Zheng also noted that Arc’teryx opened a new design and innovation hub in Tokyo. The brand’s new ePE technology, which complies with the PFAS ban, has performed well, with sales of its Beta Jacket accelerating since switching to the new waterproof product.
The Peak Performance brand, which is also under the technical performance category, is undergoing a brand reset, Zheng said.
Salomon and Outdoor Performance DTC Grows by 55%
DTC revenue in Amer’s outdoor performance category grew by 55%, while wholesale declined slightly because of slower pre-orders in North American sporting goods and ski channels.
“2024 will be a slightly softer year for winter sports equipment due to slower trends in North America where ski equipment sales are (returning to normal levels) after a strong run through and beyond COVID,” Zheng said. “This is in addition to cautious orders in EMEA after two tough snow seasons in Europe.”
Winter sports make up approximately one-third of the outdoor performance category.
Salomon represents about 66% of sales in the segment, up from 54% in 2022. The brand opened 27 new stores in the second quarter in Greater China, bringing the total in the region to 136. It aims to have 200 owned and licensed stores by the end of the year. Salomon also opened a flagship on the Champs-Elysee in Paris ahead of the Olympics and a store in Osaka, Japan. In October, Salomon will open a pop-up shop in New York’s Soho neighborhood ahead of its plan to open one or two stores in the city next year.
Zheng is currently acting as interim brand CEO while Salomon looks for a new brand leader.
“Over four months in the role, I am confident in the Salomon brand and our team, as we continue to optimize the go-to-market strategy and sales structure to maximize the potential of Salomon footwear,” Zheng said.
In the ball and racquet segment, partnerships with basketball player Caitlin Clark and tennis players Roger Federer and Zheng Qinwen have helped drive sales. Qinwen won China’s first Olympic gold medal in tennis singles in Paris this year.
“This feat did not go unnoticed in her home country, as sales of Wilson racquets rose 2000% that day,” Zheng said. “There are 19 million tennis participants in Greater China.”
Amer Sports updated its guidance for the full year, projecting between 15% and 17% revenue growth. Technical apparel revenue is expected to grow by 30%, and outdoor performance will grow by mid-to-high single digits.
Original story published by The Daily Outdoor Retailer.