Amer Sports, the sports equipment giant backed by Lululemon billionaire Chip Wilson, saw its stock soar as much as 15% during trading on Tuesday after reporting earnings that exceeded Wall Street expectations. The company’s recent partnerships with tennis legend Roger Federer and rising basketball star Caitlin Clark are credited with revitalizing the Wilson brand, which had been struggling earlier this year.
Amer Sports, which owns 10 major sports gear brands including Salomon and Louisville Slugger, reported a 16% increase in sales for the second quarter ending June 30, driven primarily by strong demand from Chinese consumers for its outdoor clothing brand Arc’teryx. The company posted $994 million in sales and managed to significantly narrow its net loss to $1.8 million compared to the same period last year.
Wilson, best known for its basketballs and tennis equipment, had experienced double-digit sales declines at the start of the year. However, the brand has recently rebounded, showing modest growth in the latest quarter. The company’s strategy includes a tennis-centered revival called Tennis 360, which involves opening branded stores in China and expanding its footwear and apparel lines. A significant boost came from the launch of RF, a new line of tennis rackets, bags, and accessories in collaboration with Roger Federer.
“Roger is a living legend in tennis, and this new product line has received an overwhelmingly positive response from the market,” Amer Sports CEO Jie Zheng told analysts during a call on Tuesday.
The company is also banking on Caitlin Clark to further elevate the Wilson brand. Clark’s basketball collection, which quickly sold out online, has generated significant buzz. “Caitlin Clark is significantly increasing the brand’s visibility… We expect our Caitlin Clark franchise to gain momentum in the second half of 2024 with the launch in select wholesale accounts,” Zheng added. This spring, Clark will become the face of Wilson basketball across both men’s and women’s initiatives.
Off the back of these strong quarterly results, Amer Sports has raised its full-year sales guidance, now expecting a 16% increase in sales and earnings of around 42 cents per share, up from the previous estimate of “mid-teens” growth and earnings as high as 40 cents per share.
This positive outlook sent Amer Sports shares climbing to a midday high of $14.25 on the New York Stock Exchange before settling at $13.64, the highest closing price in two months. The stock rally also significantly boosted billionaire shareholder Chip Wilson’s fortune by about $122 million. Wilson, who owns nearly 21% of Amer Sports, along with three Chinese companies led by Anta Sports, took over the company for $5.5 billion in 2019. The consortium has since refocused the business on the Chinese market, taking Amer Sports public earlier this year at $13 per share. With Tuesday’s closing price, Amer Sports is now valued at $6.9 billion.
