Amer Sports, Inc.

Earlier this morning, we announced our financial results for the quarter ended March 31st, 2025, and the release can be found on our IR website, investors.omersports.com. A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only, and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the safe harbor statement in our earnings release and SEC filings. We will also discuss certain non-IFRS financial measures. Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to the most comparable IFRS financial measures. We'll begin with prepared remarks from our CEO, James Zang, and CFO, Andrew Page, followed by a Q&A session until approximately 9 a.m. Eastern. James will cover key operational and brand highlights, and Andrew will provide a financial review at both the group and segment level, and also walk through our guidance for the second quarter and full year 25. Our Terex CEO, Stuart Hazelden, will also join for the Q&A session. With that, I'll turn the call over to James.

Thanks, Omar. AMR Sports began 2025 with a great performance in the first quarter, delivering sales adjusted margin and EPS well above expectations. We generate 23% sales close or 26% ex-currency. and we also expanded our adjusted operating margin by nearly 500 basis points. Our performance was led by strong growth and profitability in both technical apparel and outdoor performance, as well as solid sales and margin results in ball and racket. In addition to the continued broad-based strength from our flagship French apparels, I'd like to highlight the growing momentum behind the Salomon sneakers. We are really starting to see consumers all around the world responding to their unique performance and style attributes. Furthermore, our market-leading hardware equipment franchises delivered better than expected results for both winter sports equipment and the Wilson ball and racket. Although we are off to a great start in 2025, given macro uncertainty related to the U.S. tariffs, we are operating our business with discipline and flexibility. Andrew will provide a more detailed discuss of our tariff exposure, mitigation strategies, and the financial impacts. But I'd like to emphasize that. I believe we are very well positioned to manage through a wide range of tariff scenarios given our premium brands with pricing power, secular growth trend, and relatively low U.S. revenue exposure. Looking near and long-term, we believe Amos Sports is a uniquely positioned company within the global sports and outdoor space. Several factors give me confidence for the rest of this year and the well beyond. First, we own and operate a unique portfolio of premium outdoor and sports brands. Each one is empowered by our technical innovation and is positioned at the pinnacle of its segment. Our brands have high conversion and satisfaction, but are still small players with room to grow. Second, Bacteria is a breakout growth story with great growth and profitability for the outdoor industry, driven by its disruptive direct-to-consumer models and a unique competitive position. It's still very underpenetrated globally and still has a tremendous long-term growth opportunity. Third, we believe Solomon sneakers have unique performance and design attributes. And the brand is experiencing accelerating momentum globally, but still has small market share of the global sneaker market. Fourth, Wilson and our winter sports equipment brands have authentic heritage, premium positioning, higher performance products, and the leading market positions. These high market share brands will deliver slower long-term growth in their core equipment business but they still have large softwares potential, especially Western Tennis 360. And fifth, we believe we have a very strong differentiated platform in Great China, where we continue to deliver best-in-class performance with great momentum across all three big brands. Before I turn over to Andrew, allow me to briefly recap key brand highlights from our three segments. Starting with technical apparel, which is led by our fastest growing and the largest brand, Arc'teryx. Arc'teryx deliver another great quarter with strong growth across all regions, channels, and categories, especially footwear and women's, which continue to grow faster than the brand overall. We are encouraged to see the technical apparel momentum continue in the direct-to-consumer channel, where we generate a plus 19% omnicom in quarter one. Importantly, our direct-to-consumer growth was driven by strong performance in both stores and online. We believe Arc'teryx stores are very differentiated from both our product and experience perspective, and they continue to be critical to our strategy, especially how we engage with local consumers and the community. Arc'teryx net new store openings were flat in quarter one, as four openings were offset by the closure of four legacy locations as part of our ongoing strategy to optimize the quality and the productivity of our store fleet. Key new store locations this quarter include two stores in China, one in Georgetown, Washington, DC, as well as our new Chamonix location, which is our first mountain town store in Europe and has attracted great consumer interest since day one. Acterys store expansion strategy includes a mix of different formats ranging from multi-level large-scale alpha flagship stores to small format, very distinct mountain town shops. For 2025, we plan to open approximately 25 net new Acterys stores globally. which incorporates a similar level of growth opening as in 2024, partially offset by the closure of certain outlets and other sub-optimal locations. We are focused on positioning architects for sustainable long-duration growth, and developing a high-quality store network is critical to our success, and much more important, chasing fast-paced new store expansion. For example, in Guizhou, China, We will continue to focus on optimizing Acterix retail footprint rather than pushing new store expansion. This year, we will have next store closure in China, including closing some legacy partner stores, but we'll grow our own store count, continue to open larger format, high quality locations. We expect to grow revenue strong double digits, driven by comp store growth and replacing small, less productive stores with large-format, high-quality locations. In Beijing, we will soon open a brand store within the Peninsula Hotel, and we have plans to open two more shops at other Peninsula locations later this year. We are very excited that Acterys will be the first sports brand to sit alongside traditional luxurious brands inside this iconic hotel chain. We also recently opened another mountain town store in Bend, a popular mountain destination in Canada. And it's a great addition to our small but growing portfolio of authentic mountain town locations, including Chamonix, Shangri-La, and the Whistler. Community engagement continues to be a key part of our strategy to raise brand awareness. In March, We host our first-ever Arcturus Academy in California at Mammoth Mountain. The event drew thousands of participants, achieved record-breaking rebirth sales, created 6 million media impressions, and saw a direct lift in sales in Arcturus stores in the Los Angeles area, as well as e-commerce. Shifting to products. Footwear continued to be Actel's fastest growing category in quarter one. As consumers continue to respond positively to what we believe is the best line of technical performance footwear designed for mountains. This spring, we launched the Northern LD4, an elevation of the popular zero weight made for long distance mountain runnings. We also launched a Vertex Speed, which is a mountain running shoe designed to climb through technical vertical terrain. Looking forward, Arc'teryx has an exciting pipeline for shoe launch in the second half of 2025. We believe footwear will become a sizable and profitable growth avenue for Arc'teryx, both in own retail, e-commerce, and in certain wholesale accounts over time. We have now structured footwear as a separate business unit with a dedicated P&L, and the team focus on the category. Women's also continues great momentum in court one with double-digit growth across all regions and channels, outperforming the rest of the brand in every region. We see a big opportunity to serve women in the outdoor differently through pinnacle design and the performance. A great example of our design focused on women is the Clark hairpin, which has been explosive growth in quarter one, stocking out quickly. We are seeing rising brand awareness and affinity with women in the US and the Europe as we have improved the fit, style, and the function. Revert also continues to be one of our priority strategies. which we believe will truly separate us from the marketplace. Our products are long-lived and are built for repair. We experience especially strong consumer engagement in all of our locations with our reverse center. At the end of COVID-19, we had 25 reverse service centers globally. Lastly, onto valence, which we view as the city expression of Arc'teryx. like footwear, Valence also now has its own P&L and management team. Our new Valence leadership is sharply focused on developing the best product, merchandising, marketing, and good-to-market strategies to drive Valence's long-term growth opportunity. For the first time, Valence was presented at Fashion Week in Paris, where the brand was positioned alongside the luxurious players and received very positive feedback from buyers, industry, and the media. Moving to the outdoor performance segment, which delivered an excellent quarter led by Salomon Footwear and Appel, winter sports equipment results were also better than expected. Global brand momentum behind Salomon sneakers is accelerating. Not only is the Salomon Footwear franchise continuing to grow very well in China and APEC, It's now also starting to impact in both the U.S. and Europe. Our brand awareness has doubled the past couple years, and we are now seeing very strong momentum in both sports style and our performance lines. Salomon sneakers surpassed $1 billion of sales in 2024, but it's still tiny relative to the $180 billion global sneaker market. We believe Salomon sneakers have an authentic and a unique market position with technical features designed for athletes on a variety of talents, but also great for everyday use. Our unique style and the technical attributes are resonating with consumers at a time when they are more receptive than ever to wearing new sneaker brands. Long term, we expect Salomon soft goods to grow strong double digits annually. In Q1, Salomon footwear and apparel continues very strong growth in Great China and APEC, while America accelerates and email continues its solid growth. Direct-to-consumer remains the fastest-growing channel for the brand, and the sports style offering continues to lead footwear growth. In addition to shoes, Salomon apparel, bags, and socks are also experiencing great momentum. A key brand highlight in code one was our first ever global footwear launch with XD Whisper, a new addition to our sport style offering. This global synchronized launch has been a massive success and was welcomed with excitement by customers around the globe. We did XT Whisper collaborations with Kiss and Sandy Liang in the U.S. and have been great results from our Whisper Go campaign in China. On the performance side, we have been very pleased with the launch of the long-running shoe, AeroGlide 3, one of the best footwear launched in Salomon history. AeroGlide 3 uses a form called OptinForm Evo. which we believe represent a disruptive new generation material offering the runner a new level of rebound and comfort for running on load or trail. We are also very excited by the gravel launch this month. A new line that offers consumers a more versatile than ever running shoe that performs great on various types of tearing from pavement to parks and trails. Originally, Salomon soft goods is continuing to experience great sales through and solid order books in Europe, both for sports style and the performance. Sales through for retailers continues to be strong, which is translating to healthy growth in our books. In Asia, direct consumer continue to be the critical growth channel for Salomon. Our Salomon compact shop format developed in China works very well, and we believe these stores generate significantly higher sales per square foot versus industry average and continues to improve. We are continuing to expand our compact shop in Gui, China, opening 22 new Salomon shops in quarter one, including both owned store and the partner stores, bringing our total count to 218. We are on track to reach near 300 Salomon shops in Great China this year. We believe Salomon has the opportunity to grow to several hundreds locations over time in just tier one and two cities from only eight stores four years ago. Our new Salomon flagships in Shanghai has continued to perform very well in the first few months. We will open a second Shanghai flagship in August. which will be located in the former branch of Concession District, known for its boutique shopping. In the U.S., we continue to lay the groundwork to support significant future growth, and we are seeing more and more signals that the brand is gaining momentum in the world's largest technique market. Our first U.S. store in New York City continues to show incredible traction with our consumers. and the brand is seeing strong buzz with key sneaker retailers across the city. We plan to open three to four more Salomon shops in the great New York area this year, as well as continue to expand our presence in key wholesale accounts. Beyond New York, we also focus on San Francisco and Los Angeles as epicenter markets for Salomon sneakers. In addition to the success of Salomon sneakers, Our winter sports equipment brand delivered a better than expected end of the ski season with strong sales through at retail, leading to bad at once reorders. Moving to ball and racquet highlights. We are pleased that the ball and racquet's growth trends continue to be solid in quarter one, with 12% growth driven by strength in sportswear, racquet, sports, and golf. Our 10360 continues to resonate very well with consumers, from performance rackets to soft goods, especially in Great China. Wilson's performance rackets business continues to shine, including the January launch of the Clash V3, which is off to a solid start. And at Inpickable, we are experiencing strong response to our Vespa Taro launch. Western tennis 360 soft goods also continues its excellent growth, nearly doubling in Q1 2025. We have seen very strong response to the intrinsic women's tennis shoes. We also continue to excel in China, and we'll open approximately 50 more Western tennis 360 shops in China this year, including both owned and partner stores, bringing the total to almost 100. In North America, the new tennis 360 concept store in the Dallas North Park Mall is off to a very good start. This is also true of our tennis footwear and apparel test in 50 big sporting goods locations where we are selling through better than our competitors. Lastly, we were pleased to see Western Golf have a solid improvement in sales and the margins in quarter one, led by the Standard Power launched this spring, which has received positive reviews in the golf influencer community. With that, I will turn it over to Andrew.

Thanks, James. Before I start, I want to take the time to thank our more than 13,000 AMR employees around the world. Our passionate teammates are critical to developing innovative products, engaging with consumers, and building our brand for the long term. And they've done an amazing job navigating the ever-changing macro environment with discipline and flexibility. I will discuss Terrace in detail when I provide guidance, but I want to start by saying that we are very confident that our fundamental business momentum, diverse global footprint, clean balance sheet, and strong brand portfolio with pricing power will give us significant flexibility and firepower to manage through a variety of tariff scenarios. Let's go through Q1 results first. Amerisports grew 23% in Q1 on a recorded basis and 26% in constant currency. The strong group sales performance was led by both technical apparel and outdoor performance, while Ball and Racket also delivered very solid growth in the quarter. By channel, The group continues to be led by D2C, which grew 39%, led by Salomon Footwear in Greater China and APAC. We also saw solid wholesale growth of 12% led by Arcteryx. Regional growth was led by Asia Pacific, which increased 49%, followed by China, which grew 43%. AMEA accelerated to 12%, and the Americas also grew 12% in Q1. We continue to achieve very strong growth in Greater China, and there are several reasons why we are doing so well there and are also confident in our future growth in this important consumer market. Number one, our brands compete in one of the high-quality and fastest-growing consumer segments in China, the premium sports and outdoor market. The outdoor trend in China continues to be very robust, attracting younger consumers, female consumers, and luxury shoppers. Additionally, our still small specialized brands are known for their expertise, high quality, and technical innovation, which resonates with Chinese shoppers. Third and most important, we have a great team in China. Our deep expertise and unique scalable operating platform gives us a significant competitive advantage across the portfolio. Turning to profitability, adjusted gross margin increased 330 basis points to 58% in Q1, primarily driven by favorable channel, geographic, and product mix, as well as lower discounts compared to prior year. Going forward, we expect our highest gross margin franchise, Arcteryx, to continue to be the biggest underlining driver of our ongoing gross margin expansion. Adjusted SG&A expense as a percentage of revenues leveraged by 160 basis points, it represented 42.6% of revenues in Q1. Both the technical apparel and outdoor performance segments achieved SG&A leverage on very strong growth. This was partially offset by slight deleverage at ball and racket due to the ongoing investment in Tennis 360 and D2C growth. Driven by both gross margin expansion and SG&A leverage, we generated 490 basis points increase in our adjusted operating margin from 10.9% last year to 15.8% in Q1 of the current year. Adjusted corporate expenses were $19 million, up from $17 million in Q1 of last year. Depreciation and amortization was $78 million, which includes $36 million of ROU depreciation. Adjusted net finance cost in the quarter was $17 million, which comprised of $22 million of interest expense partially offset by $5 million of FX gains and other items related to the weakening U.S. dollar. In the quarter, our adjusted income tax expense was $64 million. which equates to an adjusted effective tax rate of 30%, better than expected, primarily due to our over-delivery of operating income. Adjusted net income in Q1 was $148 million compared to $50 million in the prior year period. Adjusted diluted earnings per share was 27 cents compared to adjusted diluted earnings per share of 11 cents last year. Turning to segment results. Technical apparel revenues increased 28% to $664 million, led by Arterix. Growth was fueled by 31% D2C expansion, including a 19% Omnicomp, a very good result comparing against a 36% Omnicomp in the first quarter of last year. Arterix D2C momentum continues to be fueled by both new and existing consumers across all regions, channels, and product categories. Technical apparel wholesale revenues grew 22% driven by Arc'teryx. Although it is a small part of the technical apparel segment, it is worth noting that we are making good progress with peak performance brand and cleaning up the marketplace in EMEA and the Nordics, shifting to a more full-price D2C-oriented brand. Peak's healthier core franchise is a solid base for the new president, Stefano Saccone, to lead the brand through the next phase of its journey. Regionally, technical apparel growth was led by Asia Pacific, followed by Greater China, the Americas, and EMEA. All regions grew strong double digits fueled by Arcteryx. Technical apparel adjusted operating margin expanded 110 basis points to 23.8%, driven by SG&A leverage, thanks to strong growth. Moving to our outdoor performance segment, which saw revenues increase 25% to $502 million, driven by strong performance in Solomon's soft goods and good results in winter sports equipment. The DTC channel grew very healthy double digits driven by new storage openings in Asia Pacific and greater China, as well as solid comps from existing Salomon stores. Outdoor performance growth also benefited from a solid performance in winter sports equipment in Q1 following a slow start to the winter season. By channel, outdoor performance DTC grew 68% led by Greater China and APAC, and wholesale grew 9% from the prior year period. The wholesale results were driven by both Salomon winter sports equipment and Salomon soft goods. Regionally, outdoor performance growth was led by Greater China and APAC, followed by accelerating growth in EMEA. The Americas was roughly flat, but only because of the envy divestiture in 2024. Solomon's Soft Goods saw very good growth in the Americas. As James alluded to, the popularity of Solomon's Footwear is inflecting globally, and we are well positioned to appropriately and fully develop this unique opportunity over time. We believe we have very significant growth in all three major consumer regions and have the right talent and team structures in place to take a more meaningful share of the global sneaker market over time. Our winter sports equipment business finished on a high note as a good end-of-season snow helped boost retailer sell-through and reorders. The Nordic or cross-country market remains more challenged, but we were able to move a significant amount of inventory at reasonable discounts, leaving us in a very clean position at the end of the winter. Our assumption is that the winter sports equipment market will grow low single digits in 2025 and over the long term. The ski and snowboard industry is healthy and given advanced snowmaking capabilities industry-wide, as well as the growing attraction of winter mountain vacations, demand for on-piste skiing is strong. Winter sports equipment now represents one-third of the outdoor performance segment, and the share is shrinking as Solomon's Soft Goods grows faster. Outdoor performance adjusted operating profit margin expanded 990 basis points from last year to 14.7% in Q1, driven by strong gross margin expansion thanks to channel, region, and product mix, as well as favorable product costs. This margin expansion was also driven by SG&A leverage on high growth. Moving to ball and racket. Revenue increased 12% to $306 million driven by soft goods, racket sports, and golf. The strong growth was also helped by easier comparisons from Q1 last year when Wilson was still going through some liquidations to normalized inventory levels. We are pleased with the continued rebound, but we would caution that double-digit growth is not sustainable long-term, and we continue to expect ball and racket to grow low to mid single digits long term. By category, the growth was led by soft goods, which now represents 10% of ball and racket sales in our marquee racket sports franchises. We continue to see very strong momentum in tennis 360, especially in North America, Greater China, and APAC. Golf achieved positive growth thanks to a successful DynaPower product launch as well as improving sales in pro golf clubs. Inflatables and baseball were both roughly flat as baseball bats returned to growth offset by softer ball glove sales. Ball and racket segment adjusted operating profit margin increased 270 basis points to 6.6%, primarily driven by higher growth margin thanks to favorable product mix, channel, and region mix. We had slight SG&A deleverage due to the continued investment in Tennis 360 and D2C. Turning to the balance sheet, we ended the quarter with $515 million of net debt, down from $591 million at the end of Q4. Using the midpoint of our 2025 adjusted operating profit guidance, our net debt to adjusted EBITDA ratio was approximately 0.5 times at the end of Q1. Following our $1 billion equity raise and debt pay down last December, our balance sheet is in a healthy position to support our company as we navigate tear and other external uncertainties. Looking forward, using excess cash to pay down debt, which carries non-deductible interest, remains a high return usage of excess cash. We also exited the quarter in a solid inventory position, up 15% year over year, well below our 23% sales growth. Driven by strong profit growth and disciplined working capital management, we generated $164 million of operating cash flow in the first quarter of 2025. And for the full year of 2025, we expect to generate solid operating cash flow growth from the 2024 levels. Now moving to tariffs and guidance, there are several factors They give me confidence that we are well positioned to manage through a variety of tariff scenarios, both near and long term. First, we have low exposure to the U.S., only 26% of revenues, and we enjoy meaningful exposure to high-end consumers. Also, the high functional nature of our products creates personal engagement and a strong value equation for consumers. Thirdly, We believe the brands in our portfolio have significant untapped pricing power. The vast majority of our growth the last several years has come from more units and not higher prices. Lastly, our clean balance sheet and strong cash flow dynamics give us the financial flexibility to weather macro challenges as they arise. Given the upside in the first quarter, and our continued operating and financial momentum, and despite higher tariffs, we are raising our full-year revenue and EPS expectations. This updated guidance assumes the current 30% tariff on goods arriving to the U.S. from China and 10% tariffs on goods coming in from the rest of the world will stay in place for the remainder of 2025. Given the mitigation strategies we already have underway, we expect the impact to our P&L from higher tariffs to be negligible this year. Our updated guidance implies slower growth in the second half than in the first half. However, as we've said before, should strong trends continue and better than anticipated demand materialize, we believe we will be well positioned to deliver financial performance ahead of these expectations. Looking beyond 2025, we are confident in our ability to offset the vast majority of higher import tariffs under a wide range of scenarios through pricing, vendor renegotiations, and supply chain maneuvers. Since the ultimate tariff outcome is still unknown, we thought it would be helpful to frame our U.S. sourcing exposure. In 2024, U.S. revenues represented 26% of group revenues. sourcing from China to the U.S. was approximately eight points of the 26. Vietnam was also eight. The rest of Asia was six, Europe three, and the rest of the world one. By brand, slightly more than half of the tariff exposure is in the ball and racket segment, around 30% in technical apparel, and the remainder in outdoor performance. All three segments, including Ball and Racket, are already implementing and executing measures to offset higher tariffs. In addition to partnering with vendors, retailers also understand the landscape and price increases are being accepted and implemented in the second half for those product categories most affected. One last perspective I want to share on tariffs. Even if the higher tariffs had remained in effect for the rest of the year, or if they do return, i.e., China at 145% and the rest of the world at the higher rates from before the 90-day pause, we were only anticipating a five-cent impact from tariffs for the full year 2025 EPS after mitigation, or approximately 100 basis points annualized. And over time, we believe we will be able to mitigate the majority of even the higher tariff rates. For the full year of 2025, we are raising our expectations for reported group revenue growth from 13 to 15 percent to 15 to 17 percent. We are now assuming 150 basis point drag from unfavorable FX impact at current exchange rates compared to the 250 point drag incorporated in our prior guidance. We are raising our technical apparel revenue growth guidance from approximately 20 percent to 20 to 22%, outdoor performance from low double digits to now mid-teens, and ball and racket from low to mid single digits previously to mid single digits currently. We are keeping our adjusted gross margin expectations at 56.5 to 57% for the full year. We are maintaining our adjusted operating margin guidance of 11.5 to 12%. For the segments, we continue to expect an adjusted operating margin of approximately 21% for technical apparel, approximately 9.5% for outdoor performance, and 3 to 4% for ball and racket. You should assume full-year net finance costs of approximately $120 million and an effective tax rate of 30 to 32%. Other operating income and non-controlling interest will be approximately $10 million each. We now expect adjusted diluted EPS of 67 cents to 72 cents versus our prior guidance of 64 cents to 69 cents. which is based on approximately 560 million fully diluted shares. Also, we are assuming DNA of approximately $350 million, including approximately $180 million of ROU depreciation. CapEx is expected to be approximately $300 million, primarily to support new store expansion, ERP optimization, and distribution and logistics investments. Turning to the second quarter. We expect reported revenue growth for the group in the range of 16 to 18%. We expect adjusted gross margin to be approximately 57 to 58% in Q2, and adjusted operating profit between 3 and 4%. Our net finance cost for the quarter should fall between 25 and $30 million, and the effective tax rate should be 30 to 32%. we expect adjusted diluted EPS of zero to two cents per share. As we said in the past, should strong trends continue and higher than expected demand materialize, we will be well positioned to deliver financial performance ahead of these expectations. With that, I'll turn it back to the operator for questions.