Many sporting goods/apparel companies have struggled in recent years, thanks to intense competition in the industry and cautious consumer spending.
Those struggles have put a damper on their share prices, with Nike (NYSE: NKE) stock plunging 62% in the past three years and Adidas (CBOE: ADS) slipping 6%. But Helsinki-based Amer Sports (NYSE: AS) is an exception, with its stock jumping 89% during that period. Consumers have given the nod to its quality goods at premium prices.
Its main brands include Arc’teryx, a Canadian premium outdoor brand specializing in climbing and mountain apparel. Then there’s France-based Salomon, a leading mountain sports brand focused on innovative trail-running shoes, hiking gear, and alpine ski equipment.
Also, there’s Chicago-based Wilson the No. 1 U.S. supplier of tennis equipment and a major purveyor of basketballs and American footballs.
Put all its units together, and you have an impressive company, analysts say. “Amer’s portfolio of premium brands across multiple categories positions it to generate excess returns,” Morningstar analysts Ivan Su and Junhao Yang wrote in a commentary.
“The investment required to build and scale premium brands creates a meaningful barrier to entry in the highly competitive sportswear industry.”
Profit margin seen ascending
They predict the company’s operating profit margin will soar to 19% by 2031 from 11% in 2025. “Near-term profitability is constrained by investment in brand building and store expansion, but these initiatives should drive margin expansion over time.”
Amer reported strong earnings for the second quarter. Revenue jumped 32% from a year ago. Adjusted net income, which excludes tariff refunds, skyrocketed 252%, and the operating profit margin exploded 820 basis points to 11.7%.
The company also lifted its full-year 2026 sales growth projection by 2 percentage points to 24% and its operating margin prediction by 80 basis points to 14.2%-14.5%.
“Amer’s continued market share gains suggest consumers are gravitating toward specialized and technical categories, positioning the firm to benefit from the trend over the long term,” Su and Yang said.
They particularly like Arc’teryx, which accounts for one-third of Amer’s revenue and more than half of its operating profit. Arc’teryx’ flagship product is the Alpha SV jacket built with Gore-Tex Pro for severe weather. Its Beta jackets are famously worn both on the trails and city streets. Other products include cardigans and hoodies.
Dominant player
“Arc’teryx dominates its niche with high-quality products like the waterproof Gore-Tex shell jackets, and we believe the brand is poised for strong growth in the coming years,” the Morningstar duo said.
“Weather resistance is becoming a baseline expectation for outdoor jackets, not a luxury, as people are increasingly seeking more sophisticated performance gear. Furthermore, outerwear is typically more durable, and consumers are more willing to invest in high-quality pieces.”
An Arc’teryx hardshell jacket can go for $900, way above competitors. “This pricing makes Arc’teryx a status symbol, especially among those who view it as a less expensive alternative to luxury brands like Moncler (CBOE: MONC),” Su and Yang said. Arc’teryx’ profit margins exceed competitors.
Salomon is a growth driver for Amer too. It has high-quality shoes for trail running and hiking. And they have crossed over to fashion, with models Bella Hadid, Hailey Bieber, and Emily Ratajkowski photographed wearing them.
“Salomon has become an icon in mountain sports, and its expansion in categories, geographies, and channels should support the group’s future growth plan,” Su and Yang said.
It looks like Amer is playing its sports to win.
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