HELSINKI (BRAIN) — Sales in Amer Sports' cycling division, comprising the Mavic and Enve brands, were down 12 percent in local currencies in the first quarter, to 32.1 million euros ($38.9 million). The company said its cycling sales were "adversely impacted by lower OEM orders."
Amer's total sales were up 1 percent in the quarter, to 664.2 million euros. The company did not adjust its forecasts for the remainder of 2018.
Amer's Outdoor division saw the most growth in the quarter, up 2 percent in local currencies. Within that division — which includes the cycling brands — Arc'teryx apparel sales and winter sports equipment were bright spots, up 3 percent and 16 percent, respectively. Sports instruments sales were up 26 percent thanks to some new introductions by Amer's Suunto brand.
Across all divisions, EBITDA was 40.4 million euros, up from 35.5 million euros in the same quarter last year.
"In the first quarter, we delivered solid progress across our strategic transformation areas with ongoing acceleration in Direct to Consumer, modern sales channels, and China," said Heikki Takala, Amer's president and CEO.
"Following a year of significant transformation and restructuring, our focus in the quarter was on solidifying our margins through more attractive mix, higher quality distribution through sharper segmentation and reduced number of doors, and reduction of promotional sales especially in Footwear. As result, our margins and profit improved, and we can now focus on driving a more sustainable topline with a good pipeline of initiatives.
"The market continues to evolve rapidly, and we are embracing the changes proactively and with encouraging results. Whilst we make good progress and continue to accelerate in most areas, we also have more work to do to address the remaining areas of underperformance. As always, we maintain a long-term view guided by our sustainable growth model."
In a conference call with investors later Thursday, Takala expanded a bit on the cycling results.
"The cycling market has continued to be quite challenging. There are quite a lot of changes and a lot inventory," he said. "OEM has not rebounded yet, in fact it has continued to go down. If bike makers don't make bikes, they don't order wheels, that's kind of the logic there. ... Of course at some stage the market will reach each bottom, but we will clearly be going along with the market, so if the market does not gain traction it will impact us. ... That's clearly the driver, there is not much else dramatic going on. We are continuing to push quickly online, we are pushing distribution to new channels, but the growth in those channels is not enough to offset the millions and millions of decline in the OEM orders."
