Sports equipment maker Amer Sports in $400,000 1st quarter net profit on improved sales

Amer Sports in Q1 net profit as sales grow

HELSINKI — Global sports equipment maker Amer Sports Corp., whose brands include Atomic, Salomon and Wilson, on Thursday reported a first-quarter profit helped by a snowy winter that pushed overall sales up 5 percent.

Net profit in January through March was euro300,000 ($400,000), compared to a net loss of euro11 million a year earlier, the company said. Revenue in the period was euro372.6 million, up from euro355 million.

The company’s share price closed down 6 percent at euro8.47 ($11.23) on the Helsinki Stock Exchange.

Amer, which described 2009 as the worst year in a decade, said markets were improving as economies emerged from a global economic downturn.

“We are in a good position to benefit from the expected market recovery, and we expect the favorable development in our profitability to continue during the remainder of the year,” said Pekka Paalanne, executive vice president.

The Helsinki-based company had “executed well our key priorities. Gross profit percentage was up by more than two points and profitability increased in all segments,” Paalanne said. “At the same time, operating expenses were kept under tight control and we made further gains in managing the working capital.”

The biggest increase in sales — of 13 percent — was in winter sports equipment, to euro42 million in the period.

“Good snow conditions at the end of the 2009-2010 winter season had a positive effect in all key markets,” Amer said. “While sales in all product categories were up, cross-country skiing grew fastest especially in central and northern Europe.”

Footwear, apparel and sports instrument sections also improved, and the cycling segment showed growth of 9 percent in the period to euro29 million, compared to a weak quarter in 2009, Amer said.

The company warned that difficult market conditions continued in fitness equipment where “financing remained tight and fitness clubs continued to be cautious about opening new facilities.”

Amer repeated its aim “to drive profitable growth” as it expects “the sporting goods market to recover moderately” this year.

“However, in light of the unpredictable market conditions, Amer Sports continues to focus on improving its profitability through improved gross profit and tight cost control,” the company said.

Formerly Finland’s largest cigarette maker, Amer sold its tobacco operations in 2004 to focus on fitness and sports equipment. It has divested noncore assets and bought several sports equipment makers, including California-based Fitness Products International and Sparks, Nevada-based ATEC, a leading maker of baseball and softball pitching machines.

In December, Amer announced the dismissal of CEO Roger Talermo, who had headed the company since 2006. He was replaced on April 1 by Heikki Takala, a former commercial director at the Cincinnati-based Procter & Gamble Co.

Based in Helsinki, Amer Sports employs some 6,400 people — up from 6,300 a year earlier.

____

On the Net:

Amer: www.amersports.com