Consumers are dealing with 'a sentiment issue': Amer Sports CFO

Shares of Amer Sports (AS), the parent company of brands like Wilson and Salomon, are trading lower on Tuesday despite beating revenue estimates in its first quarter results. The company delivered weaker-than-expected guidance, weighing on the stock. Amer Sports CFO Andrew Page joins the Morning Brief to discuss the results and provide insight into the company's performance and outlook.

Page acknowledges that while the consumer is getting "more healthy," there is an ongoing "sentiment issue," prompting the company's cautious guidance. Despite the sentiment challenges, Page emphasizes that the first quarter solidified the fact that "their demand continues to be high."

Page also highlights a notable pattern across industries: consumers are beginning to "migrate toward premium" offerings. He notes that Amer Sports' products align well with this trend, sustaining demand. Pertaining to Amer Sports in particular, Page states, "Consumers continue to still take care of their health and take care of their ability to exercise, their ability to feel good, and our products play in that space very well."

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This post was written by Angel Smith

Video transcript

E sports, the parent company of Solomon Wilson and Art Taris posting a first quarter earnings be driven by sales of its technical apparel but guidance.

So weighing on the stock here this morning, you're looking at a loss of nearly 8%.

This is the second earnings report since going public Amor Sports last year here.

So here with more earlier this year, excuse me, with more, we wanna bring in Andrew page.

He's the Amer Sports Chief Financial Officer, CFO Andrew.

It's great to talk to you.

So let, let's take a step back when you take a look at the market's reaction to this print.

I think a lot of that is based on the guidance, but talk to us just about the spending trends that you are seeing and what you're seeing in terms of the health of the consumer today.

Yeah, I think that um what, what we continue to see, I think the consumer is getting more healthy.

I think it's really a a sentiment issue.

I think sentiment is getting stronger.

Uh We had anticipated the first half of this year, especially in North America and Europe being uh a bit challenging.

Uh from the consumer's perspective, from a sentiment perspective.

Uh and I was built in our guidance.

Um but as you can see in the first quarter, uh consumers continue, you know, our, our demand continued to be high, especially with uh technical apparel in our art to franchise.

Uh and we over deliver even well beyond our expectations of Q one.

So consumers, consumers continue to be uh pretty resilient as well.

You know, it's interesting, I mean, across some of these segments, technical barrel, outdoor performance, ball and racket sports.

I mean, it's everything from lifestyle to performance within there.

What, where is the consumer spending into the sports experience right now?

And, and where are you being able to capitalize and seeing that flow through the profits for the business?

Yeah, I think um that's a great question, Brett, what happens is I think that the consumers and this has been a migration that's been going on for a few years.

You start to see the consumers migrate toward premium and experience or migrate to value.

And obviously we play on the premium side of the, of the spectrum across all of our brands, whether it be outdoor performance, technical apparel or um or, or a ball and racket sports, you know, much of our equipment uh from a price point is at the high end of the spectrum within its categories.

You know, our gloves are, you know, a couple of $100 our bats over 500 bucks.

Obviously, our tennis rackets are, are fairly expensive.

They're not cheap, they're not cheap, Andrew.

I've tried to get one I priced out right now.

Yeah.

So you definitely, we definitely see consumers, um, picking a lane and, and the lane that we in the lane that we play in is on the premium side.

And like I said, consumers, consumers continue to show RSI.

Um, and, you know, within consumer discretionary, there's also a pecking order.

Uh, and I think that what I like about our portfolio is that, you know, even consumer discretionary where, where spending starts to get constrained and you start making discretionary spending, we continue and consumers continue to still take care of their health and take care of their, um, you know, their, their, their ability to exercise their ability to take care of themselves, their ability to feel good and our products play in that space very well.