Amer Sports (AS) Q4 2025 Earnings Call Transcript

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DATE

Feb. 24, 2026 at 8 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — James Zheng
• Chief Financial Officer — Andrew Page
• Chief Executive Officer, Arc’teryx — Stuart Haselden
• Chief Executive Officer, Salomon — Guillaume Meyzenq

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RISKS

• Q4 and near-term operating margin pressure -- Adjusted operating margin declined 110 basis points in Q4 to 12.5% and is guided to 13.1%-13.3% for 2026, as James Zheng described, due to "This was entirely due to accelerated SG&A investments to support key growth opportunities, particularly for Salomon."
• Inventory growth above sales rate -- Inventories increased 33% versus 27% sales growth, attributed to timing, shipping methods, FX, and the Korea acquisition, but representing a higher risk position relative to sales.
• Guidance reflects lower margin expansion than long-term target -- Operating margin forecast is at the low end of long-term algorithm (30-50 basis points), reflecting management's choice to "prioritizing long-duration opportunities over near-term profit flow-through." for Salomon.

TAKEAWAYS

• Group revenue -- $6.6 billion, up 27%, with all segments, regions, and channels delivering double-digit growth.
• Q4 sales growth -- 28% reported, 26% constant currency, with momentum led by technical apparel and outdoor performance.
• Adjusted operating margin (full year) -- 12.8%, expanding 170 basis points from 2024.
• Q4 adjusted operating margin -- 12.5%, down 110 basis points, attributed to accelerated SG&A investments, particularly for Salomon.
• Q4 adjusted gross margin -- 57.8%, up 140 basis points, driven by favorable segment and channel mix.
• Direct-to-consumer (D2C) channel growth -- 38% in Q4, led by Salomon softgoods; wholesale grew 18%, led by Arc’teryx.
• Regional revenue growth (Q4) -- Asia Pacific up 53%, Greater China up 42%, EMEA up 21%, Americas up 18%.
• Technical apparel segment (Q4) -- Revenue rose 34% to $1 billion, omni-comp grew 16%, and adjusted operating margin expanded 160 basis points to 25.9%.
• Arc’teryx women's category -- Delivered 40% growth, named the fastest-growing category within the brand.
• Arc’teryx footwear -- Revenue nearly doubled, driven by Norvan LD4 and Kopek GORE-TEX launches, approaching 40% growth.
• Veilance sub-brand -- Grew strong double digits, with showroom appointments tripling at Paris Fashion Week.
• Technical apparel store openings (Q4) -- 15 net new Arc’teryx stores, including Rockefeller Center and Mountain Towns; full-year plan for 25-30 net new stores in 2026.
• Outdoor performance segment (Q4) -- Revenue up 29% to $764 million; D2C up 55%, wholesale up 17%.
• Salomon brand (full year) -- Sales up 35% to above $2 billion, with footwear momentum and strong gains in all regions.
• Outdoor performance operating margin (Q4) -- Declined 490 basis points to 6.2%, reflecting accelerated SG&A investment in Salomon.
• Salomon store expansion -- 33 net new Salomon shops in Greater China (Q4), ending the year with 286 stores; APAC closed 2025 with 113 stores.
• Ball & racket segment (Q4) -- Revenue increased 14% to $337 million, led by softgoods and a return to growth in baseball.
• Wilson softgoods growth -- Drove double-digit segment gains, now about 15% of ball & racket revenue.
• Ball & racket operating margin (Q4) -- Improved 110 basis points but remained negative at -2.6%.
• Wilson store expansion (Q4) -- 10 new owned Wilson stores globally; 13 new Wilson Tennis 360 shops in China, total count at 77.
• Operating cash flow (full year) -- $730 million, up from $425 million in 2024, supported by profit growth and working capital discipline.
• Net debt & leverage -- Ended with $291 million net debt and net leverage at 0.3 times.
• Inventory position -- Year-end inventories up 33%, higher than sales growth, due to earlier receipts, more ocean shipping, FX impact, and Korea acquisition.
• Q4 adjusted net income & EPS -- Adjusted net income of $176 million and adjusted diluted EPS of $0.31 (vs. $0.17).
• Corporate expense (Q4) -- $40 million, up from $12 million, due to higher share-based compensation and prior-year one-time accounting reclassifications.
• Guidance: 2026 full year group revenue -- 16%-18% growth forecast, including a 200 basis point FX benefit.
• Guidance: 2026 adjusted gross margin -- Approximately 59%, driven by mix shift.
• Guidance: 2026 adjusted operating margin -- 13.1%-13.3%, at low end of long-term range due to Salomon investments.
• Guidance: 2026 adjusted diluted EPS -- $1.10 to $1.15, assuming approximately 564 million fully diluted shares.
• Segment growth guidance (2026) -- Technical apparel: 18%-20%, outdoor performance: 18%-20%, ball & racket: 7%-9%.
• Q1 2026 guidance -- Revenue up 22%-24% (500 basis point FX benefit), adjusted gross margin approximately 59%, operating margin 14%-14.5%, EPS $0.28-$0.30.
• CapEx guidance (2026) -- Approximately $400 million, up from $310 million, to fund IT and retail expansion.
• Tariff exposure statement -- CFO Page said, "We are confident in our position to manage through a variety of tariff scenarios given our low level of US exposure, strong brand portfolio and pricing power, and clean balance sheet."

SUMMARY

Amer Sports (NYSE:AS) delivered double-digit revenue growth across all brands, channels, and geographies, with Arc’teryx and Salomon showing breakout performance in 2025. Profitability was moderated by accelerated SG&A spending, especially for Salomon, which management positioned as a global growth engine. Inventory levels increased faster than sales, driven by earlier merchandise receipts, foreign exchange headwinds, and the Arc’teryx Korea acquisition. The company’s 2026 guidance projects high sales growth and continued margin expansion, but operating margin is expected at the lower end of the long-term range due to ongoing investments. Management emphasized balance sheet strength and capital allocation focused on growth investments and further debt reduction.

• Salomon's store count in Greater China grew by nearly 100 in 2025, closing at 286 doors, with further expansion planned at a slower pace in 2026.
• The technical apparel segment achieved its highest growth quarter of the year, supported by a record 40% gain in Arc’teryx women's sales.
• Amer Sports' retail expansion includes 25-30 new Arc’teryx locations, 35 net new Salomon stores in Greater China, and approximately 30 new Wilson Tennis 360 stores in China for 2026.
• Softgoods now constitute about 15% of the ball & racket division's revenue, underpinning double-digit growth in that segment.
• Group operating cash flow surged to $730 million, with net leverage reduced to 0.3 times, highlighting ample financial capacity to support strategic investments.
• Full-year CapEx is slated at $400 million, with the increase allocated mainly to IT infrastructure and global retail expansion.
• The company expects negligible P&L effect from tariff increases, based on low US sales exposure and pricing flexibility.
• Management is committed to continued disciplined SG&A investment, with margin leverage expected to improve as year-over-year comparables normalize, especially in the back half of the year.

INDUSTRY GLOSSARY

• Omni-comp: Consolidated comparable sales growth measured across direct and indirect retail channels, often integrating physical stores and e-commerce performance.
• Epicenter strategy: Targeted retail and brand investment approach focusing on key metropolitan markets (e.g., Paris, New York, Shanghai) to build awareness and accelerate brand traction.
• SG&A: Selling, general, and administrative expenses, encompassing operating costs not directly tied to production, such as marketing, salaries, and rent.
• ROU depreciation: Depreciation expense related to right-of-use assets under lease accounting standards.
• Wilson Tennis 360: Amer Sports’ specialty store concept focusing on a comprehensive Wilson tennis brand experience and merchandise, including equipment and apparel.
• Partner store: A retail door operated by a third party but branded and selling the company's products under commercial agreement.

Full Conference Call Transcript

James will cover key operational and brand highlights, then Andrew will provide a financial review at both the group and segment level and also walk through our guidance for the first quarter and full year 2026. Arc’teryx CEO, Stuart Haselden, and Salomon CEO, Guillaume Meyzenq, will join for the Q&A session. With that, I'll turn the call over to James.

Operator: Thanks, Omar.

James Zheng: Fourth quarter was a great finish to a breakout year for Amer Sports. Our growth was led by our flagship Arc’teryx brand, and the rising star, Salomon, which recently surpassed the $2,000,000,000 US dollar sales bar. In 2025, we generated 27% revenue growth to $6,600,000,000 and a 170 basis point adjusted operating margin expansion to 12.8%, with double digit growth across all segments, regions, and channels. In the fourth quarter, we grew sales 28%, and the strong momentum continues into Q1. Our performance was led by technical apparel and outdoor performance, with solid contribution from winter sports equipment and ball and racket. All four regions achieved solid double digit revenue growth.

Although we generated solid gross margin expansion in Q4, adjusted operating margin declined 110 basis points. This was entirely due to accelerated SG&A investments to support key growth opportunities, particularly for Salomon. Looking forward, we believe we are well positioned for strong and profitable growth within the premium sports and outdoor market, which continues to be one of the healthiest segments in all of consumer. Several factors give me confidence in our outlook. First, we own a unique portfolio of premium innovation-driven sports and outdoor brands. Second, Arc’teryx is a breakout brand with leading growth and profitability for the outdoor industry driven by its disruptive direct to consumer model.

Third, Salomon footwear has a compelling and unique brand position but still only a small share of the global sneaker market. Fourth, our Wilson and winter sports equipment franchises already have leading market positions and will deliver slower long-term growth, except for Wilson soft goods, which has significant growth potential. And fifth, we have a strong differentiated platform in Greater China, where we continue to deliver best-in-class performance across brands.

Before I turn it over to Andrew, I will briefly recap key highlights from our three segments. Starting with technical apparel. Arc’teryx delivered another excellent quarter of broad-based strength across regions, channels, and categories, especially footwear and women’s. Technical apparel generated a very solid 16% omni-comp driven by strong full-price growth and also healthy segment margin expansion year over year. Technical apparel sales up 34% was our highest growth quarter of the year. We continue to envision Arc’teryx as a truly global brand with significant runway in all major markets and we’re encouraged that the brand is generating double-digit omni-comps across all four regions.

Women’s was Arc’teryx’s fastest growing category in Q4 with 40% growth. We continue to enjoy rising brand awareness with women across regions as we improve fit, style, color, function, and newness. We created a significant amount of newness in women’s this past quarter, which drove notable incremental growth in key product categories. We saw especially strong momentum in ski and insulation with the Atom SV, and also the new Andessa Down jacket, which is a warm waterproof ski jacket at a pinnacle price point. Women’s bottoms also continued to be popular following the successful launch of the Clarke Pant, the Outeir, and the Neopant in 2025.

Moving to footwear, which grew nearly 40% driven by strong growth in all markets. Top performing models were the Norvan LD4 trail shoe, our most successful launch to date, followed by the Kopek GORE-TEX hiking shoe. Looking forward, Arc’teryx has an exciting pipeline of shoe launches for 2026, and we continue to believe footwear will be a large and profitable growth avenue for Arc’teryx. Our Veilance sub-brand is still small, but it grew strong double digits in Q4, and we are very excited for the future of this unique brand. Veilance drew a lot of interest at Paris Fashion Week, with showroom appointments tripling from last year.

We expect strong double-digit growth from Veilance in 2026 as we further develop our collections and expand distribution. Circularity and ReBird continue to be at the heart of our brand. We opened eight new ReBird centers in Q4, bringing the total to 43. We increased the credit customers receive in Q4 when they trade in used Arc’teryx product to 30% from 15% previously, which has driven a notable jump in trade-in activity. I would also like to highlight recent leadership announcements at Arc’teryx. First, we welcome Avery Baker, our first-ever Chief Brand Officer, who joined most recently from Tommy Hilfiger.

Avery is stepping into a newly created enterprise-wide role that will bring together global marketing strategy as well as consumer experience, insight, and analytics teams. We also welcome Tobias Prvedere, our new Head of EMEA. Tobias brings more than twenty years of international leadership experience across EMEA and APAC, most recently at The North Face and Gucci. I would also like to mention Peak Performance, our other technical apparel brand, which delivered solid growth in Q4. 2025 marked the brand’s return to growth with sales increasing across all regions and channels. The brand also continued to improve profitability driven by our concentrated efforts to reduce promotions and increase full-price selling.

Moving to the outdoor performance segment, which was led by another outstanding quarter from Salomon footwear and apparel, and a solid performance from winter sports equipment. 2025 was a breakout year for the 77-year-old Salomon brand, which grew 35% to more than $2,000,000,000 of sales. Footwear momentum continues across all regions, especially Asia, with high demand for sportstyle and performance. There are several ongoing factors that give us confidence that Salomon footwear is well positioned for significant profitable growth in the years ahead. Number one, global sportstyle momentum continues. One of Salomon’s unique strengths as an outdoor brand is that we are connecting with women and younger consumers in a way traditional outdoor brands haven’t.

Sportstyle is critical to Salomon’s position as the modern outdoor sneaker brand, and the success of XT-Whisper is the first example of how we can successfully expand focus beyond the XT-6 franchise. Second, our performance and running lines are also having great success. We continue to believe our new DRIVER franchise is helping to unlock the run category for Salomon like never before. Salomon is gaining traction in the run specialty channel in North America and EMEA, and even China, which has been a sportstyle-centric market, is seeing strong traction in performance product. Third, we installed amazing brand equity in Greater China and Asia, where we believe we operate the most productive and profitable sneaker shops in the industry.

In 2025, Salomon grew sales very strong double digits in Greater China, driven by both sportstyle and performance, as well as strong growth in apparel. Beyond Greater China, Salomon is experiencing surging demand in Korea and Japan, both large sneaker markets. Fourth, our epicenter strategy is working. Our strategy to open a handful of brand stores and refine strategic elevated wholesale distribution in key metro markets is critical to elevate Salomon’s presence and awareness globally. Epicenter cities include Paris, London, Shanghai, Beijing, New York, LA, Milan, and more to come. Fifth is the strong pull demand we are seeing from consumers in Europe, Salomon’s home market, driving strong reorders, preorders, and sell-through.

Sportstyle continues to be the growth driver, but we have also seen a real inflection in trail in Europe, supported by marketing campaigns, in-store events, and running activations. We are seeing especially strong performance in European epicenters like Paris and London, with strong double-digit omni-comps. Also, Salomon opened its first ever office and showroom in Paris, which is designed to elevate our brand presence in the city, strengthen our connection with buyers and the community, as well as support top talent acquisition. Sixth is North America, which is still a much smaller sneaker market for us compared to Europe or Asia. North America growth accelerated in Q4 driven by sportstyle.

We remain focused on ramping up our North America direct-to-consumer and wholesale expansion with key strategic partners. Early signs are positive as our North America order book is experiencing strong growth. Salomon is also making key investments in leadership. In January, we appointed our first-ever Creative Director, Haki Salomon. Haki arrives following a tenure at Diesel and most recently MM6, and will lead both product design and brand creative direction.

Lastly, I also want to mention our winter sports equipment franchise, which had a very strong Q4 despite challenging weather conditions. The market remains healthy despite low snow in certain regions. Bookings, participation, and enthusiasm for ski and snowboard are at record levels this winter. The recent Milano-Cortina Winter Olympic Games were a big moment for Amer Sports Group, especially Salomon, who outfitted all 27,000 official staff and volunteers head-to-toe. Between Salomon, Arc’teryx, Peak Performance, Armada, and Atomic, which is already one of the most successful alpine ski racing brands in history, our brands sponsored more than 200 athletes at the Games, winning an incredible 59 medals. A dominant performance. Congratulations to our athletes and teams.

Moving to ball and racket, which had a strong Q4. Sales grew 14% driven by continued strength in softgoods, a return to growth in baseball, and an acceleration in golf. Wilson softgoods continued its explosive growth in 2025, including very strong double-digit growth in Q4. Our Wilson softgoods offering is resonating with consumers in both wholesale and direct-to-consumer channels and across all major regions. Wilson is unique in its ability to outfit tennis athletes from head to toe, including rackets and accessories. And we are excited to have signed six new Wilson Tennis 360 athletes on tour, including World Top 10 player Alex De Minaur, bringing our total count to 16 players.

Beyond tennis, we also saw a return to growth in baseball, driven by strong bat sales, led by the Louisville Slugger Supra and five other bats among the top 10 this season.

Lastly, before I turn it over to Andrew, I'm pleased to announce Carrie as the next President and CEO of Wilson brand, effective March 1. Carrie is a proven brand CEO and C-suite executive with great experience in global softgoods, sports, and outdoor industries, including Helly Hansen, Levi’s, and Nike. She began her career as an officer in the United States Navy, serving both in the US and abroad. We are excited to welcome Carrie to the Wilson and Amer Sports team. With that, I will turn it over to Andrew. Thanks, James.

Andrew Page: We had another strong performance in Q4 with healthy sales growth, gross margin expansion, and EPS, despite our decision to accelerate investment behind Salomon. The strong sales and profitability of the Amer Sports portfolio allows us to accelerate resources behind the large Salomon sneaker opportunity, while still delivering great results at the group level. Let's first take a moment to reflect on the key highlights of 2025. Amer Sports Group delivered 27% growth in 2025, with broad-based strength across brands, segments, regions, channels, and categories.

James Zheng: Arc’teryx continued its very strong trajectory, Salomon softgoods entered rapid growth mode, and Wilson Tennis 360 moved the needle in our ball and racket segment.

Andrew Page: We delivered meaningful adjusted operating margin expansion from 11.1% in 2024 to 12.8% in 2025. We also continued to reduce our leverage ratio, effective tax rate, and annual interest expense leading to strong operating and free cash flow generation. Now turning to our Q4 results. Amer Sports grew sales 28% in Q4 on a reported basis, 26% in constant currency.

James Zheng: The strong group sales performance was led by technical apparel and outdoor performance, while ball and racket also delivered solid growth in the quarter.

Andrew Page: By channel, the group continued to be led by D2C, which grew 38% led by Salomon softgoods. Wholesale grew 18% globally, which was led by Arc’teryx. Regional growth was led by Asia Pacific, which grew 53%, followed by Greater China, which increased 42%. EMEA grew 21%, and the Americas generated 18% growth. Moving down the P&L. Adjusted gross margin increased 140 basis points to 57.8% in Q4, primarily driven by positive segment, regional, and channel mix shift. Adjusted SG&A expense as a percentage of revenue deleveraged by 220 basis points and represented 45.5% of revenues in Q4 versus 43.3% of revenues last year.

The deleverage was primarily driven by outdoor performance, as Salomon made the decision in Q4 to accelerate investments to support healthy long-term growth. Also, the strong growth of Wilson softgoods continues to drive elevated SG&A investment within ball and racket. These factors were partially offset by technical apparel, which achieved SG&A leverage in Q4. Driven by the higher SG&A investments, as well as lower other operating income, our adjusted operating margin declined 110 basis points from 13.6% last year to 12.5% in Q4. Corporate expenses were $40,000,000, up from $12,000,000 in Q4 last year, driven by higher share-based compensation. In addition, last year in Q4, corporate expenses benefited from certain one-time accounting reclassifications related to net finance costs.

D&A was $106,000,000, which includes $48,000,000 of ROU depreciation. Adjusted net finance cost in the quarter was $21,000,000, which comprised primarily of $20,000,000 of interest expense. In the quarter, our adjusted income tax expense was $65,000,000 which equates to an adjusted effective tax rate of 27%, compared to $90,000,000 in the prior year period. Adjusted net income was $176,000,000 in Q4. Adjusted diluted earnings per share was $0.31, compared to $0.17 last year.

Turning to segment results. Technical apparel revenues increased 34% to $1,000,000,000 led by Arc’teryx. Growth was fueled by both 37% wholesale growth and 34% D2C expansion. Technical apparel generated a strong 16% omni-comp, led by full-price selling as we intentionally pulled back our participation in key promotional events, including Black Friday and Double 11.

Guillaume Meyzenq: Regionally, the technical apparel growth rate was led by Asia Pacific, Greater China, the Americas, and EMEA. All regions grew strong double digits. Q4 was the first full quarter post the Korea distributor acquisition, which contributed a low to mid single digit percentage to technical apparel’s growth rate in Q4. In Q4, Arc’teryx opened 15 net new stores, with 21 openings offset by the closure of six legacy locations as part of our ongoing strategy to optimize the quality and productivity of our store fleet. New store openings included the new Arc’teryx Alpha store in Rockefeller Center in New York City, and Mountain Town stores in Aspen and Park City.

Arc’teryx also opened stores in Canada, Japan, Australia, and China in the quarter. Looking back at full year 2025, we opened 24 net new stores excluding the Korea acquisition, and we plan to open 25 to 30 net new Arc’teryx stores in 2026, with the largest number coming in North America and also China. Our store opening plan incorporates a similar level of gross new stores as in 2025, partially offset by the continued closure of certain outlets and other suboptimal locations. In Greater China, as planned, we had slight net store closures in 2025, which includes partner stores.

However, we still grew our own store count and overall square footage in China by opening larger format, higher quality, more productive locations.

James Zheng: In North America, I want to highlight our second New York City Alpha store, which opened in October on 5th Avenue at Rockefeller Center. The store is the most pinnacle expression of the brand in the US, and we are encouraged by the strong sales this winter. The newly opened Mountain Town stores in Aspen and Park City are also off to great starts. We were very pleased by technical apparel’s strong operating margin expansion in Q4. Adjusted operating margin expanded 160 basis points to 25.9%, driven by strong flow-through of revenue upside in the form of SG&A leverage.

This is a great proof point behind our confidence in the scalability of Arc’teryx’s highly productive store model as they comp positively over time.

Moving to our outdoor performance segment, which saw revenues increase 29% to $764,000,000 driven by very strong performance in Salomon footwear, apparel, bags, and socks, and also supported by strong double-digit growth in winter sports equipment. By channel, outdoor performance D2C grew 55%, led by new doors and higher productivity across markets in APAC and Greater China. Outdoor performance generated a 28% omni-comp with strength in both stores and online. Wholesale grew 17% driven especially by strong results in Greater China and EMEA. Regionally, the outdoor performance growth rate was led by APAC and Greater China, followed by EMEA and the Americas.

The popularity of Salomon footwear continues to inflect globally, and we are doing everything we can to ensure we are well positioned to fully develop this large opportunity over time. Salomon is positioned for significant growth in all three major consumer regions, and we are working hard to build the right team, operational, go-to-market, and brand-building functions to support our growth. In Asia, D2C continues to be the critical growth channel for Salomon, led by our highly productive Salomon compact shop format. We opened 33 net new Salomon shops in Greater China this quarter, including both owned stores and partner stores, bringing our total count at year end to 286 stores, adding nearly 100 new doors in 2025.

In 2026, we expect to continue store expansion in Greater China, but at a more moderate rate adding approximately 35 net stores to the fleet. In December, we reopened the Salomon flagship store in Chengdu. The store design is inspired by local Sichuan mountain scenery and it is the first flagship store combining winter sports and trail running. In APAC, we opened net eight new Salomon stores in Q4, including Japan, Australia, and Korea. The region finished the year with 113 Salomon stores, including partner stores, with 44 net new openings in 2025. Overall brand awareness and demand for Salomon footwear is growing rapidly across Asia.

Andrew Page: In the Americas, Salomon softgoods growth further accelerated as we continue to lay the groundwork to support significant future growth. We are excited to see very strong order books for both Spring/Summer and Fall/Winter for 2026 with growing demand across a variety of high-quality retail partners, including REI, Nordstrom, JD Sports, run specialty shops, and other specialty retailers. We also have improved our inventory position to answer the growing demand. Our brand awareness continues to rise across the greater New York area as our shop in SoHo continues to show great traction with consumers, and we opened our second New York store in Williamsburg, Brooklyn in Q4.

The Williamsburg location strengthens our presence in the core New York epicenter, performing very well out the gate. Globally and in North America, we will continue to focus on our epicenter strategy in 2026 and beyond, particularly New York, Los Angeles, and Miami. We currently plan to open seven to ten new Salomon shops in the US this year. In EMEA, we continue to expand our store fleet in key epicenters, including a third brand store in Milan and a fourth in London, and we will further develop our Europe epicenter into Spain, Germany, and other key UK cities in 2026.

For our winter sports equipment brands, Q4 was a strong quarter, with double-digit growth despite lower snow levels in the Alps and the Rockies. In addition to strong market share in our core ski, boot, and binding franchises, we continue to see incremental growth opportunities in areas such as snowboarding and protective equipment.

Moving to outdoor performance P&L. Adjusted operating profit margin contracted 490 basis points to 6.2% as Salomon made the decision to accelerate SG&A investments to support its significant growth opportunity in the global softgoods market. Outdoor performance gross margin continued to expand driven by positive mix shift across product, region, and channel. This was more than offset by higher SG&A in Q4, driven by key investments to fuel Salomon’s long-term global growth.

These investments include impactful marketing campaigns to drive long-term brand awareness, including XT-Whisper and gravel running, Olympics-related marketing, accelerated retail expansion, and increased investment in talent and operations, especially in China where we opened 25 net new brand stores in Q4, including higher incentive compensation given Salomon’s performance versus plan, new talent acquisitions such as our new Creative Director and his team, and opening Salomon’s new Paris hub. I want to emphasize that we're seeing tangible benefit and high returns from our accelerated investments, including meaningful uplifts in Salomon’s brand awareness since 2023, which has increased 15 points globally, including plus 15 points in Paris and plus 10 points in London.

Moving to ball and racket. Revenue increased 14% to $337,000,000 driven by softgoods, baseball, and golf. We continue to see very strong momentum in Wilson Tennis 360 globally. By category, the growth was led by softgoods, up very strong double digits with continued momentum in all regions. Softgoods now represents approximately 15% of segment revenue. Rackets had slower growth in the quarter due to timing of product launches and wholesale shipments, while underlying demand remained strong. With double-digit growth, 2025 was a great year for rackets, and we have exciting performance racket launches in 2026.

Baseball returned to growth driven by strong performance in bats, driven by successful product launches in 2025, and golf ended the year with improved margins and solid growth, especially in EMEA and APAC driven by a strong product offering. In other categories, we saw inflatables stabilizing in Q4 and returning to slight growth following a challenging first nine months.

James Zheng: We had 10 new owned Wilson brand stores opening globally in Q4.

Unknown Executive: Wilson Tennis 360 shops are performing well in China and we opened 13 new shops in Q4, including partner doors. This brings the total owned and partner store count to 77. And in 2026, we plan to open approximately 30 Wilson Tennis 360 shops in China, between owned and partner doors. APAC also continues to drive meaningful Wilson softgoods growth. Our first store in Japan, in Tokyo's Marunouchi district, and two stores in Melbourne, Australia are off to great starts. In North America, improving ball and racket growth was led by baseball and softgoods. In softgoods, we saw strong ecommerce comp growth in the region. Our expansion into warmer southern markets is continuing to drive strong results.

Our Dallas NorthPark mall store continues to perform very well, and we continue to expand our new Tennis 360 concept store into more southern and coastal locations, including our new shops in Beverly Hills and Miami. We also continue to expand our Tennis 360 offering into more Dick's Sporting Goods locations, including House of Sport. Ball and Racket segment adjusted operating profit margin improved 110 basis points to negative 2.6% driven by solid gross margin expansion related to less promotional activity and better regional and channel mix. This was partially offset by SG&A deleverage due to investments in softgoods.

Now turning to the group balance sheet. We ended 2025 with $291,000,000 of net debt, and only 0.3 times net leverage; our financial foundation has never been stronger. We generated $730,000,000 of operating cash flow in 2025 compared to $425,000,000 last year, driven by strong profit growth and disciplined working capital management.

James Zheng: Additionally, given our strong financial position, post year end in January, we announced a redemption of $80,000,000 of our outstanding $800,000,000 6.75% senior secured notes at a redemption price of $1.03. We ended 2025 with inventories up 33% year over year, slightly elevated compared to our 27% sales growth, as expected. We remain very comfortable with the level and quality of our inventory. The higher inventory growth is primarily related to four factors. Number one, earlier receipt of seasonal Arc’teryx merchandise to prepare for better in-stock position. Two, higher Arc’teryx goods in transit resulting from the greater use of ocean shipping versus air freight. Three, FX translations from the weaker US dollar.

And four, the addition of the Arc’teryx Korea inventory following the recent acquisition. We expect inventory growth rate to normalize beginning in 2026 as we start to cycle our improved in-stock positions and the higher use of ocean freight.

A quick housekeeping item as we turn to guidance. Beginning in Q1 2026, we will discontinue allocating certain corporate expenses that are not directly attributable to the operating performance of our reportable segments. There will be no impact to our overall group adjusted operating profit margin. It is simply reallocating certain costs from segments to corporate. For the full year of 2026, we expect group corporate expenses to increase by approximately 60 basis points or approximately $50,000,000 related to costs reallocated from the segments. These cost reallocations to corporate will most benefit the outdoor performance and ball and racket segment margins, and have a much more muted benefit to technical apparel.

Now turning to guidance. Guidance assumes the latest tariff rates on all countries will stay in place for the remainder of 2026 and beyond.

James Zheng: 2026 is off to a strong start.

Unknown Executive: And given the continued momentum from our highest margin Arc’teryx franchise, accelerating into ’26. For the full year, we expect reported group revenue growth between 16–18%, which assumes a 200 basis point benefit from favorable FX impact at current exchange rates. We expect group adjusted gross margin of approximately 59% for the full year, with the margin expansion continuing to be driven by mix shift benefits. As we said in the past, we are confident in our position to manage through a variety of tariff scenarios given our relatively low exposure to the US, strong brand portfolio with pricing power, and clean balance sheet. We continue to expect an immaterial impact on our group P&L from higher tariffs in 2026.

We expect adjusted operating margin of 13.1% to 13.3%, towards the low end of our long-term guidance of 30 to 50 bps of improvement, primarily due to the accelerating Salomon investment—opting for long-duration profitable growth over near-term profit flow-through. We are committed to investing behind the large growth opportunities in front of Arc’teryx, Salomon, and Wilson Tennis 360, while still delivering against our long-term financial algorithms. Arc’teryx’s size and profitability and our strong sales growth and gross margin expansion at the group level allow us the flexibility to invest behind Salomon and Wilson Tennis 360 in a way they could not as stand-alone entities. We believe this is a unique advantage of our portfolio.

James Zheng: Corporate expense is expected to be approximately $225,000,000, which includes approximately $50,000,000 of costs previously allocated to the segments that I mentioned above. We assume full year net finance costs of $105,000,000 to $110,000,000, higher than 2025 due to a normalizing FX impact on the revaluation of certain nonmonetary assets as well as higher imputed interest expense on store leases as our retail network grows. The effective tax rate is expected to be approximately 28%. This is an increase from 2025 as we generate a higher percentage of our taxable income in higher tax jurisdictions, and also as we cycle a one-time discrete tax benefit in 2025.

Andrew Page: We expect adjusted diluted EPS of $1.10 to $1.15, which is based on approximately 564,000,000 fully diluted shares. Also, we are assuming depreciation and amortization of approximately $400,000,000 including approximately $170,000,000 of ROU depreciation. CapEx is expected to be approximately $400,000,000 versus $310,000,000 in 2025. The increase is mainly driven by increasing key investments in IT infrastructure and retail expansion.

Turning to the segments. Our full year sales forecast incorporates 18% to 20% growth in technical apparel, 18% to 20% growth in outdoor performance, and 7% to 9% growth in ball and racket. For technical apparel, we expect adjusted operating margin of approximately 22%. We expect outdoor performance segment margin of 14.5% to 14.8% and we expect ball and racket margin of 4.7% to 5%. All three segments should generate gross margin expansion driven by mix shift partially offset by higher SG&A reinvestment. While we don't usually provide quarterly segment guidance, given the Q4 2025 margin fluctuation in outdoor performance resulting from accelerated Salomon investments, I want to provide a little extra margin color for Q1 2026.

Although we will continue to invest heavily to support Salomon’s growth, we do expect outdoor performance to return to modest year-over-year margin expansion in Q1.

Turning to first quarter guidance. We expect reported revenue growth for the group in the range of 22% to 24%, which assumes a 500 basis point benefit from favorable FX impact at current exchange rates. We expect adjusted gross margin to be approximately 59% in Q1 2026, adjusted operating profit margin to be 14% to 14.5%. Our net finance cost for the quarter will be approximately $27,000,000 and the effective tax rate would be approximately 28%. We expect adjusted diluted earnings per share of $0.28 to $0.30. Lastly, I would note that should strong trends continue, and better than anticipated demand materialize, we believe we are well positioned to deliver financial performance ahead of our expectations.

With that, I'll turn it back to the operator for Q&A.

Operator: Thank you. The floor is now open for questions. Please join the queue. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. And we do request for today's session that you please limit yourself to one question and one follow-up. Your first question comes from the line of Michael Binetti of Evercore ISI. Your line is open.

Michael Binetti: Oh, hey, guys. Thanks for taking our question here. Appreciate all the help. A couple of technical ones for the model here. The fourth quarter gross margin is usually a little bit above third quarter in the past. I'm just curious because there's a lot of moving parts here. Is there something structural that we should consider going forward in fourth quarter? Or were there any one-timers in one of the segments that we should consider as we model going forward? And then I guess, Andrew, the Salomon investments in 4Q, it sounds like those are the reason for the operating margin guidance in 2026 to be at the lower end of the long-term algorithm.

So those investments from 4Q continue in the first quarter. Just curious if maybe you could walk us through what some of the investments are in the first quarter. And then bigger picture, as you think about the Salomon investments and the incremental growth to the algorithm you presented, are the investments incremental to the algorithm that you've talked about with us? Or it sounds like there's at least an element of it being pulled forward, and I'm wondering if you're stepping up these investments if that means there’s an element of gating the margin expansion today because you can imagine a bigger brand revenue level for Salomon than what you've talked about with us in the past.

Andrew Page: A lot to unpack there, Michael. Happy to address a bunch of these. So as you think about the fourth quarter gross margin versus third quarter, keep in mind that the fourth quarter, as you think about outdoor performance, is our largest quarter for winter sports equipment.

James Zheng: Winter sports equipment actually outperformed as well in the fourth quarter, and so that is going to create a bit of a drag on gross margin. Obviously, strong business, but the fact is it’s a lower gross margin business. When it outperforms, it affects it. The other thing you also want to think about is on a comparative basis, recall that in 2023, we stood up a cost optimization program. You started to see the impact of that cost optimization in outdoor performance in the back half of 2024. And then in 2025 you saw the anniversary of that cost optimization.

So through 2025, you saw material margin expansion in outdoor performance, and then it anniversaried itself because now you’ve reset the gross margin to its new go-forward cycle. As you think about your first question around Salomon investments,

Unknown Executive: In the fourth quarter, we opportunistically made key investments behind strong momentum of Salomon. Over recent years, we’ve had one big brand—Arc’teryx—on fire, and we’ve made key investments behind that growth. Now we have multiple high-return opportunities to invest in, especially with Salomon really inflecting right now. Also keep in mind in Q1, you will see Salomon margins return to moderate growth. Again, Q4, we opportunistically made the right investments behind that accelerated momentum. This is the power of our portfolio. We run what we call our brand-direct offense, and because of that, we can get behind accelerating momentum in our brands in ways that these brands can’t do on an individual stand-alone basis.

We continue to be committed to investing appropriately behind large growth opportunities in front of Arc’teryx, Salomon, and Wilson Tennis 360, and we’ll continue prioritizing long-duration opportunities over near-term profit flow-through.

James Zheng: The last thing I want to say about that is that the gross margin mix, including outdoor performance, continues. Q4 had healthy gross margin mix shift at the product, region, and channel level. Full-year op margin for the portfolio—recall—expanded 160 basis points for the full year, after consideration of the key investments we made in fourth quarter. Long-term, we still expect SG&A leverage. I’ll turn it over to Guillaume to give you some color on discrete investments we made.

Guillaume Meyzenq: Good morning, everybody. Yes, we took the opportunistic decision to choose Salomon’s long-term expansion in Q4, and we have a few strong examples where we decided to accelerate our positioning in the market. First, we are driving a few marketing campaigns in some key areas, supporting XT-Whisper, which, as James explained, helps us build a portfolio of key franchise products. On top of XT-6, we need a variety of product expressions, and XT-Whisper looks like a very promising opportunity. We are pushing the same for gravel running, which is our point of difference in the market. Finally, we prepared for the Milano-Cortina Olympics—you see the results now—and there was preparation in Q4. On top of that, we continued retail expansion.

We opened several stores in China in the quarter. You mentioned Los Angeles, where we opened the store in Melrose, and at the same time we were building a campaign. This shows how we build the ecosystem in every city where we open a store. We partner with our B2B partners—Shoe Palace, for example, which is present in Los Angeles—and then we drive media and campaigns to attract consumers, and it was very successful. This model requires some resources at the beginning in the epicenters. The last one is about talent and organization investments. Salomon grew 35% in ’25, and we need to structure the company for a new scale. We supported incentive compensation and started new talent acquisition.

The example of appointing a Creative Director is a very good signal of the level of ambition we have for Salomon. Another was the opening of the Salomon Paris hub. We have our roots in Annecy in the Alps, and we keep that, but the scale of the company requires more facilities in different places, and Paris was an obvious opportunity for us. It’s a place where we can capture trends and world-class talents in the future.

Michael Binetti: Okay. Thanks for a lot of this color.

James Zheng: Michael, I’ll just wrap on one point, because I think the last one we talked about was whether there is something structurally different about our algo. It’s not. As I said, we delivered 160 basis points to the bottom line after that investment. Our algo has consistently been 30 to 50 basis points plus on the bottom line. We opened this year with our guide at 30 bps. We believe that’s responsible. It does not reflect a structural change in our investment. As Guillaume highlighted, we will opportunistically get behind growth momentum while still continuing to maintain our earnings outlook.

It’s early in the year, and should strong trends continue and greater demand materialize, we see no reason why we can’t outperform our guidance.

Andrew Page: Just want to clarify. 30 to 50 bps. 30 to 50 is the range. Yep.

Michael Binetti: Alright. Okay. Thanks everybody for all the help. Lot of detail. Appreciate it.

Operator: Your next question comes from the line of Matthew Boss of JPMorgan. Your line is open.

Matthew Boss: Great. Thanks and congrats on another nice quarter. So, James, following the breakout year that you cited for the portfolio, could you elaborate on the current momentum entering the first quarter? Maybe what opportunities do you see for the Salomon brand to accelerate market share further in ’26? And, Stuart, have you seen any change in top-line momentum at Arc’teryx relative to the fourth quarter? Or what's embedded to moderate within the 18% to 20% full-year forecast relative to mid-thirties that we just saw exiting 2025?

Andrew Page: Matt, we're going to have Guillaume answer your question on Salomon. James will talk global outlook for the space, including China, and then Stuart will finish on Arc’teryx.

Guillaume Meyzenq: When we speak about the Salomon momentum itself, we see a very strong outcome. 2025 was the year we confirmed that we are winning in all regions. You saw the traction in China and in Asia Pacific, but our domestic market—Europe—was really coming back strongly. All the investment we have been making in epicenter strategy with Paris, with London, and now looking to Milan, is starting to pay off. We see that we have the right strategy to drive momentum in both sportstyle and performance. Lately, we also see that the US is becoming a new place of growth. We are still quite small compared to the market, which is on one hand a challenge, but also a great opportunity.

We see early momentum in sportstyle. The epicenter strategy in New York and LA, and we opened a store in Chicago which is performing very well. Through our data we see other US cities starting to pop up. Lastly, we see early positive signals for running in the US. If we are able to combine sportstyle and running in the US, then Salomon could have very promising growth.

James Zheng: Good morning, Matt. Thank you for your questions. As I mentioned, strong trends have continued worldwide across borders. We already gave guidance for our Q1, with top line expected to grow between 22% to 24%. Our three segments all have very good forecasts to achieve their targets. Specifically, I want to mention performance in China during the Chinese New Year. We saw very positive consumer trends during the holiday in our brands, and also for the whole sports market overall. Consumption was very strong, and I think later on you will get similar color from other brands in their reports. It’s a good moment for us.

However, it’s still a bit too early for us to say this is a very bullish situation in China. At least, we are off to a good start in 2026. Stuart?

Stuart Haselden: Hey, Matt. It’s Stuart. Off to a fast start in the first quarter, really pleased with the trends that we're seeing across all our regions. We’re seeing especially strong momentum in North America over the last few weeks. That’s contemplated in the guidance that Andrew shared. On your question versus the 18% to 20% guide, this is consistent with our prior practices. We view this as responsible guidance for investors. There’s nothing structural that would prevent us from capturing higher sales should demand materialize. We’re well positioned, with a strong inventory position as Andrew noted, to convert upside should it materialize. We’re happy with the trends we’re seeing and confident in the outlook for 2026.

Operator: Your next question comes from the line of Paul Lejuez of Citigroup. Your line is open.

Paul Lejuez: Thanks. Curious if you could talk a little bit more about the wholesale expansion opportunity in the US within the Salomon business? And what sort of growth should we expect with Salomon’s wholesale versus DTC this year? And then, Stuart, also curious if you're thinking about adding any new wholesale partner doors for Arc’teryx this year? How should we think about growth there?

Andrew Page: First, Guillaume, then Stuart.

Guillaume Meyzenq: Thanks, Paul, for asking. Clearly, our strategy is about omnichannel. If we want to become a large sneaker and footwear brand in the US, we absolutely need to partner with the key players. We speak a lot about our D2C and ecommerce because this is where we can express Salomon best, but the strategy is truly to become omnichannel and partner with key players. We have renewed support with REI, our historical partner in the US when we were focused on winter sports equipment and outdoor, and now we are back on track with them. In parallel, we have Nordstrom, JD Sports, and most of the run specialty shops as current targets to drive growth.

We are not building a big push all at once, but working door by door, city by city, with close partnerships and good business foundations. We drive demand with them. We think this is the best way to win the share battle, and expand doors over time. The key driver in the end is consumer demand and how we work with partners to drive it.

Stuart Haselden: From an Arc’teryx standpoint, wholesale is emerging as an important channel across three of our key growth strategies: footwear, Veilance, and women’s. In footwear, this is an important channel of distribution, different from apparel, so we see the need to have a stronger strategy here. We’ve been building a sales team as part of our footwear business unit in Portland, and we’re engaging with specialty run accounts and premium big-box retailers, all on the premium high end with very technical positioning. For Veilance, premium wholesale—tier zero as we call it—will help create higher brand awareness and drive the business. And for women’s, we see wholesale as an interesting expansion of our distribution footprint to be relevant where she shops.

Across those three strategies, we continue to evolve our wholesale approach.

Operator: Next question comes from the line of Brooke Siler Roach of Goldman Sachs. Your line is open.

Brooke Siler Roach: Good morning, and thank you for taking the question. At Salomon, I was hoping that you could unpack the proportion of growth that you expect to realize by region for the brand in 2026. And then if there are any specific regions that will receive an outsized SG&A investment this year. As a follow-up, how much of the growth at Salomon do you expect to come from existing distribution partners versus new distribution partners in 2026? Thank you.

Guillaume Meyzenq: We expect to have growth in all regions in 2026. Asia and Greater China continue to show very strong momentum, EMEA is really back on track with high-quality sales at premium price points, and North America is definitely small scale today but very high growth and high demand, especially from the last quarter, and we see that momentum well engaged for 2026. On existing versus new distribution, we see existing partners growing with the momentum, and we also have a new strategy in Europe and the US because we have entered the sneaker market with sportstyle, which requires some new types of doors.

For example, JD was not a customer of Salomon five years ago and now is becoming one of the strategic partners. So we will add new distribution in Europe despite already strong numeric distribution, and of course in the US as we build distribution there.

Operator: Your next question comes from the line of Ike Boruchow of Wells Fargo. Your line is open.

Ike Boruchow: Hey. Thanks. Congrats, everyone. So, obviously, revenues solid. Some questions this morning on the margin. Andrew, can we just dive in a little bit on the cadence of the investment? You've got about 200 basis points plus of deleverage in Q1. But based on the full year, it does seem like you should start to be scaling the investments, especially in the ones you talked to for 4Q. Can you comment on that? Does it seem like the business should be scaling and leveraging the expense base in the back half of the year, specifically in Q4? And does that give us some visibility to scale in the out years and beyond? Thanks.

Andrew Page: One of the things embedded that is not easily seen: some of the Q1 deleverage on a comparable basis is driven by the fact that Q1 last year in ball and racket had meaningful pull-forward because of the threat of tariffs that was on the horizon. So Q1 last year, compared to Q1 this year, last year was a lot more pull-forward; this year is more normal. You saw a lot more profitability in Q1 last year. So it looks like deleverage, but underneath that, as we talked about, both Arc’teryx and outdoor performance are performing well. Outdoor performance is expected to show margin expansion.

So it’s much more of a Q1 comp issue related to ball and racket in the prior year.

Ike Boruchow: That is helpful. But my bigger question is about the pacing of the expense into the back half. Are you planning to start scaling those as you exit the year? Does that give better visibility into SG&A leverage as you exit and into fiscal 2027?

Andrew Page: In 2025, we invested a lot—opportunistically—in Q4. Empirically, that would suggest that the Q4 2026 comp is going to be pretty easy. So yes, we’d expect better scaling and leverage as we exit the year, all else equal.

Operator: Your next question comes from the line of Jay Sole of UBS. Your line is open.

Jay Sole: Great. Thank you so much. My question is for Stuart. Stuart, give us a little bit of an update on how some of the initiatives around women’s and footwear have gone for Arc’teryx in the quarter and what your outlook is for this year? And also, just with all the news on tariffs over the last few weeks, how has the landscape changed? How might it impact the company? Thank you.

Stuart Haselden: Thanks, Jay. On tariffs, it’s not nothing, but it’s a modest impact for Arc’teryx. It is not influencing how we’re pricing our products or operating the company, and we see it as an opportunity to take share from companies that might respond differently. We feel we’re in a good spot managing the tariff situation. On women’s and footwear, as James mentioned in the prepared remarks, both are really healthy—each grew about 40% in the fourth quarter. In women’s, continued strength across new products, including women’s-only pants—the Clarke Pant, the Loose, and the Neopant—offering a new lever of growth.

We also saw strength in ski and insulation with the Atom SV and the Andessa Down, two new products we introduced in the quarter. Women’s continues to grow faster than the overall company; we expect it to exceed 30% of total sales by 2030. In footwear, top models included the Norvan LD4, our top seller, and fast sales in our Kopek hike shoe. We’re launching the new Sylens 2 on March 6—our pinnacle trail running shoe—with strong athlete feedback already. And within footwear, our Portland-based footwear business unit—sales and marketing—continues to come together nicely. We’re very bullish; footwear is an important pillar of growth for us for some time.

Andrew Page: Hey, Jay—this is Andrew—just to wrap on tariffs at the group level. We’re confident in our position to manage through a variety of tariff scenarios given our low level of US exposure, strong brand portfolio and pricing power, and clean balance sheet. The two businesses most impacted would be ball and racket and winter sports equipment. We are aware of the recent Supreme Court decision and follow-up presidential action to impose the 15%, but looking at high-level scenarios, our position does not change.

Andrew Page: We have time for one more question.

Operator: Your last question comes from the line of Lorraine Hutchinson of Bank of America. Your line is open.

Lorraine Hutchinson: Thanks. Good morning. Andrew, now that the leverage is down to 0.3 times, can you talk a little bit about your expectations for the capital structure and uses of cash going forward?

Andrew Page: Yes. In 2026, CapEx is guided to $400,000,000. We still believe a high-return use of our cash is to grow our business—investing in IT, retail expansion, and strategic capabilities. We also believe it is an efficient use of cash to pay down inefficient debt, as it does not provide the requisite tax shield. We’ll continue to focus on growth, and continue to pay down inefficient debt. We like our leverage position as it stands now—close to zero.

Operator: That concludes our Q&A session. I will now turn the conference back over to management for closing remarks.

Andrew Page: Thanks everyone for joining. We'll see you in three months. Have a great spring.

Operator: This concludes today's conference call. You may now disconnect.

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