Why Amer Sports Rocketed Higher Today

Shares of sports apparel and equipment conglomerate Amer Sports (NYSE: AS) rocketed 18.1% higher on Tuesday, as of 2:18 p.m. ET.

The owner of outdoor gear and apparel brand Arc'teryx, shoe and ski/snowboard brand Salomon, tennis brand Wilson, and baseball bat brand Louisville Slugger, among others, reported first-quarter earnings today.

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Amer was actually founded as an industrial company in 1950 in Finland, but has transformed itself over the years to a global sports equipment giant, going public on the New York Stock Exchange in early 2024 after having been taken private by a consortium of investors in late 2018.

While last year's IPO was met with tepid demand, the stock has certainly defied expectations, and has now nearly tripled since its public reemergence just one year ago.

Climbing an impressive growth curve

In the first quarter, Amer increased revenue by 23% to $1.47 billion, with adjusted (non-IFRS) earnings per share nearly tripling to $0.27. Both figures came well ahead of analyst expectations.

Not only that, but the company also raised full-year 2025 guidance to 16% revenue growth at the midpoint, with adjusted EPS around $0.70. That's up from last quarter's guidance of 14% growth and about $0.67.

Growth of 23% is really impressive in this global economic environment, although there may have been pull-ins ahead of potential tariff impacts.

Speaking of tariffs, it was impressive that the company raised revenue and earnings guidance, with management noting that it would likely be able to fully offset the impact of current tariff rates through a combination of "pricing, vendor renegotiation, and supply chain maneuvers."

Image source: Getty Images.

How has this "mature" sports company tripled?

After today's gain, Amer has nearly tripled since its IPO in February 2024. Back then, the company had been struggling somewhat under the burden of its China segment, which accounted for nearly 20% of revenue at that time. However, it appears China is now recovering, as it was up 43% last quarter, fueling much of the growth -- although North America and Europe were also up low double-digits.

As a result, the company's near-break-even results a year ago inflected to healthy profitability. Profits were also helped by a much lower interest expense, as the company used a significant amount of IPO proceeds to pay down debt.

Currently, however, the stock now trades around 50 times this year's earnings guidance, so it's not cheap. That being said, if Amer can continue to grow from here, its earnings could rise rapidly, given that profits are still just coming up off of a break-even level.

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Billy Duberstein and/or hsi clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.