Amer Sports (NYSE:AS) Stock Surges On Premium Brand Power, Margin Expansion, And Global DTC Momentum
NYSE:AS continues to deliver exceptional growth across its iconic sports and outdoor brands portfolio, positioning itself among the most exciting consumer growth stories in the market today. The stock is currently trading near $41.50, showing robust momentum following its Q1 FY25 earnings release. I remain bullish on the stock, with an updated fair value target of $47, reflecting continued upside driven by multi-channel expansion, strong brand equity, and improving profitability. You can follow the live chart here: NYSE:AS real time chart.
Premium Brands Drive Global Market Penetration And Margin Strength
NYSE:AS owns an enviable portfolio of globally recognized premium brands—Arc'teryx, Salomon, Wilson, Atomic, and Peak Performance. These brands occupy leadership positions in their categories, offering both strong heritage and aspirational value to consumers. Arc'teryx, in particular, is rapidly emerging as a global luxury technical apparel brand, while Salomon is scaling quickly in the premium sneaker space, with over $1 billion in annual sales.
The company's strategy is anchored in Direct-to-Consumer (DTC) growth. DTC penetration has expanded from 15% in FY20 to 33% in FY24, with further runway ahead. DTC growth is especially evident in China and APAC, where e-commerce adoption is high and consumer demand for premium brands remains resilient. Management is executing a well-calibrated channel mix strategy, balancing e-commerce, DTC stores, and wholesale to maximize reach and profitability.
Q1 FY25: Explosive Growth Across All Segments With Record Margins
NYSE:AS reported Q1 FY25 revenue of $1.47 billion, up 26% constant currency, exceeding expectations. The standout metric was adjusted operating profit, which surged 78.9% year-on-year. Gross margin expanded by 330 basis points to 58%, while EBIT margin jumped nearly 500 basis points to 15.8%.
Segmentally, Technical Apparel led with 28% YoY growth, fueled by the Arc'teryx brand. Omni-comp store growth for Arc'teryx was +19% YoY, building on +36% YoY growth last year—clear evidence of organic demand strength. Footwear revenue for Arc'teryx grew 41%, and women's apparel grew 38%, showing healthy category diversification.
The Outdoor segment, driven by Salomon, delivered 25% growth, with Direct-to-Consumer sales up 68% and segment margin expanding 990 basis points to 14.7%. Popular new Salomon sneakers, such as the XT-WHISPER and Aero Glide 3, are resonating strongly in the global premium sneaker market, which exceeds $180 billion.
Even Ball & Racquet Sports showed solid 12% growth, highlighting the broad-based nature of NYSE:AS momentum.
Direct-To-Consumer Strategy Accelerates In China And APAC
One of the most critical drivers for NYSE:AS is its China growth engine. Greater China revenue grew 43% YoY in Q1 FY25, with management doubling down on store expansion for both Arc'teryx and Salomon. Plans include adding ~25 net new Arc'teryx stores and growing Salomon’s China footprint to nearly 300 stores by year-end.
E-commerce and DTC are now central to the brand strategy in China, where online penetration is highest globally. This strategy is also critical to sustaining high margins—DTC channels offer better gross margins and customer lifetime value compared to wholesale.
Tariffs And Macro Risks: Short-Term Volatility But Manageable Long-Term
Despite the strong performance, investors must monitor the tariff situation closely. Current guidance assumes the existing 30% tariff on China imports remains unchanged. If tariffs were to spike—for example, back to the 145% level seen in past trade tensions—management estimates a 100 basis point margin hit even after mitigation efforts. Given that Q1 net margin was 10%, this would be a material impact.
However, NYSE:AS has diversified its sourcing, reducing over-reliance on China. The US only represents 26% of total revenue, further insulating the company. Moreover, premium brand pricing power allows room to pass through some cost increases without fully sacrificing margins.
China Dependency A Growing Double-Edged Sword
While NYSE:AS is seeing exceptional growth in China, the increasing dependency is a key risk. If macro conditions worsen—through slowing discretionary spending or geopolitical friction—the company’s earnings trajectory could face headwinds. It is critical to watch for signs of slowing demand in the US and Europe to offset any China volatility.
Recent history from Nike and adidas in China shows that nationalistic sentiment can quickly impact premium foreign brands. NYSE:AS must execute carefully to maintain its current China growth trajectory.
Valuation Elevated But Justified For Category Leader
NYSE:AS trades at 44x forward P/E, reflecting market confidence in the sustainability of its growth. While this is elevated relative to peers like adidas, Lululemon, and Under Armour, I believe the multiple is justified given:
Arc'teryx’s trajectory toward becoming a global luxury technical apparel brand Salomon’s fast-growing premium sneaker opportunity, with significant global white space DTC channel driving margin expansion across markets China platform scaling rapidly with premium store footprint Record brand momentum across key categories
If growth proves resilient through 2H25, particularly in China and Europe, I believe NYSE:AS can maintain its premium multiple. My DCF-based fair value remains $47, offering upside from today’s price.
Insider Activity Supports Bullish View
Insider confidence remains high. You can monitor latest insider transactions here: NYSE:AS insider transactions. The majority shareholder ANTA Sports (holding 42.5% of shares) continues to provide strategic support, particularly in China. Any reduction of ANTA’s ownership would be a watch point, but for now, the strategic alignment is strong.
Key Metrics Support Continued Margin Expansion
Operating margin remains below peers such as Nike and Canada Goose, leaving room for further expansion. Management is targeting 11.5%–12% operating margin in FY25, with sustained 30bps annual expansion thereafter. DTC shift and pricing power are the primary levers.
Outlook: Premium Brand Power And DTC Momentum Drive Buy Rating
I remain bullish on NYSE:AS, with a Buy rating and $47 fair value target. The combination of premium brand strength, DTC-driven margin expansion, and accelerating global growth makes this one of the most compelling long-term consumer plays in the market. Near-term risks from tariffs and China exposure are real but manageable given the current execution strength and diversified global footprint.
You can track NYSE:AS real-time chart here: NYSE:AS real time chart. Given current momentum and market positioning, I believe NYSE:AS is well on its way to building one of the next great global consumer franchises. I will continue to monitor Q2 earnings and global macro dynamics closely to update this bullish view as the year progresses.
