Amer Sports Stock Jumps as Federer, Caitlin Clark Revive Wilson

Amer Sports, the sporting goods maker backed by Lululemon billionaire Chip Wilson, bested Wall Street expectations with earnings reported Tuesday, rallying shares as high as 15% during trading as management sees a recent slump in the Wilson brand being reversed by high-profile deals with Roger Federer and Caitlin Clark.

Amer Sports owns 10 sports gear brands, including Salomon and Louisville Slugger, and said demand from Chinese consumers for the outdoor clothing maker Arc’teryx, its largest division, powered sales up 16% for the second quarter that ended June 30. The company reported $994 million in sales and a net loss of $1.8 million, much narrower than the year-ago period.

Management also sounded a positive note around the brand Wilson, best known for its basketballs and tennis gear. The division suffered double-digit sales losses to start the year, but turned that around in the most recent quarter, posting modest growth. The company is pursuing a tennis-focused revival of the brand called Tennis 360, opening branded stores in China and emphasizing footwear and apparel. This month, the company also started selling RF, a line of rackets, bags and accessories in partnership with tennis great Federer.

“Roger is a living legend in tennis, and this new product line has been met with a very enthusiastic response from the market,”  CEO Jie Zheng said in prepared remarks with analysts Tuesday.

Hopes are high that basketball sensation Clark will further bolster Wilson. The company noted her basketball collection made available online sold out quickly. “Caitlin Clark is also elevating brand heat … We expect our Caitlin Clark franchise to accelerate in [the second half of 2024] with the launch in select wholesale accounts,” Zheng added. In the spring, the executive said Clark will be the face of Wilson basketball across men’s and women’s efforts.

On the back of strong quarterly sales, Amer also raised its guidance on sales for the full year, saying sales should rise 16% and produce earnings of around 42 cents per share. In May, the company had projected “mid-teens” sales growth with earnings per share as high as 40 cents.

The news rallied Amer shares on trading on the New York Stock Exchange as high as $14.25 midday, before profit-taking clipped the rise to 11%. Shares finished Tuesday at $13.64, Amer’s highest price in two months.

The gains benefited billionaire shareholder Wilson, adding some $122 million to his fortune. The executive, who founded Lululemon, owns nearly 21% of the business. Wilson and three Chinese companies, led by Anta Sports, took over Amer Sports for $5.5 billion in 2019. The group refocused the business primarily to sell into mainland China, taking Amer public earlier this year at $13 a share. Based on Tuesday’s closing price, Amer is now worth $6.9 billion.