Amer Sports Inc "One Of Softlines Most Compelling Growth Stocks; Reiterate Buy"

Research evidence excerpt

Amer Sports Inc "One Of Softlines Most Compelling Growth Stocks; Reiterate Buy"

Amer Sports Inc UBS Research

UBS Research THESIS MAP Thesisa guideMapto our thinking and what´s where in this report

Pivotal Questions Q: What is the total addressable market opportunity for Amer Sports?

We think AS' addressable market includes athletic wear and sporting equipment. We estimate

athletic apparel and footwear represent a ~$400B opportunity as of CY23 and we expect it to rise at

a 5% to 6% CAGR through CY28E. We estimate the sporting equipment industry to be worth ~$75B

globally and see it growing at a 2-3% CAGR through CY28E. With these markets together, we

estimate around a $470B market size opportunity in CY23 for AS growing at a 4-5% CAGR through

FY28 to close to $600B.

Q: How much topline growth can AS deliver?

We believe AS' sales should grow at a 15.5% 5-yr CAGR through FY30. We expect AS to drive this

growth via DTC expansion in Arc'teryx, multichannel growth in Salomon, and deeper international

expansion in Ball & Racquet. By channel, we model faster DTC growth given retail store rollout

primarily in North America and China and higher eCommerce sales.

Q: What is AS' margin expansion potential?

We anticipate AS' operating margin to expand to 15.1% by FY30E, 230 bps above FY25 levels. We

model gross margin gains over time despite tariff headwinds, mainly due to positive sales mix shift to

DTC and Amer's mitigation strategies. Also, we expect modest SG&A leverage after FY26, post years

of investments in DTC expansion. We believe that this type of margin improvement along with a

healthier balance sheet post IPO should lead to a 21% 5-yr. EPS CAGR post FY25.

UBS VIEW We rate AS Buy. We think AS is a growth stock. Our sense is that the market is skeptical of Amer's