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Amer Sports (AS -5%) is trading lower today after reporting its Q2 results this morning. This Finland-based athletic company with brands like Arc'teryx, Salomon, and Wilson, reported EPS upside. It has not missed EPS expectations since going public in February 2024. Revenue increased 23.4% yr/yr to $1.24 bln, also above expectations. In addition to the upside results, it guided Q3 revenue above consensus and raised its FY25 EPS and revenue guidance. FY25 EPS is now expected to be $0.77-0.82 from $0.67-0.72, while revenue is expected to increase 20-21% yr/yr compared to 15-17%, which computes as $6.22-6.27 bln. Despite the beat-and-raise report, the stock is trading lower, and we think part of that could be Wilson's CEO stepping down.

• Its outdoor performance segment had the most robust growth this quarter, with revenue increasing 35% yr/yr to $414 mln. This is a nice acceleration from the 25% increase in Q1. The results were driven by a strong performance in Salomon's footwear, apparel and bags and socks. Management noted that Salomon brand momentum continues to accelerate across all regions, with EMEA and Americas accelerating "meaningfully." The acceleration is nice to see, as management continues to note that Salomon footwear is inflecting globally and sees a significant growth opportunity in all three of its major consumer regions. As a result, the company raised the revenue guidance for this segment pretty significantly to 22-25% from "mid-teens."
• Its Technical Apparel segment was led by Arc'teryx, with revenue increasing 23% yr/yr to $509 mln. Growth was fueled by a 31% D2C expansion, including a 15% omni-comp. This stands out as management noted it was facing the toughest two-year stacked comp comparison of 2025. Footwear continues to be Arc'teryx's fastest growing category, growing faster than the overall brand. Looking forward, Arc'teryx has an exciting pipeline for shoe launches in 2H25, with management believing footwear will be a large and profitable growth avenue for Arc'teryx. A final positive here is that AS raised its FY25 revenue guidance for the segment to +22-25% from 20-22%, including continued strong omni-comp growth.
• Its Ball & Racquet segment continued its growth trend of double digits. Revenue increased 11% yr/yr to $314 mln. While management cautioned this double digit growth is not sustainable, it did raise FY25 revenue guidance for the segment to 7-9% from mid-single digits. That said, we think this segment may be weighing on shares today, as the company announced that Wilson's CEO Joe Dudy has decided to step down. Management noted that Mr. Dudy was instrumental in many key achievements, recently growing the brand to over $1 bln in annual revenue and setting the stage for its next growth inflection, driven by Tennis 360.

Overall, AS delivered another solid quarter, extending its streak of earnings upside since going public in February last year. The company raised FY25 EPS and revenue guidance, raised segment level revenue, and issued Q3 revenue above estimates despite a higher than expected tariff rate. So why is the stock lower today? We think investors are viewing Wilson's CEO Joe Dudy stepping as a negative. Additionally, the stock jumped to highs following its Q1 report in May. It has since been trading in a narrow range between $36-39. The stock has fallen slightly below that range on this report.