Amer Sports: The New ONON and DECK of Consumer Discretionary?

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Amer Sports: The New ONON and DECK of Consumer Discretionary?

In 2025, among the biggest rebounders is one of the hottest names in the consumer discretionary sector over the past year or so, Amer Sports (NYSE:). Since going public back in Feb. 2024, Amer Sports has seen its shares rise by around 187% as of the May 23 close. This dramatic rise conjures images of the explosive returns seen by other stocks like On Holding (NYSE:) and Deckers Outdoor (NYSE:) in past years.

So, can Amer Sport’s incredible run continue, and is the apparel and footwear stock the new On Running and Deckers Outdoor of the current market?

To answer that question, let’s break down what Amer Sports does and its financial progress.

Amer Sports’ Strong Q1 Earnings Catapult the Stock into Deep Green Territory

Although the rebound in its sector has greatly helped Amer Sports’ recovery, the company has done much of the heavy lifting itself. Amer Sports’ extremely impressive Q1 earnings allowed the stock to rise 19% afterward. The company saw sales grow by over 23%, much faster than analysts’ expectations of just under 17% growth.

The company over doubled its adjusted diluted earnings per share (EPS) from $0.11 to $0.27, which also massively exceeded expectations. Amer increased the midpoint of its full-year EPS guidance by over 4% and increased the midpoint of its revenue growth guidance from 14% to 16%. Both of these figures were solidly ahead of analyst forecasts.

AS: Underlying Drivers Look Just as Impressive

As is typically true with hot clothing and footwear stocks, Amer Sports’s success is all about the brands it owns. Amer Sports’s largest and most important brand is Arc’teryx. Arc’teryx makes very high-end outdoor clothing. It is particularly known for its lightweight waterproof jackets, which sell at prices between $400 and $900.

The company’s technical apparel segment, in which Arc’teryx is, saw the fastest revenue growth of 28%, accounting for 45% of total revenue.

Amer’s promising geographic-based sales also stand out. Greater China sales grew by 43% and accounted for around 25% of total revenue in 2024. Last quarter, the United States made up 26% of revenue, with the company’s “Americas” sales growing by 12%.

This demonstrates that the company has a strong presence in the two largest economies in the world, giving it a strong runway to grow its business.

The company’s direct-to-consumer (DTC) growth of 39% also outpaced the 12% growth of its wholesale channel by over three times. This is another very positive sign, as DTC sales cut out middlemen, allowing the company to generate higher margins. The higher DTC growth rate bodes well for the company’s ability to continue expanding margins.

Additionally, the company’s second-largest segment, Outdoor Performance, saw its growth rate nearly double to 25%. This segment made up 34% of total revenue. Strong performance by its Salomon footwear and apparel line drove this. The company sees strong long-term growth potential in its Salomon shoes.

They generated $1 billion in revenue in 2024, giving them less than 1% market share in the global $180 billion sneaker market. The company also plans to roll out more Arc’teryx footwear in the second half of 2025, allowing another way to further penetrate this market.

Amer Sports: High Valuation Stock With Opportunities and Skilled Management

Overall, the success of Amer Sports and the strong pathways for growth and higher profitability make its rapid rise understandable. Wall Street analysts significantly raised their price targets after the May 20 results. Among those tracked by MarketBeat that updated their forecasts afterward, the average price target is just under $41.

This implies an upside of only 6% from the stock’s May 27 closing price.

Additionally, the company’s relative valuation versus its industry looks elevated. The stock’s nearly 49x price-to-earnings ratio is significantly above the 29x average of a group of the eight largest U.S. stocks in its industry. However, the company also has one of the best earnings and sales growth profiles.

Expecting the stock to continue generating returns similar to those of On and Deckers in its heyday may be a bit unreasonable at these levels.

If the company hopes to continue substantially beating forecasts, expectations will keep rising. The potential in footwear could allow this to happen.

The company’s fantastic execution and ability to make products that resonate with consumers are hard to bet against. Overall, investors should view Amer Sports as a somewhat high-risk, high-reward consumer discretionary play going forward.

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#Amer #Sports #ONON #DECK #Consumer #Discretionary

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