The strong Q1 beat, DTC momentum, and deleveraging make a compelling case for upward EPS revisions, but watch for Ball & Racquet margin pressure and tariff headwinds. Monitor the potential for tariff refunds related to the Supreme Court ruling on IEEPA tariffs, which could provide further upside. Capital expenditure guidance of ~$400M for FY2026 is elevated; track free cash flow conversion in Q2.
Price Chart
Executive Summary
Amer Sports reports a strong Q1 2026 beat: revenue of $1,945.5M (+32.1% YoY, +26.2% constant currency) and adjusted EBITDA of $432.4M (+44.4% YoY), with segment margin expansion in Technical Apparel and Outdoor Performance. The company also completed a $862.5M equity offering to fully redeem $800M of 6.75% senior secured notes, eliminating high-cost debt and simplifying the capital structure. However, the Ball & Racquet Sports segment saw a 44.6% profit decline, and a $50.5M debt extinguishment charge depressed reported net income. Overall, the strong top-line beat, margin expansion, and deleveraging event are clearly positive.
Key Facts
- Q1 revenue of $1,945.5M, +32.1% YoY from $1,472.5M (on a constant currency basis +26.2% YoY)
- Technical Apparel revenue +33.3% (33.3% YoY to $885.0M) and Outdoor Performance +42.0% (to $713.6M)
- Adjusted EBITDA of $432.4M, up from $299.4M YoY; margin expanded 190bps to 22.2%
- Adjusted net income attributable to equity holders of $218.0M, up 47.1% from $148.1M YoY
- Gross margin improved 210bps to 59.9% from 57.8% YoY
- Company completed secondary equity offering raising $862.5M on March 4, 2026; redeemed all $800M of 6.75% senior secured notes
- Balance sheet debt extinguished: non-current borrowings reduced from $792.3M to zero at quarter-end
- Ball & Racquet Sports segment adjusted operating profit fell 44.6% to $12.4M, driven by higher selling expenses and tariff costs
- Loss on debt extinguishment of $50.5M depressed reported net income to $170.1M ($0.29 EPS)
- DTC revenue grew 44.6% to $1,001.5M, now 51.5% of total revenue (vs. 47.0% YoY)
Financial Impact
Revenue beat of ~32% YoY (vs. apparel sector trend), adjusted EBITDA margin expansion of ~190bps, and complete elimination of $800M 6.75% debt after a $862.5M equity offering
Risk Factors
- Ball & Racquet operating profit down 44.6% due to higher costs and tariffs — indicates potential structural margin pressure in mature categories
- Share dilution: 23.7M new shares issued in the quarter, increasing diluted share count by ~4.2%
- Foreign exchange headwinds: $7.8M loss vs. $3.9M gain YoY from FX translation; U.S. dollar strength could persist
- Elevated capex guidance of ~$400M vs. $283.7M in FY2025 may pressure free cash flow
- Tariff exposure: management cited higher U.S. tariff costs in Ball & Racquet; pending IEEPA tariff refunds are uncertain in timing/amount
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001988894-26-000075 |
| Document: as-2026q1xexx991.htm | 0001988894-26-000075 |
| Document: as-20260331.htm | 0001988894-26-000075 |
| Document: 0001988894-26-000075-index-headers.html | 0001988894-26-000075 |
| Document: 0001988894-26-000075-index.html | 0001988894-26-000075 |
| Document: 0001988894-26-000075.txt | 0001988894-26-000075 |
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Oct 26, 2026 1d ago | 3 | $28.55 | awaiting T+60 | — | $28.19 (−1.26%) |
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