Q1 2025 Amer Sports Inc Earnings Call
Thank you for standing by and welcome to the AMR Sports first quarter fiscal 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad, if you'd like to.
Withdraw your question again press Star one.
Speaker Change: I'd now like to turn the call over to Omar Saad S. VP capital markets and Investor Relations you may begin.
Speaker Change: Welcome everyone. Thanks for joining AMR sports, earning call for the first quarter of fiscal year 2025.
Earlier this morning, we announced our financial results for the quarter ended March 31, 2025, and the release can be found on our IR website at investors <unk> sports Dot com.
Speaker Change: A quick reminder to everyone that today's call will contain forward looking statements within the meaning of the federal securities laws.
Speaker Change: These forward looking statements reflect our current expectations and beliefs, only and are subject to certain risks and uncertainties that could cause actual results to differ materially.
Speaker Change: Please see the safe Harbor statement in our earnings release and SEC filings.
Speaker Change: We will also discuss certain non <unk> financial measures. Please refer to our earnings release for important information regarding such non <unk> financial measures, including reconciliations to the most comparable <unk> financial measures.
Speaker Change: We will begin with prepared remarks from our CEO, James Ang and CFO, Andrew page, followed by a Q&A session until approximately nine a M. Eastern.
Speaker Change: James will cover our key operational and brand highlights and Andrew will provide a financial review at both the group and segment level and also walk through our guidance for the second quarter and full year of 25.
Speaker Change: Our parents CEO Stuart Hazelton will also joining for the Q&A session.
Speaker Change: With that I'll turn the call over to James.
Speaker Change: Thanks Omar.
James Ang: Hey, my supposed to begin in 2025, we've got great performance in the first quarter.
James Ang: Did you ever in sales I guess, the margin and EPS well above expectation.
James Ang: We generate 20% Crs gross or 26% ex currency.
James Ang: And we also expanded our adjusted operating margin by nearly 500 basis points.
James Ang: Our performance was led by strong flows and the profitability in both technical apparel and the outdoor performance.
James Ang: As well as solid sales and margin results being bought and reckitt.
James Ang: Addition to the continued broad based strength from our flagship brand carries I'd like to highlight the growing momentum behind the Saddam of sneakers.
James Ang: We are really starting to see consumers all around the ward respond to suit their unique performance and the size of Jupiter.
Furthermore.
James Ang: Our market, leading how good equipment franchisees delivered a better than expected results for both winter sports equipment, and the Westin Boston Racquet.
James Ang: Although we are off to a great start in 2025, given macro uncertainty related to U S tariffs.
James Ang: Operating our business with discipline and flexibility.
James Ang: And you will provide a more detailed discussion of our tariff exposure mitigation.
James Ang: The mitigation strategies and our financial impacts.
Speaker Change: But I'd like to emphasize that I believe we are very well positioned to manage through a wide range of tariff scenarios, given our premium brands with pricing power.
Speaker Change: Your skills training and real activity or low U S revenue exposure.
Speaker Change: Looking year end, a long time.
We believe a much sports is a uniquely positioned company within the global sports and outdoor space.
Speaker Change: Several factors give me confidence for the rest of this year and they will be out.
Speaker Change: First we own and operate a unique portfolio of premium outdoor and sports brands.
Speaker Change: Each one is empowered by our technical innovation and your position at the Pinnacle of its segment.
Speaker Change: Our brands have high conversion and the satisfaction with these small players with room to grow.
Speaker Change: Second.
Speaker Change: Tennessee is a breakout close boy with great growth and profitability for the outdoor industry driven by disruptive direct to consumer models and the unique competitive position.
Speaker Change: It's still very underpenetrated globally, and it still has a tremendous long term growth opportunity.
Speaker Change: Should.
Speaker Change: We believe so.
Speaker Change: Hello, Ms Sneakers have unique performance and design attributes and the brand is experiencing accelerating momentum globally, but still has small market share of the global sneaker market.
Speaker Change: Paul.
Paul: And our winter sports equipment brands have authentic heritage premium positioning higher performance products and the leading market positions.
Paul: These high market share brands, we did have a slower long term closed India core equipment businesses.
Paul: They still have large soft goods potentials, especially with <unk> 10 is 360.
Paul: And the fifth.
Paul: We believe we have a very strong differentiated platform in greater China, where we continue to deliver best in class performance with great momentum across all three big brands.
Speaker Change: Before I turn over to Andrew allow me to briefly recap key brand highlights from our three segments.
Andrew Page: Starting with technical apparel.
Andrew Page: Which is led by our fastest growing and largest brand terrorists.
Andrew Page: I've terrorists delivered another great quarter with strong growth across all regions channels and categories, especially of footwear and women's.
Andrew Page: Which continued to grow faster than the brand overall.
Andrew Page: We are encouraged to see technical apparel momentum continue in the direct to consumer channel, where we generate.
Andrew Page: 19% Omnicom in quarter one.
Andrew Page: Importantly, our direct to consumer growth was driven by strong performance in both stores and online.
Andrew Page: We believe our cash stores are very differentiated from both a product and experience perspective.
Andrew Page: And they continue to be critical to the Io strategy, especially how we engage with local consumers and the community.
Andrew Page: Oh tariffs net new store openings were flat in quarter, one as a fall openings were offset by the closure of four legacy locations as part of our ongoing strategy to optimize the quality and the productivity of our store fleet.
Andrew Page: The new store locations this quarter, including two stores in China.
Andrew Page: One in Georgetown, Washington, D C as well as our new Chamonix location, which is our first month in Townsville in Europe and has attracted great consumer inkjet since day one.
Andrew Page: Oh tariffs, especially in strategy inclusive of mix different formats, ranging from multi level large scale, our friendship sports two small format.
Andrew Page: Very distinct.
Andrew Page: Clinton pawn shops.
Andrew Page: Oh 2035.
Andrew Page: Plan to open approximately 25, net new stores globally, which incorporates a similar level of gross openings as in 2010 before partially offset by the closure of certain audits and the other sub optimal locations.
Andrew Page: We are focused on positioning <unk> for sustainable long duration growth.
Andrew Page: Developing a high quality store network is critical to our success and the much more important chasing fast paced new store expansion.
Andrew Page: For example in greater China, we will continue to focus on optimizing our coast retail footprint, rather than pushing useful expansion.
Andrew Page: This year, we will have net store closures in China, including closing some legacy partners calls.
Andrew Page: Well below our own store count continued to open larger format high quality locations.
Andrew Page: We expect to grow revenue strong double digits, driven by comp store growth and the pricing small less productive stores with large format high quality locations.
Andrew Page: In Beijing, we were still opening a branch store within the Peninsula Hotel.
Andrew Page: And we have plans to open two more shops at other Tennessee locations later this year.
Andrew Page: We are very excited that tariffs will be the first sports brand to sit alongside traditional luxury spreads getting started this iconic hotel chain.
Andrew Page: We also recently opened another mountain palm store in back our popular a mountain destination in Canada.
Andrew Page: And that's a great addition to our small but growing portfolio of authentic mountain palm locations, including Chamonix, Shangri La and a whisker.
Andrew Page: [noise] community engagement continues to be a key part of our strategy to raise brand awareness.
Andrew Page: March we hosted our first ever Archives Academy.
Andrew Page: California at Mammoth Mountain.
Andrew Page: The event drove thousands of participants achieved a record breaking rebirth sales.
Andrew Page: Created a 6 million media impressions and saw the lift in sales traffic stores in the Los Angeles areas as well as E Commerce.
Andrew Page: Shifting to product.
Andrew Page: Footwear continued to be okay as far as the growing category in quarter one.
Andrew Page: As consumers continue to respond positively to what we believe is the best line of technical performance footwear designed for mountains.
Andrew Page: This spring, we launched the northern L D for <unk>.
Andrew Page: Elevation of the popular <unk> made for long distance mountain ratings.
Andrew Page: We also launched our vertex speed, which is a mountain running shoe designed to climb through technical vertical Terry.
Andrew Page: Looking forward.
Andrew Page: Terrorists has an exciting pipeline for shoe launch in the second half of 2025.
Andrew Page: We believe footwear will become a sizable and profitable close Avenue for October exposing own retail e-commerce and in certain wholesale accounts over time.
Andrew Page: We have now structured footwear as a separate business unit with a dedicated P&L and the team focus on the category.
Andrew Page: Womens also continued great momentum in Q1 with double digit growth across all regions and channels.
Andrew Page: Outperforming the rest of the brain.
Andrew Page: Every region.
Andrew Page: We see a big opportunity to serve women in the Aldo differently through clinical design and the performance.
Andrew Page: A great example of our design focus on women's is the clock here pen, which has been explosive growth in quarter one.
Andrew Page: Stocking out quickly we.
Andrew Page: We are seeing rising brand awareness and affinity with women in the U S and the Europe as we have improved the fit style and function.
Andrew Page: <unk> also continues to be one of our priority strategies, which we believe will truly separate us from the marketplace.
Andrew Page: Our products are long lived and the bid for the pair.
Andrew Page: We experienced especially strong consumer engagement.
Andrew Page: All of our locations with a rebirth center.
Andrew Page: At the end of Q1, we had 25 lever service centers globally.
Andrew Page: Lastly onto betas, which we view as the city expression of tariffs.
Andrew Page: Footwear Valence also now has its own P&L and the management team our new beta <unk> leadership is sharply focused on developing the best product merchandising marketing and a good two market strategies to drive bally's long term growth opportunity.
Andrew Page: For the first time <unk> was presented at fashion week in Paris, where the brand was position alongside the luxury players and they received a very positive feedback from buyers industry and the media.
Andrew Page: Moving to the outdoor performance segment, which delivered an excellent quarter led by Saddam of footwear and apparel.
Andrew Page: Winter Sports equivalent results were also better than expected.
Andrew Page: Global brand momentum behind the Sodom with sneakers is accelerating.
Andrew Page: Not only is the Solomon footwear franchise continued to grow very well in China and the APAC.
Andrew Page: Now also starting to impact in both the U S and Europe.
Andrew Page: Our brand awareness has double the past couple of years and we are now seeing very strong momentum in both both style and our performance slides.
Andrew Page: Sneak a surplus of 1 billion U S dollar sales in 2024.
Andrew Page: But it is still tiny relative to the $180 billion global sneak market.
Andrew Page: We believe Saddam sneakers, everyone authentic and a unique market position with technical features designed for etsy on a variety of tariffs, but also great for everyday use.
Our unique style and the technical attributes are resonating with consumers at a time when they are more receptive than ever to wearing new sneaker brands.
Andrew Page: Long term, we expect settlement soft goods to grow strong double digits and Europe.
Andrew Page: In Q1, Salamone footwear and apparel continued its very strong close in great China and APAC.
Andrew Page: America accelerate.
Andrew Page: EMEA continued its solid growth.
Andrew Page: Direct to consumer remained the fastest growing channel for the brand.
Andrew Page: And the sport style offering continues to lead footwear it goes.
Andrew Page: In addition to shoot.
Andrew Page: Saddam apparel bags and the stocks are also experiencing great momentum.
Speaker Change: A key Brian highlights in Q1 was our first ever global footwear launch with XD Whisper.
Andrew Page: In addition to our sports style offering.
Speaker Change: This global synchronized launch has been a massive success.
Speaker Change: Welcome with excitement by customers around the globe.
Speaker Change: We did XD whisper collaborations with Keith and Sandia labs in the U S.
Speaker Change: And have been great results from our Whisper go campaign in China.
Speaker Change: On the performance side, we have been very pleased with the launch of the long running shoe.
Speaker Change: <unk> one of the best footwear launch Salomon history.
Speaker Change: <unk> uses a form called Optum for Evo.
Speaker Change: We believe represent a disruptive new generation materials offering their retina, a new level of rebound in the comfort core running unload all true.
Speaker Change: We are also very excited by the global launch this month.
Speaker Change: A new line that offers consumers a more versatile than ever running shoes that are performed great on various types of Terry from Piedmont to pox and chose.
Speaker Change: Originally sentiment soft goods is continuing to experience great sell through and a solid order books in Europe.
Speaker Change: Those four sports style and performance.
Speaker Change: Jetblue for retailers continues to be strong, which is translating to healthy growth in our books.
Speaker Change: In Asia.
Correct consumer continued to be the critical growth channel for Salomon, our Solomon complex shop format.
Speaker Change: In China works very well.
Speaker Change: We believe these stores generate significantly higher sales per square foot versus industry average and continues to improve.
Speaker Change: We are continuing to expand our compact shop inquiry China.
Speaker Change: Opening 22, net new solomos shops in quarter, one, including both owned store and upon the stores, bringing our total count to 218.
Speaker Change: We are on track to reach near <unk> shops in greater China. This year.
Speaker Change: We believe the settlement has the opportunity to grow to several tenders location overtime, we just tailwind in two cities from only eight stores four years ago.
Speaker Change: Our new Sullivan fresh ships in Shanghai has continued to perform very well in the first few months.
Speaker Change: We will open our second Shanghai flagship in August, which will be located in the former French of concession district known for its Petite shopping.
Speaker Change: In the U S. We continue to lay the groundwork to support significant future growth and we are seeing more and more signals that the brand is gaining momentum in the world's largest sneak market.
Speaker Change: Our first U S store in New York City continues to show incredible traction with our consumers and the brand is seeing strong buzz with key retailers across the city.
Speaker Change: We plan to open three to four mall Salon with shops in the Greater New York area. This year as well as continue to expand our presence in key wholesale accounts.
Speaker Change: Beyond the new year, we also focus on San Francisco, and Los Angeles, as the epicentre market for Salomon sneakers.
Speaker Change: In addition to the success of Saddam of sneakers.
Speaker Change: Our winter sports equipment brands deliver a better than expected and of the ski season with strong sell through at retail.
Speaker Change: Leading to bed at once Reorders.
Speaker Change: Moving to <unk>, an Iraqi highlights we are pleased that the board and Iraqis close trends continued to be solid in quarter, one with 12% growth driven by strength in sportswear record ports in the call.
Speaker Change: Our Tennessee had 60 continues to resonate very well with consumers.
Speaker Change: Performance related to soft goods, especially in greater China.
Speaker Change: Wilson's performance Records business continues to shine, including the January launch of the crash <unk> III, which is off to a solid start.
Speaker Change: And the in pit Bull, we are experiencing strong response to our best foot pedal launch.
Western Tennessee, Honey 60 soft goods also continues its excellent goes nearly doubling in Q1 2035.
Speaker Change: We have seen very strong response to the increased women's tennis shoes.
Speaker Change: We also continued to excel in China.
Speaker Change: And that will open approximately 50 more western Tennessee, 360 shops in China This year.
Speaker Change: Including both owned and partner stores, bringing the total to almost 100.
Speaker Change: America.
Speaker Change: The new 10 to 360 concept store in the Dallas North Park Mall is off to a very good start.
Speaker Change: This is also true up our tenants footwear and apparel test in 50, Dicks sporting goods locations, where we are selling through better than our competitors.
Speaker Change: Lastly, we were pleased to see wasn't golf have a solid improvement in sales and the margins in Q1 led by the tender power outage. This spring, which has received a positive reviews in the golf inference or committed.
Andrew Page: With that I will turn over to Andrew.
Andrew Page: Thanks, James before I start I want to take the time to thank our more than 13000 AMR employees around the world.
Andrew Page: Our passionate teammates are critical to developing innovative products engaging with consumers and building our brands for the long term.
Andrew Page: And they've done an amazing job navigating the ever changing macro environment with discipline and flexibility.
Andrew Page: I will discuss tariffs in detail when I provide guidance I want to start by saying that we are very confident that our fundamental business momentum diverse global footprint clean balance sheet and strong brand portfolio with pricing power will give us significant flexibility and firepower to manta.
Andrew Page: It's through a variety of tariffs scenarios.
Andrew Page: Let's go through Q1 results first.
Andrew Page: Amyris sports grew 23% in Q1 on a reported basis and 26% in constant currency.
Andrew Page: The strong group sales performance was led by both technical apparel and outdoor performance, while ball and rapid also delivered very solid growth in the quarter.
Andrew Page: By channel. The group continues to be led by <unk>, which grew 39% led by Solomon footwear in greater China and APAC. We also saw solid wholesale growth of 12% led by our Terex.
Andrew Page: Regional growth was led by Asia Pacific, which increased 49% followed by China, which grew 43%.
Andrew Page: EMEA accelerated to 12% in the Americas also grew 12% in Q1.
Andrew Page: We continue to achieve very strong growth in greater China and there are several reasons why we are doing so well there and I'm also confident in our future growth in this important consumer market.
Andrew Page: Number one.
Andrew Page: Our brands compete in one of the high quality and fastest growing consumer segments in China, the premium sports and outdoor market.
Andrew Page: The outdoor trend in China continues to be very robust attracting younger consumers female consumers and luxury shoppers.
Andrew Page: Additionally.
Still small specialized brands are known for their expertise high quality and technical innovation, which resonates with Chinese shoppers.
Andrew Page: Third and most important we have a great team in China, our deep expertise and unique scalable operating platform gives us a significant competitive advantage across the portfolio.
Andrew Page: Turning to profitability adjusted gross margin increased 330 basis points to 58% in Q1, primarily driven by favorable channel and geographic and product mix as well as lower discounts compared to prior year.
Andrew Page: Going forward, we expect our highest gross margin franchise, our terex to continue to be the biggest underlying driver of our ongoing gross margin expansion.
Andrew Page: Adjusted SG&A expense as a percentage of revenues leveraged by 160 basis points and represented 42, 6% of revenues in Q1.
Andrew Page: Both the technical apparel and outdoor performance segments achieved SG&A leverage on very strong growth.
Andrew Page: This was partially offset by slight deleverage at ball in racket due to the ongoing investment incentives 360 and DTC growth.
Andrew Page: Driven by both gross margin expansion and SG&A leverage we generated 490 basis points increase in our adjusted operating margin from 10, 9% last year to 15, 8% in Q1 of the current year.
Andrew Page: Adjusted corporate expenses were $19 million up from $17 million in Q1 of last year.
Andrew Page: Depreciation and amortization was $78 million, which includes $36 million of <unk> depreciation.
Andrew Page: Adjusted net finance costs in the quarter was $17 million.
Andrew Page: Which comprised of $22 million of interest expense, partially offset by $5 million of FX gains and other items related to the weakening U S. Dollar.
Andrew Page: In the quarter, our adjusted income tax expense was $64 million.
Andrew Page: Which equates to an adjusted effective tax rate of 30%.
Andrew Page: Better than expected, primarily due to our over delivery of operating income.
Andrew Page: Adjusted net income in Q1 was $148 million.
Andrew Page: Compared to $50 million in the prior year period.
Andrew Page: Adjusted diluted earnings per share was 27 <unk>.
Andrew Page: Compared to adjusted diluted earnings per share of <unk> 11 last year.
Andrew Page: Turning to segment results.
Andrew Page: Technical apparel revenues increased 28% to $664 million led by our Terex.
Andrew Page: Growth was fueled by 31% DTC expansion, including a 19% Omnicom a very good result, comparing against a 36% on the comp in the first quarter of last year.
Andrew Page: Our Terex D to C momentum continues to be fueled by both new and existing consumers across all regions channels and product categories.
Andrew Page: Technical apparel wholesale revenues grew 22% driven by our terex.
Andrew Page: Although it is a small part of the technical apparel segment. It is worth noting that we are making good progress with peak performance brand and cleaning up the marketplace in EMEA and the Nordics shifting to a more full priced D to C oriented brand.
Andrew Page: Peaks healthier core franchise is a solid base for the new president.
Andrew Page: The final <unk> to lead the brand through the next phase of its journey.
Andrew Page: Regionally technical apparel growth was led by Asia Pacific followed by greater China, The Americas and EMEA.
Andrew Page: All regions grew strong double digits fueled by our terex.
Andrew Page: Technical apparel adjusted operating margin expanded 110 basis points to 23, 8% driven by SG&A leverage thanks to strong growth.
Andrew Page: Moving to our outdoor performance segment, which saw revenues increased 25% to $502 million.
Andrew Page: Given by strong performance in Solomon soft goods and good results in winter sports equipment.
Andrew Page: The D to C channel grew very healthy double digits, driven by new store openings in Asia Pacific and greater China, as well as solid comps from existing Solomon stores.
Andrew Page: Outdoor performance growth also benefited from a solid performance in winter sports equipment in Q1, following a slow start to the winter season.
Andrew Page: By channel outdoor performance D to C grew 68% led by greater China, and APAC and wholesale grew 9% from the prior year period.
Andrew Page: The wholesale results were driven by both solid and winter sports equipment and Solomon soft goods.
Andrew Page: Regionally outdoor performance growth was led by greater China, and a Pac followed by accelerating growth in EMEA.
Andrew Page: The Americas was roughly flat, but only because of the NV divestiture in 2020 for.
Andrew Page: Solomon soft goods saw very good growth in the Americas.
Andrew Page: As James alluded to the popularity of Solomon footwear is inflicting globally, and we are well positioned to appropriately and fully develop this unique opportunity over time.
Andrew Page: We believe we have very significant growth in all three major consumer regions and have the right talent and team structures in place to take a more meaningful share.
Andrew Page: The global sneaker market over time.
Andrew Page: Our winter sports equipment business finished on a high note.
Andrew Page: As a good end of season snow helped boost retailers sell through and Reorders.
Andrew Page: Nordic across country market remains more challenged but we were able to move a significant amount of inventory at reasonable discounts, leaving us in a very clean position at the end of the winter.
Andrew Page: Our assumption is that the winter sports equipment market will grow low single digits in 2025 and over the long term.
Andrew Page: The ski and snowboard industry is healthy and given advanced snowmaking capabilities industry wide as well as the growing attraction of winter mountain vacations demand for on peace skiing is strong.
Andrew Page: When a sports equipment now represents one third of the outdoor performance segment and the share is shrinking our Solomon soft goods grows faster.
Andrew Page: Outdoor performance adjusted operating profit margin expanded 990 basis points from last year to 14, 7% in Q1, driven by strong gross margin expansion, thanks to channel region and product mix as well as favorable product costs. This margin expansion was off.
Andrew Page: <unk> driven by SG&A leverage on high growth.
Andrew Page: Moving to Bolton racket revenue increased 12% to $306 million driven by soft goods racquet sports and golf. The strong growth was also helped by easier comparisons from Q1 last year. When Wilson was still going through some liquidations normalized inventory levels.
Andrew Page: We are pleased with the continued rebound, but we would caution that double digit growth is not sustainable long term and we continue to expect solid rocket to grow low to mid single digits long term.
Andrew Page: By category the growth was led by soft goods, which now represents 10% of ball and racquet sales and our marquee racquet sports franchises.
Andrew Page: We continue to see very strong momentum into the 360, especially in North America, Greater China and APAC.
Andrew Page: Golf achieved positive growth thanks to a successful <unk> power product launch as well as improving sales and pro golf clubs.
Andrew Page: Inflatables and baseball, where both roughly flat as baseball bats returned to growth offset by softer <unk> sales.
Andrew Page: Following racket segment adjusted operating profit margin increased 270 basis points to six 6%, primarily driven by higher gross margin. Thanks to a favorable product mix channel and region mix.
Andrew Page: We had slight SG&A deleverage due to the continued investment in Tennessee 360 in D C.
Andrew Page: Turning to the balance sheet, we ended the quarter with $515 million of net debt down from $591 million at the end of Q4.
Andrew Page: Using the midpoint of our 2025 adjusted operating profit guidance, our net debt to adjusted EBITDA ratio was approximately 0.5 times at the end of Q1.
Andrew Page: Following a $1 billion equity raise and debt Paydown last December our balance sheet is in a healthy position to support our company as we navigate tariffs and other external uncertainties looking forward using excess cash to pay down debt, which carries nondeductible interest remains a high return uses of excess.
Andrew Page: Less cash.
Andrew Page: We also exited the quarter and a solid inventory position up 15% year over year, well below our 23% sales growth.
Andrew Page: Driven by strong profit growth and disciplined working capital management, we generated $164 million of operating cash flow in the first quarter of 2025.
Andrew Page: And for the full year of 2025, we expect to generate solid operating cash flow growth from the 2024 levels.
Andrew Page: Now moving to tariffs in guidance. There are several factors that give me confidence that we are well positioned to manage through a variety of tariff scenarios, both near and long term.
Andrew Page: First.
Andrew Page: We have low exposure to the U S only 26% of revenues.
Andrew Page: And we enjoy a meaningful exposure to high end consumers.
Andrew Page: Also the high functional nature of our products create personal engagement and a strong value equation for our consumers.
Andrew Page: Thirdly, we believe the brands in our portfolio have significant untapped pricing power.
Andrew Page: Vast majority of our growth the last several years have come from more units and not higher prices.
Andrew Page: Lastly, our clean balance sheet and strong cash flow dynamics give us the financial flexibility to weather macro challenges as they arise.
Andrew Page: Given the upside in the first quarter, and our continued operating and financial momentum and despite higher tariffs, we are raising our full year revenue and EPS expectations.
Andrew Page: This updated guidance assumes the current 30% tariff on goods arrive into the U S from China, and 10% tariffs on goods coming in from rest of World will stay in place for the remainder of 2025.
Andrew Page: Given the mitigation strategies, we already have underway, we expect the impact to our P&L from higher tariffs to be negligible. This year.
Andrew Page: Our updated guidance implies slower growth in the second half than the first half.
Andrew Page: However.
Andrew Page: As we've said before should strong trends continue and better than anticipated demand materialize. We believe we will be well positioned to deliver financial performance ahead of these expectations.
Andrew Page: Looking beyond 2025.
Andrew Page: We are confident in our ability to offset the vast majority of higher import tariffs under a wide range of scenarios through pricing.
Andrew Page: <unk> renegotiations and supply chain maneuvers.
Andrew Page: Since the ultimate tariff outcome is still unknown, we thought it would be helpful to frame our U S sourcing exposure.
Andrew Page: In 2024 U S revenues represented 26% of group revenues.
Andrew Page: Sourcing from China to the U S was approximately eight points of the 26.
Andrew Page: <unk> was also eight.
Andrew Page: The rest of Asia was six Europe, three and the rest of world wide.
Andrew Page: By brand slightly more than half of the tariff exposure is in the ball and racquet segment.
Andrew Page: 130% and technical apparel and the remainder in outdoor performance.
Andrew Page: All three segments, including ball and racket are already implementing and executing measures to offset higher tariffs.
Andrew Page: In addition to partnering with vendors retailers also understand the landscape and price increases are being accepted and implemented in the second half for those product categories most affected.
Andrew Page: One last perspective, I want to share on tariffs, even if the higher test had remained in effect for the rest of the year or if they do return I E. China at 145% and rest of world at the higher rates from before the 90 day cost.
Andrew Page: We were only anticipating a five cent impact from tariffs for the full year 2025, EPS after mitigation or approximately 100 basis points annualized.
Andrew Page: And over time, we believe we will be able to mitigate the majority of even the higher tariff rates.
Andrew Page: For the full year of 2025, we are raising our expectations for reported group revenue growth from 13% to 15% to 15% to 17%.
Andrew Page: Now, assuming 150 basis point drag from unfavorable FX impact at current exchange rates compared to the 250 point drag incorporated in our prior guidance.
Andrew Page: We are raising our technical apparel revenue growth guidance from approximately 20% to 20% to 22%.
Andrew Page: Outdoor performance from low double digits to now mid teens and ball and racquet from low to mid single digits previously to mid single digits currently.
Andrew Page: We are keeping our adjusted gross margin expectations at 56, 5% to 57% for the full year, we are maintaining our adjusted operating margin guidance of 11, 5% to 12%.
Andrew Page: For the segments, we continue to expect an adjusted operating margin of approximately 21% protect nickel apparel, approximately nine 5% for outdoor performance and 3% to 4% for ball and racket.
Andrew Page: You should assume full year net finance cost of approximately $120 million and an effective tax rate of 30% to 32%.
Andrew Page: Other operating income and Noncontrolling interest will be approximately $10 million each.
Andrew Page: We now expect adjusted diluted EPS of <unk> 67 to <unk>.
Andrew Page: 72 <unk>.
Andrew Page: Our prior guidance of 64 to 69 cents, which is based on approximately 560 million fully diluted shares.
Andrew Page: Also we are assuming DNA of approximately $350 million, including approximately $180 million of Aro <unk> depreciation.
Andrew Page: Capex is expected to be approximately $300 million.
Andrew Page: Primarily to support new store expansion, ERP optimization and distribution and logistics investments.
Andrew Page: Turning to the second quarter, we expect reported revenue growth for the group in the range of 16% to 18%.
Andrew Page: We expect adjusted gross margin to be approximately 57% to 58% in Q2, and adjusted operating profit between 3% and 4%.
Andrew Page: Our net finance costs for the quarter should fall between 25% and $30 million and the effective tax rate should be 30% to 32%.
Andrew Page: We expect adjusted diluted EPS of zero to <unk> <unk> per share.
Andrew Page: As we've said in the past should strong trends continue at higher than expected demand materialize, we will be well positioned to deliver financial performance ahead of these expectations with that I'll turn it back to the operator for questions.
Andrew Page: Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad. If you would like to withdraw your question simply press Star one again.
Operator: First question comes from the line of Matthew Boss from Jpmorgan. Your line is open.
Matthew Boss: Thanks, and congrats on another great quarter.
Speaker Change: Thank you.
Speaker Change: So.
Speaker Change: James on your broad base strength as we think about the competitive advantages could you walk through operating from a portfolio approach in this backdrop and just what that provides and then brand specific could you elaborate on momentum at Solomon and White space, you see to scale best brand and Stuart on our tariffs.
Speaker Change: Any change as we think about the omni comp strength into the second quarter relative to high teens you saw in the first quarter.
Speaker Change: Okay. Thanks, Matt Okay first of all I'll say.
Speaker Change: Amer sports is really.
Speaker Change: Our unique portfolio company sporting goods company.
Speaker Change: Very unique.
Speaker Change: <unk> unique portfolio of brands in the markets. So we are different from other sporting goods companies. So all of the brands we own they all got to distinguish for positioning the markets and with a very strong.
Speaker Change: <unk> technical product pipeline offer to the market to adjust that different different level.
Speaker Change: Sports participants.
Speaker Change: So I think that this kind of a unique proposition gives us a very strong competitive AG markets and and also especially on the premium secondly, Aldo Aldo.
Speaker Change: Out of categories, we really see a strong demand in cross border in the world, especially in Asia, and China, and deploy more consumers participant outdoor activities and our products.
Speaker Change: Saddam really adjust the strong demand from the market so.
Speaker Change: We are we feel very good.
Our overall proposition today in the markets on the other side really look at Saddam them.
Speaker Change: In Q1 result.
Speaker Change: Also really happy to see our soft goods business going from Saddam on brands and especially on our forward. Okay. So we created a new category, we call the modern outdoor sneakers, which really adjust very special needs in the market. This kind of a unique position.
Speaker Change: As to attract.
Speaker Change: Neutral to the volatile.
Speaker Change: Levers I mean, especially for our female younger female consumers groups. So we create the right us and a very unique our sneak markets and we receive a tremendous positive feedback not only from Asia Pacific, but also in Europe, and the U S at the starting base.
Speaker Change: And the people are looking for the kind of a kind of a attractive offers to the market and that they really enjoy the products we offer to them what we call the <unk>.
Speaker Change: Technical products with.
Speaker Change: Very nice designs to address the.
Speaker Change: <unk>.
Speaker Change: The needs for.
Speaker Change: Our consumer.
Speaker Change: For both.
Speaker Change:
Speaker Change: Sports activities and also the on the lifestyle environment. So I think it's.
Speaker Change: That's quite a unique position and we see a very we also see a very strong runway for that Stuart that you also can comment on some other stuff.
Matthew Boss: Yes, Thanks, James Yeah, Matt.
Matthew Boss: The comp in the quarter, which was really solid plus 19, omnicom thats comparing against a 36% last year that is the highest.
Matthew Boss: Comparison that will have in 'twenty five the comp comparisons moderate for the balance of the year.
Matthew Boss: And I would just add it was a traffic driven comp we had really strong.
Matthew Boss: Solid conversion, but the upside is really driven from traffic increases, which we think reflects the momentum of the brand.
Matthew Boss: And just the investments we've made in community and brand marketing.
Matthew Boss: And the expansion of our store fleet and the brand stores continue to perform well, we're seeing expansion and productivity across every region.
Matthew Boss: We're really pleased with how our stores performing also pleased with the traction that we're seeing in e-commerce.
Matthew Boss: Eric.
Matthew Boss: Every every signal from the market is positive.
Matthew Boss: And yeah, we're excited for what the balance of the year looks like.
Matthew Boss: The only thing I would say is in in the first quarter.
Matthew Boss: There was a drag on the army comp as it relates to our outlet sales.
Matthew Boss: Our outlet sales.
Matthew Boss: It was lower in both China and North America.
Matthew Boss: As we had a stronger full price business and we chose to.
Matthew Boss: Pull back on how much inventory, we are pushing through our outlets. So we view that as a very positive.
Matthew Boss: Factor.
Matthew Boss: Speaks to that to the high quality full price nature of our business that we want to continue to increase.
Speaker Change: That's great color best of luck.
Speaker Change: Your next question comes from the line of Brooke Roach from Goldman Sachs. Your line is open.
Brooke Roach: Good morning, and thank you for taking our question it sounds like your confidence in broad based growth for Solomon is growing are there.
Speaker Change: The technical reasons that attributed to the outside growth in <unk> or do you believe that the momentum observed in the quarter is sustainable as you look on a multiyear horizon what margin profile do you think that this business.
Brooke Roach: Thank you.
Speaker Change: Okay. Thanks, Brooks Andrea yes.
Speaker Change: We are on track and doing what we had always set ourselves up to do I mean to get to your question around do.
Speaker Change: Do we believe it's sustainable I mean, we've raised our guidance for the full year as it relates to the Sullivan outdoor performance. So we're pretty excited about it we always.
Speaker Change: Understood that we had great product, we obviously had to operationalize our commercial go to market strategy to get our teams in place you saw the brand really driving momentum and in Asia Pac in greater China, and its continuing with both of those regions up over 60%.
Speaker Change: In Europe, you continue to see the brand picking up momentum there as well and it's.
Outside of not only our performance, but as well as our sports style.
Speaker Change: And we're doing more with our key strategic partners. We've talked about this kind of in may of last year, signing up some key strategic partners that we're able to do more with and then as you move recently to North America that continues to be our.
Speaker Change: A less mature market, but we definitely have the leadership team in place and we're starting to penetrate.
Speaker Change: Penetrate key accounts that we'd like to continue to see the brand.
Speaker Change: See the brands continue to grow it but as we've talked about I mean, our D to C is a leading indicator for where we think that brand can do.
Speaker Change: And the conversion there.
Speaker Change: Attachment to the consumers is pretty strong. So we're excited about what we see for settlement footwear.
Speaker Change: Alright, great.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: Our next question comes from the line of <unk> from BNP Paribas. Your line is open.
Speaker Change: Good morning. Thank you very much for taking my question I'm going to be the third person asked about Solomon.
Speaker Change: You've raised your outdoor performance category to grow mid teens, perhaps by 'twenty five with winter goods I think Andrew I think you said guided to grow low single digits for this year is it fair to assume that it implies that soft goods can grow 20% this year and longer term James you called out that sneakers founded sneakers.
Speaker Change: <unk> 1 billion in sales last year, you mentioned, it's still tiny relative to the market.
Speaker Change: <unk> solid sneakers double over the next five years.
Speaker Change: Yes, so great question I appreciate it we're not necessarily given.
Speaker Change: Specific long term growth targets, but what I will say is that we have a great product you can see the margin profile of Solomon footwear, Solomon soft goods really starting to inflect, we talked about the fact that as soft goods within the outdoor performance grows you're going to see margin.
Speaker Change: Accretion, which which you saw March strong margin accretion to gross margin.
Speaker Change: In the first quarter, and even operating margin and operating margin up almost 1000 points and outdoor performance two thirds of that was in gross margin about a third of that SG&A.
Speaker Change: <unk> to speak to the fact that <unk>.
Speaker Change: As we over delivered top line you have this.
Speaker Change: Really strong effect coming down to the bottom line.
Speaker Change: The $1 billion that settlement is that's $1 billion.
Speaker Change: On a on a $180 billion.
Speaker Change: Sneaker socket and we believe that we have the product we have the same end.
Speaker Change: That can disrupt and take meaningful share within this business I mean within this market. So.
We're excited about it again Youll continue you saw the margin at flexion as we grow that soft goods.
Speaker Change: And we believe that that margin inflection reflects that.
Speaker Change: The longer term profile that we that we will continue to benefit from.
Speaker Change: Very helpful. And then just a follow up question on housekeeping for the model Andrew.
Speaker Change: Andrea you're maintaining your gross margin for the year, but underlying I think you've talked about 100 basis points on an annualized basis.
Speaker Change: The impact from tariffs.
Speaker Change: Maybe just unpacking that a little bit like under the Hood like what are the moving pieces versus 90 days ago is it like 50 bps from tariffs and then 50 bps, just just better performance and the overall business.
Speaker Change: Yes. Thanks for the question just let me just kind of reiterate some of my.
Speaker Change: Some of my prepared remarks on tariffs.
Speaker Change: Our assumptions.
Speaker Change: For 2025 guidance as at the 30%.
Terraform assignment and 10% rest of the world remain in place.
Speaker Change: The burdens on our 2025 P&L is negligible.
Speaker Change: After our mitigation initiatives.
Speaker Change: I thought it would be prudent to kind of contextualize. It had the higher tariffs stayed in place or if things go backwards I E. China of 145% rest of world.
Speaker Change: 30% to 40%.
Speaker Change: That with that was that's where the 100 basis point annualized drag would come from.
Speaker Change: So over time, we believe that we.
Speaker Change: The levers that I talked about whether it be pricing re resourcing vendor management that overtime, we can neutralize the 100 basis point drag so when.
Speaker Change: When you look at our gross margin for the remainder of the year. We obviously, we had a strong first quarter.
Speaker Change: There is a meaningful amount of uncertainty still left in the market.
Speaker Change: And we believe that the guidance for the rest of the year is prudent is responsible given the uncertainty that's out there, but like I said I mean, we felt convicted and confident in our mitigation initiatives and from a bottom line perspective.
Speaker Change: The impact on tariffs based upon which have stand today is negligible.
Speaker Change: Thanks, a lot.
Speaker Change: Your next question comes from the line of Alex Stratton from Morgan Stanley. Your line is open.
Trevor: Hi, Thanks for taking the question. This is Trevor now on for Alex.
Speaker Change: I'd like to touch on bone racket.
Speaker Change: My first question is on store growth of 189% in the quarter.
Speaker Change: A portion of those store openings were in China, and how do you think about the sustainability of Wilsons store openings beyond 2025 in the region and then my second question is on bone rack of profitability you saw a nice improvement in margin in <unk>.
Speaker Change: <unk> margin back to the mid single digit levels or beyond that you've seen in previous years. Thank you.
Speaker Change: Yes, so the the store growth related to ball and rocket is primarily all of that is in mostly all of that is in Asia and in greater China. So.
Speaker Change: So that's where you see the store growth remember that is a that's an environment that is very receptive to the.
Speaker Change: Mono brand retail format that works very well our team is very astute at running that and that's what that's the store growth that you see from a profitability perspective.
Speaker Change: I think what gets US back is continuing to scale. This are our investment we are investing in our Tennessee 360 concept. We believe that we have the authority to play there and we will continue to drive that business and so what's happening is once you see that reach scale, then youll start to see the profitability.
Speaker Change: And Boston Racquet return.
Speaker Change: So yes, we are.
Speaker Change: We're excited about the direction we're going.
Speaker Change: Yes.
Speaker Change: Great next question comes from the line of Michael Binetti from Evercore. Your line is open.
Michael Binetti: Thanks for taking my question here I will add my congrats on a nice quarter.
Speaker Change: Maybe Stuart just another way to ask you about the omni comps of 19% and technical apparel.
Speaker Change: And that slowed a little bit from last quarter, but you mentioned the big comparison from a year ago. You mentioned the outlet pullback I'm wondering if you could speak to whether there was any pull forward or change in the cadence of important product launches for the winter and maybe the progression of how you see that comp evolving through the year.
Speaker Change: Yes.
Speaker Change: <unk> like impactful launch cadence and impactful launches for the brand.
Speaker Change: The rest of the year and then I'm just curious on the comment that we're going to close in our tariffs partner stores in China to open larger format can you just talk about the strategy. There from an ROI standpoint, obviously partner doors are probably capital light to run maybe just walk us through the opportunity or what the financial prizes for investors as you shift to larger format. Thanks.
Speaker Change: Yeah, Thanks, Michael so.
Speaker Change: Yes, I think it's a good call out on the product and how it influences just revenue broadly.
Speaker Change: Obviously reflected.
Speaker Change: And the Omnicom.
Speaker Change: We're very confident in.
Speaker Change: The outlook that we've shared for the year.
Andrew Page: Is that Andrew described.
Andrew Page: We've made improvements in our in stock positions across a number of categories footwear in particular, we've seen.
Andrew Page: In a stronger position as we entered the year, we learned a lot from last year.
Andrew Page: We're really excited to see strong footwear trends in the first quarter of footwear was up 41% on top of the launch.
Speaker Change: Of the three new models last Q1.
Speaker Change: With the success that we're seeing now in the northern <unk>, four which was up 163% of plan.
Speaker Change: As part of the launch that's easily our largest footwear model vertex speed was also very successful in the first quarter.
Speaker Change: So that will continue to be an important part of the growth story is still leading our product category growth will have a couple of new models.
Speaker Change: Launches later in the year that can seal.
Speaker Change: <unk> and the ballast trail.
Speaker Change: <unk> and the crack also continues to be a hot hot.
Speaker Change: Model as well.
Speaker Change: So much better position from a footwear standpoint.
Speaker Change: Where we've seen.
Speaker Change: Continued.
Speaker Change: Exciting demand gamma franchise in particular, we really haven't found the edge of demand yet for the gamba.
Speaker Change: It actually moved up.
Speaker Change: The second.
Speaker Change: <unk> largest franchise behind the data now for us.
Speaker Change: And so that is exciting to see the momentum in the gamma its a great product is first of all it works in many different climates.
Speaker Change: Think this has a lot of room to continue to expand and importance in our overall assortment as I said, we're fighting out of stocks and again, we see that as a.
Speaker Change: Potential into the future.
Speaker Change: And our women's business was up 38% in the first quarter.
Speaker Change: Behind footwear, we're seeing great momentum there and you heard James mentioned.
Speaker Change: The success that we saw in the womens pants, the clarkia pad in particular was up more than double in the first quarter.
Speaker Change: We're chasing demand there as well so success in our womens strategy.
Speaker Change: And overall, we did see some out of stocks also in the first quarter and certain hartzell jackets.
Speaker Change: We didn't buy enough into so.
Speaker Change: Overall, I think our in stocks better this year than last year, but.
Speaker Change: Opportunities in the areas I just mentioned.
Speaker Change: Shifting to your other question around partner doors in China that continues to be an opportunity for us to.
Speaker Change: To elevate the execution in China to move to better locations that better represent the premium nature of the brand expanding the square footage when we do that.
Speaker Change: So we see this as a scene of higher quality execution.
Speaker Change: And upside as we convert those from from essentially a wholesale to an owned location.
Speaker Change: You get multiple layers of benefit in terms of larger store more productive better execution and then just the accounting of going from wholesale to <unk>. So.
Speaker Change: That's.
Speaker Change: That's a theme that will have for the next few years actually in China.
Speaker Change: Okay really helpful. Thanks Lester.
Speaker Change: Thanks Oliver next.
Speaker Change: Your next question comes from the line of Jonathan Komp from Baird. Your line is open.
Jonathan Komp: Yes. Good morning, Thank you Andrew I wanted to follow up on the full year outlook.
Jonathan Komp: When you look to the second half and the implied performance.
Jonathan Komp: Looks like limited profit growth and a margin decline thats embedded so I just wanted to ask how youre embedding.
Jonathan Komp: After a pretty strong start to the year here versus.
Jonathan Komp: Our prudent approach to forecasting and some of the assumptions you've made.
Jonathan Komp: Yeah.
Jonathan Komp: Yes. Thanks for the question, Jonathan first quarter was strong and as I look through as we look through how we're trending now.
Jonathan Komp: We can.
Jonathan Komp: Trends continue to be strong that being said like I said.
I talked about there's a meaningful amount of uncertainty out there we believe that focusing on the things that we can control.
Jonathan Komp: <unk> is really important.
Jonathan Komp: As you know the macro uncertainties with not only the tariffs, but what could go on in the environment. We're focused on all the things that we can control we believe that we put our guidance really.
Jonathan Komp: The sponsor book that puts more things that our control then.
Jonathan Komp: The macro in and if the macro should turn sour or some things that we're not anticipating out there. We believe that we'll be able to navigate a multiple multiple scenarios out there. So.
Jonathan Komp: Our guy in fairs.
Jonathan Komp: A slowdown a guy who further slowdown in the back half and we believe that that is.
Jonathan Komp: Responsible given the amount of uncertainty.
Cannot control.
Speaker Change: Okay understood. Thank you and just one follow up on Solomon the wholesale business. There I know had been negative for some time and just recently turned positive. So just any further color on the visibility you see in wholesale given the accelerating.
Jonathan Komp: Momentum thank you.
Speaker Change: Yeah, Jonathan Saddam a wholesale business, mainly driven by our core region, which is Europe. Okay. So it's the last region four hour Saddam footwear business and.
Speaker Change: We saw great momentum also.
Speaker Change: Again, you have the year in terms of our sell through in the various channels in Europe, Okay, and which give a.
Speaker Change: Very strong confidence.
Speaker Change: For our retail partners so.
Speaker Change: So in the reorder also.
Speaker Change: Accelerate in the first quarter, so and also our future order booking also see a very positive movement for the second half of this year.
Speaker Change: It's a very encouraging and.
Speaker Change:
Speaker Change: And also that.
Speaker Change: Kind of a trend we believe will carry on because based on our new product offers to the market for both sports and sports performance product.
Speaker Change: Really resonating.
Speaker Change: The market trend and also also.
Speaker Change: Came out as a good level of confidence for our partners.
Speaker Change: Yes.
Speaker Change: Just double down and on that if you think about.
Speaker Change: Sports style as an example, our XT Whisper sports style was always a strong franchise. Our XD Whisper was the most successful sports style launch within that franchise.
Speaker Change: <unk> <unk> three.
Speaker Change: A very very successful launch and our performance categories. So not only are the are the strategic relationships that have wholesale relationships getting stronger with the brand in Europe, but also the franchises are resonating extremely well with consumers and given us momentum and confidence to go forward.
Speaker Change: Okay. Operator, we have time since we went over on the tariff commentary maybe time for a couple of more questions. Thanks.
Speaker Change: Certainly your next question comes from the line of Jay sole from UBS. Your line is open.
Jay Sole: Great. Thank you so much Stuart can you elaborate a little bit on the opportunity in the women's business. James made some comments that business was really growing nicely can you just maybe talk about.
What.
Speaker Change: What you've learned in the last 90 days and what kind of potential you see long term for the women's business in our tariffs.
Jay Sole: Yes.
Jay Sole: Sure.
Jay Sole: We really see this as a visit.
Jay Sole: A strong growth driver for our business, we're underpenetrated in womens.
Jay Sole: As we have focused on improving our color our fifth choice for our female guests.
Jay Sole: We're really seeing traction and.
Jay Sole: The color investment in the first quarter really paid off.
Jay Sole: Much stronger color presentation.
Jay Sole: And higher sell throughs as a result.
Jay Sole: Mentioned, the clarkia Pant, which is.
Jay Sole: It's been a runaway hit for us with our women's assortment and.
Jay Sole: Excited to chase that.
Jay Sole: Really.
Speaker Change: Could be exponential growth for us as we crack into a part of the assortment that's really a new a new add for us. The gamma was really successful in women's as well as men's and that's sort of right in our wheelhouse and outerwear.
Speaker Change: And something that we've been able to find.
Speaker Change: A fit in our model design that really appeals to our female guests.
Speaker Change: And something I would add is we had you heard James mentioned, our Mammoth Academy in California.
Speaker Change: This was a huge success and we saw 49% of the participants in that where women.
Speaker Change: And over 70% of the content that we generated coming out of that was aimed at our female guests. So.
Speaker Change: There's just there's a lot of momentum not only from a product category standpoint, but also just as we're building community and engaging.
Speaker Change: With our with our female guests we see this as.
Speaker Change: The huge potential.
Speaker Change: A more balanced business ultimately, we see the potential to see our guest 50 50 between men's and women's so.
Speaker Change: Is something that we feel we have good momentum as I said, 38% growth in women's and a quarter second only to footwear and we expect that to continue.
Speaker Change: Got it thank you so much.
Speaker Change: And that concludes our question and answer session.
Speaker Change: Sorry, well have our last question from the line of Paul Lajoie from Citi. Your line is open.
Paul Lajoie: Hey, Thanks, guys.
Paul Lajoie: If you could talk about your AUR is Solomon footwear business, and just where within that assortment youre seeing the greatest strength and growth.
Then second.
Paul Lajoie: Curious if you saw any air pockets over the last several months in any of the businesses is just tied to all the tariff news and if so which segments which regions. Thanks.
Speaker Change: Oh, they're little coming through a little bit muffled can you repeat the first question was about Solomon AUR.
Paul Lajoie: In the second half.
Paul Lajoie: Yes, it's dominated or within the assortment youre seeing the greatest strength and growth.
Paul Lajoie: Mark with regard to Ngls.
Paul Lajoie: Yeah, Yeah with regard to the greatest strength and growth I mean, we believe that both our performance category and our sports style category are very strong from a growth perspective, we continue to see.
Paul Lajoie: Sports style as the biggest growth driver.
Paul Lajoie: Performance is more mature, but sports style is the biggest growth driver now what I will say is that.
Paul Lajoie: Even within the performance category, our gravel franchise, which both have a.
Paul Lajoie: Running any any gravity platform.
Paul Lajoie: We're very very very successful launches. So we're super excited about sports style as a category, we're super excited about gravel and running.
Paul Lajoie: As a as a performance within our performance section.
Speaker Change: You talked about are.
Speaker Change: Our average units at retail and I mean, we haven't we haven't given.
Speaker Change: That information, but what I will say is that our both our <unk> and <unk>.
Speaker Change: Our asps are ticking up with both of these franchises in going into right Theyre exit.
Speaker Change: And Paul There was a second part to your question related to tariffs did I hear that right.
Speaker Change: Yes, just curious if you saw any air pocket. So over the last several months in any of your business is tied to the whole tariff news.
Speaker Change: No no.
Speaker Change: As we said we are we continue broad based strength across the portfolio that you saw in the recent quarters and especially this most recent quarter continue so far so I don't know that were going to be the leading indicator on the macro but we haven't seen any air pockets yet.
Speaker Change: Thank you guys. Good luck.
Speaker Change: Thank you.
Speaker Change: And that concludes our question and answer session I will now turn the call back over to management for closing remarks.
Speaker Change: Thanks, everyone for joining and look forward to reconnecting in 90 days for our second quarter results have a great week.
This concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: