New CEO For Salomon
Amer Sports CEO James Zheng announced on a conference call with analysts that Salomon’s Chief Product Officer, Guillaume Meyzenq has been appointed president and CEO for the brand.
"Guillaume Meyzenq, current Chief Product Officer for Salomon, has been appointed President and CEO for Salomon. Additionally, Michael Hauge Sørensen, Chief Operating Officer and executive officer for Amer Sports, has decided to step down from his current position and will return to his former role as advisor to the Board of Directors of Amer Sports. We conducted a comprehensive search for the next Salomon CEO, including both internal and external candidates, and concluded that Guillaume is the right person to take Salomon to the next level.
"I have worked closely with Guillaume the last several months as interim CEO. He has built a strong reputation during his 28 years at Salomon and is extremely well respected throughout our company and the industry. Born and raised in the French Alps, an avid skier and outdoorsman, Guillaume embodies the core values of Salomon. He brings a strong track record of operational excellence and strategic innovation in diverse leadership roles across Salomon, including sales, product innovation, and both soft goods and winter sports equipment. More importantly, Guillaume was instrumental in the doubling of Salomon footwear sales over the last five years, including creating and developing our key sports style category which is now approaching one-third of Salomon sneaker sales.
"We have the right team and strategy in place, and I have full confidence in Guillaume to lead Salomon for the next stage of its growth journey."
Speaking more broadly Zheng said
"Residing in the old Arc’teryx Soho location, the Salomon store is performing very well so far with strong response from both tourists and locals. Globally, we plan to end the year with 404 Salomon shops, including both owned and partner stores, doubling the count from last year. In Europe, Salomon footwear and apparel are performing well, especially driven by strong reorders, and because Salomon is selling so well, this is also driving our higher preorder rate. In both EMEA and North America, Salomon sports style is still early in its long term development. We have evolved our go-to-market organization in both markets, more clearly separating the winter sports equipment sales team from the Salomon footwear team, which should help us reach our potential in both categories given their unique brand markets.
"The third quarter was very strong for Amer Sports Group across operating segments, geographies and channels. Our premium technical brands are taking market share and creating white space in sports and outdoor markets around the world. We are executing well against our largest growth opportunities in Arc’teryx and the Salomon footwear, while our market leading ball and racquets and the winter sports equipment franchise both grew faster than expected. Amer Sports Group generated 17% sales growth in Q3, led by our flagship brand, Arc’teryx. We achieved a very strong 14.4% adjusted operating margin, well above our expectations. We continue to enjoy strong growth margin expansion driven by the pricing power of our brands and a healthy mix shift toward our highest margin franchise, Arc’teryx.
"Within our other performance segments, Salomon soft goods continue to grow double digits, led by footwear, while ball and racquet sales trends improved, reaching double-digit growth in Q3. We believe Amer Sports is very a uniquely positioned company within the global sports and outdoor space, and several factors give me confidence for the rest of this year and beyond. First, we own and operate our unique and valuable portfolio of premium outdoor and sports brands. Each one is fueled by technical innovation and positioned at the pinnacle of its segment. Our brands have high engagement, conversion and [indiscernible] with consumers but are still relatively small players on the global stage with significant room to grow. Second, Arc’teryx is the breakout growth story with standout growth and profitability for the outdoor industry, charting new territory with its disruptive D2C model and the unique competitive position.
"Our growing store network, pinnacle products and deep community connections allow us to continually attract new consumers to our brands and also have success expanding into new categories, such as footwear and women’s. Third, we believe that Salomon, our brand born in the mountains, has a unique technical performance position and design esthetic within the global sneaker market, but still has low market share and a long runway of growth ahead, especially at this time when consumes are more open to new sneaker choice than ever before. Fourth, Wilson and our winter sports equipment brands have longstanding, authentic heritage, premium position, high performance products, and a leading market position. Because they already enjoy strong equipment market share, they have delivered slower long term growth in their core equipment business but still have large soft goods potential, especially the Wilson Tennis 360 line.
"Fifth, while other consumer companies faced challenges in Greater China, in Q3 we generated 56% growth there, continuing to well outperform the market. We are seeing strong momentum across all of our three big brands, including strong consumer confidence following the government stimulus actions. I’d like to highlight some of the key reasons behind our standout performance in Greater China. Number one, our brands compete in one of the healthiest and the fastest growing consumer segments in China, the premium sports and outdoor market. The outdoor trend in China continues to be very strong, attracting younger consumers, female consumers, and even luxury shoppers. Additionally, the China consumer landscape today has evolved into a market of winners and losers, with some brands doing extremely well and others underperforming.
"Our three small specialized brands are known for their [indiscernible] properties, high quality and technical innovation which resonate with Chinese shoppers. Thirdly and the most important, we believe we have a great team in China. Our deep expertise and unique scalable operating platform gives us a significant competitive advantage across the portfolio. Now coming down to some key highlights from our segments in Q3, starting with technical apparel, which is led by our fastest growing and now largest brands, Arc’teryx, Arc’teryx delivered another very strong quarter with healthy growth across all regions, channels and categories, especially footwear, women’s, and [indiscernible] jackets. The brand momentum was most evident in its strong [indiscernible] performance against a very difficult growth comparison from last year.
"Arc’teryx is executing well its retail expansion plan, opening nine net new brand stores globally in Q3, bringing the total owned brand stores count to 134. Key new locations include four openings in the United States, two in Canada, two in Australia, two in China, and one in Germany. Arc’teryx opened another brand store at the Fashion Island Mall in Newport Beach, California, bringing us to four stores in Los Angeles, an epicenter market for us. The brand is resonating well with LA consumers, giving us confidence that Arc’teryx has large growth potential even in warmer markets. Doubling down on our commitment to the LA community, we are hosting our first-ever Arc’teryx Backcountry Academy in Mammoth, California this winter, a reflection of the opportunities we see in this region.
"In Europe, we have opened net five new stores this year so far, and we are seeing exciting results including strong affinity with both tourists and the locals. In Paris, local consumers are embracing our store in Le Marais. Thirteen years of engaging with French and European alpinists at our climbing academy in Chamonix had generated significant brand recognition and appreciation with French consumers even before we opened our first store there. We also opened our New York City flagship store at 580 Broadway in September. This new outlet store features our most pinnacle expression of ReBird, including shoppable ReGear in-store for the first time, our large ReBird service center facility for care and repair, and our unique in-store coffee shop.
"This unique flagship delivers the brand in a slightly new way in the U.S., taking cues from the success of our retail format in China, presenting much of the assortment by activity instead of by category, which creates a strong energy and engaging presentation of our products. The store is performing very well relative to our internal expectations in its first few months. Shifting to products, innovation is at the heart of Arc’teryx DNA. Recently, we were thrilled that our MO/GO motorized hiking pants were recognized by Time Magazine as one of the best inventions of 2024. Designed to support users in their outdoor recreational pursuits, MO/GO stands for Mountain Go and is the world’s first pair of powered hiking pants. MO/GO pants incorporate robotics with carbon elements and was engineered by the Arc’teryx advanced concepts team alongside external partner, Skip, which is a Google X spinoff dedicated to tackling mobility challenges.
"We believe this technology has the potential to increase accessibility to outdoor sports in a meaningful and scalable way, regardless of physical ability. Also, Arc’teryx footwear continued it’s early trajectory since launching its first in-house line, growing strong double digits across all regions and channels in Q3. The Kragg continues to be wildly successful, including our latest insulated version for cooler fall and winter temperatures. This is a great example of how we will add new dimensions to our key franchise with ideas and inspiration coming through collaboration with our [indiscernible] teams. We also introduced a new hiking model, called the Kopec, which has also delivered strong early results. Overall, we are extremely pleased with consumer reception to what we believe is the best line of technical performance footwear designed for mountaineering, and because of its unique position in the sneaker marketplace, strong sales in our DTC channels and enthusiastic features from key wholesale accounts, our confidence is growing that footwear will become a very sizeable and profitable growth avenue for Arc’teryx, both in owned retail and in certain brand-relevant wholesale accounts.
"Women’s continues to perform extremely well, growing very strong double digits, outpacing overall brand growth, and represented nearly one quarter of sales in Q3. This outperformance was driven by seasonal relevant color and [indiscernible] combined with breakout new styles, like the Cartier [ph] pants. We continue to see significant upside in the category as we add more models, colorways and style options that resonate with her. Lastly, an update on our cutting edge community engagement programs. This summer, Arc’teryx launched gym residencies in climbing gyms from New York to Paris to San Francisco as part of the brand’s Summer of Climb. Investments in brand awareness and activities that feed off the global excitement and the popularity of climbing are driving awareness, cultural relevancy, and position Arc’teryx at the heart of this phenomenon.
"Our academies continue to generate strong buzz and an affinity for the brand, including our largest ever academy in the French Alps in Chamonix with 650-plus participants, ranging from beginners to world-class climbers. Moving to the outdoor performance segment, which also delivered a solid quarter and outperformed our expectations, led by Salomon soft goods and [indiscernible] partially offset by softer trends in Salomon winter sports equipment. The higher margin, fast growing Salomon footwear franchise still represents a very low share of the global sneaker market. Today, Salomon soft goods represent approximately two-thirds of the outdoor performance segment, up significantly from 54% in 2022. We believe Salomon sneakers have an authentic and unique market position with technical features designed for the mountains but also great for everyday use.
"Our unique style and technical attributes are resonating with consumers at a time when they are more receptive than ever to wearing new sneaker brands. Long term, we expect Salomon soft goods to grow double digits annually. In Q3, Salomon footwear continued to show strong traction in Greater China and APAC, where consumers love our [indiscernible] offerings that combine a distinct trendy look with high technical features. In China, we have created a new category called outdoor sneakers which especially resonate with young consumer. Our Salomon compact shop format in China is also working very well, profitable starting day one and four times more productive per square foot than industry average. We are continuing to expand Salomon shops in Greater China, opening 39 net new Salomon shops in Q3, including both owned stores and partner stores, bringing our total count to 165 in Greater China.
"We expect to end 2024 with approximately 200 Salomon stores in China with opportunity to grow to several hundred locations over time in just Tier 1 and 2 cities. We have also begun testing the Salomon compact shop format outside China, glowing up new locations in APAC and EMEA, including Tokyo, Singapore, and the Le Marais shop in Paris. We recently opened our first Salomon flagship in Shanghai, a 5,400 square foot pinnacle brand expression in the affluent shopping district, Xintiandi, which combines both footwear and apparel in a comprehensive offering and highly immersive brand experience. We are also excited to share that we opened a pop-up shop in the heart of New York City in Soho in October. This is our first branch store in the U.S. and comes ahead of plans to open one to two permanent New York stores in 2025."
