Amer Sports Q3 Results Show Strong Growth, Easing Bearish Concerns Amid Lingering Risks

What happened

Amer Sports reported robust Q3 2025 results, with revenue surging 30% year-over-year, margin expansion, and raised guidance, leading to a rating upgrade to buy. This performance dispelled prior bearish concerns highlighted in the DeepValue report, such as doubts over growth sustainability amid tariff and inventory risks. Greater China accelerated to 47% growth, and Arc'teryx maintained strong momentum with full-price sales, supporting global expansion efforts. However, the company's elevated inventory levels, up 29% year-over-year, and high valuation metrics like a P/E of 76x temper the optimism. Overall, the results indicate improved execution, but critical watch items like inventory normalization and tariff pass-through remain unresolved.

Implication

The Q3 results demonstrate Amer Sports' ability to drive broad-based growth and expand margins, suggesting effective brand execution and pricing power even with assumed tariff headwinds. However, the stock's high valuation leaves little room for error, requiring sustained performance to justify current levels. Elevated inventory poses a clear risk of markdowns that could compress margins and harm brand equity if not managed well. Long-term, the company's DTC expansion and premium brand portfolio offer upside, but near-term gains depend on successful holiday sell-through and tariff mitigation. Investors must monitor quarterly metrics closely, as any slip in execution could trigger a reassessment of the bullish stance.

Thesis delta

The strong Q3 performance shifts the thesis toward a more positive outlook by alleviating growth and margin concerns that underpinned the prior HOLD rating. However, the upgrade to buy is tempered by the stock's full valuation and unresolved inventory risks, emphasizing the need for continued proof of execution. Key catalysts like inventory normalization and tariff pass-through will determine if this shift sustains or reverts.