Amer Sports Is Maintained at Overweight by Wells Fargo

By Hannah Miao

SHANGHAI — Just about every day since Arc'teryx opened a store so big it calls it a museum, shoppers wait in line to enter the glass building on luxury shop-lined West Nanjing Road.

Rocky walls are designed to evoke the Coast Mountains of British Columbia, near Arc'teryx headquarters in Vancouver. It's a backdrop for $1,000 waterproof jackets with a dinosaur-fossil logo that have become a status symbol for finance bros and streetwear enthusiasts in Shanghai, London and New York.

The upscale outdoor brand Arc'teryx is conquering China where many luxury brands are struggling, and is taking its playbook global. In November, it opened a flagship store in New York's Rockefeller Center, with more openings planned.

Its success in China is riding a cultural shift in the country. As a real-estate boom has turned to a bust, wealthy Chinese shoppers have pulled back from flashy luxury. High value is the new high end.

In addition, outdoor activities like hiking and skiing are catching on as hobbies, enough so that their style is aspirational. The company has become a hit with shoppers who might never see a mountain up close, but still want a jacket that can keep them dry on the way to work. They are the Chinese equivalent of suburban Americans who buy rugged SUVs for their carpools.

"We sit in between sport and luxury," Stuart Haselden, CEO of Arc'teryx, said in an interview. "It's helped us to do well as the consumer environment has been challenging in China."

Arc'teryx's gear is a China-powered global challenger to the Patagonia vest: its parent company is partially owned by Anta Sports Products, China's largest sportswear company and the third biggest in the world by revenue behind Nike and Adidas.

China, with its 1.4 billion people, is the world's second-largest consumer market after the U.S. with about $7 trillion in annual household spending. But the country has become a headache for many international brands in recent years as economic momentum has slowed and consumers have gotten choosier.

Luxury fashion powerhouses including Gucci-parent Kering and Louis Vuitton-parent LVMH have struggled with sales slumps in China in recent years. "The general economic environment still creates a low consumer confidence," Francesca Bellettini, who was recently named CEO of Gucci, said of China on a Kering earnings call in July. "The consumer is for sure more discerning."

Arc'teryx, meanwhile, prices its products about 20% higher in China than in the U.S., at a time when most of China's economy is gripped by deflation.

The company is owned by Amer Sports, which owns other sporting brands including Salomon and Wilson and is based in Finland. Anta purchased a controlling stake in Amer in 2019 with ambitions to become a household name globally.

Arc'teryx grew its total revenue to more than $2 billion last year from $500 million in 2020, driven by explosive expansion in China. Greater China accounted for 45% of its sales, compared with about 25% of sales in 2020. Amer reported a 47% year-over-year jump in greater China sales for the third quarter, and raised its guidance for 2025 revenue and profit.

Even Arc'teryx's sponsorship of a fireworks display in Tibet in September, which set off widespread outrage on Chinese social media over the event's environmental impact, hasn't stopped its growth in China. (Arc'teryx has apologized.)

Online sales of outdoor and sporting goods in China totaled nearly $56 billion in 2024, a 20% year-over-year increase, according to Asia-focused e-commerce consulting firm WPIC. Sales of outdoor jackets grew even faster, reaching $2.7 billion in 2024, up 49% from the year prior.

"Having the freedom and time to do something — this is also becoming part of luxury in China," said Amber Wu, an independent marketing consultant.

Bu Guobin, a 41-year-old businessman, stopped by the Arc'teryx store in Shanghai on a recent weeknight to buy a $280 black vest for himself and a $420 jacket for his wife.

A friend introduced him to the brand about two years ago and he has since purchased Arc'teryx jackets, pants and shoes. While he does sport Arc'teryx when he goes rock climbing, a hobby he picked up in the last couple of years, mostly he just wears it. He likes Arc'teryx because it's popular and recognizable.

"It's a bit pricey," he said, but "I just think the clothes look good."

Arc'teryx was founded in Vancouver in 1989. An abbreviation of Archaeopteryx, a birdlike dinosaur, it started out making climbing harnesses. Developing its first apparel almost bankrupted the company, but the bet paid off. In 1998, it debuted its Alpha SV jacket made with waterproof and lightweight Gore-Tex material. It became an instant classic.

In 2001, French outdoor sports company Salomon, then-owned by Adidas, acquired Arc'teryx. In 2005, Amer bought Salomon and Arc'teryx was part of the deal.

It wasn't until Anta became a controlling shareholder in Amer that China became a major growth engine for Arc'teryx.

A consortium led by Anta, which included investors such as Lululemon Athletica founder Chip Wilson and Chinese tech company Tencent (the parent of China's do-everything app WeChat), bought Amer and took it private in a roughly $5 billion deal that closed in 2019.

James Zheng, then-group president of Anta, saw an opportunity to leverage Anta's domestic know-how to help Amer's brands "grow as fast as possible in China," he told state-owned broadcaster CGTN in 2019. Zheng soon became CEO of Amer.

Some customers on social media fretted that Anta, a mass-market brand, might cheapen the reputation of Arc'teryx. Anta started as a family-run shoe maker founded in 1991 in Fujian province and became the country's biggest sportswear company.

Xu Yang, who managed Anta's basketball business, joined Arc'teryx to oversee its greater China market in 2019. Early on, during a trip to headquarters, Xu told his Vancouver colleagues he thought it would be difficult to grow Arc'teryx in China.

"Chinese people don't rock-climb," he recalled telling them, according to a 2022 podcast interview with the China Europe International Business School.

But China was set to host the 2022 Winter Olympics and was building ski resorts and other outdoor sports facilities. Arc'teryx got the ultimate celebrity boost in China when Chinese leader Xi Jinping wore an Arc'teryx parka in 2021 to inspect venues for the Olympics and again at the Opening Ceremony.

Around that time, Arc'teryx brought in a new CEO who would make some big strategic changes.

A former U.S. Army officer, Haselden spent years as a finance executive at J.Crew, which was a master of conveying a brand and lifestyle with its clothes. It was there that he got an education in vertical retail — when a company controls everything from designing products to managing supply chains to operating stores. After stints as chief financial officer at Lululemon and CEO at luggage company Away, Haselden was recruited to become Arc'teryx's chief executive.

When he joined in 2021, Haselden cleaned up Arc'teryx's product lineup to focus on items mountain athletes — or people who fancied themselves like them — would actually wear. He ditched the flannel shirts and dresses.

He cut down on sales to other retailers and focused on Arc'teryx's own branded stores and online shopping. The company went from generating about 70% of its sales from other retailers six years ago to around 75% from its own stores and e-commerce platform in 2025.

Arc'teryx also studied its customers in China.

In North America, Arc'teryx was beloved in the outdoor-sporting community, but its jackets and beanie-like toques also had a following among "gorpcore" fashion aficionados. It has been worn by the likes of the late trailblazing designer Virgil Abloh, of Off-White and LVMH fame, and singer Frank Ocean.

The company found that in China, the proportion of customers who actually use the products for mountain sports was even smaller than in North America. Even so, Arc'teryx kept its focus on mountain athletes, which Haselden says has attracted other customers who see the products as top-notch.

Xu, the former head of greater China, remembers calling colleagues in Vancouver to suggest designing a long down coat to appeal to customers in China's northeast. The feedback from Vancouver: have you ever seen someone skiing or mountaineering in a long down coat?

"I wanted to argue at the time, but I slowly came to understand the importance of brand positioning and consistency," Xu said in the podcast interview. Xu now heads the Anta brand.

Arc'teryx's signature Alpha SV jacket sells for 8,200 Chinese yuan, or around $1,160, and most products cost at least several hundred dollars. China commands a wider profit margin for Arc'teryx than other regions, according to the company.

"It's the new power uniform in the office," says Bernstein analyst Melinda Hu.

Anta's longstanding relationships with landlords helped Arc'teryx nab prime real estate for its shops. It opened bigger stores in luxe shopping districts and closed shops in less attractive locations. In-store shopping is important for Arc'teryx in China, where e-commerce makes up only about 13% of its sales compared with around 39% in North America.

Arc'teryx is aiming for North America, currently about a third of its sales, to be on par with China sales by 2030. It operates 61 of its own stores in China and expects to add another 30 or so by 2030. At the end of this year, Arc'teryx will have about 168 of its own brand stores globally, with 68 in North America.

On Sept. 19, Arc'teryx sponsored a fireworks display by Chinese artist Cai Guo-Qiang on the Tibetan Plateau. The event quickly drew outrage over the potential environmental impact of the fireworks, becoming a top trending topic on Chinese social-platform Weibo. Users discussed boycotting Arc'teryx and Anta.

Cai and Arc'teryx apologized. The fireworks display was "out of line with Arc'teryx's values," the company said, and it vowed to "change the way we work to ensure this doesn't happen again." Arc'teryx canceled a rock-climbing academy in China scheduled in October. Arc'teryx's Greater China General Manager, Ivan She, stepped down.

An investigation by local authorities released in October found the fireworks caused ecological damage. Four local government officials were dismissed. Cai's artist studio and Arc'teryx were told to pay restoration costs.

"We regret our involvement and are working closely with the local authorities to address the impact," Zheng, the CEO of Amer, said on a Nov. 18 earnings call.

Despite threats on social media, a widespread boycott of Arc'teryx didn't materialize. Haselden told investors on the recent earnings call that, after an initial slowdown at the start of the fourth quarter, sales growth has rebounded as the weather has cooled.

Amer, which went public again in February 2024 on the New York Stock Exchange, saw its shares drop after the fireworks controversy. They have rebounded since it reported earnings Nov. 18. The stock is up 28% this year.

Zhao Luchun, a civil servant, and Lu Jieyang, a teacher, a couple and both 28, bought waterproof jackets from Arc'teryx for about $800 each ahead of a recent vacation to Iceland, their first outdoorsy trip.

They chose Arc'teryx, Zhao said, because "everyone can recognize the logo."

Write to Hannah Miao at hannah.miao@wsj.com

(15:05 GMT) Amer Sports Price Target Raised to $54.00/Share From $52.00 by UBS

(13:31 GMT) Amer Sports Price Target Raised to $46.00/Share From $43.00 by Evercore ISI Group

Q3 delivered 30% sales growth, margin expansion, and doubled adjusted EPS, led by Salomon, Arc'teryx, and Wilson. Raised 2025 guidance across all key metrics, with strong momentum in Asia-Pacific and China and robust D2C growth.

Based on Amer Sports, Inc. [AS] Q3 2025 Audio Transcript — Nov. 18 2025

Q3 delivered 30% sales growth, margin expansion, and doubled EPS, led by Salomon and Arc'teryx. Raised 2025 guidance for revenue, margins, and EPS, with strong momentum across all regions and channels, especially in Asia-Pacific and China.

Based on Amer Sports, Inc. [AS] Q3 2025 Audio Transcript — Nov. 18 2025

Q3 2025 delivered 30% revenue growth and margin expansion, with all regions and segments posting double-digit gains. Guidance for 2025 remains strong, led by DTC and APAC/Greater China, and key brands Arc'teryx, Salomon, and Wilson continue to outperform.

Original document: Amer Sports, Inc. [AS] Slides Release — Nov. 18 2025