Amer Sports Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $15.55b | Revenue (TTM) = $7.44b
Market Cap = $15.55b | Estimated Revenue = $8.41b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $15.93b | Revenue (TTM) = $7.44b
Enterprise Value = $15.93b | Forward Revenue = $8.41b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Amer Sports Stock Analysis
Analyst Opinions
29 Analysts have issued a Amer Sports forecast:
Analyst Opinions
29 Analysts have issued a Amer Sports forecast:
Amer Sports Events
Past Events
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SEP
17
Analyst/Investor Day - Amer Sports, Inc.
4 days ago
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AUG
18
Q2 2026 Earnings Call
about one month ago
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MAY
19
Q1 2026 Earnings Call
4 months ago
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MAY
14
Shareholder/Analyst Call - Amer Sports, Inc.
4 months ago
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FEB
24
Q4 2025 Earnings Call
7 months ago
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NOV
18
Q3 2025 Earnings Call
10 months ago
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SEP
18
Analyst/Investor Day - Amer Sports, Inc.
about one year ago
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StocksGuide Free
Amer Sports — Analyst/Investor Day - Amer Sports, Inc.
1. Management Discussion
Good morning, everyone, both here in the room and Annecy, France and those joining on the webcast as well. My name is Omar Saad. It's my pleasure to welcome you to the 2026 Salomon Amer Sports Investor Day. People listening on the webcast here in person, we're in our Salomon headquarters in Annecy. We appreciate you making the journey. I know some of you came from very far to learn more about the Salomon brand here in the French Alps, where Salomon was founded 79 years ago.
All right. First, the safe harbor statement. During today's Investor Day presentations, you will hear forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only. They are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the safe harbor statement in last night's press release and SEC filings. We will also discuss certain non-IFRS measures.
So our main agenda is going to focus on product and brand as well the CEO introductions from James and Guillaume. And then in the afternoon, our agenda is going to be more about the regions the financials and Q&A at the end.
As you can see, we've got a lot of leaders lined up to present today. You guys have the agenda and the bio is in front of you. A couple of points of order dimension. First, please hold your questions until the Q&A session at the end of the day, especially the financial and guidance related and algorithm-related questions. We're going to have Andrew Page, the Group CFO; and Antonio the Salomon CFO at the end of the day as well as a Q&A immediately following. For those of you online, e-mail us at [email protected] with your questions, and we'll try to incorporate as many of those as we do for.
So before I turn it over to James, our CEO, I want to share a personal observation about Salomon. The more I've come to know the brand since joining Amer Sports, the more I've kind of appreciate how unique it is. It really is different from any other brand that I've studied in my career. It has many facets, they're all authentic, they're all rooted in performance and function.
So for me, as a New Yorker, I think 1 of the best ways to show you what I mean is with the map of Manhattan. This is just a sampling of the different places in different ways, Salomon shows up at New York retail. We have the 5 owned Salomon shops that we've opened recently, including Brooklyn, Upper West Side, [indiscernible], which is the newest, Woodbury Commons, and of course, our first store in SoHo, which still today, there's almost always a line to get into that one. Then you've got -- you can find Salomon trail shoes, hiking, footwear, hydration packs, other gear at Paragon Sports in flat iron. You can also find Solomon skis, snowboards, boots, bindings, helmets and other winter sports equipment gear at Paragon or at the various local ski retailers like Panda Sports in Brooklyn. You can also buy our running and gravel lines at running specialty shops throughout the city, including fleet feed. And now you can find Salomon sports style shoes at the top sneaker destinations in New York including the Foot Locker flagship on 34th Street or the JD Sports across Brooklyn. And then last but not least, Salomon showing up in a big way and some of the coolest places to shop in New York, like the [Kit] shop in SoHo or the Nordstrom flagship on 57th Street.
So now I'm going to turn it over to our CEO, James Zheng. As James has a great track record from Adidas to Anta to Amer Sports. I would characterize them as one of the most experienced and successful executives in the global sports and outdoor industry over the last 20 years. James?
Hello. Good morning, everybody. [Foreign Language]. I hope [indiscernible] gang can correct my pension, which means many of you may not understand [indiscernible], of course, you know, I'm pleased to reach you here, okay?
So welcome. Welcome to Annecy, our headquarter of Salomon. I think many of you probably the first time to be here. I call Annecy the paradise of the world. I mean you guys -- I mean, maybe already spent a couple of hours running on the loads -- besides the lakes and maybe somebody also got a chance yesterday or the day before yesterday also went to the mountain. So it's such great place to exercise to have outdoor activities here.
So Salomon was born here, 1947. Today, it's Salomon's 79 anniversary. So actually, so we brought all you here and obviously, people also sitting on the virtual meetings. So you guys will have great experience with our brands, Salomon in these 2 days. So first of all, I still like to say Amer Sports is a new list public company in our industry, okay? We list our company on February 1st 2024. So in the past 10 quarters, I really appreciate all your guys' support and trust make Amer Sports become top 5 sport increase company in terms of market cap, okay. Thank you very much. Thank you for your trust. I mean -- before that time, so we literally were invisible in the market, okay, as a private company. And you gave us such great credits just for the 10 quarters, make us become a top 5 sporting goods company in terms of the market cap, okay?
So I think it's a great complementary for us. And this is our second Investor Day since our public, okay? I think some of you also attend our first one, which was held in Vancouver, mainly focused on [indiscernible]. So I mean, in the past 10 quarters, I attend almost all the low shows after quarterly earnings calls. So in the first 6 low shows, people always got questions and also the -- try to understand how -- what Amer Sports stands for, okay? And you guys put a lot of waiting on Arc'teryx, which obviously, it's our first flagship brands to make successful story in the markets. And 6 quarters later, Okay. Starting from second half of last year and you guys start to pay attention on Salomon. And today, and Salomon, I mean, represent the fastest-growing brands in our portfolio in the past 4 quarters. So I think it's kind of a journey, I mean, you guys really got kind of level of the kind of curiosity to see how the Amer Sports. I mean Amer Sports, obviously we are portfolio brands. We got the main 5 brands in the portfolio. They're all positioned at the premium technical kind of sectors. And we made a very successful story for Arc'teryx first. Then, I mean, you see great for Salomon afterwards. And last quarter, we also report our -- another big brands, [Wilson] also grow more than 24%. And -- so the third brand is also evolving. So this is kind of a road map we build up our portfolio brands in our companies. And we really made great successful track record in the past 10 quarters to really convince -- try to, I mean, convince the industry, the street, the public market. So we are the company really got a very unique proposition in the market. And it's a highly competitive market. So it's also saturated, okay? So how we win the market shares from our unique proposition on the brands and by creating the most innovative high technical products to address the needs in the market and create a unique angle to unlock the potential for the brands to bring our consumers, great attention for the brands, Arc'teryx, Salomon and Wilson onwards in the future.
So I think it's -- we have a pretty nice setup inside Amer Sports, which gives us a very solid foundation to grow our business in the future. For today Investor Days, we got literally got obviously 2 topics. Okay. One is obviously -- we -- you guys already look at our release last night, okay, for our Q3 guidance. So we continue to outperform our initial guidance, and we -- the whole menu team got a very high-level confidence to deliver. I mean, we only got 2 weeks left for Q3, and we think we can continue to our kind of a track record on bid and raise patterns for Q3. And also -- we also give the street about our guidance for our long-term 5-year plus long-term and see how our development patterns will be come out for the future. So I think Andrew will give you guys more detailed elaboration in the overall company financial session.
But more importantly, I mean, obviously, the second purpose, we will dive in on Salomon today and tomorrow. And Salomon today is the fastest-growing brand in our portfolio. So our brand CEO [indiscernible] and his team will give you guys full introductions about who Salomon is, what Salomon stands for? How Salomon today to unlock the potential for the markets? What's the key competitive edge we own for Salomon brand so that Salomon today can really stand out in the overall outdoor sporting goods market. And more importantly, [indiscernible] and his team also will share you guys the vision of the Salomon for the future.
So what's the road map for us, for some -- for coming 5 years and also [Audio Gap] a very detailed introductions about our key strategic pillars, we'd like to develop a setup to fulfill our road map for coming 5 years. So this is the most important content today. And I think Guillaume and his team will share full perspective about how we'd like to develop salmon from today and make Salomon become truly leading global sporting goods brands in the near future. So I think it's a very important content. And you guys will listen and experience the brands in our ADC and also you guys also got the opportunity to interact with all our Salomon executives here, okay? In this building. And also, obviously, tonight, we've also got the kind of very good events on the lake.
So you guys have a chance to go got interaction with all the -- our Salomon executive to understand their thoughts about how we build up the Salomon brand in the future. So pretty much, I mean, I -- before I hand over to Guillaume, I'd still like to say something because I used to be Interim CEO for Salomon for 8 months in 2024. So I'd like to share my certain perspective about my understanding of Salomon and how the experience I got really this kind of a unique experience I got have here in Annecy in 2024.
So this interim low really give me a very deep insights into what makes Salomon so special. I think looking in the French mountain since 19947, Salomon carries generally technical heritage. Our products really deliver outstanding performance and functionality, shipped by long time sports culture. So besides the brand owns pretty high market share in both outdoor performance and the winter sports equipment, we also create very unique division we call More Than Outdoor Sneakers, okay, led by our XT franchisees. I think all of you already experienced these products. So that segment, new segments, we are settlement today, still the only outdoor brand sitting in that segment, which give us permission to compete in 200 billion sneaker markets besides the normal outdoor segments, okay? It's a big luck for Salomon wins. So I literally spent more than half of my time in 2024 in Annecy and working closely with the team. I still remember on April 16 '24, when I have had the first, we call the Salomon sales meetings in Annecy, I shared my vision to the whole audience. At that time, I talked to the team, by 2028, from 2024, '25 years journey, we'd like to make Salman become $3 billion brand. By 2028, we will sell more than 30 million paris per shoes to the market. 2024, we sell more or less 40 million paris. So that's the very clear vision for the brands and for the coming 5 years.
So how we get that? So I also give the kind of work with Guillaume and team, and we came out the clear 5 important strategic pillars to achieve these calls. One, obviously, we amplify our sports diabetes which I just called Modern Outdoor Sneaker market. This is a very unique angle. I mean the market not short -- have any shortage on 1 piece of garment and 1 pair of shoe. How you really -- we are new players literally in sneaker market? So how we find the unique angle to make the consumers, especially for our younger female consumer, now us like us. So I think that the sports style really gives a weapon to unlock the big portal.
And the second, we need to win in Europe, okay, which is our home base okay? The third, we got to really accelerate our business in great China and APAC. Fourth, I think we also make that very clear. We want to make a great breakthrough in North America, which is the largest sneaker market in the world. The fifth, the last one, not least, we need to really elevate our organization to fulfill to realize strategic pillars at the quality side. So these are 5 major strategic pillars. I mean we shared to the audience in 2024. And everybody on the same page, the goal is very clear. $3 billion by 2028, 30 million pairs of shoes by 2028. So obviously, did a -- it's not angle. So it's a vision by 2028. How we translate into our daily operation starting from April 2024? So all the teams working on the specific initiatives afterwards. So we made great success in the past 2 years okay? It's just to end 2.5 years ago. So in Europe, we're fixing our distribution has restored strong growth, leading by our epicenter strategy, including Paris and London. In China and APAC, as you guys also are aware, we have delivered excellent results. Salomon in China right now, we've got à stores. Starting from 2024, we got [indiscernible] 100. So in the past 2 years, we opened more than 200 shops, Salomon dedicated stores. And all these stores are profitable and they give very high productivities. And we're really crushing the markets we created a new segment, we gained the market share. So Salomon in China, I mean, quickly will become $1 billion market, okay?
And North America, I mean, just thing from Omar statement, okay? You guys also see a great movement. We are still on the early stage, but we opened same-stores in North America, in the United States, all these shops performed extremely well. And we also start to cooperate the most distinguished retail partners like NorthStream JD Sports, Fook Locker, Dick's Sporting Goods, besides , okay, as our always outdoor -- the largest outdoor retailers. So we really open our distribution channel in North America. It is still on the early stage we explore.
And the -- our sports [indiscernible] business it's frying. So people -- I mean, you guys also can experience not only in Asia Pacific, but more importantly, in North America and United States and in Europe. So sports style, XT Series franchise already become 1 of the most popular sneakers in the market. So I think Gian and his team will give you more elaboration why we can make such great success for our sports type business. What's the key attribute sitting in the sports [indiscernible] business to drive us to be distinguished from such I would say, such competitive saturated sneaker market, okay? So it's a great progress. And before I pass to the Salomon team, I also want to really recognize our exceptional talents across all the functions sitting here.
And also, I want to take this opportunities to send my deepest gratitude to all the Salomon staff executives sitting here. Thank you for your great efforts dedication and commitment in the -- in this unique journey, okay? To make our brands at the $3 billion brand, I think, most likely before 2028. Okay. Thank you very much.
Obviously, I also want to say some words on Guillaume Meyzenq, our CEO, President and CEO of Salomon, Guillaume started to take out the law at the beginning of 2025. The Board and myself eventually choose Guillaume as a permanent CEO for the brands. Why? 3 major reasons, Guillaume, 2026 -- 2026 is 30 years anniversary for Guillaume in Salomon. Actually, he said his journey with Salomon began back in 1995 as an intern. So in his brand, Salomon is the whole life. He knows Salomon inside out.
Growing up as sportsman in Alps, Guillaume is a true outdoor enthusiast, deeply committed to Salomon brand, [indiscernible] and the communities.
So over 3 decades, Guillaume got chance to hold many leadership lows in Salomon, including the recent the Chief Product Officer before he was assigned to the CEO. He really created the great product engines for Salomon, secure long-term sustainable sales growth. And on the other side, he knows the people, he knows the markets very well. And he's also very open-minded for the global -- I mean, how we'd like to build a Salomon from Annecy to the truly global sporting goods brand.
So -- and he's also a quick learner and working and working extremely hard, and he's also a truly team player, okay, to work around. He's working on very, very well, not only for internal Salomon [indiscernible] but also the [indiscernible] from Amer Sports. So that he can really have very strong kind of organization to support him to fulfill the role he take.
So I think it's a very right choice for us to make Guillaume. I'm also, obviously, very, very proud of transformation his team has delivered for Salomon in the past 3 years. So we are also very much still at the early chapter of this brand storage and the best lives ahead under the strong leadership of Guillaume Meyzenq. So with that, it's my pleasure to hand over the stage to Guillaume Meyzenq. Guillaume?
Thank you. Good morning. I'm [indiscernible], I'm thrilled to welcome you at Salomon ADC. ADC means an design center. My name is Guillaume Meyzenq, I'm the CEO of Salamon. So I've been working here for more than 3 decades, as James mentioned. I am a passionate alpine skier. And during the '90s, we see where Salomon was dominating the market, designing amazing gear. So it was kind of teenage dream job to join the company. And this is why I did as an intern. In my career, I have a few key stage. The first one is being an intern. I've been meeting in this corridor at the entrance of the building Salomon a few times and listening a little bit this passion and the about the brand when he was the Chairman of Salomon. Salomon joined also a big additive brand in many years, and I was a big sales role at Salomon at the time, and I learned about the disciplined merchandising, but also the business of footwear at scale. And finally, I did several role in R&D, business unit leader of Cross Country Ski, which is 1 of the strongest DNA sport of Salomon in the history. And my last assignment was leading the commercial part of footwear when we started to move from this outdoor niche in Europe to a broader trail running and this is where we already tripled the sales at the time and starting to be more global.
And my last assignment was the Chief Product Officer where we decide we made a few decisions, so it was 7 years ago. It takes a time of building technology, knowledge, but we will make a strategic move. It's the first one is moving from trial running to all terrain running. And I think that the single you see in the entrants, having this ironman partnerships that we closed last week is a good example of how Salomon is transitioning for trail running, which remain our corp to lean road, gravel, and the second one was building Salomon in the cultural movement of modern outdoor sports and having this modern sneaker segment starting to develop at Salomon.
So this is 8 years of story. We're going to celebrate it next year. We have a very unique platform. Sometimes you look at sports brand and you wonder, it's okay, where the brand is in from, which type of sports, I would define Salomon much more kind of engineering platform. And this engineering platform connected with community. Because today, we have so diverse sports. And when we speak about the sports, you have even subculture, so you'll hear about winter sport, for example, in Alpine Ski, it's not 1 sports. It's several subculture from racing to freestyle to freeride and so on. So what Salomon is good at is having this design center as engineering platform and having passionate people being able to connect with community and understanding what's needed for this community in the sport, but also how it's going to be the inspiration for the future.
And a good example of that is footwear. So we launched footwear 35 years ago. So it was already -- we had already a long journey before we started footwear. It was born from a cross-country boots. And we have few generation of development, which gives a good example of what Salomon is able to do. The first 1 is during the 90s, for the one who remember at the time, it was very heavy rugged, outdoor, mid-cut to protect the anchor, and it was the way that people were thinking like if I go outside, I have to have this type of level of action and gear.
Salomon was the first brand coming with a very light, local shoe with a full protection but amazingly versatile. We were able to do mountain bike, working, already working quite fast. And it was the first distribution that we create in the market. And if you go now to the market and you go to any wall of outdoor in the world with all the competition, -- of course, now mid-cut is really a small part of the range, and the inspiration was about agility lightness, versatility. The second was endurance in the outdoor. And we started with adventuring. But then quickly, we moved to trail running. I speak about trail running, what you have as an image now is this type of very big events like the 1 happening 2 weeks ago in [indiscernible] driving a lot of people, thousands, people running, 10,000 or even 20,000 people going and following an so on. In 2003, trial running was small sports, a small inspiration, only few races very limited community. So some of them in close Tatau in California, for example, it was also in [indiscernible] and in different area in the world. and Salomon decided that this inspiration give a much bigger opportunity than it was at the time. And this is why where we are coming and the innovation of Salomon was not only bringing a pair of footwear and say, okay, this is what you have to use is partnering with event organizer, starting to build a team, so where we identify young athletes, which have the potential really to change the world and elevate the game and create this inspiration for the rest of the world. And, of course, developing gear, and this is what Salomon did. And if you look at 25 years ago, you see also it's a good example of the vision we can bring and the contribution we are bringing to the sports and the industry. When we are coming now with gravel running, which is a new multi-surface raining, so you don't know where you're going to run, but you know already that you have this type of multi-surface versatile running shoe and so on. This is what we are currently doing. Or if we are doing the modern sneaker shoe, this is also a new space where we don't want to compromise between function and style when you go into the city.
So Salomon has a big engineer platform connected with communities, consumer and creating the future gear of the market. So this is exactly what we are looking for. And this is why sometimes today, you're going to visit a space where you see a lot of products, but think of the purpose of the product and think about the purpose of what people are doing in this building. It's really the connection with insights, consumer insights, identifying the next solution to solve and moving forward. This is why we call it like innovation, but innovation 360, innovation to the consumer and, of course, product excellence. We started from skiBidings, which is sanyone of the most complicated sports gear to develop in the world because you have some component of safety. You have a lot of name to -- and of course, you let go people using more than more than 60, 70 miles an hour on slope and you have to bring the safety. So this is where the engineers are today formatted in Salomon. So when we are moving to the next year, footwear, apparel, bags, we have this subsection of durability, product excellence, quality because this is the DNA of the brand, and this is where we are coming from when we are starting to think forward and developing some products.
This is today what's happened in terms of category. And I was using a few slides like that because at the end of the day, we are quite diverse. So I know that when I meet you sometimes in some meeting, sometimes I feel that you never know where you should start with Salomon because we have so many different products. So I wanted to clarify that and make it as transparent as possible like today, winter sport equipment and then a specific slide for each of the segment.
But winter sport is 15% of the business. It looks small. But today, this is the largest winter sports company in sales in the world. Salomon is #1. Then we have performance footwear, 30% of the sales; sports-style footwear, 40, which is really the rising star and this is what starts to get us with a new population, new consumer. And finally, we have this head to toe apparel and bags, which is, I would say, only 15% today. It has never tackled as a play. It was more kind of opportunity for us. And today, it's already 15%, as big as the winter sport, but you could imagine that the potential opportunity, the where to play is much larger than it is.
If I come back to winter sport and you will have a specific presentation from Xavier Le Guen, our VP for winter sport. We are in all terrain. We are a leader because we are covering any time you go on slope or you go and snow in the winter and you want to have an equipment gear, you will find Salomon. And this is what is unique. Everywhere you are going in the world. If you go to Japan, U.S., Europe, whatever you will find Salomon, and we are covering all the distribution with premium distribution with strong partner with our B2B partner. So this is what is very unique as well in the industry. [indiscernible] is our core performance category in footwear. So we are born in outdoor. And you will see that we are still amazing proposition in outdoor, where we are coming from. It's a niche. But of course, this is the sole place where we can express the best. This is where -- we know the best consumer. And then we had trail running, which is we consider as well as our business. As I explained you, we were shaping the trail running culture. And we have, again, very large proposition in trail running because we match all the needs in the world in different mountain, terrain, durability. So sometimes you have even different tone when you are going to different mountain and so on. And we are able to match. These 2 outdoor and trail running are places where we have a strong authority, where we have strong investments, connection with the community, a pipeline of innovation, and this is why we continue to have vested Salomon narrative. But if you look at them, you will see later, there are still quite small market opportunity.
And they are moving to running all terrain where we identify gravel and road running as a big opportunity. Why gravel? because it's small. Once again, you can come back to me, say, okay, what's the size of the pie? Today, it's not a market as it is, but we bid that Salomon can really come with a very unique narrative, unique point of view. And we hear about the signal of multi-space versatility issue where sometimes road running are very slippy shoe, a little bit slippery and maybe not always matching the consumer needs. But this is where we can grow and we have the ambition to grow in performance. The second part of footwear is our core sports style footwear. What you have to understand, this is a much larger market than performance footwear. So sometimes you are looking at the number. You may think like okay, Salomon start to be bigger in this space compared to the performance but the size of the pie, the oppertunity is much bigger. So today, we are still quite small -- a small player in this area despite the fact that maybe in the place you are leaving, you start to see the cook kid wearing Salomon. This is only the place you are living, and this is only the place where the cool kids are living. So we have a lot more opportunity. What Salomon has been able to do, and I feel very proud of that, and I feel proud for the team because when it started to happen and we are selling only a few pairs in some Tier 0 plays, we had this vision of Salomon could be bigger. If you look at the sneaker market, sneaker is always with a cultural proxy. The Tennis is a big inspiration. You are going to -- you think about tennis and you may think about the brand and you may think about a model, which is leading the pack. And then you have that same for basketball, maybe 2 brands. But you may think about, okay, this is a big cultural movement and then they start to translate into this place in the city where people start to endorse this culture for their daily routine. [indiscernible] is another one. Sometimes you have workwear as well. Salomon has been able to shape the outdoor segment in the sneaker environment. And the XT-6 is iconic product of this segment. And the segment is very small, despite the fact that it starts to be visible, this is still very small if you compare to other segments. And you will see later in terms of how the market is developing, Arc'teryx inspiration is getting -- is very big behind outdoor, and this is why we have a lot of confidence in what we are doing. The last 1 is head to toe. So we are playing in the sport. We start to have more retail. So we have to have consumer base. You will see also how we are moving our consumer base with people more in younger. So of course, this is a big opportunity. And today, we are kind of -- I would call it as a baby step for Salomon.
So we have engaged investment. We have developments. We start to consider maybe having in some area in the world, a bit larger stores so that we can fit apparel together with footwear. So this is in motion. But today, it's remained quite small category. While you will see later with iteration best, for example, we believe that we could have a very strong point of view and bring very strong innovation in this segment. So when we have been doing that and where we are standing now and the movements, of course, we get some results already. And today, these are the few KPIs that I wanted to share with you about Salomon and some of them are very strong KPI for the sporting goods industry.
The first one is you hear about James of what we decide to invest behind footwear. So because this city sometimes creates a tension of a little bit seeding investment a little bit everywhere, and then you are a bit losing the track with the consumer, how you deploy it in the market. So we decided to go full speed on footwear and over-index our investment in footwear. And it's happening. So it's making like we are growing fast, and this is a -- this is 70% of the [indiscernible] sales today. The second one is we accelerate in sports tile. Of course, you can see this type of 30 index looks like amazingly, we started from very small, just going outside of Covida starting to go to the store, I would challenge you to find any Salomon shoe the store. You could see it in some e-com -- in our e-com, in our same store, some Tier 0 Tier, 1. So maybe Keith was already a partner in New York, for example, but it was only 1 store in Manhattan. So -- but of course, we have this big acceleration.
Another way and it was very intentional is how much we were able to grow the price. So 1.4%, we increased the price by 1.4% in the category. So it's a massive work. And it's not just you reprice the current product is you are going intentionally say, okay, we become premium. So how you curate your distribution how you are playing the game of merchandising where we really decide to go on the best product and the best proposition for the consumer, but one, which has better value, and of course, how you are moving forward in different scope and retail was also supporting this development. But this is a massive shift for Salomon.
It also put us to rethink the way we are structuring the range the way we address the market because now we have a different positioning in the market. And finally, ultimately, after all this very I, of course, we improve the profitability. -- and we double the profitability, which also is a very good place to be.
So as a conclusion, it's -- we have the figure of 23% for the last 5 years. And our revenue at the end of '26 will be above $2.5 billion. So this is where outstanding now, and this is why hopefully, we start to raise your attention to salmon, okay, what's next? How Salomon from this European niche brand, small category start to become visible in the market. and how Salman will become a big player in the market. I think we have several very good assets. The third 1 is a consumer sentiment. If when we are going and we are going to the consumer and we ask them what about Salomon, what are the key word, which is popping up. [indiscernible]. I remind you, we are starting from ski biding was very complex. We are obsessed by quality and so on and get what the consumer can look at it. We repositioned the brand. We have a better experience, and we look like premium brand. innovative, which is a big responsibility as well because innovation is kind of blur word and you understand that the challenge of this building and all this team is always coming with new ID but compelling new ID and engaging the consumer for the future development. This is what they perceive from Salomon. And the last 1 is on ventures. I think that we are not a still standing type of brands. So we are a brand where innovation is not coming like we have done 1 product and we redo the same and we do it better, we do differently. We are coming in new way.
And I wish that 1 segment for the 1 following the industry, we were in is. We closed a partnership with Ironman, and we claim our adurance positioning, starting from cross-country ski, auto racing, trail running and now moving to Tritan. This is about adventure and this is about unexpected, very legitimate, authentic, but also a new adventure for Salomon. So this is about Salomon, and this is very strong assets for the consumer.
But then we were also looking at the big societal trend and we all start to understand how the crude is moving forward, what people are thinking and what they expect. And we identified 4 driving force, which look like tailwind for salmon, driving force, looking like tailwinds for salmon. The first 1 is outdoor how there is a big inspiration today. So we are connected all day long. People are living in large city and the city are becoming bigger and bigger and so. And of course, going out, just connecting with the nature is becoming a big, big part of the inspiration for consumer, it's even starting to come like kind of luxury. So if you are able really take your holiday, having free time and go outside is becoming more and more expensive in the good quality, but this is also kind of inspiration of how you spend the time.
The second one is fitness, but fitness in community. All the sport and image you could have during the 90s 2,000s, people starting to running in the morning, running alone, the people want to share now their experiences and community is becoming a big part of it. As I used to say, is certainly at the age when I was 20 years old, certainly, connecting France even having a date were certainly much more going to the bar or going to the night club and sun. I would remind the 20 year old girl or buy to start running and start to connect with the local community, and there is certainly a lot more opportunity to connect and having social relationship with people.
The next one is health, and we know how much health, mental and physical health is becoming a big topic. If you listen to the news, this is things that you hear very oftern about how people are looking at that, how we can improve this the quality of health for everyone and how individually people understand that this is certainly our biggest capital. Life is about health. The next one is longing for engagement. If you look at the sports industry, you have 2 type of sport. You have some of the team sports where as kids, you dream of becoming a star, when you are going to the college, you may practice the sport for few years, and then when you leave the college, finally, you go back, watch on TV or in the stadium and you get this inspiration. And you have a difference sport, where you start at 7 years old with a pair of ski, with a pair of hiking and you may continue to practice the sport until the end of your life. And this is where Salomon is playing. We are playing with a sport where your life long, you can enjoy practicing our sports, running, skiing, hiking everywhere in the world, in family, in community. And this is about Salomon. And this is where we feel that we have also a lot to bring to this movement.
And the last one is function [indiscernible] -- function meet style. One of the biggest transformation in and wise modern outdoor sneaker was starting to have a big impact in the market. It's because suddenly consumers don't want to choose. And the world was a little bit kind of black and white. You choose your style or you use a function. But unfortunately, if you choose a function, maybe you have to trade off. Nobody wants to trade off anymore. And when you're coming from an outdoor gear or footwear and you are moving to the city and you're able to speak with new energy, new environments kind of influence in the way we are addressing the words. Of course, you have this type of -- you don't choose anymore. You know that your product will have an amazing function, rain protection, warms, workability, especially for terrain show is able to do 100 miles, and you have the style at the same time. So these are the 5 forces where we believe that we could take advantage of that and we can move forward in the market. So this is our position in today. And this is how we are starting to describe our strategy for the future. And I wanted to start from this slide because this is what will drive our consumer experience, our product development, the way we will articulate -- our campaign is about the modern mountain sports culture.
I think you understand the point where we are mountain sports, clearly. We were more mountain sport linked to performance for many years. So it's become a culture because it's like you practice or you don't practice, but you go to the movement and you undersea movement and the modernity of Salomon, where we challenge always the status quo, having this engineered platform and finding new solutions to the words every time we are coming and there is a new trend popping up in the market.
So now we are moving to the steps and the next chapter and how we are moving forward. The first one, and I started to disclose this inflation is we started from a very core market. If you look at winter sport equipment, outdoor footwear, trial running. This is kind of -- we calculate $25 billion visible market. You just think about what we are currently moving forward and we start to move from trial running to all terrain running, so going to road running, gravel and having sports style already the market is 5x bigger than the previous one. And we are growing very fast, but we are still very small in this market. Our market share are very small, we have still a kind of low brand awareness, and we can have this opportunity to continue to nurture the opportunity of in front of us.
And if you think even forward for the coming years is -- and you think about we start to address head to toe and not in the fashion area, just like head to toe is just linked to what the sports wear are practicing, raining silhouette, outdoor silhouettes, sometimes a little bit more versatile, but still in this type of work to play. The market is 300 billion. And of course, we have a massive opportunity. So but if we want to address this new market, of course, we have to -- we need to have a very compelling and very disciplined strategy, and this is what I will start to disclose. It start with category management. So what are the function and the mission of each of the category in this strategy. We first have to protect the core. And of course, people believe in Salomon because we have this core authentic point of view in the sports, in the mountain, and we have to protect the car. We have to accelerate in running. We have several very good success and signal that we can really make it happen and transform. But of course, we need to go bigger scale, investing in events, inventing in [indiscernible], coming still with new pipeline of innovation. I'm pretty sure you will be impressed with what you will see tomorrow for[indiscernible] .
Then we have to build on sports style. The market is big. We have a small market share, but of course, now we are becoming visible. How it's continued to nurture and we continue to take a bigger space -- and of course, it will deal with new products. It will deal with new type of story to move forward and continue to grow this space of modern outdoor sneaker. And the last one, how we can expand in head to toe. How much we can benefit from this energy, connection with the consumer, better touch point, better quality touch point and suddenly, we have a little bit more addressable category. So the category in plan. The next big one is how are we going to develop in the world. And today, we have a unique opportunity. Today, Salomon has success in every region. We are not in a case where we are good in Europe, and then we are challenged in the places. We are growing in every space. We have different type of maturity and life cycle maturity, different type of challenge and we are a game plan, we are winning everywhere. Today, EMEA is our largest region, and it's, -- this is where we are coming from. This is our domestic market. And we continue to agree. We continue to create the opportunity. The second largest one is China, and you hear about James, how much we have been intentional behind China, how much we have been able to connect with the consumer, creating amazing experience in sports category, but performance -- sports style as well. And how we continue to nurture and grow the market in China.
APAC is also developing very fast. We have a long-lasting history in APAC. So we were this type of niche brand in winter sports, in Japan a little bit in so people know the brand and know the brand from this type of premium, super authentic part and, of course, now are able to leverage with a new product category and new connection with the consumer. And the last 1 is America, North America is today our smallest region, where you have the biggest markets. So guess what? This is really where we have the biggest challenge and this is why so people start to be really focused. All the teams start to focus behind North America and make sure that the early trend we had and the positive momentum we are currently building transform at scale in North America.
So category plan, regional one. The next level is the channel. And you have a lot of discussion in the sporting goods industry between what -- how brand has to displace in channel, so between D2C and between B2B. I think that we have a very solid plan and vision of how we have to drive omnichannel at Salomon. First of all, -- we have 1 omnichannel concepts and then we tailored the strategy according to the region because you have a region which are D2C like China, where it's retail and e-com. So we absolutely need to play this game. And we have other regions where if you have a strong and large footwear brands, you absolutely need to work with our B2B partner. They are the 1 -- they are very instrumental by being able to nurture your innovation, connecting with the consumer, driving a large traffic. And they are we are a long-term partnership with them. So this is why we have this retail strategy where we are looking at premium location, what is the best experience for salmon in the premium location. E-commerce -- you look at the sales mix of 15%, which does not mean a lot because depending on the region, you have large e-com business or small e-com business. So it's more kind of average of a very big stretch number. But for sure, this is why you have your digital flagship. This is why you can monitor what you're doing. This also when you are starting to invest in media and you will see also how much are focusing on investing in quality media of course, to translate into business and you translate with your e-com business. And then our B2B partner, and of course, premium partner, long-lasting partner. You have some of them working for them for many years. And of course, we continue to develop the business.
And you see also you see quite a lot of U.S. banners where we start to mortgage last year and this year, new development. So category, region development, omnichannel, and then we have to articulate our strategy in order to invest and make sure that we have clear investment behind our marketing, media and comments. The first thing we have been doing is we are focusing on epicenter. So we have 7 epicenter in the world where we're focusing it. You will see the details. But of course, Paris is our lab because Paris is where we are coming from. And this is where we over-index in terms of retail investments. So we have several store. Sometimes the stores are in different locations with different type of product proposition. We are partnering with our B2B partner to make sure that all touch points is very well covered. And we are investing in marketing, either in media or also in community. The second one is we have -- we built the brand here to sport and cultural proximity. You will see what does it mean. But definitely, we have -- we are becoming very accurate and sharp on the choice we are making only few campaigns per year linked to product innovation, and we are already trying to build this cultural element where we have the strong legitimity with the consumer.
And of course, the part of authenticity is the name of the game in this area so that people connect with Salomon first time and they can get the full Salomon story. And the last one is about community for 2 reasons. First of all, community is a source of inspiration of insight, you under it. So we innovate because we have this connection with the people and we listen to them, we get close to them. We are doing sport with them. And of course, this is also a big relay in terms of marketing, how much people wants to endorse your brand and start to communicate across the market. The more you go in different cities, the more you need to have this connection with community.
Growing fast also plus a big responsibility or at least give us as a leadership team, a big responsibility. We have a lot more means, and we have to sustain big growth. So we need to invest and we have to build this company. So we understand that the company was below $1 billion 5 years ago. Now we're in the journey of being above $2.5 billion. And of course, we need to invest some money we have additionally and where we have to invest and how we are to prioritize. And I wanted to disclose also where we have full commitment and where we want to build this type of Salomon at scale for a multibillion company global one. The first one is product innovation. So no surprise. We have to continue to have this narrative of unique innovation, what's next? What's the next technology, what are the next inspiration from the consumer and how much we can find solution for them. And I wish you will be impressed about what you will see this afternoon. The second one is brand awareness. We are coming from this core small outdoor brand in Europe, and now we are anywhere. So we absolutely need to continue to tell the Salomon story across the globe on the relevant way and also with the right channel.
The next was D2C at scale. You understand that it's not 1 size fit all so. We are not a retail compnay. So we are a product company, and we are trying to find the best way to distribute our product in omnichannel. But, of course, continue to create these amazing touch points, creating a Salomon experience, having the best location in the world, remains 1 of the biggest focus. We're going to open a store, for example, in the Rodeo Street in L.A. in a month. So it's a good ample where we are looking for the best location to create this connection with consumer. Digital, IT, AI is also a big part because on one hand, we are growing very fast, which is creating some challenge, but we have also a lot of opportunities how we are shaping the new Salomon. And how much when we are starting to have new system, IT system, platform, we are able to shape and create a platform updated to the next ambition we have for Salomon. And AI is also a big topic. We start very early to think further about how much we're able to create new products design, testing, using a lot of data in order to understand how -- what is the pattern of the consumer answer. And of course, we are looking for. So we have a lot of small projects around.
There are a lot of different expertise in order to leverage this big opportunity. The last 1 is about talent. A company could not sustain and deep and be successful without a very strong future. which is also. And we have a strong future, but how much we are able to scale and continue to enrich this culture. I need to be done with 2 different type of opportunity. First one is continue to develop the people in the company and giving them the big opportunity. You can understand with my profile, I'm very passionate by when someone is taking advantage of moving forward, having new initiatives, showing leadership how much we can train them and start to continue to develop them. And this is a big part of the future of Salomon. And also showing carefully the best talent of the industry. The 1 who understand the Salomon story and the Salomon opportunity coming amazing expertise and being able to bring additional asset expertise in the market.
This becoming one of the biggest focus at Salomon is how we are really building a Salomon team across the world with a very strong culture. So as an example, is the Salomon leadership team, we call it SEB Salman Executive committee, where -- and you will be exposed to people, some of them we do presentations, some of them you will meet at the break. Some of them are in the pattern of internal development at Salomon, catching opportunity, developing themselves. And of course, we have also very seasoned people coming from the -- outside of the organization, different brands. not only on the usual space, you will see that we have people coming also from parallel industry like fashion or luxury because we believe that we have a lot to learn from this type of mature industry as well. And a good example of that, which is kind of disruption is [indiscernible] Salomon that you will be -- he we will do a presentation about some we have in the direction. Coming from [indiscernible], where we had a long-term collab, but also passionate outdoor deck, doing a lot of trail running and the skin during the -- what is very unique for that is usually sporting goods brand have redirection in products and creative direction in brands. So we are trying to identify the 2. And we think that this is also kind of next generation of brands. if you want to create a very unified proposition between products, retail experience campaign, you need to have this type of unification, it makes sense for the consumer. And it's also a best expression of how much we can move forward and continue to speak the authenticity of that. This is a strategy. It gives us a very strong conviction about the business case we have in front of us, being attentive, continue to nurture innovation, having an amazing team, having a very disciplined strategy how we want to develop in the world, with our channel, with our partner, connecting with consumers. We have the conviction that mid-teens CAGR for the next 5 years is the future of Salomon. And we will really -- the company is in motion behind this strategy and this ambition. And our -- if you are moving forward and growing the business, of course, you are improving the operating margin. So this is really a very strong conviction, and you will see how much people dedicate energy behind this product.
The last word is, what fascinates me is what I will do tomorrow. It was a court of [indiscernible]. And among all the legacy left to us, I think this is one of the biggest one is this inspiration of what's next, how moving forward and celebrating the past, being proud of our authenticity of what we have been doing, but how much we can move forward. And we will move forward with the right product we win with the consumer. We're going can move forward with a strong global omnichannel developments, making sure that we have a strong partnership with our B2B partner. We will move forward -- we will succeed as well when we will have a clear game plan, how we address with the consumer coming from epicenter, having very strong authentic campaign, but also moving and connect with the community. And of course, having the right team to grow.
And I wish that you will enjoy the day, be exposed to our leadership team and understand what means having a very strong team dedicated for the brand. So I thank you very much.
[Break]
Good morning, everyone, and welcome back. Welcome to Annecy. I'm ever. I'm in charge of the Winter Sports Equipment business for Salomon, the origin of the brand. In fact, it all started in 1947, in Annecy. I discussed with some of you this morning. Some of you enjoyed the work last night in the old city -- this is exactly where everything started in the old city of Annecy where Francois Salomon had a small workshop, manufacturing silver blade. And is son, George, so an opportunity with the emerging of a new industry, the manufacturing of Alpine Ski. He thought Okay, we are making so late. Why not making metal hedges for skis. This is how the Salomon family entered in the winter sport equipment world. And for now, more than just a product category more than just our routes, more than a solid business.winter sports equipment is for Salomon, the DNA and the powerful driver of our brand equities. Yes, we are at the forefront of winter sports equipment since 1947. As and then the first automatic binding for more safety. And then the revolution, the real entry, alpine boots, that combine both performance and comfort. We are at the forefront of winter sports since 1947 with a relentless stable recipes. It's all about product excellence rooted in innovation. And that is putting us today in the leading seat. We are the global leader of the winter sports equipment business. We have roughly 13% market share in a mature fragmented and competitive markets. This leadership position is remarkable, is unique in a sense that we are extremely well balanced across the 3 regions, North America, EMEA, Asia, this is unique. No other brand has such a nice balance of business. This unique position comes as well from the fact that we are covering all the discipline of winter sports, Alpine [indiscernible], Alpine freeride, Snowboard Cross Country. Why is that important? It does 2 things at once. It's cautioning us from cyclical downturn from a region or a sport. And also, it allows us to touch vast diversity of consumers across the globe. Whatever you age, your style, your nationality, Salmon can speak to you. And indeed, we are reaching the cool kids, core free stylers, snow borders from West Coast in North America. We touched the active adult in the Scandic for instance, 1 train in winter time in cross-countries skiing, perfect complement of their active sport in cycling or running during summer.
We touched the premium families who safeguard a weekend or holidays in the resort as a premium family quality time, and we touch urban use who are learning how to ski or snowboard in a dome in Shanghai. So that's how Salomon has offered a nice segue -- a nice entry gate to a broad type of consumers. As in the past, as with George Salomon, CP already start with products, product excellence. With our heritage of engineering we are making products really superior in function. Aligned with our puring of model Mountain Sports that Guillaume introduced to you, we are radical in design, aligned with our heritage of craftsmanship we pay a lot of attention to detail. And this product excellence is also visible in the way that we transform our industry towards sustainability. On this picture here, you can see the Brigade helmet, the first helmet fully recyclable and unique helmet fully recyclable of the market. Product excellence is a social case in the way our engineers have developed incredible processes to allow everyone to enjoy the glide on snow even after a tragic life accident. This product excellence is revealed through sports through the performance of [indiscernible]. We are winning on the biggest stage. Take, for example, Milano-Cortin last winter, Olympic, Olympic game in Italy. The Salomon athletes won 36 medals. And in Para olympics, 9 medals showing the commitment of the brand to reveal the greatest of everyone. And every year, we are present on more than 200 points on World Cup, World Tour, et cetera. The interesting thing is that our assets are giving back to us.
Most of our products are developed with their experience, their inputs. Winning on the bigger stage is great to qualify the superiority of our products. It's also a fantastic amplify effect. Sonic landscape, incredible image on snow, deep emotions of the outlets -- this is a great way to connect emotionally consumers. And this is visible on TV on our own media, on outlers, social media, in the press. Every year, we are reaching more than 1 billion people. And in an Olympic year, it goes -- it's more than 2 billion through winter sports.
So to recap, we are making great products. We qualify the super of our products through sports and winning on stage. And we connect emotionally with the consumers. Next question is how do we go to market. Our primary focus is to connect with consumers where they are ready to purchase. when their mind is connected to the sport. And to be honest, for most of us, winter sports is a hobby, and we don't necessarily think about it all year long. Therefore, 6% of our business happened in resorts, through retail, specialty, our rental operator. For the 1 of you, most avid, we like to prepare in advance their equipment, you can find us at key accounts like Paragon in New York or with e-tailer like EVO. And you may think 10% direct-to-consumer, it's really, really small. I don't know if some of you have bought recently pair of Alpine Boots, for instance, I'm sure you to purchase that online I'm not sure that you are absolutely sure that this is what you need, and you don't want to try different type of product. In fact, more than 50% of our direct-to-consumer business is addressing sessional. People who know exactly what they need, ski lift operator, clubs, teachers and so on and so on. A very, very important point now for Salomon winter sports equipment, a massive competitive advantage we have is our operations excellence. The specificity of this industry, we own most of our production facilities. This has enabled us to develop best-in-class processes and tools along the years. This has enabled us to develop very strong engineering and R&D capabilities and expertise. And more importantly, this is offering us a massive scale through its outdoor performance segment, Amer Sports the global leader, Salomon, and the #2 at [indiscernible]. And we also have some other brands like Armada. So all in all, when you produce all of that, it's more or less 30% of the market that being produced by the industrial setup of Amer Sports. It's a massive advantage in terms of scale. So we've talked a lot of the current status, that what we do now.
Looking forward, you may think, yes, it's a bit a changing business. We all know about climate change. We all know about global warming. We all know that resorts below 2,000 will struggle to operate in some case. It's absolutely true. And it's fully embedded and acknowledge in our strategic plan. At the same time, we can see a very, very positive dynamic on the market. One very important KPI for us. Today, we have 400 million ski days per year. What does that mean? Imagine that everyone going to ski 1 day is purchasing 1 ticket, we are selling today 400 million tickets per year in the world. It's a all-time high. It's a bit counterintuitive.
I think that 10 years ago, it was 350 million. So you can see that there is a dynamic, very positive, which we can explain 2 ways. First one, the magic of winter sports. -- in the stressful world that we all live, connected world that we all live, urban world that most of us live, escaping in the resort, in the mountain for a couple of days or a week remains a great luxury. Second aspect, you can see it here, we have new markets emerging fast. Biggest example is China. 3 years ago, there was roughly nobody skiing or snowboarding. Then the Olympic arrived to Beijing. The government decided to invest infrastructure, in clubs, in ski school. There is today 35 million skiers and snowboarders in China. This is the biggest number of participants in the country. So they are not skiing as much as American. But -- there's a lot -- so which is preparing the next generation. And what's happening in China? We can clearly see it happening. Indian people we want to do skiing. Middle East people and so on and so on.
It's very interesting thing with China that is showing the way to a lot of markets is the way they've built it. You learn how to ski next door in a dorm. Then when you're getting better, you go outdoor in a resort in your home country. And then you're becoming more of an expert, you can travel the world to enjoy different conditions. And this is something we can really see in some places. And the last thing is that consumer wants premium. Our consumers are used to premium experience where they live, are used to premium experience when they travel, and they want premium product as well.
So our average selling price went up 30% in the last 5 years. This is how we explain all the dynamics, explain our growth, 8% CAGR in the last 5 years, which is clearly above the market growth. We are taking market share. When we are looking ahead, we are confident that we'll keep growing low to mid-single digits with 1 goal, again, always the same outperform the market and take market share.
So to conclude, Salomon is the only winter sports equipment brand that has been able to diversify successfully in soft goods, the only one. And this is a virtuous circle for us. Winter sports equipment is clearly benefiting from the brand heat, from the coolness of the brand and the connection with urban consumers. The other way around, as we hyper accelerate in soft goods, the strength of winter sports equipment is a very, very strong asset to nurture the brand authenticity. And my key message, a bit like what Guillaume said this morning, we want to bring the mountain sports culture to the city. No other sneaker brands have such an asset. No other sneaker brand play in such an inspiring playground with the same passion and the same commitment as it did on day 1 in 1947. Thank you very much.
I know wearing a red shirt during an Investor Day is a risky choice. But don't worry, all the numbers that I will show is green. My name is Christophe Cavazzana. I've been born in the world of sports, especially cycling. What's it means in the world of cycling is pushing the boundary of myself, but mainly to create adventure, adventure to explore new terms. With Salomon, there is 1 of the beautiful adventure has a chance to be part of, the Sportstyle adventure. I led Sportstyle since 2015. And with a collective. It has been an amazing journey, an amazing journey to bring the mountains sports culture from the mountains to the city. And I think we can be very proud of that. But guess what? It's just the beginning. Today, I'm Vice President of Product & Experience, leading all the product offers in the soft goods area. Today, I have 2 missions: one, make it clear our pattern of innovation and the second one, clarify our product strategy. Let's start by this one. Guillaume already shared with you the Salomon innovation, product excellence. But what do you see on the screen, some of you will see just a show. Some of you will see the show that you are wearing, the XT-6. But what I see is a technology, Sensei, for foothold, chassis for support, [indiscernible] for the group, quickly. All this function, is innovation to solve a problem, to solve a product from an athlete or communities. And many years later, those functions meet the styles. And you guess what, we created the outdoor sneakers, but we'll come back to this because addressed big elephant in the room.
Innovation, how we approach innovation, 3 pillars, pretty simple. The third 1 for those guys who are here physically any, you will discover S lab. S lab stands for Salomon laboratory. It's our public laboratory to express our innovation, to put the boundary of engineer, to push them on area of design. And this is what we build at the pinnacle. This is our pinnacle line. The second one, we are very lucky to have more than 60 athletes across trail running, road running, free at long and even handicapped athlete. By having those athletes, we are able to push those innovation across different terrain, different culture, on the mountain, on the street and so on and so forth. By doing that, we have feedback that we inject in the product of our creation. You will tell me this stuff is good to have innovation, but it's better to scale innovation. That's the third pillar. Every innovation that is upon in the S lab, we try to inject that in our core offer for a wider base of consumer. This is a pattern of innovation at Salomon. Product is 1 thing. Product is 1 piece of the ecosystem. Guill already shared with you that we have what we call a creative direction. If we want to make impact, we need to build consistency and coherence between the product, the brand any the consumer. Okay, for innovation, okay for the consistency, but we are missing 1 piece, consumer. We need to connect to the consumer. You will see in my presentation that I have tenancies to speak about. I forget to speak about consumer because for the team here in Annecy, it's a no-brainer. It's part of our daily life. So bear in mind that every piece of product there is a promise behind. There is a consumer, whatever is the top athlete or a wider consumer. Consumer and also from mountain to the city. So it's a strategic choice that we bridge this mountain sports culture from the mountain to the city. By doing that, we address a wider base of consumer, so a wider base size of the price. Okay. Now it's time to concretely enter into products, and it's what I like. So let's go.
This is our portfolio, the soft goods category portfolio. Each of the segment has a clear role, a clear mandate in our portfolio. From the left to the right, from the left, which is our more comfort zone, our authenticity, authority in outdoor two, you have seen apparel and bags where we have more market share to gain on the right. I will start with outdoor. So by the way, footwear more 80%, 85% of soft good revenue. So footwear is our priority. 85% of revenue is footwear.
Let's move to outdoor first, 15% in '26 of our sales mix. But I will start by the end, not just the beginning. I think today, if you go in the mountains, you know this shoe, modern outdoor shoe, light, breathable perfect shoe for going on the mountains, very comfy. But where we come from, where we come from 35 years ago in outdoor, we come from this, we come from another adventure. The name of the shoe is Adventure 7 in 1992, first, hiking boots. But I think if you look at the far left, you recognize some things. In 1980, we had a Nordic ski boots with all innovation as well, all innovation propriety of Salomon. And from this, we created the first hiking boot. And from this, we went further to create with new innovation, new technology, the modern outdoor show.
So 35 years of [indiscernible] in outdoor, 35 years of innovation, bring us to here. Today, it's what we call undisputed authority, top 3 leader player in hating foot in Europe, key markets, Germany, France, but as well above 15% market share in Alpine countries. This is really what we call authority. If we move to the product, this is our franchise portfolio. You will tell me, but it's not a lot. Yes, it's not a lot by choice. 3 key franchise, X-Series, Quest and [indiscernible], simple, better, bigger. This is a choice, and I will repeat that in different segments, simple, better, bigger, free franchise with different proposition accounts for 80% of the outdoor revenue in 2016. And if you don't know, we got 7 awards from U.S., Europe or China, so award from consumer, award from media and so on and so forth. This is a recipe. So it's a piece to build and scale a franchise.
Let's take the example of the X Series, how we target different type of consumer, how we target different type of genders by playing with different triggers. The first one, top is colorway. By playing the colorway, you can raise different wider audience. Material iteration and also different ankle cuts. Part of this model group, Sensu, different duration. It's allowed to maximize and to reach a maximum consumer needs. This is what we do in outdoor. If you look forward, we'll apply this recipe. We'll reinforce our leadership in outdoor by outpacing the market of outdoor with single-digit growth rate. by expanding the existing franchise, like I shared with this CMS color material finishing and also by launching new franchises. Every 2, 3 years, we come in with a new proposition, new franchise. We put in the market new innovation, and we apply this recipe color material finishing.
Let's run. We move or we stay in maintains, but we run. This is our biggest market, an opportunity we have in performance, 20% nowadays for the running performance. This is a picture, and this is what we call internally run in all terrain at Salomon, covering trail, gravel and road. Trail, our comfort zone, where we come from, but the size of the price of the market to 5 billion, quite small. But if you look at the right, where biggest opportunities happen, and the total market, EUR 40 billion to EUR 45 billion. We have 1 gravel in the middle, just untapped terrain in the running world, and this is where Salomon started to enter a few years ago, a few seasons ago and is our current big bet. But we'll take 1 by 1 and we'll dig 1 by 1. One important piece. Back in the time, it was very siloed. One consumer was only doing trail. The road runner we are doing only road running drain Nowadays, what we see and what we see, the trend is that if you are running, basically you run on the street, you can run gravel and you run on trail. There is no any more silo, which is important for Salomon because we have the equipment to address those needs.
Let's start by the trail. I think you can picture the trail -- this is a trend, mountain, technical trail, beautiful landscape and sometimes very tough conditions. Trail, you understand from Guillaume, it's where Salomon where even before we speak about sports, even before a lot of competitor enter. It's where we were part of the first mover. It's where we bring innovation. It's where we shape the silhouette of a trail runner. It's where we shape the sports and the races. And nowadays, that trail is becoming a global phenomenon. We are 1 of the established leaders.
If we look at product back in the times, we had 1 product from the red win specialty for the head adventure races where you do multiple spots, X-Series, Xtensa. Nowadays, we have a range, a quiver of technical product from S lab to the top of the product to a wide to address different needs, we have this quiver of product. And like I said, behind each show, there is a story. There is innovation There is need there is a problem to solve. And I encourage you to go in the showroom to touch a product to fill the product and try to see that. This is a DNA for Salomon.
As a result, today trail is 10% of the global market share in '26. Same for outdoor, we won global awards from magazine media based on consumer feedback. So we continue to run, but we are going a bit down on the mountain to do gravel. I think some of you are coming from the U.S. and in U.S. a gravel road are a bit everywhere. It's a no-brainer. This is gravel, where you can escape from the city, play with a terrain, be comfortable in the street, but also be comfortable on the light gravel road. This is our recent success and our next big bet. We see a space like trail running, and we enter in this space. Today, we are shaping this space, and we want to own this space and to lead this space like trail running. And it's where we can express all the technology that we bring at Salomon either through trail or road running. If you take the outsole of our show, basically, this is our product. You can recognize a very trail shoe. You can recognize a clear out shoe. But if you put and merge the best of the 2 worlds, you have in the middle, the gravel shoe. End of grip, comfort and cautioning to play with a terrain wherever you are. It is my go-to shoe when I am in business trip because I know that I can run in concrete. I can know I can go on a trail without compromising things and so on. It's really the go-to shoe. And it's the feedback we have the consumer wherever they are in LA, in Paris or in here.
And it's working, and we were right to take this space. This is a figure 3x growth in 25%, 15% in '26 of the sales. And in U.S., 3 awards with the [indiscernible] gravel in '25.
Best comfort shoe, best gravel shoe and so on and so forth.
Now we went to the mountain, we went to the gavel, it's time to go on the road. And we are here to speak about innovation. So the [indiscernible] that I'm hearing, which is made in France. While the current wall champion of iron man, Casper tons choose Salomon and choose shoe, the 3rd January of '26. Why amongst competitors because it brings all technology, all marginal gains to win second during this moment. And you can understand that after swimming, biking 150K and you need to run a 42K marathon, you need to have the shoe that helps you to perform and to win second and gain marginal gain. This is where we are in road running.
But I speak a lot about top at let you bring innovation as well for a wider base, for every consumer where we are bringing this technology to make win every second for every consumer. At Salomon, we have this positioning called Dynamic Conor. Comfort's cushioning for your long run also dynamic and comfort for your ultra marathon, your drug. It's okay. And we extend that across the range from top to more inclusive, road, from top to training and in between the gravel, go-to show. If you look at the year for sure of many, many other shoe. But if you look at this picture, you have all the products that you need to do a marathon, an ultra or just a simple joh in central park. With Gravel now, we have this portfolio, and we have this versatility of so and to provide -- to reach a new consumer.
I will continue to grow in running, push gravel running. It's our big bet. It's a space. We enter in space and to own this space. Second, continue to bring innovation, continue to bring key franchise, animate franchise. As an example, I spoke about [indiscernible]. 100,000 pair 3 years ago, almost 1 million pair next year. In 3 years, you can see the progress and also the success that we have. You can imagine as well, and you will see that later with by partnering with athlete or events, it will help to bring this awareness to a broader consumer.
Let's stop. We move to Sportstyle. Sportstyle, the most recent and biggest growth driver, and I guess this is where you have the most question. Sportstyle, it's a category that has grown from a double-digit million business in '21 to almost EUR 1 billion. I remember with the team to celebrate our first EUR 50 million business. And for us, it was amazing. If you look at today, it looks far ago, but it's not so far ago, only a few years ago.
[Presentation]
We invented in performance, reinvented in the city, invented in the tough stern on the mountain, the ectasis here wearing wear by our athlete in 1993 has been invented to perform in 100 miles around Montblanc. 10 years later, reinvented in city. It's an iconic product of what we call now the outdoor sneaker. And like I said at the beginning, it's bring all the technology, the [indiscernible], the contact grip, the quick lace, even what we call [indiscernible] feet to make sure that the [indiscernible] are not going inside, all these bring now comfort in a different usage, reinvented for our brand, reinvented for diverse communities. And the adoption has been organically. We didn't came here and push it. The community, the culture of sneaker adopted first. And later today, I will share with you the first show because it's not the excess for sure of Sportstyle. You will see, I'll keep the secret for later. But next [indiscernible] the icon in a few years, it has been a success story, but it's just the beginning.
We didn't even put marketing budget behind at the beginning. So initially, I wanted to share with you all the opinion leaders, all the starts, all the VIPs that are wearing Salomon. Or Formula 1, top model, but for usage rights, I was not able to do that. But here, it's a perfect example of the communities wearing Salomon understanding the DNL settlement, understanding the mountain sports culture of Salomon and playing with that.
Sportstyle starting the growth, 30x sales between '21 and '26 and the most interesting part with Sportstyle. It's a huge catalyst to target new consumer. Today, 80% of consumer in Sportstyle are new to Salomon. You will see the details with very later on the age and everything. But for us, it's amazing. We target 80 new consumers that we can also transform into the world of performance, whatever outdoor, running and so on and so forth. Sportstyle grew an over 90% CAGR over the last 5 years. Now it's becoming our largest footwear category. Let's talk about the big elephants in the room, the XT-6. I keep hearing the question every time I go, yes, but you are dependent on the Xt-6 yes, but your XT-6 you're shoe. Today, for sure, we are very young in the world of sneaker. We are new. So that's why the XT-6 is a more visible show today, and it's only for us since 3 to 4 years that we are putting investment behind XT-6, 100% CAGR between '21 and '26 on XT-6. And the most interesting piece is only 15% of the brand sales is XT-6. And we have other babies, such as XT-WHISPER. For me, it's a bigger success story than XT-6. And you will see why. 15% of Sportstyle sales are WHISPER, and I spotted that some of you are wearing with WHISPER. In 1.5 years, we moved from 0 percentage of sales to 170% sales growth. We moved to 0 pair to almost 1 million pairs in the year and half. How we did that? This is our recipe. For sure, I will not disclose all the recipe. It's like my grandmother when she was cooking. I keep some secrets. But basically, in 1.5 years, it'a a principle. We have in range launches. So we start by a very weird color, 24 -- December 24, then we bring an innovation. Some of you living in New York may now [indiscernible] to target different type of consumers, more women, New York, then we bring energy on the in-line product with some Energypack. We move to, let's say, a different model iteration with [indiscernible]. In between, we do another collaboration with London communities, [indiscernible], and we move on and move on.
For sure, it's not all the color of the XT-WHISPER. We have many other colors in between, to target men and women, different communities and so on and so forth. So basically, we have a large project, but also we have collaboration, limited edition to bring energy, to bring an awareness and to reach different communities.
And sometimes, such as the last piece, carpet company, partner with local retailers or local brands, we do a special makeup to target a specific community, which will have a clear influence in the sneaker world. 1.5 years to build the exterior. Once again, it's just the beginning. If you look at the quiver of Sportstyle, from where we started with is -- the only issue that we have in the quiver, where we are going. You may recognize XT-WHISPER. We also have another franchise, [indiscernible] and the new one, the next 1 will be the SCS franchise. Will start this year to animate franchise.
All this is above 1 million pair. But I will not also close all the new franchise that we are cooking for '28, '29 and '30. Today, we have a strong pipeline. We have a master plan of all franchise that will bring until 2030. And I was very incurred you will see in the showroom few of them how we continue to grow. We'll continue to curate the franchise, having a clear merchandising and franchise management, also bringing Nunes collaboration and capsule. -- discipline on the franchise energy. And you will see later this with regions. We are also making sure that we are curated as a go-to market to be very sharp on the growth and to have a sustainable growth.
Last, apparel accessories, bags and iteration. Apparel and accessories, 13% Soft good sales today and bag generation, 7% sales mix, also good. Those 2 categories, you understand is the introduction to expand our to offer, how to expand the silhouette of the footwear and it is the next building block for Salomon.
Let's start by apparel. [indiscernible] of footwear silhouettes -- we bring additional piece, and the strategy on apparel will be to have an offer from top performance to a more lifestyle usage. This will couple next year. So big building block coming next with apparel. And bags, you will see later I have a specific slide, we'll need to reinforce our leadership. And you will see a very interesting story that we have on bags. This is a sneak peek of our [indiscernible] across all the sports Yes, it's not exhaustive. From sports side to outdoor to the running which in running, we have different sports, gravel, rail and road and also, like you have seen with Xavier supporting the winter sports equipment.
If we move to bags, you will look at me and say, but Christopher for you are speaking in bags. We are investor days in Annecy, this is bags. What you see here, from 2010 to 2026, you have 1 word, which is coming back every time when we speak about bag is skin. Internally, we call that the second skin.
From 2010 to '26, Salomon bring innovation, material, problem solving, reaching different consumers men, women for different problem solving. All the competitors today are following us and sometimes, unfortunately, copy us. This technology starts with a problem solving. We are back to innovation, 1 athlete, 1 day, came in and see here and say, I want to start this race, but I don't want to carry my hand, my jacket, my fuel and so on, what we can do. I think we can do some pocket on my T-shirt and I can carry my stuff on my T-shirt. We started to enhance a T-shirt to carry all the mandatory stuff from there, all our engineers, all our product geek were starting to say, but we have a problem to solve. Let's do a second skin. Let's do a bag that will feel like a second skin. And this is a success story. The success stories is this number. If you go to UTMB, Ultra Trail Demantra. It's the biggest sales happening end of August in [indiscernible] 1 hour of the way. It's kind of the fashion week of trail running, 60% % of the runner, 60% of the runner are wearing Salman bag. It's what we call leadership. We got 4 global awards for the advanced skins for the second skins. I will continue to grow, bring technology, I think, as an example, it management is 1 of the problem to solve with the weather increasing the climate and so on, how we bring technology evolutions and also how we can accelerate in apparel with focusing in performance, but not only are we gain buying performance to a lifestyle.
To recap, for soft goods. We have a CAGR of 26% between '21 and '26. If you look ahead, we will be mid- to teens. Soft goods, footwear 80% today, looking at the future [indiscernible] and apparel accessories, the next building block, 20% today to low 20s.
To wrap up, we have this premium growth engine in soft goods, encoring performance, expanding across categories enriching a new consumer. You know now the innovation DNA and the pattern of innovation. You know the product strategy and how we continue to build the mountains sports culture from the mountain to the city. We are the brand that continue to diversify and accelerate the soft goods and in urban government. Salomon is a game changer to win towards the consumer. And I will finish by some things, why I put the red color today? Some of you, if you look at your shoe, you have what we call the red flag, blue, red and yellow. Each color has a meaning. I will only tell 1 on stage and we can discuss for other 2. Red mean hard work, mean brand energy and brand ambition. And for this, I will lead [indiscernible] to speak about this brand energy and brand ambition. Thank you very much.
Good morning. My name is Valerie Low and Salomon's, SVP of Brand and Marketing. I joined Salmon a few months ago at our career across mostly legacy luxury brands, the last of which Moncler. I joined Salomon because it's a brand with unmatched heritage, credibility in sport and which is enjoying the momentum in culture that a lot of brands would dream of. I saw a brand with huge equity and relatively low awareness and a tremendous potential for growth, which is why I'm so happy to be here this morning. This morning, I'll walk you through our marketing strategy and how we aim at further developing the brand equity and amplifying the amazing product portfolio you just discovered. With Christophe and Xavier's presentation before. We have defined 5 pillars to help us reach our strategic objectives. The first 1 is epicenters that you've already heard this morning, the second impactful campaigns, the third, strategic collaborations and partnerships; fourth, community globally and locally. And fifth, unique consumer journey and excellence at retail. By the end of this presentation, I hope to demonstrate that this approach works.
Let's start with our first pillar, epicenters, a word you're probably getting familiar with by now. Our development strategy aims at efficiency. We don't want to spread everywhere. We have defined 7 global epicenters where we focus our means and efforts. They are the cities that define global culture, whether we talk about fashion, lifestyle or sport. And when we win there, it gives us outsized brand halo. That's why we focus our investments in those cities. For example, overinvesting in London, plus 90% versus the rest of the U.K. and the same goes for Paris and for a lot of the other epicenters. And this works. Concentration and overinvestment in epicenters is paying off. And you can see that we are making great strides in terms of increasing brand awareness year-on-year. Each region sits at a different maturity level. And this shows also in where they stood and where they stand today in terms of awareness. In [indiscernible], which is our heritage region, Paris leads the way with already 50% brand awareness. In the U.S., New York City, only 2 years ago, stood below 10% awareness. It was our smallest awareness base. But in 2 years, we have already doubled the awareness level. and it's continuing to accelerate. Same is true for APAC and Greater China, where we have considerably increased our presence over the past 5 years. And now we have Tokyo and Shanghai, both standing at 20% brand awareness.
We are making progress. We have considerably increased our awareness levels. But as you can see with the numbers on screen, we still have big opportunities ahead. Equity and awareness at a broader scale, are key transformation drivers that will enable us to reach our growth targets. To achieve this, we are evolving how we invest. -- investing more, but also investing better. In the last 2 years, not only have we doubled the investment in marketing, but we are also shifting the way we invest, focusing more on awareness building and long-term brand demand construction and depending much less on paid search and short-term decision phase tactics. And this works. Our strategic and intentional concentration on epicenters is efficient in terms of building awareness but it's most importantly, efficient among the consumer targets we are aiming to conquer. As we grow awareness, we reach new audiences, and we aim at concurring younger and more gender-balanced audiences.
And over the past 2 years, we see that this is working. We have made significant shifts in our consumer base. And looking at D2C, we see that over the past 2 years, we went from 35% of our D2C clients below 35 years old, to around 60% of clients below 35 years old today. And the same goes for women. We went from around 35% of women in our D2C base to around 45%, a plus 10 percentage points over the course of 2 years. Now on to our second pillar, campaigns. What's the high-impact campaign. We create integrated global campaigns that combine and concentrate product marketing and commercial priorities behind a single idea and a unified 360 plan. It is orchestrated.
So the brand showed up as 1 big coordinated story. You'll see how this comes to life this afternoon in the regional presentations, but this works. A perfect example is the gravel campaign, which we ran in spring/summer. And you can see on the screen, which was deployed as a fully coordinated offense across different touch points, whether that's firm out of home to store windows, or community events. This campaign achieved excellent results with a brand lift in the U.S. of plus 15% and a search lift of plus 15% as well in France, for example.
Another good example in Sportstyle this time is the WHISPER, XT-WHISPER launch, which also took place in spring/summer and again, was a fully coordinated offense with PR, media, in-store events, all coordinated, making it a very efficient campaign.
XT-Whisper campaign generated a plus 15% brand lift in the U.S. and a plus 51% search lift in the U.S. as well, a very impactful campaign. On to our third pillar, strategic partnerships -- and these span across brand and batters, athletes, product collaborations or events. Starting with brand ambassadors. Maybe you're familiar with the face on the screen now. Brand ambassadors amplify the brand heat and help us reach a broad audience. This year we are proud to announce Jisoo as our first global brand ambassador. With a young and loyal fan base and over 90 million followers on Instagram and TikTok alone, Jisoo elevates our Sportstyle presence and will be the phase of an upcoming campaign this October. But we don't stop at global mega Stars. We also collaborate regional superstars like, for example, the Colombian Star Feid in North and Latin America. Feid, who has over 35 million monthly listeners on Spotify started off as the fan of the brand only to become an ambassador in 2024. He brings his own DNA to the collaboration, building a collection that looks like he could be wearing it. And the current X-T4 collaboration, which is in-store now, sold out actually from the presell phase already in the U.S., completely sold out. Product collaborations don't stop at Sportstyle [This call length has exceeded streaming capabilities - Please refer to the preliminary transcript that will be posted shortly.]
[Foreign Language]. But don't worry, all the numbers that I will show is green. My name is [ Christophe Cavazzana ]. I have been born in the world of sports, especially cycling. What's [indiscernible] in the world of cycling is to push the boundary of myself, but mainly to create adventure. Adventure To explore new terrains. With Salomon, there is one of the beautiful adventure I had a chance to be part of: The [indiscernible] adventure. I [indiscernible] in 2015. And with a collective, it has been an amazing journey, an amazing journey to bring the mountain sport culture from the mountains to the city. And I think we can be very proud of that.
But guess what? It's just the beginning. Today, I'm Vice President of Product and Experience, leading all the product offers in the [indiscernible] area. Today, I have two missions: one, make it clear our pattern of innovation and the second one, clarify our product strategy. Let's start by this one. Guillaume already shared with you the [indiscernible] DNA, innovation, product excellence. But what do you see on the screen. Some of you will see just a show. Some of you will see the show that you are wearing, the excess. But what I see is a technology, [indiscernible] for foothold, chassis for support, contact for the grid, quick place.
All this is function, is innovation, to solve a problem, to sell a product [indiscernible] or communities. And many years later, those functions meet the styles. And you guess what, we created the outdoor sneakers, but we'll come back to this, because [indiscernible] in the room. Innovation, how we approach innovation? 3 pillars, pretty simple. The third one, for those guys who are here, [indiscernible], you will discover SLAB. SLAB stands for Solomon Laboratory. It's our public laboratory to [indiscernible] to push the boundary of engineer, to push them [indiscernible] design and see what we build as a pinnacle. This is our pinacle line.
The second one, we are very lucky to have more than 60 athletes across [indiscernible], road running, [indiscernible] assets. By adding those athletes, we are able to prove those innovation START across different caring, different cultures, on the mountain, other street and so on and so forth. By doing that, we have feedback that we inject in the product of our creation. You will tell me stuff is good to have innovation, but it's better to scale innovation. That's the third pillar.
Every innovation that is at in SLAB, we try to inject that in our core offer for a wider base of consumer. This is a pattern of innovation at Solomon. Product is one thing. Product is 1 piece of the ecosystem. Guillaume already shared with you that we have what we call a creative direction if we want to make impact, we need to build consistency and coherence between the product, the bunny and the consumer.
Okay, for innovation, okay, for the consistency, but we are missing one piece. Consumer, we need to connect to the consumer. You will see in my presentation that I have salons to speak about, I forget to speak about consumer because for the team here in [indiscernible] it's a no-brainer. It's part of our day life. So bear in mind that every piece of product there is a promise. There is a consumer or whatever is the top at it or a wider consumer. Consumer and also from Mountain the city.
So it's a strategic choice that we bridge this mandators culture for the mountain to the city. By doing that, we address a wider base of consumer, so a wider base since price. Okay. Now it's time to completely enter into products, and it's what I like, so let's go. This is our portfolio, the softgoods category portfolio. Each of the segment has a clear role, a clear mandate in our portfolio. From the left to the right, from the left, which is our more comfort on our [indiscernible] authority in outdoor to, you have seen [indiscernible] bags where we have more market share to gain on the right.
I will start with outdoor. So by the way, [indiscernible] more 80%, 85% of softwood revenue. So [indiscernible] is our priority. 85% of our [indiscernible] is Footwear. Let's move to outdoor first, 15% in [indiscernible] of our sales mix. But I will start by the end, not the beginning. I think today, if you go on the mountains, you know this so modern outdoor through, light, breathable perfect for going in the mountains, very comfort country. But where we come from, where we come from 35 years ago in outdoor.
We come from this -- we come from another adventure. The name of the shoe is Adventure 7 in 1992, first hiking boots. But I think if you look at the far left, you recognize some things. In 1980, we had a Nordic ski boots with all innovation as well, all innovation propriety of Solomon. And from this, we created the first hiking boot. And from this, we went further to create with new innovation, new technology, the modern outdoor so. So 35 years of authority in outdoor, 35 years of innovation, bring us to here. Today, it's what we call undisputed authority, top 3 leader player in hating footwear in Europe, key markets, Germany, France, but as well above 15% market share in Alpine countries.
This is really what we call authority. If we move to the product, this is our franchise portfolio. You will tell me that it's not a lot. Yes, it's not a lot by choice. 3 key franchise, X-Series, Quest and [indiscernible]. Simple, better, bigger. This is a choice, and I will repeat that in different segments, simple, better, bigger, 3 franchise with different proposition accounts for 80% of the labor revenue in '26. And if you don't know, we got 7 awards from U.S., Europe or China, so was from consumer or at from major and so on and so forth. This is a recipe. So it's a piece to build and scale a franchise. Let's take the example of the X Series, how we target different type of consumers, how we target different type of genders by playing with different figures.
The first one, top left [indiscernible]. By paying the colorway, you can alienate audience, material, [indiscernible] and also different ankle cuts, part of this model group, [indiscernible]. It's allowed to maximize and to reach a maximum consumer needs. This is what we do in outdoor. If you look forward, we'll apply this [indiscernible]. We reinforced our leadership in odor by outpacing the market of our door with single-digit growth rate. By expanding the existing contents, like I shared with the CMS color material finishing and also by launching new franchises.
Every 2, 3 years, we've come [indiscernible] with a new proposition, new franchise we put in the market new innovation, and we apply this CCP color material finishing -- let's remove are we staying the maintains that we run. This is our biggest market, an opportunity we have in performance, 20% nowadays for the running performance. This is a picture, and this is what we call internally run in all print Salomon, covering [indiscernible], our comfort zone where we come from, but the size of the price of the market to 5 billion, quite small. But if you look at the right, where the biggest opportunities [indiscernible] and the total market, [indiscernible] EUR 45 billion [indiscernible]. We have one travel in the middle, biggest untapped terrain in the railing world, and this is where salmon started to enter a few years ago, a few seasons ago and is our current big bet.
But we will take one by one and we will dig one by one. One important piece back in the time. It was very siloed. One consumer was only [indiscernible]. The Roadrunner we are doing only in Nowadays, what we see and what we see the trend is that if you are running Basically, you run on the treat, you can run and gravel and you can run and trail. There is no any more silo, which is important for salon because we have the equipment were less those needs. Let's start by the trail.
I think you can picture the trails. This is a trial, maintain technical trail, beautiful landscape and sometimes very tough condition. Trail, you understand from Guillaume, it's where Salomon were even before we speak about sports, even before a lot of competitor enter. It's where we were part of the first mover. It's where we bring innovation is where we share the silhouette of the [indiscernible] it's where we ship the sports and the races. And nowadays, that trade is becoming a global phenomena. We are one of the established leaders. If we look at product, back in the times, we had one product from the headwind specialty for the head adventure laces where you do multiple spots accessories twins.
Nowadays, we have a range, a quiver of technical products for slab is top of the product to a wider range but a different need, we have this lever of product. And like I said, behind each show, there is the story, there is innovation. The need there is a problem to solve. And I encourage you to go in the showroom to touch a product, to feel the product and try to see that. This is a [indiscernible]. As a result, to that highly 10% of the global market share in '26. Same for outdoors. We won global awards from magazine media based on consumer feedback. So we continue to run, but we are going a bit down on the mountain to do gradually.
As I think some of you are coming from the U.S. and in U.S. [indiscernible] are a bit everywhere. It's a no-brainer. This is gravel, where you can escape from the city, play with the terrain, be comfortable in the street, but also be comfortable on the light trial gravel road. This is our recent success and our next big bet. We see a space like Cerroni, and we enter in this space. Today, we are shaping the space, and we want to own this space and to really this space like rerunning, and it's where we can express all the technology that we bring at salmon either [indiscernible].
If you take the outside of our show, basically, this is our product, you can recognize a very ratio you can recognize a clear road show. But if you put and merge the best of the 2 worlds, you are in the middle travel. End of grid, comforts and peso to play with the terrain, wherever you are. It is my go-to show when I [indiscernible] I know that I can run in concrete I can know I can go on a trail without compromising things and so on. It's really the go-to shoe and as the feedback we have the consumer wherever they are in LA, in Paris or in Asia.
And working, and we were right to take this space. This is a figure 3x growth in '25, 15% in two of the sales. And in U.S., 3 awards with the glide gravel in '25. Best [indiscernible], and so on and so forth. Now we went to the mountain, we went to the gavel. It's time to go on the road and we are here to speak about innovation, look at the show, the 103 or the 4,000 that I'm running, which is made in France. Why the current wall champion of iron man, Catterson, choose Salomon and choose [indiscernible], the first January of '26, why, amongst competitors because it brings all technology, all marginal games to in second during this moment.
And you can understand that after streaming biking 100K and you need to run a 420 marathon, you need to have the shoe that helps you to perform and to win second and good margin gain. This is where we are in [indiscernible]. But I speak a lot about top at but we bring innovation as well for a wider base for every consumer where we are bringing this technology to make win every second for every consumer. At Salomon, we have the positioning called Dynamic for any comfort, it's cautioning for your long run. It's also dynamic and comfort for your ultra marathon. [indiscernible] it's okay. And we extend that across the range. This is one portfolio of products 1 top to more increase or hold from top to training and in between the gravel, the go to show. If you look at this picture, for sure, we have many, many [indiscernible].
But if you look at this picture, you have all the products that you need to do a marathon, a ultra or just a simple jog in Central Park. With [indiscernible] now we have this portfolio. And we have this versatility of so and to provide to reach a new consumer. How we continue growing running us [indiscernible], it's our big bets. It's a space. We have to space, we need to own this space. Second, continue to bring innovation, continue to bring key franchise animate franchise. As an example, I spoke about [indiscernible], 100,000 pairs 3 years ago. almost 1 million par next year. In 3 years, you can see the progress and also the success that we have.
You can imagine as well, and you'll see that later with [indiscernible] but by partnering with athletes or events, it will help to bring this awareness to a broader consumer. Let's stop money. We move to Story. Softstyle the most recent and biggest growth driver. And I guess this is where you have the most question. Sports a category that has grown from a double-digit million business in '21 to almost EUR 1 billion. I remember with the team to celebrate our first EUR 50 million business. And for us, it was amazing. If you look at today, it's far ago, but it's not so far ago, on a few years ago. invented in performance reinvented in the city, invented in the toughest ran on the mountain, the ectasis here winery at list has been invented to perform in a 100-mile on mobile.
10 years later, reinvented city. It's an iconic product of what we call now the outdoor maker. And like I said at the beginning, is bring all the technology, the sense, the Chelsea, the contrary, the quick pace even what we call order fit to make sure that the rock are not going inside all these big now comfort in a different usage, reinvented for urban inverted for diverse communities, and the adoption has been organically. We didn't come here and push it the community, the [indiscernible] adopted first. And later today, I will share with you the first show because it's not the exact first of total. You will see. I'll keep [indiscernible] for later. But [indiscernible] is just the icon in a few years, it has been a success story, but it's just the beginning. We didn't even put marketing budget behind at the beginning.
So initially, I wanted to share with you all the opinion leaders, all the staff, all the VIP that are wearing Salamon or Formula 1, top model, but for usage rights, I was not able to do that. But here, it's a perfect example of the communities, wearing salmon, understanding the GNL settlement, understanding the mountain sports culture salmon and playing with that. There [indiscernible] the growth, portal sales between 21% and 26%. And the most interesting part with post. It's a huge catalyst to target new consumer Today, 80% of consumer Santal are new to salmon. You will see the details this value later on the age and everything. But for us, it's amazing we target 8 new consumers that we can also transform into the world of performance, whatever outdoor, running and so on and so forth. Stores grew an over 90% CAGR over the last 5 years. Now it's becoming our largest footwear category.
Let's talk about the big electrons in the room, the expenses. I keep hearing the question every time I go but you are dependent on the expenses, you have about your [indiscernible]. Today, for sure, we are very young in the world of sneaker. We are new. So that's why the basis is a more visible show today, and it's only for us since 3 to 4 years that we are putting investment behind the [indiscernible], 100% CAGR between [indiscernible] and the most interesting piece is only 15% of the [indiscernible].
And we have other babies, such as [indiscernible] some a bigger success story than in [indiscernible], and you will see why. 15% of [indiscernible], and I posted that some of you are wearing Whisper. In 1.5 years, we moved from 0 percentage of sales to 170% sales growth. We moved to 0 pair to almost 1 million pairs in a year and half. How we did that? This is our SAP. For sure, I will not disclose all the CP. It's like my grandmother when she was looking. I keep some secrets. But basically, in a year is a principle. We have in-range launches. So we start by a very weird color, December '24.
Then we bring on innovation. Some of you living in New York may know San Dillon to target different type of consumers, Moran, New York, then we bring energy on the in-line products with some energy pack. We move to, let's say, a different model iteration with steroid. In between, we do another collaboration with London communities, Amer and [indiscernible]. For sure, it's not all the color of the strip. We have many other colors in between to target men and women, different communities and so on and so forth. So basically, we have in large projects, but also we have collaboration limited edition to bring energy to bring an awareness and to read different communities. And sometimes, such as the last piece Carapa, we partner with a local retailer or local brands to do a spot special makeup to target a specific committee, which will have a clear influence in the sneaker world. 15 years to build the exterior.
Once again, it's just the beginning. If you look at the reversal from where we started with the cases, the only issue that we have in the [indiscernible] where we are going? You may recognize the tier. We also have another franchise request and the new one, the next one will be the SCS franchise. We'll start this year to [indiscernible]. All this is above 1 million pair. But I will not also disclose all the new franchise that we are booking for 28, 29 and 30. Today, we have a strong pipeline, and we have a master plan of all franchise that we bring until 2030 and I was very [indiscernible].
So, how we continue to grow? We'll continue to [indiscernible] the franchise, having a clear merchandising and franchise management and also bringing [indiscernible] collaboration and [indiscernible]. Discipline on the franchise energy. And you will see later this afternoon in the regions. We are also making sure that we are curated as a go-to market to be very sharp on the growth and to have a sustainable growth. Last, apparel, accessories back and ration. [indiscernible] sales mix today and by generation, 7% sales mix of [indiscernible].
Those two categories, you understand in the introduction, are here to expand our right to do so, how to expand the [indiscernible] of the footwear [indiscernible] the next building block for Salomon. Let's start by Apparel, [indiscernible] of footwear [indiscernible]. We bring additional piece and the strategy on Apparel will be to have an offer from top performance to a more lifestyle usage. This will come in a couple next year. So big building block coming next with [indiscernible]. And by, you will see later, I have a specific slide we'll need to reinforce our leadership, and you will see a very interesting story that we have on Bags.
This is a sneak peek of our [indiscernible] across all the stores. Yes, it's not exhaustive. From sports side to [indiscernible] to the running which in running, we have different sports, travel, rail and road and also like you have seen with [indiscernible] supporting the Winter Sports Equipment. If we move to Bags, you will look at me and say, but Christophe, why you are speaking in bags? We are investor [indiscernible]. What you see here, from 2010 to 2026, you have one word, which is coming back every time when we speak about bank is keen. Internally, we call that the second scheme. From 2010 to '26, Salomon bring innovation, material, problem solving, reaching different consumers men, women for different problem solving.
All the competitors today are following us, and sometimes, unfortunately, copy us. This technology starts with a problem solving. We are back to innovation, [indiscernible] day, came in and see here and say I want to start this rate, but I don't want to carry my hand, my jacket, my fuel and so on, what we can do. I think we can do some okay from makeshift, and I can carry my stuff on my short we started to enhance [indiscernible] to carry all the mandatory stuff from there, all our engineers, all are product geek, we are starting to say that we have a painter. Let's do a second scheme. Let's do a bag that will feel like a second skin. And this is a success story. The success stories is this number. If you go to UTMB, Ultra demand.
It's the biggest sales happening end of August in Shamoli, 1 hour of the way. It's kind of the fashion rack of sell running of the runners, 60% of the owner are wearing Salmon bag. It's what we call leadership. We got 4 global awards for the advanced schemes for the second scheme, how will continue to grow, bring technology I think, as an example, if management is 1 of the problem to solve with the weather increasing the clinic and so on, how we bring technology evolution and also how we can accelerate in a pile with focusing in performance, but not only how we can make performance to a lifestyle [indiscernible].
We have a CAGR of 26% between 21% and 26%. If you look ahead, we will be mid to teens. Soft goods, footwear 80% today, looking at the future of mid-to and Natal accessories, the next building block 20% [indiscernible]. To Wrap up. We have this premium growth engine in -- so goods, encoring performance, expanding across categories enriching a new consumer. You know now the innovation DNA and the pattern of innovation. You know the product strategy and how we continue to build the mountain sports culture from the mountain to the city. We are the brands that continue to diversify and accelerate the soft goods and in urban government. Salomon is a game changer to win towards the consumer.
And I will finish by something. - Why I put the right color today. Some of you, if you look at your shoe, you have what we call the rest flag, blue, red and yellow. Each color as a meaning I will only tell one on stage and we can discuss for those 2. The red mean hard work, mean brand energy and brand ambition. And for this, I will leave [indiscernible] to speak about this brand energy and brand mission. Thank you very much.
SP999 Good morning. My name is [indiscernible] and Salomon's SVP of Brands and Marketing. I joined Salomon a few months ago after a career across mostly legacy luxury brands, the last of which once I joined Salomon, because it is a brand with unmatched heritage, credibility in sport and which is enjoying the momentum in culture that a lot of brands would dream off. I saw a brand with huge equity and relatively low awareness and a tremendous potential for growth, which is why I'm so happy to be here this morning. This morning, I'll walk you through our marketing strategy and how we aim at further developing the brand equity and amplifying the amazing product portfolio you just discovered with Christophe and [indiscernible] presentation before.
We have defined 5 pillars to help us reach our strategic objectives. The first one, [indiscernible] award that you've already heard this morning, the second impactful campaigns, the third, strategic collaborations and partnerships; fourth, community, globally and locally. And fifth, unique consumer journey and excellence at retail. By the end of this presentation, I hope to demonstrate that this approach works. Let's start with our first pillar, epicenters, a word you're probably getting familiar with by now. Our development strategy aims at efficiency. We don't want to spread everywhere. We have defined 7 global epicenters where we focus our means and efforts.
They are the cities that mine global culture, whether we talk about fashion, lifestyle or sports. And when we win there, it gives us outsized brand halo. That's why we focus our investments in those cities. For example, over investing in London, plus 90% versus the rest of the U.K. and the same goes for Paris and for a lot of the other epicenters. And this works. The concentration in our investment in epicenters is paying off, and you can see that we are making great strides in terms of increasing brand awareness year-on-year. Each region sits at a different maturity level. And this shows also in where they stood and where they stand today in terms of awareness. In EMEA, which is our heritage region, Paris leads the way. with already 50% brand awareness.
In the U.S., New York City, only 2 years ago, stood below 10% awareness. It was our smallest awareness base. But in the course of 2 years, we have already doubled the awareness level and it's continuing to accelerate. The same is true for APAC and Greater China, where we have considerably increased our presence over the past 5 years. And now we have Tokyo and Shanghai, both standing at 20% brand awareness. We are making progress we have considerably increased our rent levels. But as you can see with the numbers on the screen, we still have big opportunities ahead. equity and awareness at a broader scale, our key transformation drivers that will enable us to reach our growth targets.
To achieve this, we are evolving how we invest. Investing more, but also investing better. In the last 2 years, not only have we doubled the investment in marketing, but we are also shifting the way we invest. Focusing more on awareness building and long-term brand demand construction and depending much less on pay search and short-term decision phase tactics. And this works. Our strategic and intentional concentration on epicenters is efficient in terms of building awareness but it's most importantly efficient among the consumer targets we are aiming to conquer. As we grow awareness, we reach new audiences, and we aim at concurring younger and more gender-balanced audiences. And over the past 2 years, we see that this is working. We have made significant shifts in our consumer base.
And looking at D2C, we see that over the past 2 years, we went from 35% of our D2C clients below 35 years old, to around 60% of clients below 35 years old today. And the same goes for women. We went from around 35% of women in our D2C base to around 45%, a plus 10 percentage points over the course of 2 years. Now on to our second pillar, campaigns. What's the high-impact campaign. We create integrated global campaigns that combine and concentrate products marketing and commercial priorities behind a single idea and a unified 350 plan. It is orchestrated, so the brand shows up as one big coordinated story. You'll see how this comes to life this afternoon in the regional presentation. But this works.
A perfect example is the gravel campaign, which we ran in spring/summer. And you can see on the screen, which was deployed as a fully coordinated offense across different touch points, whether that's firm out of home to saw windows, or community events. This campaign achieved excellent results with a brand lift in the U.S. of plus 15% and a search lift of plus 15% as well in France, for example. Another good example in Sports style this time is the Whisper X Whisper launch, which also took place in spring/summer and again, was a fully coordinated offense with PR, media, in-store events, all coordinated, making it a very efficient campaign. XT Whisper campaign generated a plus 15% brand lift in the U.S. and a plus 51% search lift in the U.S. as well, a very impactful campaign.
On to our third pillar, strategic partnerships, and these span across brand ambassadors, athletes, product collaborations or events. Starting with brand ambassadors. Maybe you're familiar with the phase on the screen now. Brand ambassadors amplify the brand heat and help us reach a broad audience. This year, we are proud to announce GS as our first global brand ambassador with a young and loyal fan base and over 90 million followers on Instagram and TikTok alone, GSU elevates our sport-style presence and will be the face of an upcoming campaign this October.
But we don't stop at global mega stars. We also collaborate with regional superstars like, for example, the Colombian Star phase in North and Latin America. Say, who has over 35 million monthly listeners on Spotify started off as the fan of the brand. only to become an ambassador in 2024. He brings his own DNA to the collaboration, building a collection that looks like he could be wearing it and the current collaboration, which is in store now. Sold out actually from the presale phase already in the U.S., completely sold out. Product collaborations don't stop at sports style. They also can be expressed in the performance side of the brand. The down to desk collection is a good example.
It was designed and tested with trail running legend Courtney Daulwalter. Who doesn't love Courtney? Courtney is one of the most outstanding athletes in trail running. Her capsule is inspired by her 2023 season, during which she won the 3 most iconic races of trail, Hardrock, Western States and UTMB, and she's the first athlete However, male or female to achieve this. She approved every product in the collection, which was built with comfort over long distance in mind. Courtney is part of the Salomon athletes roster. You've already heard from Christophe how we collaborate with a lot of athletes and from Xavier as well.
Staying true to our performance D&A, we proudly sponsor over 200 professional athletes across all our key performance categories from Alpine ski raters to snow borders, to [indiscernible] Olympic champions all the way to ultra trail runners and parties. As part of our commitment to performance and to sports, we also sponsored a number of races and events in sports. Besides the Milano Cortina Olympic Games partnership, [indiscernible] talked about.
We also have the Golden Trail World Series, which was created by Salomon in 2018, on which has since grown to become the leading short-distance trail running series globally. Most recently, it was already mentioned, we have just announced we become a global partner for Iman starting in 2027. I strengthening our connection to running across Triathlon and over 150 races from next year. Let's see how it is going to play out.
[Presentation]
Partnership [indiscernible] culture. And since 2026, we are salmon, the proud partner of the Paris Opera Ballet, the Opera National de Paris equipment partner. The ballet's 154 dancers benefit from equipment that was designed to support every stage of their training from warmup to recovery or travel. Beyond equipment, this partnership brings together 2 institutions that share a common value of discipline, dedication and daily practice. We are extremely proud of this partnership. On to our fourth pillar, which is the animation of our communities through experiences and events that deepen the emotional connection and with our sports and culture communities. Local events, first, allow us to connect with local communities in a tailored way.
When it comes to sports style, those events can take the shape of an in-store activation, organized with our S+ loyalty program members, for example, or they can come as a stand-alone event with local sales makers which is the case with the launch of the Whisper voice, you can see on the screen, which was held with an event in L.A., our epicenter in L.A. with [indiscernible], who is an artist locally in L.A. and the event was held to celebrate self-expression to art with the objective of creating both around the brand on the local community. When it comes to performance community events, Salmon truly has grassroots legitimacy.
All regions engage actively with their respective sports communities, whether they are run clubs or gravel tours. Salomon is, for example, the third community globally on travel with over 100,000 members. We also activate our communities at a broader level through initiatives like Gravalanza, for example, a week and long festival like event, combining gravel running, of course, product testing and live music concerts. The first [indiscernible] took place in Paris in June, gathering over 3,000 participants, 40% of which were women with an average age of 34 years old. This was a success achieving also outstanding feedback from all the participants. We're going to hold the second pilot in Los Angeles this October.
Finally, our fifth pillar is on retail experience. We engineer an elevated, cohesive and distinctive salmon brand experience for our consumers, whichever channel they choose to interact with us. First, our retail stores. They are designed to offer the best expression of the brand. From design concept, to sensory experience to the training of our store teams, every element is built to immerse the consumer in the Salomon universe. Salomon stores are a central element of the consumer journey as our retail footing footprint grows. We've heard from Guillame this morning, how those stores are becoming more and more important.
And we have, for example, opened over 100 owned stores in 2025. We're not forgetting our online flagship with our dot-com open 24/7, of course. With our selected multi-brand partners, we also deploy premium installations that capture brand DNA, be it on a single footwear wall or through full shop-in-shop installations. Our goal here is consistency, providing an experience that captures the essence of our brand and allows us to win at the point of sale. I'm now coming to the end of my presentation.
We are expanding beyond the ramps of our core segments into broader markets, but without compromising or losing what made the brand authentic and credible in the first place. Everything we went through is part of a coordinated strategy to achieve this goal. In my introduction, I said when I joined Salomon, I had the intuition that this brand has great potential for growth. Now after 7 months, I am certain and I hope I was able to convey a bit of that certainty over to you. I thank you for your attention, and I will leave you with an illustration to a short video of what it means for Salomon to be the mountain -- the Modern Mountain Sports culture brand.
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We're running about 15, 20 minutes ahead. We're going to start lunch a little bit early for people on the webcast, we're going to take about 2.5 hours for lunch in the in-person product tours. So that means we're going to resume the presentations from management at 2:15 p.m. Central European time. Which is 8:15 a.m. in New York or 8:15 p.m. in Shanghai.
So again, for people online, we're going to resume the afternoon management presentation at 2:15 p.m. Central European time. For everybody here in the room, we're going to adjourn to lunch, start lunch a little bit early, take an hour for that, and then we're going to spend about 1.5 hours of the product tours. You each got a name tag today. There should be a number on your name tag. There's 4 groups for the 4 product stations and then we're just going to rotate between and there'll be signs and people to help you find your starting patient based on your group number. Okay. See at lunch. Thanks, everybody, for a great morning.
[Break]
Okay. Thanks, everyone. Thanks, everybody in person. Welcome back to the afternoon session. Thanks, everybody online on webcast. We're starting the afternoon session, which will be focused on the regions as well as the financial presentations and finish with Q&A. Our first speaker is [indiscernible] who leads our EMEA business.
Good afternoon, everyone. Welcome back to the after session. My name is [indiscernible] I lead the region EMEA for salmon. I joined Salomon 30 years ago for 6 months internship only not like [indiscernible]. Interestingly enough, I was focusing on product diversification and the strategic team. And I was actually working on running probably 8, 10 years before we even launched our first reline we tell you a lot about Salomon has been obsessed with products since day 1.
Eventually, I started a real job in the MGC in sales and marketing. But I spent most of my journey at Nike across different functions, different roles, different countries. And I went back to Salomon 32 years ago, in my current role. And you guess you will find out why I came back to Salomon in the last 15 minutes or so. So E&A, as you know, stands for Europe Middle East and Africa. But today, for the sake of the presentation, I will focus on Europe only, which represents the vast majority of the business and where we will find most of the growth in Europe is the best place of the brand.
This is where most of the iconic products that you saw this morning and during the launch time, we have developed launch even in this building even. And the region where we are. Europe is also a very unique maintained sport [indiscernible], culture-defining global epicenters, sportive and affluent consumer base. In Europe, the salmon retail is super strong, and our consumer is very loyal to the brand, making it super critical for us to keep this authentic positioning. So therefore, in Europe, the first question we have to ask ourselves is or do you protect the core while entering into new spaces, right?
So seeing authentic for us means protecting the communities that [indiscernible] very unique, the peers, the maintainers the trailers, the our core. Opening new spaces mean new cities, new consumers, new moments, new partners without diluting what makes us very, very unique. So over the years, we started to make some bets, make some choices where to bring us where we stand today, and we start to see some significant shifts in the region. From the winter sport and although only brands, we are now broader performance brands. And really recently, we have added sports sale into the category portfolio.
Sports side is 30% of our business. From a male predominant brand, we are now at [indiscernible], male and female 50-50, and we are engaging with a much more younger consumer audience. 60% are below 35 years old. Only 3 years ago, it was 45%, massive improvement. And then from a B2B-driven business, we are no way more balanced between B2B and B2C and its has been leading the growth. So [indiscernible] a quick sale of play. Over the last 5 years, we grew by 10 points, 10%. [indiscernible] pay the market to make it simple, we grew 2x faster than the market. We are still a little bit driven.
We come from a long way, but D2C is already 25% of our business. And as you saw from the last slide, we are growing fastest. So now let me take you through the channel strategy, starting with B2B. It's before shifting to retail and e-com. We're starting to make some choices and focus on the retailers that are really following and supporting Australia. Starting from the core of brand builders, they are really anchored in the culture of sport, and they play a key role for us to engage with the poly community, right? So we started to invest with them through dedicated sales, dedicated marketing made meaningfully with our communities.
We also present at the point of sale as a matter of fact over the last couple of years. We have built more than 200 footwear walls directly in the stores, facing the consumer to elevate the brand. accelerate international strategic partners. So think about the JD, the foot locker, the snips of the world, as we naturally external reach those partners play a very key role for us to talk to refinance, younger, more urban, often more feminine, right? We have been for the partnership with those guys. We are working hand in hand. They really see us as a strong partner for their growth. We have opened 300 doors over the last couple of years with them, always focusing on PGTs always on key locations.
Last, we rationalized our other costs, meaning we rationalize account that don't play this central first in the marketplace. The choice we've made in B2B by picking the right partners are paying off to drive a category of sense and to have the quality growth. If you recall that the last year our growth is 10% with any of the partners you see here, we are growing well faster, and we see them as a reality growth driver for the next 5 years.
Now shifting into D2C. Our different store types play a very distinct role in each neighborhood they are located. They are not just an additional retail footprint. They are really a manifestation of the brand. Starting from left to right, flagship store like the one we have in Charles de Lis. This is really the best expression of our brand, the pinnacle expression for any consumer. You can go to a brand store like the one in Covent Garden in London. This is our full price of good offering that we find in our regional key cities. Signature store, our sports style focused location that you will see in areas that drive culture. Typically, you will see a store like this in Paris, Le Marais in London, so again, global epicenters. And then factory outlets, which actually for us play a dual role, right? They allow us to get in contact with a new consumer that get access to the brand for the first time, and it's also helping us in terms of inventory liquidation.
At the end of 2026, we will operate more than 50 stores, largely dominated by outlet stores. But by 2031, we should operate approximately 75 stores with 2/3 of the stores being full price. Here again, another big shift. In addition to our retail, our own website is a key driver of our D2C acceleration and consumer connection. In the last 5 years, e-com grew 2x faster than any other channel in our portfolio. And looking ahead, there's a lot of room to grow as we continue to bring high-quality traffic, elevate consumer experience, elevate the order value, bring new business models like connective inventory, and you can name a few more, right? We also continue to build on our membership program that we call S+. Only last year, we grew 40%. We now are at 2.5 million members only in Europe.
As we discussed this morning with Valerie, we also made deliberate bets in key cities. And as you've learned, we started with Paris, our first epicenter that give us a blueprint for any other activation, any other epicenters globally, right? So here, the stores are more than any store, right? They become really the showcasing for our brands. We partner with our B2B store, elevator presentation, working on pop-up, working on POP permanently, right? We organized gravel races in the city to engage meaningfully with the communities, and we also partner with music festivals to engage with influencers that we couldn't have reached through the conventional channels.
The progress we've made in Paris are really phenomenal. We reached 50% of awareness in 1 year. And in terms of revenue, we grew 2x faster than total fans. So while we're expanding Paris, we are also taking to the next wave of epicenters using this proven playbook and open up this strategy in London, Berlin, Munich, Milan or Barcelona. We actually started in Milan during the Milan Olympics with activations stores, and we saw our awareness rising dramatically. But our big focus in Europe is London. London is our second global epicenter is Paris, and this is where we invest the most. We talk about the marketing investment this morning with Valerie. But only in the last 18 months, we've opened 3 stores. And next spring, we're going to open a dedicated U.K. warehouse to serve our U.K. consumer even faster. Now enough of me. I think the images speak louder than any of my words. Let's see a nice video on what we have in activated in Paris over the last few months.
[Presentation]
To wrap it up, our business grew 10% from '21 to '26. We expect low double-digit growth over the next 5 years. We will grow strategically in Sportstyle and running. Those are our 2 biggest growth drivers for the region, and we'll maintain leadership in outdoor and trail, again, to protect our core. Then from a channel standpoint, we will grow across all channels. But in B2B, we will focus on premium partners. In D2C, we will focus on full price stores and e-com. That was, in a nutshell, the Amer plan. Thanks for your attention.
And let me introduce you to Jeffery Ma for China.
Thank you. Hello. I'm Jeffery Ma. I'm the President of Amer China. Noha is Shanghais. So whenever you go to Shanghai, it's highly welcome when you speak Noha to all the Shanghai. And also, this actual speaking is one of our last August, our culturally relevant activation happened in Shanghai. It's a keyword on the social media. Salomon entered China in 2008 and a new chapter really kicked off in 2019 since the change in ownership. And the retail and sports style have accelerated in the past years. Today, China -- Great China, including Mainland China and Hong Kong and Macau. Great China is Salomon's biggest and fastest-growing D2C market.
Great China is attractive sportswear market with a very positive trend, one of the largest and most dynamic market with large and affluent population, high share of the premium-oriented consumer who really value European brands with authentic heritage and also rising participation in outdoor sports, particularly among the young consumer like the hiking, show running and running. Of course, this created a lot of opportunity for Salomon across both sports style and performance business. And this is proven in our results on the last years. We built a very extensive retail premium network. And so far, we have 330 stores end of this year. On the past 5 years, we opened 300 stores and significantly outpacing the market with triple-digit cargo growth.
And also, we established Salomon as a premium challenger brand in Asia continent. We have grown strongly in our main categories. We're driven by the Sportstyle. On the past 5 years, 120% cargo growth and amplified by our performance, 70% last 5 years cargo growth. This has led to a significant momentum. Our business grew 30x. We started from less than USD 30 million till now it's high triple-digit million business. And also, of course, our growth has led by the retail. Our majority part is the retail, 85% our retail business. B2B business is very small. I can say it's tiny in China. And digital amplified by digital, 15%. And we have a very clear strategy from the start. We maintain the European heritage but tailor to our local Chinese consumer fit and preference. This is how we've grown and how we will continue to grow, very important to make successful in China.
For the product side, we localize all our global products and across all categories tailoring to consumer fit and design preference. And we will accelerate apparel anchoring on performance DNA. For the channel part, we have very strong connection to how consumer shops and focusing on the premium location and also amplified by the digital platforms. For the marketing, just as I mentioned, the culturally relevant activation that we speak to the local consumer, and we're engaging local celebrities and athletes. And each time, we're connecting our activation strongly with our product and retail excellence. And our product strategy is key to success in China. And Chinese consumer, of course, that's different as common. We have the different fit and also design preference. So we will leverage our brand heritage and the product acknowledge adapting to these needs. So we have our China limited edition, all developed in [indiscernible] but tailored to our fit and design preference. That is very key for us. And I use one example here. It's like this is our Lunar year capsule beginning of this year, the year of the horse, the Whisper, we use the Whisper model, but redesigned to match the total package, use a different color and different upper.
So in the future, we will continue to offer the mix of the global range and China limited edition. And also today, I wear one of the new XT-rich model here. And every 2 to 3 years, in China, we need to have one on model for the Sportstyle, which is very important for us. And apparel definitely will be the key building block in the future. And our strategy is clear. We want to accelerate the business through local design and production for those performance-inspired apparel category. And we will use premium the engineering, premium fabric and technology. And local design and production allow us to efficiently fulfill the local customer demand and also complement our global apparel offer. And also, I here give example like the lady wear. This is our the first running apparel line we call Falcon Fly. And this is inspired through our legendary Salomon ski boot Falcon. And we achieved a very good result. For the running apparel for this first half year, we achieved 300% year-on-year growth. And also, we raised our average selling price, and we improved our gender mix.
Then from a channel standpoint, we will continue growing through retail. Over the past years, we focused on the premium retail network. End of this year, we have 330 stores, and we scale it by speed and booming the business on the past years. And in the future, we still have 3 objectives. First one, keep increasing our productivity. For this year, our productivity is more than USD 2.5 million per store per year. And we do believe end of 2031, we will achieve more than USD 4 million per store per year. And secondly, we were broadening our multi-category in-store, especially the performance footwear and apparel. And third, we will continue control fleet expansion. So end of 2031, we more or less we will have 400 stores. So from this year to 2031, we will have another 17 new store opening.
For epicenter, very important for us, Beijing and Shanghai, but because of our D2C model in China. So totally, we have top 10 key cities covered by our D2C, including Beijing, Shanghai and also Hangzhou, Nanjing, Chengdu, total top 10. And besides of that, we will cover through our outlet and partnership store.
And of course, we will accelerate our business through diversified retail format. And I list here like the Shanghai A Road, which is the street, a lot of the young fashion consumer there. And end of this year, we will open our new big store in Shanghai Zeng, the Taiigu project. And the Shenyang Mix City, this is the top productivity of Salomon China store. The annual productivity will achieve USD 15 million per store per year. And digital, the digital channel is very key for us to connect with our consumer base. And China, the overall the e-commerce environment is a little bit different. Normally, we will have 3 kinds of e-commerce. The first one is we call the traditional e-commerce platform like the Tmall and Jingdong. The second one, which I listed here, the content e-commerce, like the Rednote and TikTok. We do a lot of the product seeding, product marketing. And third one is like normally in Europe, North America, dot-com, we're using the Tencent Mini Program, not only do the transaction, but also we connect with all of our members.
The community application, everything happen. We use the Tencent Mini Program. So our focus will be the premium trend setting e-commerce digital platforms. And of course, we build brand heat through the culture relevant activations. Here, I listed 3 key campaigns on the first half year. Beginning of the year, we do the Chinese Lunar New Year pop-up store in the Chengdu, Taikoo. And the middle one, we do the influential program in the Shanghai A Road. It's more like the -- we call the road to the future. And the third one just happened on the past August, and we have grand store opening in the Beijing, the big store and our global ambassador, J was there. And also, of course, our Christophe there we achieved a very good exposure on the media and also a very good transaction result, sales result back.
And then also GRVL. GRVL is very important, like Barry mentioned about. This year is the second year for China, we handled the gravel activations. On last weekend, we just did the first stop in Chengdu City. And this weekend, we will do it in Shanghai. So GRVL community run. And we also reinforced our positioning in performance through the events and athletes. And the Golden Running series race is very key for us. We sponsored 5 of GTS in China, which is out of the top 13 running series race in China. We achieved a very good result. And also, we think it is very critical for us to keep investment on the performance part. And I covered a lot of the strategy.
Then let's look at how it comes in life.
[Presentation]
The brand momentum is real, and we have confidence for the growth plan in China and driven by performance footwear and apparel acceleration as well as sustained sports style momentum. Looking back, we delivered strong acceleration as we scale from a small business to triple-digit millions. And looking ahead, we'll continue outpacing the market at a strong, sustainable level. We see a clear opportunity ahead. Growth will be retail-led and amplified by digital. We will focus on key cities, increasing productivity of our existing fleet and expanding selectively. We are excited about what they have built in China in the past years, and we are looking forward to the new journey in the future.
Thanks for your attention, and welcome Cynthia, our Head of the APAC, Amer.
Good afternoon, everyone. I'm Cynthia. I'm leading the Solomon for the region. I have been AM Sports for 13 years, and all my career is focused on the region. This experience really gives me the appreciation how we have involved in the region and how much opportunity is ahead of us. So APAC, APAC is the most diverse region. APAC is the region with 2.5 billion people. APAC is the region with 4,000 language and over 50 countries. And with this one, when we look closely with this region in through the Salomon eyes, -- it presents a huge opportunity for Salomon's in 3 elements. First of all, when you look into the market size, APAC is the market for $50 billion, and it has a unique combination of affluent consumers and young consumers, and Salomon can speak to both. And when you're looking into the outdoor landscape, from the Japan legendary Powdernow, Himalaya Mountains, Southeast Asia Ring Forest, Salomon produced product for all them. And when you're looking into the culture influence, APAC does not just follow the global trends. APAC creates the trend for the global. Japan craftmanship attracts a lot of global brands to collaborating with the local artists. K-pop changed the young consumer globally how to behave and Salomon rise on it. The typical example is Jo, our newly global ambassadors.
And how are we going to do and what we have achieved so far? In the diverse regions, we are accelerating. We are accelerating in the strong B2B strongholds with 30% CAGR in the past 5 years. We're accelerating B2C with 30x bigger than before and reaccelerating the market coverage from a handful 5 years ago, now we cover 15 markets. Reaccelerating soft goods from winter sports equipment dominate a decade ago, now it is 90% with soft goods. And that just shows the Salomon potential to win in a such bigger sector in soft goods. And the number speaks clearly 50% CAGR across multiple regions. And very importantly, we also achieved much more balanced channel growth, 40% from B2B and 60% from D2C. There is a significant transformation in this scale and also omnichannel play in APAC. How do we do that? APAC is not one market. APAC is multiple markets. And in this region, we have clearly 2 sectors. One is the developed markets like Japan and Australia. The other is emerging markets in Korea and Southeast Asia. Two different markets, one global playbook, but we do take different approach.
Let's start with Japan and Australia, is the developed markets where the wholesale channels or wholesale partners are widely disputed. Our consumers know our brands, mainly from those multiple brand stores. And we continue to deepen our relationship with the B2B partners. We continue to invest in with better product offering and also better in-store experience. At the same time, we accelerate D2C. Retail is the place for us to present the full brand experience, e-commerce helping us to reach the new consumers wherever they are and whatever they want. As a result, in those developed markets, our D2C business is 50% and wholesale business is 50%. And at the same time, those 2 markets, mature markets go at 45% and 35% in parallel separately. And this is a truly multi omnichannel success. And that also shows how the global playbook can win in the developed markets if it's fully working.
Walking into our emerging markets like Korea and Southeast Asia. This is a very different market. Those markets are monobrand less. Our consumers learn our brands through the retail stores. And that's why our quality and the pace of retail expansion is critical. In those markets, we work with the local team who has a strong deeply local know-how. They are the team of the retail experts knows the best location, the best format to run the store at the best way. And with their expertise, they allow us to move faster. In the last 5 years, we're able to build close to 100 stores across those markets, and the momentum continues. Korea 120% and Southeast Asia is 45% CAGR in the past few years.
Then let's look at our omnichannel play, retail, e-com and B2B. Retail is our most important consumer touch points. Retail is the one, again, really brings the full experience to the market. In the last 5 years, we started with 8 stores in 2021 and quickly, we scale up to 120. Looking to the next 5 years, we do have the ambition to double number of stores. At the same time, we also have the plan to double our store size and also productivity per store. And we build consistency across all those markets. When the consumer walk into the store in Seoul, in Singapore, in Sydney, they will see the consistent look and feel, consistent format and consistent presentation. And they do have the same confidence into the brand. But when we think those consistency, we do strategically to build on the signature store format. Signature store is the one that we are able to build much deeper engagement with a unique group of consumer with elevating experience.
Let me share with you a few examples. Let's start with this one in Seoul in Shandong. So Shani Dong is also known as Brooklyn in Seoul, where you get all those gen gathering together. And our store location, our design, our energy is designed for to amplify the global campaigns at the local level. So soon after we opened the store June last year, it become the brand destination of the city and also become #1 productivity store of the city. And we're moving from the Booking in Seoul to Shen Li in Tokyo, Amotental. So that is an area we have upscale consumers. We have the trends centers. We build a store there with the experience, exclusive product, one-on-one services, the culture moment. Consumer in the store, they spend 4x longer in the store, they spend 25% more per purchase and the conversion rate is 45% higher than other stores. And that is how we view the Salomon Sportstyle credibility.
And we take the same approach to trail running. Trail running is our brand DNA, and we also built up a signature store only for trail running in along Seoul, where it's in the city center surrounding by the mountains, a perfect place for the urban child running consumers. In this store, we offer footwear, apparel, hydration bags, posts and other accessories. Look at the product we sold, 44% footwear and 56% apparels and others. So consumers are buying the whole solution, not just the footwear. And that's what we want to see, and that's also what we want to build for the brand in the future.
Moving to e-com. E-commerce is another critical touch point for us. Brand.com remains at the heart of the execution. We will provide the widest product range, the richest stories and also the best experience online. However, in APAC, particularly for the young consumers, they live on their own platforms. You got Xinan in Korea, Rakuten in Japan, Lazada across Southeast Asia. We sold up Solomon in -- with the same quality and execution. This is not cutting the corner to build the volumes. This is the way that we sold Solomon in the new digital place to reach consumer in the right way. CAGR for e-commerce 80% and the momentum continues.
The last but not the least, B2B remain our backbone, continue to drive our reach at scale. On the performance side, we are the leading premium outdoor brands. Our partners like Khatmandu, Sibiu, Alpan, they carry our product with authority. And in the running specialty, we established Salomon as a running brand for all tars. With the result, sellout in all those performance customers is high 20s in 2026, way ahead of the market. And when you move to the Sportstyle side, that's why we partner -- we scale up our business with Foot Locker, JD Hy and [indiscernible] 4x more distribution points, 3x store productivity per store, and this is the quality growth we look after. And when you're putting everything together, all the channels together into a city, and that's what we call the epicenter strategies. In Tokyo, it is one of the example that we execute the epicenter strategy.
When we do that in Tokyo, we don't isolate performance of sport, we don't isolate B2B retail or communities. And we do it all together because this is a brand how generally show up to the consumer in the city. Our consumer when they walk into the store at Emos in Shuguyan, he might discover X6. Turning the corner, he might try on our gravel shoes in the Seoul for the performance products, consumer, 2 products, 2 purposes for 1 brand. And at the same time, we strengthened our ecosystem with 16 retail stores across the cities. creating a huge brand presence in the city that is new -- not too much consumer knowing about the brands. Beyond the point of sales, the retail store significantly transformed Salomon as a single product offering to a modern mountain brand experience, and that's how we build that.
We also saw ourselves in all those local communities, the mountain events, the running races and also the culture moments. And we engage the performance consumer and the sports consumer at the same time. Wherever we encounter with the consumers, we always want to bring them back to the sports, and that's what the brand DNA is. And we need to have the paces in the city that's doing that every day. Solace is one of the most famous running station. next to the Empire Palace and on the most iconic running route in Tokyo. We occupy the whole running stations, and we occupy all the product display in the store and every single conversation in the store. Runners come into the store, they can try on our products. They can get advice from the shop staff and also they connect with the community. And this is not the advertisement. And this is the authentic services as a brand that we provide to the owners -- to the runners.
Mountain Takao, 30 minutes train rides from Jo is a mountain with 3 million hikers and checkers a year. We have a Solomon experience center at the gate of the mountains. We provide the same services to the consumers. When they come in, they try on our gears, they rent our equipment, they chat with the staff who on the trails every day. And that's the nature connection with the brand the possible. One Mountains on the mountains in the cities, 2 hubs, brand. Again, that's what we do. Salomon is really the brand connects the past to the future, the mountain to the city, the performance to the style, the French help to the world, and it happens in Tokyo. Salomon is the exclusive partner with Mountain Fuji, the iconic Fuji globally, and we established multiple years collaboration.
One of the most remarkable project we're working on is called Mountain Fuji restoration project. This is a project we partner with the local government to rebuild a 100 years old historical West House. Then we bring the story, we bring the product to the city center, Shibuya to invite more urban consumers to the mountain. And this is like the Salomon Spirits, modern mountain sports in action, and please enjoy the film.
[Presentation]
We have the formulas of the epicenter in Tokyo, and we're going to expand it to all other epicenters in the region. Seoul, Sydney, Melbourne and Singapore. One playbook, local adaptation, one ambition. Looking forward, the diversity is our growth engine. We have the winning formula. We have the track record. We continue the momentum with the high-teen growth across all the markets in the coming -- in the next 5 years, strong, sustainable, profitable growth, and that's what we aim for. We continue to commit the omnichannel approach and that give us the biggest and the best services to the consumers. B2B, we're aiming for mid-high teens growth in the next 5 years, D2C low 20s, and we aim to add approximately 110 stores in the region. a business built on the authentic connection with the consumers, and this is how to win in APAC.
Thank you very much. And let's welcome Steve.
Thanks, Cynthia. Salomon has been a dominant force in the mountains for decades. Today, it's being discovered and adopted across America streets. My name is Steve Nolan. I lead Salomon's Americas business. I'm an American who actually grew up about an hour from here. The Americas is North America plus Latin America. And Latin America itself is a compelling story, growing 30-plus percent. We have about 55 retail stores and a healthy and growing wholesale business. and we're outperforming our main competitors in Mexico City. However, North America is 85% of the business. Therefore, it's where I'm going to spend the majority of the next 14 minutes because the whole opportunity sits in one fact that you've heard talked about a little bit today.
North America is the largest global footwear market, unmatched potential across every one of the segments we play in, which makes it the biggest opportunity in front of this company today. And we come at it from a position of real strength. The geography maps perfectly to our portfolio, Mountain Heartlands for winter sports and outdoor, running hubs like Boston and Chicago and culturally relevant cities like New York City and Los Angeles for sports style. We're relatively new to soft goods, but the brand is already very well positioned. Brand perception is strong. We have authentic DNA, as you've heard today. We have technical leadership, which you've seen over the course of the last couple of hours. And we have premium positioning in all the channels we play in.
Let me show you how far that move has already taken us. Over the last 3 years, we've changed the shape of Salomon. We accelerated soft goods. We've transitioned from a winter sports company to a soft goods brand. Historically, our soft goods was outdoor-centric. Today, we're a balanced mix across run and sports style. We've renewed and premiumized legacy wholesalers out, strategic partners are now the focus. Two years ago, we had no stores. At year-end, we'll have 8 in the U.S. We have outperformed the market, 20% CAGR across soft goods and a 12% CAGR inclusive of our winter sports equipment over the last 5 years. Today, we are still wholesale driven, but we have robust e-com capabilities and in the early stages of retail, but clearly seeing it accelerate quickly in 2026.
We fundamentally reset the organization in the last 3 years in order to tap into Salomon's immense potential. We restructured for scale from a WSE heavy business to one that is a clear soft goods operating model. We cleaned and curated the entire B2B marketplace, closing close to 400 accounts. scale retail from 0 over the last 2 years and importantly, have resourced buying and planning and the site merchandising behindsalomon.com. We invest -- in fact, we overinvest in epicenters with always-on and community-first activations. The result is an organization today that is fit for the growth that we're planning. Here is what that growth looks like. Our largest revenue component and our largest and importantly, consumer acquisition tool remains B2B, the wholesale environment. Sportstyle is driven from heat from smaller culturally relevant accounts such as KI. Scale will come from Nordstrom, JD Sports and the recently launched Foot Locker.
Run specialty retailers have carried our trail footwear and hydration vests for years. We're using that foundation to establish soon as the all surfaces running brand. Outdoor is where we have always lived. We're doubling down on dominant accounts such as REI and locally connected such as Paragon Sports, going deep rather than broad as we build new categories like gravel. We're focused on fewer, better partners, full price sell-through, protecting what we've built and alongside it, our own front door. With our market reset, today, Salomon is in less than 1,000 carefully curated run and Sportstyle doors. Over the next 5 years, we have a clear road map that grows our door count to leverage our retail partners' footprint in order to grow our consumer base. Salomon's B2B leadership is focused on door productivity as a key component of our commercial strategy. Wherever the consumer meets us, the experience is premium in our DTC environment and always full price.
Our own stores are the best representation of the brand, handpicked premium locations in New York City, Los Angeles and Chicago today. This validates our model and gives us the confidence to scale to between 30 and 40 by 2031. We've elevated the e-com experience, focused on driving quality traffic, converting at full price and deepening the consumer loyalty, backed by a growing set of digital investments and capabilities. We're delivering premium experiences across all channels, strengthening brand equity and converting consumers into Salomon advocates. We're epicenter-led. We're concentrating our investment where brand heat exists, New York City and Los Angeles and sequencing outwards as momentum builds. Always-on full funnel activations from high-impact out-of-home and creator partnerships to in-store placements and experiences. Community first, bringing the brand to life where consumers already are, run clubs, trail races and community events.
The brand is being noticed, and the numbers are moving with it. Brand awareness grew 2x in New York City since 2023. Search share grew 150% year-on-year in Los Angeles, which is why we're confident about what comes next. We've tested this approach in New York City and Los Angeles with tremendous success. As we grow, we'll amplify our city focus to 4 additional geographies: Boston, Washington, D.C., Miami and San Francisco. As we grow, we will amplify our city focus. Selected cities will all play a key role as we accelerate run and sports style and connect with new consumers.
[Presentation]
From that, I hope you get a sense of the buzz, the energy that we're consistently building, whether it's at store openings, at launches in new retail environments or partners or community focused and events. We spent the last 3 years building the foundation. The acceleration starts from here, a roughly 12% CAGR from '21 to '26. That number was the cost of the reset. It's certainly not the ceiling, low 20s from this point forward. Growth will be led both by B2B, the wholesale environment and our own D2C channels, led by premium wholesale partnerships where door productivity is the go-to KPI, excelling retail as we roll out our full-priced retail fleet. Thank you so much.
And with that, I'll turn it over to Omar.
Okay everybody. Last break coming up. We're a little bit ahead of schedule. So why don't we take a 20-minute break, come back at 10. The people on the webcast, maybe you guys help us organizing the webcast, let them know we're going to restart at 3:50 with the financial section and Q&A. Thanks, everybody. See you in 20.
[Break]
Welcome back. I'm jealous. You have seen my colleagues this afternoon, nice products, nice films, nice pictures. Probably next time I have to dance my numbers, just to give you a little bit of emotions back. So good afternoon. I'm Antonio Regoni. I joined Salomon in September 2022. Next week, I will celebrate fourth years. You see it on the pictures look a little bit different, but it was a great journey. After spending much of my career leading global premium brands and driving financial transformation, it has been really a privilege to be part of Salomon journey since then. As CFO, my focus has been driving sustainable profitability and strengthening our financial foundation so we can accelerate global brand growth. The team and I introduced rigorous financial discipline with strategic commercial vision, which supported into the results we have today. You've had a lot already today or you heard a lot already today about Salomon's transformation journey and our strategic priorities for the future.
Now I'll walk you through how it all comes together in our financials, the key components behind our growth story over the next 5 years. Sometimes, and this is important, we forget where we are coming from, Salomon transformation delivered a 23% CAGR over the past 5 years, and we doubled our operating margin along the way. As you have heard from the other leaders today, we have transformed this business from a European-centric performance and B2B brand into a global multi-category omnichannel brand with strengths across the board. That growth came from clear direction and focused investment in a few key areas. First, we stayed relentless, and I think you've got today a picture of it on product innovation and excellence, designing durable, high-quality products from day 1. That's what led us earn and keep our credibility.
Second, we expanded in multiple categories. You got a feeling today. Footwear remains our core. And there we have grown beyond outdoor into run and Sportstyle. Apparel bags and accessories are amplifiers. They round out our head-to-toe offer. Third, we transformed how we go to market, premiumizing our wholesale partnerships, accelerating B2C with a focus on full price brand stores and building out our global epicenters to nurture our target communities. And finally, we build the team and infrastructure to enable and fuel the business at scale.
Again, the result is on the slide, 23% revenue CAGR from less than $1 billion as I started to over $2.5 billion over the past 5 years. And we doubled and there I'm very proud of, we doubled our operating margin at the same time. 2026, looking a little bit ahead, would be our strongest year end. And I'm proud to say we are significantly ahead of the 5-year plan we set back in 2024. By year end, we will surpass the $2.5 billion of revenue, which means about a 30% year-over-year growth. More than 85% comes from soft goods with the rest from major sports. All 4 regions are outpacing their regional markets, you heard that. And we are delivering that growth with operating scale, which means higher profitability too. Our D2C share will reach about 45% of revenue by year end, 5 points higher than last year with approximately 540 owned and partner stores around the globe.
Strong digital acceleration in Europe and North America, a new or deepened partnerships with high quality D2C partners that fed us up well for the future and from a category standpoint of view, the numbers backup our positioning. We are still anchored in performance, which is 55% of soft good revenue while Sportstyle now give us an access to broader categories and consumers, which is basically 45% of soft goods. What happens from a regional point of view actually the summary you heard today. We have a very balanced portfolio. No single region represents more than 40% of our sales and looking ahead, we accept growth-based growth, meaning every region will accelerate. You have EMEA as largest region we grow at low double-digit CAGR over the next 5 year. China, our largest D2C, will grow at high teens. APAC would also growth at high teens, led by strong omnichannel growth and lastly, North America will accelerate significantly, growing at a low 20s CAGR.
Category standpoint, we have winter sport, will continue outpacing the market, reinforcing our leadership across all winter sports. Soft goods will grow up high teens CAGR, led by the acceleration of Sportstyle and running footwear as well as our head-to-toe portfolio. Within soft goods, footwear, which is the largest part of our business, will grow at mid to high teens CAGR. Apparel, accessories and bags will grow at low 20s CAGR as we begin investing in this category and you got the snapshot this afternoon.
Coming together, and this is why I took the job 4 years ago because I believe to see the potential. I didn't know that it was so big. And looking ahead, I'm excited about the potential for the plans to keep growing. From a top line perspective, we expect to deliver mid teens CAGR over the next 5 years and we expect to see higher growth rates in early years, which naturally normalize as the brand gets bigger. We also expect to deliver 20 to 60 plus basis points of operating margin expansion annually ensuring we manage the business in disciplined manner, driving strong profit flow through by balancing key investments needed to scale the business over the long term.
Let's dive into this gross drivers which is what make us confident that the target is achievable and you see them here. But before we got in this, there's one thing I would like to highlight. We are not just growing somewhere. We are growing across multiple areas at the same time, not relying on any single lever. That's important. We try to balance the business. Let's start with the product. We expect strong growth across whole soft goods portfolio, footwear, apparel, accessories and bags. Our head-to-toe offer, apparel and bags will also accelerate, growing in line with run and Sportstyle. As mentioned before, no single region represents more than 40%.
Looking ahead, we expect broad-based growth, meaning every region will accelerate. Let me repeat that. We are not relying on a single region to bring in the growth. We have this global plan in place driven by our global and regional epicenter strategy and strong locally go-to-market strategies. As our younger regions, call it younger, deadlock, our regional portfolio will become even more balances, that's important. we will also expect that our channels will grow, all the channels will grow. D2C growth is expected at the high teens CAGR from 2026 to 2031, driven by both retail and e-commerce. And you heard that today, on retail, we will keep building at our fleet globally and increasing productivity in China, while prioritizing premium locations and food price store formats in every region.
On digital, we will keep increasing consumer reach year-over-year and improving e-commerce productivity as we grow awareness and boost online conversion. And we expect wholesale to keep growing consistently focus on high-quality premium accounts aligned with our brand positioning, delivering the right consumer experience across run, Sportstyle and major sports. Growth priority is clear by region. EMEA is our most major market, is mainly focused on growing doors, while North America and APAC need to grow both doors and strategic partners.
This is my life thing here. I like that because I’m really working everyday. This is my everyday mantra. [ It’s still creating ] margin. We’ll expand 20 to 60-plus basis points every year driven by a mix of gross margin improvement and [ as unit leverage ]. Gross margin will be a key lever here due to the category channel and regional mix effect. Let me break that down.
On category mix, footwear is our highest margin category and Sportstyle is our highest margin segment within. So as sports [indiscernible] and footwear overall becomes a bigger part of the business we benefit from a higher product gross margin. One region and channel mix with our D2C channel expand globally, gross margin improves along with our full-price sellout.
And there is a regional component to regions with a large D2C share gain more momentum. And across all of this, premium -- brand premiumization matters. We'll keep protecting full price sales and reinforcing our premium position globally and across every channel. On SG&A, we expect modest leverage, especially in the early years. We are leveraging our fixed operating costs while making the critical investments we need to build and enable this business.
These are investments we have to make now to build the capabilities to scale over the next 5 years and beyond. And the gross margin improvement helped us to fund them. What are these key investments? And before I go into that, I want to share the shared philosophy, his leadership team has behind them. we will increase investments. You heard that also in marketing in strategic areas, but we will do so with discipline. We invest in proven drivers, consistently measuring the returns as we go. So this isn't just about investing, but more testing, but it's more investing better. On product, on brand and product innovation, you have heard it today, product innovation is a constant. We are always fueling that. We need that.
On strategic priorities, we are increasing investments in D2C expansion especially on full-price stores, epicenters and full funnel marketing to increase awareness, recruit new consumers and expand our community of loyal consumers. On the Technology & Digital, we continue to invest in capabilities that support our omnichannel approach strengthening the customer experience and engagement across all touch points. In parallel, this is also important. We are also modernizing our internal platforms and processes, leveraging AI to improve productivity and scalability. Last but not least, talent and capabilities. We will continue building our teams with best-in-class talent from the industry, and we will also expand our corporate presence globally with corporate and design hubs across AMC, New York, [indiscernible], Shanghai, Tokyo, to name a few.
To close, I want to leave you with 3 main takeaways. We have experienced significant growth in the past years driven by clear strategies and strong execution, which has led us to outpace the market across key categories and regions. We are still, and this is really also my belief in the early innings of the Salomon journey, with white space to be captured in younger categories, regions and channels. And there is an ample growth potential ahead, and we have clear and achievable plans to deliver on our objectives, while staying true to our DNA, bringing the modern mountain sports culture to the city. Thank you for your attention. I will now hand over to Andrew, who will walk you through the financial of the wider Amer Sports portfolio.
Good. Thank you, thank you, Antonio. And what an awesome presentation today. So before I get into the numbers, let me just say thank you to the Salomon team for an awesome presentation, awesome set of content and thank you guys for coming. Maybe I think it's important, before I dive into the financials today and give you the Q3 -- updated Q3 guidance, let me take a moment to really reflect on how we got here and how we were able to really unlock the value across our portfolio and set ourselves up over the last 5 years. Our shift from a central model to a decentralized brand direct model is key to the decisive revenue unlock that we've experienced over the last 6 years. This model has enabled our brands to operate independently supported by putting in place the right management team and the organizational structure designed to enable long-term value creation. This is what you call demonstrative evidence. Essentially, we've gone from a mature portfolio of equipment brands stuck at the $2 billion to $3 billion range for decades to a unique portfolio of premium sports and outdoor brands fueled by 3 growth engines poised to eclipse $8 billion in sales this year. This represents a 20% CAGR of the portfolio since 2020.
Today, we have 3 key growth drivers that are still relatively small in the global marketplace. And I put this up here for a reason, guys. This is our Terex is 1 of our key growth drivers, Salomon soft goods as 1 of our key growth drivers and Wilson Tennis 360. So I am basically within each operating segment, define what the growth drivers are. So as -- so these numbers do not represent the operating segment but rather the growth drivers. Arterix has been our largest and fastest-growing brand and continues to be driven by broad-based strength across categories, regions and channels. It's grown at a 40% CAGR since 2022, and it will eclipse $3 billion this year. And we are very confident in our -- that our care still has significant growth and runway ahead as we continue to open stores across all 4 major geographies as well as expand key growth categories such as women's, footwear and Veilance. Then you've got solo and soft goods, which you've heard a lot of details about today. It is a critical growth engine for Amer Sports. 30% CAGR since 2022, but it's still only a $2 billion revenue business in 2026. With a significant runway across all 4 geographies as Antonio just pointed out. And then our third growth driver, Wilson Tennis 360, a 20% CAGR since over the last 4 years, and it will exceed $600 million in 2026. The success has been driven by both in apparel and footwear as well as performance rackets.
Moving down to gross margin. It's clear that this is not just a sales inflection. Profitability has also meaningfully accelerated for the group. Since 2022, we have enjoyed a very positive gross margin mix shift benefit. This includes sales shift towards soft goods from hard goods, D2C from wholesale and China and APAC versus the rest of the world. So all 3 of these mix shift benefits have benefited the company. And so when you think about that, this mix is combined with management's commitment to maintaining our brand's premium positioning in the marketplace, and disciplined inventory management have allowed us to expand our adjusted gross margins by over 1,000 basis points since 2022. And gross margin dollars have nearly tripled from $1.8 billion in 2022 to $4.9 billion at the midpoint of our 2026 guidance.
So what does this all mean? Our strong gross margin performance have enabled us to reinvest in growth engines from a position of strength. Our confidence in our key growth opportunities have increased. We've been able to significantly increase our investment behind this portfolio over the last 4 years, and we've been able to make this investment at a challenging time for many others in our industry, and we've also been able to do this without sacrificing operating margin, which has increased 450 basis points since 2023.
A 150 basis points per year, well above our 30- to 70-plus basis points that we provided in our Algo. So we believe that this is the natural result when you have great assets that has been under monetized and then you put the right organizational structure with great teams who are well incentivized to make the right decisions and execute and you feel this with the natural gross margin mix shift that I talked about, this is what you get. You get the ability to invest in growth as well as expand operating margin over that time period.
So we believe that, that disciplined approach and decision has significantly benefited our organization. This transformation continues down the P&L. If you look at this and look at our EPS trajectory, similar trajectory as you've seen in our operating profit.
Turning to the balance sheet. As many of you know, it wasn't just the P&L that inflected. We have also transformed our balance sheet with net debt going from approximately $3.5 billion pre-IPO and a leverage ratio well above 5x to a net cash position today. And thanks to the strong business momentum as well as disciplined working capital management, we are generating strong improvements in our operating cash flow.
Now turning to the Q3 update we shared this morning. Please note that since we have not yet closed Q3, we are not updating full year guidance at this point. We will publish our Q3 results and our updated full year outlook when we report Q3 in November. As you saw in the press release this morning, we expect another strong quarter in the third quarter this year [indiscernible] in a couple of weeks. We now expect reported gross revenue of 20% to 22% versus the previous guidance of 18% to 20%. Also, we now expect adjusted operating margin to be slightly above the high end of the previous range of 13.5% to 14%. The strong results continue to be driven by strong performances from Salomon, Arc’teryx and strong -- and a solid performance by balled racket.
Now moving into the long-term financial algorithm. Please note, this is important that the midpoint of our most recent full year 2026 guidance, this represents the new baseline for the updated 5-year algorithm that I'm going to discuss today. Starting at the group level. We are reiterating the group sales algorithm we provided a year ago of low double digits to mid-teens. This is despite the fact that we're starting from a revenue basis, 30% higher or $2 billion larger today than it was last year. Regarding the cadence of our growth over the 5-year horizon, we expect growth to be towards or above the high end of the CAGR range in the earlier part of our planning horizon and slower in the later years as we grow from an increasingly large base.
Switching to profitability. At the group level, we continue to expect adjusted operating margin expansion of 30- to 70-plus basis points per year despite the fact that our baseline EBIT margin is approximately 200 basis points higher than from a year ago.
All right. One thing that's important, let me walk you through the tariff. So regarding the tariff benefit of $64 million or 80 basis points that we received in 2026. Approximately half of that 80 basis points of margin benefit related to 2025. This means that our 2026 guidance of 14.2% to 14.5% includes a benefit of approximately 40 bps related to 2025. So onetime pickup this year.
As such, when you back out the 40 bps, the baseline for our updated 5-year margin is effectively 13.8% to 14.1%. This is the operating margin that we believe reflects our underlying business in 2026.
Okay. Margin expansion will continue to be driven by 3 factors: a positive mix shift as the higher technical apparel and outdoor performance segments continue to grow faster than the lower-margin ball and racket business; number two, margin expansion within each of the segments; and then number three, some leverage of corporate expenses, which we expect to grow slower than revenue. A couple of points to consider regarding our updated EBIT margin. We've generated significant margin expansion in the last 3 years. As I noted, 450 basis points. Our EBIT baseline margin is now approximately 14%, as I just discussed, and we believe it is imperative that we invest behind our 3 big growth engines, all of which means that we expect future EBIT margin expansion to be more in line with our long-term algo of 30 to 70 basis points per year versus the much higher expansion that you've seen since the IPO.
Given the significant value creation potential for each of our 3 growth engines, we want to be flexible to invest behind our brands and capabilities so that we can deliver healthy and sustainable growth and ensure strong brand equity over the long term. This means making the investments to attract and retain high-quality talent, support our brands with best-in-class marketing, build premium owned store build out our premium owned store network and develop strong IT and digital platforms.
Accordingly, we expect EBIT margin expansion to be driven by more -- to be driven more by gross margin in the first half of the planning horizon and more SG&A leverage as you get later years than the planning horizon.
Now moving to the segments. For technical apparel, we continue to expect annual revenue CAGR of mid-teens, and this is on a sales basis, 30% higher than a year ago. Sales growth will continue to be driven by new store openings and Omnicom growth across all geographies. We continue to expect technical apparel segment to expand at adjusted operating margin of 20- to 60-plus basis points annually.
Please note, technical apparel expansion will be towards the lower end of the range in the early years and towards the higher end of the range in the later years as Arc's investment in store openings and brand awareness begins to really scale.
Moving to outdoor performance. As you heard today, Salomon footwear and apparel are driving the revenue and profitability acceleration in this segment. And we have elevated and as such, we've elevated the outdoor performance segment long-term sales algorithm. We now expect outdoor performance to achieve mid-teens long-term sales growth versus low double-digit to mid-teens previously provided. This incorporates mid-teens for the Salomon brand and low to mid-single digits for atomic intermodal Winter Sports Equipment businesses. And on margin, we are now expecting 20- to 60-plus basis points of annual operating margin expansion versus the 40 to 80 basis points previously provided.
The lower annual margin expansion expectation is due to 2 factors: number one, very strong, nearly 400 basis points of underlying margin expansion, the Outdoor Performance segment achieved just this past year; and number two, our strategic decision to reinvest in the many growth opportunities across categories, channels and regions that you heard about today. Outdoor performance margin will continue to be driven by mix shift from hard goods towards soft goods, which carries a higher gross and operating margin than Winter Sports Equipment.
Now for Ball and racket. We now expect a mid- to high single-digit revenue CAGR over the next 5-plus years versus our previous mid-single digits rate. Growth will continue to be driven by Wilson Tennis 360, especially soft goods, which now represents 15% of segment sales and is growing at a very strong double-digit rate. We expect the remaining ball and racket equipment business to grow low single digits.
Lastly, we expect adjusted operating margin expansion of 20- to 60-plus basis points versus the 40 to 80 basis points previously provided. This is driven by our strategic decision to accelerate investment behind Wilson Tennis 360. We believe this franchise has strong and unique value proposition in the marketplace and still low brand awareness. And we are confident in the overall growth of RacketSports participation globally. All-in racket margin expansion will be driven predominantly by scaling the softgoods investment over time, especially as we build out our retail expansion in China D.C. and wholesale expansion in Europe and America.
A few other financial considerations as you build out your models. We expect our effective tax rate to continue to approach 25%. We continue to expect annual CapEx of approximately $400 million. CapEx will be focused on building out our D2C footprint and making IT and other infrastructure adjustments to support our growth engines. We continue to target inventory growth at or below revenue growth, and this is a key KPI for our management team. We are very pleased with the quality and the quantity of our current inventory position across all of our brands.
Moving to capital allocation. Following our newly achieved net cash position, our priorities are as follows: number one, invest in the growth of our business, we see significant long-term growth opportunities in all 3 of our growth engines of our Arc’teryx, Salomon Soft goods and Wilson Tennis 360. Share repurchases to the extent that they offset dilution of our long-term incentive plans and maintaining a net cash balance sheet midterm, given that our portfolio consists of 3 early-stage growth brands in a volatile and uncertain external environment.
Lastly, I would emphasize that M&A is still not a priority given the fact that given given the opportunities that exist in our existing portfolio. To wrap it up, I want to leave you with this. If you apply our updated long-term sales and margin plans through our 2026 baseline, we believe Amer Sports Group has a strong potential to achieve significant earnings power by 2031. That includes $14 billion plus of sales, 16% plus operating margin and EPS of greater than $3 or more.
All right. So with that, I will pause for a second. We're not going to take a break, just about 2 minutes. I'm going to reset the stage. We'll set up for Q&A, okay?
[Break]
Thanks, everybody, for the great day. Thanks to the team. We've got about 30 minutes for Q&A. We have Sara and [indiscernible] from the IR team with microphones.
[Operator Instructions]
Let's start with Lorraine right here hereon.
2. Question Answer
Thank you. Andrew, my question is about the capital structure. You've got yourself to net cash. You have laid out a great investment plan for the next several years yet you talked about share buyback just to offset dilution. So why? And what will you do with the cash that you generate over the next 5 years?
I mean I think it's a great question. Just -- I think that given my last point around the volatility of the environment leaving ourselves the flexibility to really invest in the growth of our 3 growth engines is very, very important to us, making sure share buyback and M&A is not a priority right now, but we have left ourselves flexibility to as the environment changes as opportunities come up, we've left ourselves the flexibility, and we believe that that's important and prudent right now.
Matt right here.
Great. So on the multiyear wallet share opportunity for Salomon, you cited performance has led growth in Europe. Sportstyle has led in China in both categories very small. I think you might have said tiny in the U.S. Do you see both Sportsstyle and performance in early innings today? And can you elaborate on the diversified drivers of growth for the brand?
Yes, okay. So in fact, the Salomon story is about a performance story. So this is the first part. And what we are looking for is definitely -- we are convinced that if we tell the performance story and you see we're coming from Intersport outdoor and then moving to running and running on more opportunity than [indiscernible] train. We believe that we can really create a very strong connection with the consumer. [indiscernible] style is how we translate that into a cultural moment and then people are using our product every day. So when we look at -- when you are saying that Europe is coming from performance, China from [indiscernible], I think it's yes and no because, of course, Europe is performance first because this is what we are planning and we developed for many years.
But in China, we have a very strong reputation in performance. So we have -- you have seen some video today. We organized in running on the great world, for example. So people get this image of core performance, innovation. So I think that we have to pay attention not to decouple the -- and I think the driver is more on the brand awareness on the acquisition of consumer and the capacity, if we acquire consumer on performance and sports and as they become to the full ecosystem.
So I think that we have to look at this way in terms of consumer journey. And I just want to add 1 thing is -- there is 1 slide about how we spend the media, and you understand that we are reducing a lot the paid media, and we are starting to cut the story to the consumer. This is a lot about that. A lot of new consumers coming to the Salomon ecosystem. And we could have 2 choices. We could have one say, okay, we just board with paid media on 1 or 2 style and we try to sell as much as possible or we go on quality. We are telling the full Salomon story to this consumer, and we are trying to convert this consumer to the Salomon ecosystem.
And today, this is what we start to observe in the data. We start to have this type of second wave of success where buying one and then going back to the store or going back to the system and moving forward. So this is the way we look at the strategy today.
One question. I mean, on Lorraine, back to your question on capital allocation. I think it's important to inform the group that should our capital allocation strategies and priorities change, we will definitely -- we'll signal that and update the market on the priorities. So if that was your embedded question.
Kelly Crago, BMO. Thanks for having us, guys. There's been lot of news out there, obviously, about the lifestyle sneaker category since you last reported seems like Salomon may be the only brand right now that's really in demand by the consumer and assume the retailers need to sell this whole as we look to next year. So just curious if there's any opportunities to accelerated distribution or sort of how you're thinking about that?
So what we are looking for is, once again, it's are you in style the brand for a long run. So this is a good example of what we have been doing in U.S. for the last 18 months, I would say. We're starting to work with -- in B2B with Nordstrom, GDS or [indiscernible] we are not coming to them and, okay, you have ABC score, and we are starting to fit Salomon on the star we are looking at where Salomon get traction and choose the store strategy team in order to make sure that we secure the demand, and we are telling the right Salomon story. So now the question is how much we are developing and today still quite small. So we speak about maybe between 50 and 100 stores in each of the partner, but it's how we are driving the sales standard in this area and we secure that and we start to build this awareness in this space. And then, of course, we are moving forward to the next step.
And today, we have this 2 epicenter, which is New York and LA. I speak about U.S., but it's a good example. Now we have ensured cities. So we define 10 cities where we believe that we can have, again, an investment connection with community a bit more media. And then we are partnering with them, so we are choosing [indiscernible] in this area. And of course, then we see how much we can transform season after season, and we start to feed the demand. There is one good signal is e-com is helping a lot. So now we have a very modern platform. We are able to drive data. So as soon as we have information and signal on the e-com platform that 1 place is good for sla, then this is where we engage our partner.
Epicenter strategy, consumer demand is really what we are looking for. It may look like a bit cautious compared to jumping on this opportunity. But I think in the long run, this is where we would like to install the brand in the market.
Before I go to the net question, I just want to remind you got all the Salomon team's here, too, as you have questions for the regions or the product guys, you can -- we have mics for them as well. Michael Binetti?
It was about Salomon. So I want to thank you, Gil. I know we've been waiting a long time to hear this is excellent, thank you. I do have a question for Andrew, though. Andrew, there's really been some very tough supply dynamics at play for the stock here lately. I think people who believe in the story, I think it's hard to buy a big position in where this is going because of the low float. I think other people are afraid that there's some concentrated holdings that could mean unexpected supply hitting the market. When you think about that, does this business need to operate at net cash? Does -- is there anything you can do to create a perceived buyer of a sizable position to backstop people who believe in everything that we hear from the -- what we've seen today, but I think the stock is trading far below what fundamentals would part.
Yes. I mean we definitely appreciate the fact that of our concentrate of the limited float that we have out there. And we've heard from the market and long only investors in key investors that, in some cases, is a hurdle. Again, I think that creating and leaving the flexibility for us to be able to run our business, grow our business, do the things that we need to do and invest in our growth initiatives is important, but also having the flexibility to make key decisions if we need to in the future is also critical.
Yes. And I would just add on Andrew's comment we have been in a net debt position in the past. We have a substantial cash flow. It's not debt in and of itself. We're afraid of it. I think it's really more just a position we're in the early stage of the growth companies. We have the flexibility do a myriad of options in the future if we should we so choose. I will go to Laurent here.
Laurent Vasilescu from BNP Paribas. I thought it was very helpful this morning the product segmentation, particularly around Sportsstyle. I think 1 of your colleagues said, the big elephant in the room. So with that said, I think it was 40% of your business is sports up. Where do you think that goes as we think about that $5 billion target for Salomon? Within that, is it going to be the XC6 or is there going to be a whole like a more complete offering within that a few points?
First of all, the sneaker market is 3x wider the performance market. So we look like over relaxing, but we are not -- so we are still rooted in performance. This is one. You have some usual suspect in the room that you were going there. We get already a big signal from the B2B partner where they want to play a big game in order to diversify with after stasis. So I think the case you hear about [indiscernible] is a very good case so that how much we can expand to new franchise. We have a big launch in '27 with another one that was on this morning. So I think we will have a portfolio of projects. So at the end of the day, we have a portfolio of products. Usually, you cannot kill an icon. So we were discussing about -- we opened this new store -- new market, which is modern outdoor sneaker and it will remain the kind of future.
I suspect our people, okay, I understand this segment because I think about this project. And it looks like in all your question and weakness, but guys, everybody -- every single [indiscernible] car brand in the world would love to have only 1 segment and having the icon of the segment. So we have to leverage that. And of course, now you see that we are going for life cycle management, opening the sticker distribution, having new style, sometimes [indiscernible] and sometimes, we are also the ambition to have new design and leveraging this new design for powerful sneaker.
[indiscernible], will not go in details on that. But of course, the market potential is much bigger in sneaker, but we will fight hard to open this altering opportunity, for sure.
Paul Lejuez, Citi. Curious how you think about performance versus Sportsstyle and the crossover between those customers or how much are you really pushing 1 customer to try to get them over to the other side? How successful have you been? Are you really making that a big push within your marketing efforts to take that Sportstyle customer and get them over to performance and the other way around. Where do you think you've been successful? And where are the big opportunities on that front?
Today it's part of the strategy. I think that you understand that we are growing so fast that we did not transform yet all the opportunity having newcomers. You hear this morning, we have at of new consumer, first buyer from the brand and so on. But once again, I would it when you look at the way we are looking at our store and we have just limited stock for sneaker and all the store will tell you [indiscernible] story [indiscernible] performance where we are investing in media, where we are really paving the [indiscernible] mid-funnel upper funnel where we drive campaign, and we are getting the story. It's everything about that.
Today, we have some good [indiscernible] in the data, but it's time to transform as well. So because of very early success and how much we have been able to acquire a lot of new consumer, but it's really part of the strategy. It's how much first-comer in the brand buying an [indiscernible] tomorrow, considering changing is running shoe because of affinity of the brand because they start to have some emotional connection, could consider to move to Salomon. It's one of the biggest challenge we have in front of us. We are very confident with all innovation we are coming energy behind the ground that we will be able to cover this consumer.
Yes, we have the CRM. So we are very obsessed by looking at the data and looking at the consumer journey and how much consumer are connecting and repeating behind. So yes.
I think Xavier made a good point, too, that brand he is circular. It's going for performance sports yack to performance and so on. Brook Roche right here.
Brooke Roach, Goldman Sachs. I had a follow-up on the customer acquisition journey. Can you speak to what you're seeing regarding customer repeat rate, given the significant number of new customers you've gained over the last 5 years? How quickly are customers coming back to the brand? Does that differ by geography or by Sportstyle versus performance?
Do you have some data, but we do sense and Okay. Anyone to accurate that [indiscernible]. I don't want to.
Qualitative, answer qualitatively.
Maybe just qualitative data at this point. What we definitely know is that there is a frequency that is very different from geography to geography. Our EMEA clients come less frequently and that's also linked, I think, to the distribution structure that we have compared to our Greater China clients. where we have a really, really high frequency. I think it's also somehow linked besides the distribution itself to the fact that we probably have, at this point, more apparel in our China stores, which also is a driver for frequency. So the more we're going to have a diversified portfolio. I think the more we're going to work on the velocity in the different geographies.
Jon Komp here and then Mauricio next.
Jon Komp from Baird. Thanks to everyone for hosting us here. Maybe a question for Steve and Guillaume. I want to follow up on North America. The plans certainly imply a much bigger part of the growth going forward than over the last few years. And I'm wondering, when you look at providing a complete running solution, cleaning up the marketplace distribution, and then the global brand heat, how would you lay out the biggest factors supporting the confidence for the next few years? And what does North America look like just the road map the next couple of years on the growth strategy?
You want to -- they were steep doing over here -- and then Jim, you can add on any comments. Thanks for the question. The cleanup in terms of the wholesale market is complete today as far as we're concerned. So that is good to have that behind us. In terms of run, and we were in about this a little bit earlier we have a consumer base and a retail partner base that has looked at Salomon for traditional trail [indiscernible] product and hydration vest and hydration, as you've heard, is a key part of the business for us. And it's a really important solution that consumers turn to, especially as we move into an environment where heat and longer running as part of their everyday life. I'll pause there, and I'll talk about you've had a few awards that were going in terms of partnerships that we have in Iran is obviously a key road running component there. And then you've had a view of where it is that our product is going in terms of development. We believe that we are building the assortment that a consumer is going to need and find full fit from stability issues to [indiscernible] to tempo shoes so that every consumer is going to have the product that they need.
So as you continue to see us build out the product assortment. We believe that 1 specialty is absolutely where we have to live and win, and then we'll build from there.
Adrienne sorry, Marcio. Sorry, Marcio, my bad and then Adrienne.
Susana from UBS. I think you mentioned that you were thinking about -- you're doing investments on several items, but I think 1 of them was leveraging AI. Could you talk a little bit more? I think you mentioned something about leveraging for productivity, what you've achieved and what you aspire to do. And on the marketing front, how are you thinking about the marketing dollars in the next 5 years as part of the plan?
Are you talking about Salomon AI or just as a company? I think Antonio mentioned some investments in -- are you talking about Salomon or...
Andrew, if you want to touch on AI.
Yes. So touching on AI today. So if this is a usual suspect everybody speaking about AI right now. What we have -- we -- we are looking at -- we have 2 big drivers of development. The first one is when you are when you have your system with big players, which are running some operation is how we capture the last update you when you have a PLM, you have a kind of supply chain system and 1 is how much you are getting the first 1 to capture the last updated system supporting AI and so on and how much because we are also showing to our partner that we have new technology and new we can capture this type of update. So this is one, and this is general and I don't think it's going to be a point of difference for the brand. It's going to be -- everybody will benefit from that.
The second one is we are generating a kind of bottom-up area. So we have a lot of different areas where we have data or we can use G&A for different style like design, for example. So we are trying to develop new opportunities. So in the team, we have a system with kind of [indiscernible] people are teaching their idea and how we are moving forward and how each job by job, we are looking at what could be the opportunity to use AI to go to the next step. So for example, you have today you have to the new editor on design, for example, where from the sketch, you can start to move to industrial design, for example.
So I just signed up like it was 18 months ago, 10 license our designers are sketching and we start to learn what are the benefits of using this type of new system. I speak about design, but this is the same for when we are looking at CRM, where we are looking at another development and so I think we have kind of 14 initiatives in the company, which are a bit elevated. And this one, we are really tracking month by month and see how it could influence tomorrow the organization. do we miss some competencies? Does it mean that maybe we have some idea of we need more people in some areas we may not need in the future. So we have this type of [indiscernible] moving forward.
There is no magic wand. So there is no like -- we just say AI and certainly we changed the organization. So we are ready to go on the type of process of learning test and sale, learning. And any time we see an opportunity we are really pushing the opportunity. So -- but we feel confident that the way we address it, and it's also in a close operation with [indiscernible] because we are very transparent and we're trying to elevate Air initiative in every brand and department at the level of the company. I feel that when I start to benchmark with outside, we are on the race of having this transformation.
I mean similarly to the point that Gail was making as a company from a Amer Sports perspective, we look to proven technology to ensure -- take improved technology, proven AI technology to create capacity for our resources around the organization. How do we do think fast, how do we do things smarter? How do we see and mine data out of our data lakes more quickly and more accurately but it's through proven technology. So to Guillaume's point, we're not leading with unproven technology and doing anything out in front as it relates to our back office infrastructure.
Adrienne and then Alex after Adrienne?
Adrienne Yih from Barclays. Guillaume, my question is on the evolution of R&D and innovation. The 2 places that you're going to invest to drive the flywheel or marketing and then the innovation. How has it changed now that you have multiple categories? Where are you sourcing dollars from? And then maybe at the corporate level, in that plan relative to like our [indiscernible] the Salomon require more R&D because there's more possibly more technical make? And in the long-range plan, are you pushing dollars back into the R&D line? So I'll start with Guillaume.
We have all this category for a long time. Some of them were successful some other one. So we are still investing when we look at [indiscernible] say head to toe and we have the back and ai, we have already a team here. But finally, Fruta was taking all. I don't feel that we need to -- you understand that we are in this building where we are nursing engineers. So we are using a lot of young engineers and then we hire them and we develop and so on. So I think that what we have to pay attention is making a shortcut where we believe that innovation could be made shorter or the quality could have like quality is always something that you have to rethink every season, every time because it's -- if you start to forget this is where you start to do some mistake.
When we are speaking about investments, it's more like we are growing. We have a lot more money -- we want to invest and you see the space where we're investing and what we would not like is suddenly believe that we have, at the end of the journey of innovation and we start to cut investment, and we say, okay, we are happy with what we are. We are a lot more bigger. We have several regions. We have to be -- we have to drive innovation and also make sure that the product is appealing for all the consumers in the region. So we know that we need to generate a little bit more investment to continue to have this type of momentum in R&D.
Alex Traton, you will come back.
Thank you. Maybe for Guillaume or for Steve, just on Salomon, has had a lot of success early in China. So as we're thinking about the North America growth acceleration can you just walk through how that market and your strategy there is either similar or different to what may do so successful in the Chinese market?
The -- I think the recipe of getting traction in the market -- and especially when we are speaking about this sports time, I think the recipe was more or less the same. So we were connecting with routed community, [indiscernible] Tier 1 store, creating energy on that and starting to show up. At the time that the consumer were looking for this type of proposition. So what the major difference is China was retail only. So we had to develop our own retail distribution retail store elevating the capacity. The capability as well to support retail. So having a little bit more draft, making sure that merchandising is matching what retailer require U.S. is omnichannel. So the fundamental difference is we are looking for epicenter strategy because we -- if you spend marketing in U.S. without any targeted area or consumer, this kind of drop in ocean and you don't ever. So the main focus on U.S. is going city by city, opening some stores to create the best experience and partnering with B2B in the same space and start to develop and having this type of rotating the brands according to epicenter. And today, we are at early stage. So we will have the old store in LA in a month. So we are really at this stage of how we are able city by city going for the investment and having this omnichannel approach so that getting very close to our B2B partner and make sure that they are also joining our strategy, which is really a consumer demand strategy.
Do you want to finish -- I think I cut you out before you answered.
Yes, I think 1 of the things that is remarkable and really be efficient about our brand direct strategy, but our brand direct strategy provides the autonomy to each of the CEOs of the brands. And part of that autonomy means that they're designing their business, their go-to-market strategy, they're funding all of that to be able to be self-sustaining in that business. So there's not a center-led R&D remit as a brand-led R&D remit. And luckily, and because of that, our brands are generally self-funding. There are some group initiatives, but that's far in.
Anisha Sherman from Bernstein. So I want to ask about Sportstyle. We've seen several other Sportsstyle franchises, many of your bigger competitors experienced a wave of brand need for a couple of years and then fade. What are the signs that you're looking for to anticipate the potential shift in brand heat? And then how flexible can your cost base be if you were to see a deceleration quicker than you expected in the sales trend?
So it's a lot about the portfolio of projects currently we are currently managing. So you see that we are starting to run on diversification. One thing -- one key driver of having a life cycle -- a short life cycle for success is also how much you put the product in the market. So today, when we are looking at our best seller, we decide how much we would like to put in the market. So you understand that we have a great momentum today. We have good partnership with our B2B partner, and we are able to master also this type of areas, such as, for example, in Europe, we agree on how many pairs of certain style. We are dropping in the market.
And of course, it's also a question of marketing allocation. So when you have this type of success, you are also making sure that you -- you are using this product maybe to move and open new distribution while in the current distribution, you are starting to remove and you are starting to build a merchandising play with a larger assortment.
We feel good that at the time that maybe thesis may be plateau, we will have at least 2 to 3 style, which will be above 1 million pair and being able rely to catch up.
I think also the trade innovations.
Yes. of course, of course. So then launching new projects as well.
Okay. It looks like we're all out of questions. One more from Brook.
If we have a moment, I'll ask one more. I was hoping that you could break down the contribution to the gross margin expansion at Salomon brand over the course of the next 5 years between each of the key drivers and then help us understand some of those relative mix dynamics just a little bit more between sports style performance running and how much of the gross margin expansion in the next 5 years is driven by mix?
So maybe before Antonio give the details, I'm just going to reiterate what we've said publicly before. The overall Winter Sports Equipment, so the overall outdoor performance segment is going to be about 25% winners ports equipment this year of goods. And the Winter Sports Equipment piece includes both atomic Winter Sports Equipment and the whole atomic -- sorry, Salomon and Winter Sports Equipment equipment and Atomic and Armada. What we've shared in terms of relative profitability in the past, is really the equipment business can be double digit, sometimes high double-digit differential between gross margin between the equipment business and a full price soft goods business.
And I don't know, we haven't really -- and you can use that to come up on growth rates and quantify what the mix benefit could be -- gross margin, yes. The gross margin, but also more profitable on the operating margin line. Typically, winter towards equipment historically has been a high single-digit margin. And you can see the guidance for this year is into the mid-teens for the segment, which means of fit, obviously, we're thinking about.
Andrew, I just have 1 more. On the cadence of the 5-year plan, I think you cited higher returns in the earlier years of the plan than the later. Is that top line and bottom line? Or just elaborate on the cadence of the 5-year plan?
Yes, I said in the 5-year horizon that the the -- on the revenue side that the growth rate was going to be at the higher end of the range. And as we mature through that over a larger base, the growth rate will slow as you get to the -- in the back end. And then I disaggregate it between the operating margin contribution. So with Arc’teryx as an example, the operating margin is going to be towards the lower end of the range in the earlier part of the year, and then it will start to accelerate or expand more in the later part of the planning horizon, given that we'll be scaling the investment into the store build-out. As you can imagine, with regard to the outdoor performance business, you would expect that the operating margin performance, this is a fast-growing business as delivering a lot of profitability down to the bottom of the line, it's not going to be front weighted toward slower expansion in the beginning, it will be more even.
Andrew also noted in the technical apparel, 20 to 60 basis points of margin expansion will be towards the lower end in the earlier years and the higher end than later years as they invest in the store expansion as well as brand awareness because they obviously also have a big brand of our opportunity.
Yes. And -- but again, overall, a lot of the point that I really wanted to make on the operating margin is, again, the 150 basis points the year that we've delivered over the last 3 years is really indicative of we've said if certain demand, if high demand continues, and there's no reason that we can't deliver more on the bottom line. We're going to -- we realize that now we have 3 growth engines that are all popping. We have to really invest in our tariffs awareness in North America. We really need to invest in our [indiscernible] store build-out. We need to invest in brand awareness for Salomon, we need to invest in our commercial go-to-market North American strategy for Wilson Tennis 360. So the need to invest and making sure that we are setting ourselves up for long-term growth. is more imperative than it ever has been. And so we're going to be very thoughtful and disciplined in how we expand bottom line margin going forward. So really just kind of resetting expectations that our expansion will be closer to the algorithm than it has been over the last 3 years.
Okay. Perfect. We're 05:01, I can't believe we came in within a minute at when we said we were going to end. Thank you, everybody, for joining. Thank you, Salomon team. Thanks, everybody, for making the journey. Thanks, everybody, for being online to watch. For people in person just it stay in your seats for 1 second, I want to sign off the webcast and then give you some instructions for what's next. Thanks again, everybody.
Amer Sports — Q2 2026 Earnings Call
1. Management Discussion
Hello, everyone. Thank you for joining us, and welcome to the Amer Sports Second Quarter 2026 Earnings Call. [Operator Instructions]
I will now hand the conference over to Omar Saad, Head of Investor Relations and Capital Markets. Please go ahead.
Welcome, everyone. Thanks for joining Amer Sports earnings call for the second quarter of fiscal year 2026. Earlier this morning, we announced our financial results for the quarter ended June 30, 2026, and the release can be found on our IR website, investors.amersports.com.
A quick reminder to everyone that today's call will contain certain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only. They are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the safe harbor statement in our earnings release and SEC filings.
We will also discuss certain non-IFRS financial measures. Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to the most comparable IFRS financial measures.
We'll begin with prepared remarks from our CEO, James Zheng; and CFO, Andrew Page, followed by a Q&A session until 9:00 a.m. Eastern. James will cover key operational and brand highlights, then Andrew will provide a financial review at both the group and segment level, and also walk through our updated guidance. Arc'teryx CEO, Stuart Haselden; and Salomon's CEO, Guillaume Meyzenq will join for the Q&A session.
With that, I'll turn the call over to James.
Thanks, Omar. Our global momentum continued in the second quarter with over 30% revenue growth and strong operating margin expansion. All segments, geographies and channels achieved strong double-digit growth led by another exceptional quarter from Salomon Softgoods, a strong Arc'teryx omni-comp and Wilson Tennis 360 acceleration. We manage our portfolio sports and outdoor brands that's very unique in the marketplace. And all 3 of our primary growth engines, tariff, Salomon Softgoods and Wilson Tennis 360 are still relatively small with significant room to grow.
First, I will recap key highlights from our 3 segments, starting with Technical Apparel. Arc'teryx delivered another great quarter with broad-based strength across regions, channels and categories, including another exceptional performance in women's. Strong DTC momentum also continued driven by a 17% Technical Apparel omni-comp. We believe Arc'teryx is a truly global brand with significant runway in all major markets and are encouraged by the strong double-digit growth across all 4 regions in Q2. The brand also resonates strongly across categories and the consumer segment.
I want to highlight our momentum in womens, which grew faster than any other category for Arc'teryx. Our confidence in the size and the scale of our women's opportunity is very large. Brand awareness and affinity with women is rising significantly as we improve fit, style and function and also build expanded assortment. Redesigning our core ABCD models for her, plus expanding family color pallets is driving higher female traffic and conversion. In Q2, units and seasonal colorways generate over 60% of women sales, standout new franchises include the [ SenSura ] and are [indiscernible] hiking styles and also the Saudi utility West and Jacket. Our remarkable success in women's bottoms with franchises like the Clarkia, [indiscernible] is helping us unlock the female consumer from head to toe, driving higher overall spend.
Turning to footwear, which had another great quarter, including strong double-digit growth across regions, led by both existing and the new starts. Popular existing starts included Norvan LD 4 trail shoes, which continues to be our biggest volume driver, followed by the [indiscernible] tracking cures. In March, we launched the latest version of our Technical [indiscernible] raising shoe, the silent [indiscernible], performing very well so far and we are excited to have [indiscernible] athletes competing in the UTMB race in [indiscernible] next week. Looking forward, we are confident that Arc'teryx has an exciting pipeline of shoe releases for the coming years.
Turning to our Veilance sub-brand, which had a solid growth in Q2 on a small base. We continue to focus on investing [indiscernible], further developing our collections and expanding distributions, all of which is creating engagement and awareness in the marketplace.
Turning to Circularity and ReBIRD, which continue to be at the heart of Arc'teryx. In Q2, we added 5 new ReBIRD centers, bringing us to 47 total. Later this month, we will unveil an important new innovation which combines our passion for Circularity with uncompromised technical performance. On-Mountain, our renowned [indiscernible] academy, was again a great success in July with over 15,000 visitors in the village over the weekend and more than 1,000 attentive in clinics. Our On-Mountain academies are the [indiscernible] premium mountain education events and the space for mountain enthusiast of all levels to advance their skills and the knowledge through clinics on the mountain. We are especially proud that we women now account for half of the academic participants.
Turning to Peak Performance, which delivered solid growth in Q2. The brand continues to reduce its Nordic dependency and is rationalizing its footprint in the region while seeing healthy growth in other parts of EMEA. For both Peak Performance, and our winter sports equipment brand, we are excited that free rise ski will become an Olympic sport at the 2030 games. Peak Performance sponsored freeline water and our ski equipment brands [indiscernible] many of the professional free rise skill.
Now turning to the Outdoor Performance segment, which was led by another outstanding quarter from Salomon Softgoods, the investments we are making to grow Salomon brand awareness and the distribution footprint are paying off, driving strong footwear momentum across regions, channels and for both Sportstyle and the Performance Products. I'd like to highlight a few factors that give us the confidence that Salomon is well positioned to achieve its long-term potential.
Number one, Global Sportstyle momentum continues. Sportstyle is critical to developing [indiscernible] position as the modern outdoor sneaker brand. The XT6 and XT Whisper franchise are resonating with a younger and more diverse adults from technical sports in the mountains to culture and the community in the cities. We were excited to announce that [indiscernible] the global superstar single and actress will be Salomon's new global ambassador. The news had amazing global coverage reaching nearly of 1 billion consumers across social platforms.
Second, our performance lines are also working well. We continue to believe our new global franchise is helping to unlock the rum category for Salomon like never before. Salomon has gained traction in the run specialty channels in North America and EMEA. In July, we launched the Arrow [indiscernible] with reengineering upper using new mesh technology. We also recently launched the second generation of Genesis, a highly technical trail shoe. Salomon athletes were winning rates in Q2, including [indiscernible] earning her fourth hard lock 100 title validating Salomon's technical merit on the hardest trials.
Third, Salomon continued to have excellent brand heat in -- great China and Asia where we believe we operate the most productive and profitable sneaker shops in the industry. China continued to deliver very strong double-digit growth in Q2 driven by strength across Sportstyle performance and apparel. Our local-for-local apparel and accessories lines in China with technical products inspired by [indiscernible] has also been gained traction in the past few quarters. Beyond China, Salomon is also experiencing surging demands in Korea and Japan, very important markets given their influence on global sneak culture.
Fourth, our epicenter strategy is working. Focusing on key global metro markets is allowing us to build up Salomon's reach and presence in the right way. Our Tier 1 global epicenter, Paris, London, Shanghai, Beijing, Tokyo, New York and the [indiscernible] are all driving very strong sales momentum as well as rising brand awareness. We approach these markets by opening a handful of impactful brand stores in the most relevant locations [indiscernible] or outside handpicked elevated wholesale doors. In this market, we're also investing in event partnerships, community activations and local media to build a strong and lasting connection with our consumers. We plan to adopt and expand this approach to several new major cities in the future, including Buring, So, Miami, San Francisco, Chicago and Basel.
Fifth is the strong demand we are experiencing in our home market in Europe, driving strong reorders, preorders and sell-through. Sportstyle continues to be the biggest growth driver but the [indiscernible] is also impacting in Europe, supported by marketing campaigns, in-store events and running event activations. Also, we are seeing high e-com growth in Europe, even as we expand our premium DTC and wholesale footprint. In markets, we have been very active hosting a [indiscernible] focused learning event called [indiscernible], spaning music festivals and artist collaborations and the most recently, we begin a unique partnership with the National Opera House of Paris to [indiscernible].
Lastly, I will mention the U.S., which is the largest single sneaker market in the world but still a small business for us. We know there is a strong demand for Salomon here but still very limited distribution for consumers to find us. Today, we are seeing a clear acceleration in North America as we leverage the rising brand awareness to expand distribution with both new and existing wholesale partners as well as our own stores and e-com.
In Q2, we opened our first North America flagship stores on Fifth Avenue in the [indiscernible] district of New York Cities, offering both footwear and apparel, and we continue to carefully expand our footprint and shelf space in existing wholesale partners, including North Stream, JD Sports and Foot [indiscernible].
Lastly, before I switch to Ball & Racquet, although Q2 is a very small quarter for our winter sports equipment franchise, Salomon, Atomic, and [indiscernible]. We are pleased that our brands continuing taking share despite challenging conditions in certain markets.
Moving to Ball & Racquet highlights. Ball & Racquet sales grew 24% in Q2 driven by continued strength in Tennis 360, both Softgoods and the Racquet as well as improved growth in baseball, golf and inflatables. Our Tennis 360 strategy continues to resonate very well with consumers from unique lines of tennis apparel and footwear to high-performance luggage. Wilson had a couple of very big racquet launches this spring, including the Q1 rollout of our iconic Blade franchise, Version 10. This has been one of the strongest launches in our history and also the racquets for world #1 arena Subrimka.
We also recently launched a completely new racquet lines called the Defyer. This is our first-ever power-spin racket, which has been a growing segment of the racquet market. Early results from the Defyer are even exceeding the v10 launch I just mentioned. We continue to invest in new tool players, recently signing former World Top 5 Player, Holger Rune and the 17-year old rising star, Moise Kouame, both playing the Defyer racquet. Marta Kostyuk, one of our highest profile head-to-toe asset has been creating great buzz for the brand with her unique Wilson Tennis outfits, reaching the semi finals at both Roland Garros and Wimbledon. Wilson Softgoods continued its exceptional trajectories with very strong growth across all 4 major regions. Also baseball, golf and inflatables saw improved growth in the quarter.
Before turning over to Andrew, I'd like to conclude by saying that, given the broad-based momentum across our portfolio, a healthy and growing premium sports and outdoor markets and the world-class teams we have in place around the world, I'm very confident in the future outlook for Amer Sports. Andrew?
Thanks, James. We had a great financial performance in Q2 across the P&L with strong sales growth, margin expansion and EPS growth. The investments we're making are paying off, driving strong momentum across each of our 3 biggest opportunities, Arc'teryx, Salomon Softgoods and Wilson Tennis 360.
In Q2, Amer Sports grew sales 32% on a reported basis or 3% ex currency. Our 3 growth engines all eclipsed 20% growth, with Technical Apparel and Outdoor Performance growing more than 30%. By channel, the group continues to be driven by DTC, which grew 40% led by all 3 big brands. At the group level, DTC represented approximately 55% of revenue in Q2, marking a record high. Wholesale grew 24%, led by Arc'teryx and Salomon. Crop was also very strong across all geographies, led by Asia Pacific, which increased 60% and China, which grew 36%. The Americas accelerated to plus 26% and EMEA grew 20%.
Turning to profitability. Adjusted gross margin increased 710 basis points to 65.8% in Q2, primarily driven by a onetime net tariff refund benefit of $64.3 million or 390 basis points. Excluding this net tariff refund benefit, we generated more than 300 basis points of underlying gross margin expansion driven by favorable pricing, product, channel and geographic mix as well as favorable transportation and duties costs. The benefit from lower tariff rates versus our plan during Q2 was relatively immaterial.
Adjusted SG&A expenses as a percentage of revenues increased 20 basis points and represented 54.9% of revenues in Q2. We leverage in both Technical Apparel and Outdoor Performance was offset by deleverage at Ball & Racquet Sports due to investments in Wilson Tennis 360 as well as higher Amer corporate expenses.
Led by strong gross margin expansion, we generated a 730 basis point increase in our adjusted operating margin from 5.5% last year to 12.8% in Q2. Excluding the above-mentioned net tariff refund benefit, adjusted operating margin expanded 340 basis points. Corporate expenses were $68 million, up from $45 million in Q2 of last year, mostly related to higher IT personnel and deferred compensation expense. Depreciation and amortization was $113 million, which includes $55 million of ROU depreciation. Adjusted net finance cost in the quarter was $21 million, above the $15 million guidance primarily due to higher cost of hedging and currency losses.
In the quarter, our adjusted income tax expense was $50 million, which equates to an adjusted effective tax rate of 27%. Adjusted net income in Q2 was $127 million compared to $36 million in the prior year period. Adjusted diluted earnings per share was $0.22 compared to adjusted diluted earnings per share of $0.06 last year. Net tariff refunds benefited Q2 EPS by approximately $0.08 per share.
Now turning to segment results. Technical Apparel revenues increased 32% to $674 million, led by Arc'teryx. Growth was fueled by 34% D2C expansion, including a 17% omni-comp. Technical Apparel wholesale revenues grew 27%. In Q2, we opened net 8 new Arc'teryx stores globally, and we continue to plan 30 to 35 net new Arc'teryx stores for the full year of 2026 across all markets. Regionally, the Technical Apparel growth rate was led by Asia Pacific, followed by accelerating growth in EMEA and Americas, followed by Greater China. All regions continue to grow strong double digits.
Not only is the brand seeing a nice acceleration in North America and EMEA, the largest outdoor markets in the world, Greater China continued to deliver strong growth and maintain exceptional profitability in Q2. We finished Q2 with approximately 140 Arc'teryx stores in Greater China between owned and franchised and believe this could be 200 long term. We are planning 10 to 12 net new store opens in Greater China for the full year of 2026 with openings weighted toward second half and Q4. We had one net China opened in Q2, the Chendu flagship store, which spans over 7,000 square feet and 2 levels, featuring a distinctive cliff house design.
Arc'teryx growth continued to accelerate in North America in Q2, and we delivered strong double-digit omni comps in the U.S. We are seeing significant progress in the U.S. brand awareness rising by approximately 50% versus last fall, led by top of funnel marketing. We also will focus on further leveraging brand experience and community to unlock higher conversion in the U.S. Q2 store openings in North America include Oak Ridge Park in Vancouver and Southdale in Minnesota, both very elevated presentations of the brand. We now have 75 stores in North America, which we believe could be 200 doors over time. In the U.S., we are expanding into a new partnership with DICK'S Sporting Goods where we will be entering 15 hand-selected premium [ house of sports ] locations from Fall Winter 2026. Arc'teryx will be showcased in elevated and experience of shop-in-shop formats with a particular emphasis on the core outerwear offerings and including footwear. This is still in the test and learn stage, but has the potential to expand further over time.
EMEA remains Arc'teryx most underpenetrated market, and we are continuing to open great locations, including Oslo and Copenhagen in Q2, both off to exceptional starts. We now have 19 stores across EMEA, and we believe the market could support 75-plus over the long term. Technical Apparel adjusted operating margin expanded 470 basis points to 18.8%, including a 170 basis point benefit from net tariff refunds. Margin expansion was driven by both gross margin expansion and SG&A leverage on strong sales.
Moving to our Outdoor Performance segment, which saw revenues increase 37% to $569 million, driven by continued very strong performance in Salomon footwear and apparel. By channel, Outdoor Performance DTC grew 52% led by new doors and higher productivity across markets, especially Greater China, APAC and the Americas. Outdoor Performance achieved a 28% omni-comp with strength in both stores and e-commerce. E-com is continuing to grow across regions driven by Sportstyle momentum and higher traffic, especially in the Americas and APAC. Wholesale grew 25%, driven by strong sell-through and reorders for sports style as well as door count expansion.
Regionally, the Outdoor Performance growth rate was led by APAC and Greater China and accelerating growth in the Americas, followed by EMEA. The popularity of Salomon footwear continues to inflect globally, and we are doing everything we can to ensure we are well positioned to fully develop this large opportunity in the right way over time and across markets. In Asia, DTC continues to be the critical growth channel for Salomon led by our highly productive Salomon shops. We opened 13 net new Salomon shops in Greater China this quarter, including both owned stores and partner stores, bringing our total count at quarter end to 315 doors with the potential for 400 to 500 doors over time. For the full year of 2026, we continue to expect to open 45 net new stores in Greater China.
We are focused on both expanding and upgrading the fleet with larger format, more productive doors in the highest traffic shopping centers and space to incorporate footwear and apparel. For example, we recently upgraded the best-performing Salomon store in China, [indiscernible]. The new shop performed very well in this first month, demonstrating that even high productivity doors can benefit from an upgrade.
In APAC, another region where Salomon has experienced an explosive growth, we opened net 7 new stores in Q2 across Japan, Korea and Australia. Salomon's overall brand awareness and desirability continues to grow very rapidly in Asia for both Sportstyle and Performance. In the Americas, as James mentioned, Salomon footwear is continuing to see a material growth acceleration. The brand is seeing great DTC demand in stores and e-com in both Sportstyle and Performance. We are pleased to see traffic is up very strongly in e-comm, which tracks our expanding geographic presence, distribution and awareness across key cities.
As we shared in our last call and aligning with our Epicenter strategy, Salomon has begun to expand into a small number of key wholesale doors with important U.S. sneaker retailers such as Nordstrom, Foot Locker and JD Sports. It is still in the early stages, but these channels are performing very well in terms of pre-orders, sell-through and reorders. We will continue to selectively expand with these retailers over the next couple of years. We are also expanding our own retail footprint in North America, including our first flagship store on Fifth Avenue in the [indiscernible] District of New York City. The story is the first one in North America to carry a wide range of both footwear and apparel and is off to a very strong start. And the new Salomon store in the Upper West side of New York City also continues to perform very well.
Looking ahead, as we expand our Los Angeles epicenter, we are planning a Beverly Hills location for October. We will continue to focus on our epicenter strategy in 2026 and beyond, particularly New York, Los Angeles, Miami and San Francisco. We continue to plan to open 7 to 10 new Salomon shops in the Americas this year. In EMEA, key epicenters Paris and London are seeing a strong growth. We are also further developing other European markets, including a Barcelona shop that opened in July.
Lastly, while Q2 is by far the smallest quarter of the year for our winter sports equipment franchises, we are encouraged by the positive order book trends and continued market share gain despite challenging weather and market conditions. The demand for ski vacations in the mountains remains high and consistent and the core alpine on piece market is healthy despite inconsistent snow conditions as most top ski resorts now have excellent snowmaking capabilities.
Outdoor Performance adjusted operating profit margin expanded 800 basis points from last year to 14.6% in Q2 including a 270 basis point positive impact from net tariff refunds. This improvement was largely driven by gross margin expansion due to mix shift benefits and SG&A leverage on strong sales.
Moving to Ball & Racquet, where revenue increased 24% to $390 million, driven by Softgoods and Sports. We continue to see very strong momentum in Tennis 360 globally. By category, the growth was led by Softgoods, up very strong double digits with continued momentum in all regions. Racquet's growth was also strong across the board, driven by China, APAC and EMEA. Performance Racquets grew more than 50%, driven by the very strong Blade v10 launch. We're also seeing Padel gaining momentum, and it has become one of the top 5 revenue drivers in Q2.
Beyond tennis, we saw a return to growth in baseball after slower sell-in last quarter. Golf and inflatables also saw solid growth in the quarter. All regions generated double-digit growth for Ball & Racquet led by Greater China, APAC and EMEA, followed by the Americas. We opened 12 net new Wilson brand stores in Q2 with the majority split between Greater China and APAC. We have extensive store opening plans for China given the performance of existing Wilson Tennis 360 shops there.
For the full year, we continue to plan to open approximately 40 net new Wilson Tennis 360 shops in China between owned and partnered doors. APAC continues to drive meaningful Wilson growth driven by soft goods in Korea and rackets in Japan. In North America, we saw strong growth across channels as baseball and inflatables rebounded. We've also continued to expand our Tennis 360 offering into more DICK'S Sporting Goods locations, including House of Sports and are now in 450 DICK stores with our full head-to-toe to-hand offering.
Looking ahead to the rest of the year, please keep in mind that Ball & Racquet's tremendous 24% growth in Q2 benefited from some big product launches and related sell-in and we do not expect this level of growth on an ongoing basis. Ball & Racquet segment adjusted operating profit margin increased 1,300 basis points to 17.2%, including a 970 basis point benefit from net tariff refunds. The underlying margin expansion was driven by favorable pricing, product, channel and region mix. This was slightly offset by higher SG&A and our intentional decision to invest behind Wilson Softgoods, including Tennis Tour Pros.
Turning to the group balance sheet. We ended the quarter with $573 million of net cash and exited the quarter with inventories up 19% year-over-year, well below our 32% sales growth. We are very comfortable with the level and quality of our inventory and happy to see the inventory levels normalize versus revenues earlier than planned. Driven by strong profit growth and disciplined working capital management, we generated $339 million of operating cash flow in the first half of 2026 compared to $108 million last year. And for the full year of 2026, we continue to expect to generate solid operating cash flow growth versus 2025 levels.
Now moving to guidance. We had another great financial performance in the second quarter across the P&L with strong sales growth, margin expansion and EPS growth. The investments we have been making in our brands are paying off in the form of exceptional trends across each of our 3 biggest opportunities: Arc'teryx, Salomon Softgoods and Wilson Tennis 360. We will continue to reinvest behind these early-stage growth engines to ensure high-quality, long-duration growth and strong brand equity over the long term.
Our guidance assumes that the most recently announced Section 301 tariff rates remain in place for the remainder of 2026. We have already received a majority of our total tariff refund submission amount and any remaining impacts will be negligible.
Let's begin with the updated full year 2026 outlook. We are raising 2026 revenue growth guidance from 20% to 22% to approximately 24%, which includes a 200 to 250 basis point currency benefit at current exchange rates. By segment, we are raising our Technical Apparel 2026 revenue growth guidance from approximately 22% to 24% to 25% to 26%. We are also increasing our Outdoor Performance sales growth expectations from 22% to 24% to 27% to 28%. Our Ball & Racquet sales growth guidance goes from 10% to 12% to approximately 14%.
Turning to margins. We are fortunate to have the revenue and gross margin momentum that allows us to reinvest behind our 3 growth engines to ensure a high-quality growth and strong brand equity over the long term while also expanding our operating margins over time. For 2026, we are raising our full year adjusted gross margin guidance from 59% to 59.5% to 60.5% to 61%, which includes the 80 basis point benefit from the Q2 net tariff refund, and we are raising our adjusted operating margin guidance from 13.4% to 13.7% to 14.2% to 14.5%.
By segment, we are raising Technical Apparel adjusted operating margin guidance from approximately 22% to approximately 22.5%, which includes approximately 30 basis points of net tariff refund benefit from Q2. For Outdoor Performance, we are raising adjusted operating profit margin guidance from 15% to 15.5% to 16% to 16.5%, which includes approximately 50 basis points of tariff refund benefit. And for Ball & Racquet, we are raising the adjusted operating margin from 4.7% to 5% to 6.7% to 7.2%, which includes approximately 250 basis point benefit from tariff refunds.
We are assuming 2026 net finance cost of approximately $85 million which is up from the previous $70 million guidance, mainly attributable to an increase in the cost of hedging, FX losses as well as an increase in lease expense. We continue to assume an effective tax rate of 28%. Other operating income should be approximately $43 million for the full year. Corporate expense is now expected to be $240 million versus $220 million previously, primarily due to higher IT investment spend and deferred compensation expense.
Net income attributable to noncontrolling interest is expected to be approximately $30 million for the full year. We now expect adjusted diluted EPS of $1.27 to $1.30 versus our prior guidance of $1.18 to $1.23, which is based on approximately 585 million fully diluted shares. Other full year modeling items to consider, we're also assuming depreciation and amortization of approximately $450 million, including approximately $220 million of ROU depreciation. CapEx is still expected to be approximately $400 million, primarily to support our retail expansion and IT infrastructure investments.
Now turning to the third quarter guidance. We expect reported revenue growth for the group in the range of 18% to 20%, which assumes an approximate 50 basis point tailwind from favorable FX impact at current exchange rates. We expect adjusted gross margin to be approximately 59% in Q3 2026 and an adjusted operating profit margin of 13.5% to 14%. Keep in mind, that last year's Q3 gross margin benefited by approximately 50 basis points from onetime inventory reserve adjustments. Net finance cost will be $15 million to $20 million and our effective tax rate will be approximately 28%. We expect adjusted diluted EPS of $0.31 to $0.33 in Q3. Lastly, should better-than-anticipated demand materialize, we believe we are well positioned to deliver financial performance ahead of our expectations.
With that, I'll turn it back to the operator for questions.
[Operator Instructions] Your first question comes from the line of Matthew Boss from JPMorgan.
2. Question Answer
Okay. Great. And congrats on a really nice quarter. So James, 32% revenue growth, sequential acceleration at all 3 brands in the second quarter. Can you elaborate on the strong top line momentum that you cited has continued into the third quarter? And Andrew, can you walk through top line and margin back half assumptions or why not more top and bottom line upside given the revenue strength and margin flow-through rate that you saw in the front half of the year?
Thank you for your questions. Okay. So we got the exceptional result in Q2. We feel very good about the foundation we built up especially for the major 3 brands. They are on right track to grow the market cross-border in the world. So for Q3, I think the momentum is still there, and we already given the guidance. So we will grow our revenue top line from 18% to 20%, okay, based on the much higher base of our business, okay? So Q3 is one of the largest quarters in cross-border this year. So I think based on our current projections, whole year, we will foresee 24% growth across [indiscernible] for the company. So overall, I think the momentum still carry on and the management team got a very good confidence to continue to still our business on [indiscernible].
Matt, this is Andrew. And as you think about the flow-through and the momentum coming out of Q2, we feel very good about our guidance going forward, as James said. I mean, we continue to always strive to provide ambitious and yet responsible guidance. As you think about the flow through, I mean just really think about the fact that we're going to deliver at the midpoint of our guidance, we're going to deliver well over 100 basis points of margin expansion and we've done that consistently since the IPO. We've delivered over 100 -- on average, 150 basis points a year. We have visibility to be in that ballpark as we go through this.
And in the back half, there are going to be some continued investment into the growth in our business, especially as you look at the big opportunities we have in Salomon, Arc'teryx and Tennis 360. We're going to have a little bit more increase, as I talked about in my prepared remarks, increased in our net finance costs as we look at some of the hedging and FX exposure that we have. And we did note the increase in our corporate expenses related to IT investments that we're making. But at the end of the day, we are still focused on delivering very strong bottom line expansion. We're excited about where we're going and we have the opportunity to continue to invest in our growth opportunities and responsibly provide guidance for the back half of the year.
Your next question comes from the line of Laurent Vasilescu BNP Paribas.
I wanted to ask first on Salomon. With the recent rollout of Foot Locker and then also, I think JD Sports a few quarters back. But curious to know how many doors are you currently at in these 2 key retailers? And where do you think the opportunity lies going forward in terms of number of doors? And then I have a follow-up on Ball & Racquet.
Thanks for your question, Laurent. We're going to go to Guillaume who's off-site and dialed in for the Salomon questions.
Hello. Good morning, everybody. First of all, we have this very diligent strategy, developing the bidders in U.S. One thing I want to highlight before we speak about how we develop, we are very much driven by consumer demand, and we are also driven by our epicenter [indiscernible] so that we are looking at the consumer [indiscernible] distribution, but where that sits and how much we are able to drive demand across the market. So today, we have -- our longest partner is Nordstrom, where we -- we see a very -- Nordstrom, then we have JD Sports and then we just started Foot Locker in July, as you maybe you have seen in our communication that we have been doing. So we are very pleased about the results. We have very strong demand. It is on preorder, sell-through and reorder. And now we are really planning to have these developments. This is very much hand picked location. So we are looking for epicenter.
So starting from New York City, of course, but LA, Chicago, San Francisco, Miami and others. And once again, we start from small. So you know that this type of partner, they have a very large fleet of those. And today, we just speak about a couple of -- the ambition is [indiscernible] the best location where we're going to have the best sales through. But this is where we are driving today the demand and the success. And in parallel, this partner, they have also a very strong e-com platform, which is also helping because this platform drove quite a lot of traffic also in North America.
So we -- it's more quality of our quantity today, and this is the way we would like to plan in order to really secure the brand's positioning, the brand equity and also continue to support the consumer demand behind Salomon.
Wonderful. And then Andrew, under your leadership and now [indiscernible] leadership, Ball & Racquet has really taken off with this 24% growth. I know you mentioned that it should not grow at this rate over the next few quarters. But near term, I know you're not in the habit to give us color by segment by quarter. But it does imply if we assume like low double digits for 3Q that it materially slows to mid-single digits for if we take the guide for the full year. Is that the right way to think about it near term? And then last year at the Investor Day, you called out that it should be growing mid-single digits top line overall over the next few years. Is that still the right way to think about it?
Yes. So this is Andrew. Thanks for the question. Very, very strong, as you've talked about, very strong third -- second quarter for Ball & Racquet. It was led by a couple of things. Our go-to-market strategy for our wholesale accounts in North America, we've really amped that up. So our key national accounts, providing them a more fulsome offering, we really amped that up. Wilson Tennis 360, both Softgoods and Racquet, really had a strong second quarter, led by our 2 racquet launches of Defyer and Blade v10 and our soft goods door expansion and DICK'S going from 250 to 450 doors.
So if you think about all of those things that I just talked about, the 2 successful launches, the increased door count with DICK'S, the revision of our go-to-market strategy and focus on our offerings to our key wholesale accounts, those were accelerated in the quarter, and they drove that outsized performance.
We also had solid performances in our baseball and our gold irons and our inflatables business. So we feel great about Ball & Racquet record quarter. We would not expect such high growth rates to sustain given the new launches. So there were new launches in new sell-ins and revision of our go-to-market. So our updated guidance reflects the appropriate growth rate that we believe is appropriate for the second half.
And longer term, it should it grow mid-single digits as a segment?
Update the algorithms on the 2Q call, Laurent. But yes, it is a fair point that the Softgoods business has become a lot larger and that business is growing faster.
Your next question comes from the line of Brook Roach from Goldman Sachs.
I was hoping you could elaborate on the growth investments in the business that you're making in the back half of the year. Is there any texture you can provide regarding the categorization of spend? Is this a step-up in marketing spend as a percent of sales relative to your prior forecast? Or are these more durable and permanent investments such as head count? And how should we be thinking about the revenue and sales growth opportunity on the back of this?
Brooke, this is Andrew. Let me kick off a little bit, amplifying some of the points I made earlier. Philosophically, because of the significant value creation potential for each of our 3 growth engines, we're going to invest behind the brands and the capabilities so we can deliver a healthy, sustainable growth while also ensuring strong brand equity over the long term. As I noted, we've delivered -- we've delivered a very large amount of margin expansion over a short period of time. And if you think about the midpoint of our 2026 guidance, we've averaged 150 basis points of annual EBIT margin over the 3 years since the IPO from 9.8% in 2023 to 14.2% to 14.5% this year. This is well above our 30 to 70 basis points plus bps on an annual margin expansion in our algorithm.
So we believe we have 3 of the most unique brands in all of consumer discretion there, and we're sitting in one of the healthiest and fastest-growing segments. So making it well worth our investment on our sales and gross margin upside to ensure that we capitalize on these opportunities in the right way and still be able to deliver bottom line margin over time. So this means, again, attracting high-quality talent, supporting our brands with best-in-class marketing, building premium owned stores and developing our IT digital platforms.
So as you think about that, I'll hand it over to James because I think it's important for you guys to really understand what are we investing in for our key big growth drivers.
Yes, I will add more color relating to the brand investment areas. So for Arc'teryx, we will continue to invest on our overall global brand awareness, okay? So through very strong global brand campaigns. And we will continue to leverage our store opening process and make sure we have a good level of penetration in the markets [indiscernible]. And obviously, we will put a good level of investment of our products especially on women, footwear and [indiscernible] where we really think it's a key growth engine for coming years. So for Arc'teryx, obviously, -- so these are the major area.
For Salomon, I mean, as Guillaume mentioned, epicenter strategy is still, I mean, underway, cross-border in the world, especially in Europe and North America. I think these are the areas we really like to put the resource behind that through the strong product and the brand campaigns to leverage our overall brand awareness and equities. And also, I mean, we will continue to accelerate our own retail penetration in China, Asia Pacific as well as in North America. So I think these are the areas we really like to focus on Salomon.
But Wilson, obviously Wilson Tennis 360 is the most important growth engine for Wilson for coming years, okay? So we will continue to invest on our assets and also the overall store development in -- both in Asia Pacific, China and also North America. So these are kind of areas we really like to put a good level of investment behind that to secure long-term sustainable growth cross-border for these 3 brands.
Your next question comes from the line of Ike Boruchow from Wells Fargo.
I'll add my congrats. Two questions. one, and I don't know if it's for Andrew or James, but just commenting on the constant currency growth you saw in Europe or seeing in Europe. Could you give us an update, there's been several brands, both footwear and apparel that have kind of called out some recent slowdowns in the past couple of months. Doesn't seem like you're seeing anything notable, but I wanted you to comment on that.
And then this one, I think, is for Andrew. Just -- it's just simple math, but you have your algo of 30 to 70 basis points on margin. by our math, you're getting the 80 bps of the refund in the guide this year. Should we assume just to keep the models clean that next year, year-over-year margin should net out that 80 basis points, which kind of gets you more flat to down margin as a starting point to your plan to adjust for the refund? I just kind of want to make sure the models that kind of stay clean in the outlook.
Okay. Thanks, Ike. We're going to start with Guillaume actually. He is going to talk about the market in Europe, the market trends in Europe, what we're seeing in the landscape. And then obviously, Andrew will answer your margin question.
So I think the European market is not a fast-growing market today. But there is still some segments where we can really play a big role, and we see that we get some traction, one is running. So I think that there is still upside and excitement for the consumer in running and especially when we are coming with very unique stories, so trail running is one for Salomon. What we are currently building with GRVL running is also another one. So it looked like [indiscernible] but finally, you are able to attract traffic and interest from the consumer and leading conversion. The second one is this outdoor sneaker market or modern outdoor sneaker market where Salomon was definitely building this space in the market. So it was -- it's a new space. It's -- it looks like now obvious because we are driving big sales.
And as you can mention from this quarter results -- and this segment still is a place -- a good place to be, a good place to shape for Salomon, driving excitement, bringing the modern mountain sport in the city and attracting new consumers. So in a nutshell, I think that it's -- the market is a challenging market overall, but still with some room to grow. And I think Salomon is very well positioning with very unique competitive edge in Europe.
This is Andrew. Thanks for the question as well. So I'm not ready to provide -- to give margin guidance for next year. But I will acknowledge to your point and included in my prepared remarks that we did -- the net tariff refund will be an 80 bps increment to our margin in the current year. Recall, though, if you think about the 2-year stack, our we essentially handle the tariff challenge last year, primarily through [indiscernible], which was netted out against this, and we essentially absorbed most of the hit of the tariff impact. So if you look at the '25 and '26 together, we have -- we believe that our margin reflects a good 2-year picture for us. But I do acknowledge 80 bps margin expansion this year, and that's why I called it out to -- when you look at where we guided in the beginning of the year and the onetime impact of the 80 bps.
Your next question comes from the line of Adrienne Yih from Barclays.
Congratulations across the board on all the brands. James, there are 2 very different strategies between the 2 biggest brands wholesale drive brand awareness faster than DTC. But Arc'teryx following a DTC strategy, maybe more brand premiumization and control and then Salomon is driven by the wholesale. How do you think ultimately kind of this pans out for the longer terms in terms of channel mix and penetration?
And then for both Stuart and Guillaume, my follow-up is Arc'teryx has been strong in China, Salomon is strong in Europe. What elements of those successes in current regions accelerate the road map for penetration into the U.S. market?
Thanks, Adrienne. We're actually going to have Stuart and Andrew -- sorry, Stuart and Guillaume answer your first question for Arc'teryx and Salomon, how they approach D2C versus wholesale and how that might shake out long term. And then we'll have James and Stuart and Guillaume answer your second question as well.
Okay. Thanks, Omar. And Adrienne, thanks for your question. I'll try to be crisp here. So Wholesale remains important for Arc'teryx. It helps ensure that our brand is showing up in the right points of sale and with the right comparisons with other great brands that helps elevate our own brand position. The D2C has been critical in a massive catalyst for our growth around the world and has really unlocked the trajectory we've seen over the last 5 years. So both parts are important and play different roles for how we're driving growth and brand awareness.
Specific to the U.S. market, Canada is our home market, where we see highest brand awareness, and it's enabled us to have a natural launching point into the U.S. U.S. is the largest global market and in many ways, the most competitive. Our strategy is focused on what we call epicenters, focusing on major urban areas like New York, L.A., San Francisco, Chicago, where the pools of demand are greatest to drive brand awareness and that's where we focus our store openings that have been very successful over the last several years. We complement this with what we call our Mountain town strategy, which is focused on the place of practice where we see opportunities to stoke the brand identity in places like [ Aspen ] and Park City.
So it's the combination of those factors that build the brand while also developing the economic opportunity, and it really leverages an omnichannel approach where we're driving the brand position through our DTC channels, but also driving brand awareness importantly with selected premium wholesale partners. So I'll pause there and hand it over to Guillaume.
So thanks, Stuart. I think that first of all, globally, Salomon is still -- is developing very fast in DTC. So I think that the perception of having Salomon relying only on B2B is a little bit kind of old position we have and previous strategy we had. I think we were turning really into omnichannel so at the global level. This is true that if we want to develop in U.S. because of the scale of the market, we have to have this true omnichannel strategy. So first step is moving to epicenter, opening some stores, making sure that our e-comm platform is also a very -- one of the best experience you could have for Salomon. So best experience in our store, best experience in e-com. And of course, we want to rely and we will develop on B2B. So it's an omnichannel.
For the simple reason that traffic buying footwear is very much about traffic and B2B partner are the one running the traffic and doing a very good job at distributing footwear in the market. So this is why we are looking at this B2B. But when we develop B2B and maybe for the one living in New York, you have been noticing that in July is we have a very close partnership with our partner. We want to have very strong and outstanding visual nationalizing, so where you can notice the brand. We are also building activation to make sure that they are really activating the local community at every store in order to make sure that we position Salomon at the best level even on B2B.
So this is really the mindset for U.S. is building retail and epicenter, leveraging with e-com and having this partnership on B2B because this is where you can leverage larger traffic, but keeping a very strong consistent approach towards the consumer and focusing on demand, which is, of course, our priority number one.
Your next question comes from the line of...
I mean -- Stuart, I'd like to add a bit color on Arc'teryx China. So Adrienne you asked for Arc'teryx China. So actually now Arc'teryx is already the largest premium outdoor brand in China market. So naturally, its growth pattern will normalize versus the hyper growth levels during the past 5 years. So -- but I take China, I think will continue to deliver solid double-digit growth annually especially given we only have 40 stores today and versus 200 potential for coming years. So the management team, we also got a very good level of confidence. We are running exceptional work for Arc'teryx in China market, and we will continue to drive our business and gain market share in China markets.
Our final question comes from the line of Jonathan Komp from Baird.
Yes. If I could follow up on Salomon. I want to ask further the new store opening in July in Flatiron, really telling the full story footwear and apparel performance and Sportstyle. Does that really represent where you see the brand heading as you continue to diversify towards a broader lifestyle -- performance lifestyle brand positioning?
Yes, this is for me. So Salomon has been -- is rooted by performance. And there is one single [indiscernible] this idea of modern Mountain Sports driven by innovation, elevating the sport experience in the Mountain and beyond because, of course, now we [indiscernible] also the city, but still having this idea of modern mountain sport. This is where Salomon is coming from. And this is first for footwear because this is where we have the biggest traction, but we have the ambition to move forward in apparel. Though the apparel is pretty small, but we have -- we start to see some traction, and we are preparing the future pipeline of innovation as well in order to offer the full silhouette. So this is a position.
When we are coming and we are elevating that into culture, this is where Sportstyle resonate to the consumer. And this is why you see this momentum coming in the city with Sportstyle. I think that Flatiron is a very good example of what Salomon wants to develop is it's not ever on its performance and still driven by innovation and culture. So this piece of performance products moving to culture into Sportstyle, and this is footwear because this is where we express today the best of our innovation, premiumness quality of product. But of course, we are also working hard in order to develop that in apparel. So I think that your level of readiness into the store is the right one.
But keep in mind that we are coming -- we are [indiscernible] by performance and innovation. And this is not either or, but it's hands, its performance and future together.
That's very encouraging. And then, Andrew, if I could just finish Technical Apparel margin in the back half segment operating margin implied down year-over-year. Is that reflective of incremental investment or some other factors or conservatism? Just any more color there?
We're going to actually have Stuart is also dialing in remote, talk about the margin for our Arc'teryx Technical Apparel.
Jonathan, it's Stuart. So Yes. We're pretty confident in the overall P&L outlook. For the full year, we're going to see healthy expansion in gross margin. We're going to see balanced SG&A leverage, and we're going to see operating profit margins expand for the full year. So it's -- the overall business momentum is healthy. As you heard from Andrew earlier on the call, characterize how we provide guidance as being responsible, yes, there's nothing structural that would prevent us from delivering higher levels of top line as well as bottom line results should demand materialize. I think we've had a good track record of delivering on that. on that approach to the business in prior quarters since coming public. So yes, we're going to have what we would call a responsible posture for guidance.
But there's, as I mentioned, nothing structural that would prevent us from delivering higher levels of sales and profitability. And we're quite bullish on the outlook for the balance of the year and beyond. So hopefully, that gives you some color or context on how we approach guidance
At this time, there are no further questions. I will now turn the call back to management for closing remarks.
Thanks, everyone, for joining. And a quick reminder, the Salomon Amer Sports Investor Day, September 17. I look forward to seeing you there or online for the webcast. Have a great day.
This concludes today's call. Thank you all for attending. You may now disconnect.
Amer Sports — Q2 2026 Earnings Call
Amer Sports — Q1 2026 Earnings Call
1. Management Discussion
Hello, everyone. Thank you for joining us, and welcome to Amer Sports First Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Omar Saad, SVP of Investor Relations and Capital Markets. Omar, please go ahead.
Welcome, everyone. Thanks for joining Amer Sports earnings call for the first quarter of fiscal year 2026. Earlier this morning, we announced our financial results for the quarter ended March 31, 2026, and the release can be found on our IR website, investors.amersports.com. A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only, they are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the safe harbor statement in our earnings release and SEC filings. We will also discuss certain non-IFRS financial measures.
Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to the most comparable IFRS financial measures. We will begin with prepared remarks from our CEO, James Zheng; and CFO, Andrew Page, followed by a Q&A session until 9:00 a.m. Eastern. James will cover key operational and brand highlights, then Andrew will provide a financial review at both the group and segment level, and we'll also walk through our updated guidance. Arc'teryx CEO Stuart Haselden and Salomon CEO, Guillaume Meyzenq, will join for the Q&A session. With that, I'll turn the call over to James.
Thanks, Omar. Our excellent momentum continuing in Q1 as our unique portfolio of technical sports and outdoor brands are creating white space and take share globally. All segments, geographies and channels performed extremely well in the quarter, led by exceptional Salomon Softgoods growth, a strong Arc'teryx Omni-comp and solid -- and we delivered strong results across the P&L, including 32% sales growth and 160 basis points of adjusted operation margin expansion. All 4 regions achieved solid double-digit revenue growth, and that strong momentum has continued in Q2. Looking forward, given the continued broad-based momentum across our portfolio and the talent and ambitious teams we have in place around the world, we are very confident in the future outlook for Amer Sports Group. Several factors give me that confidence.
First, we own and operate a unique portfolio of premium innovation-driven sports and outdoor brand. These brands are still only small to medium size with significant room to grow globally. Second, Arc'teryx is a breakout outdoor brand. with leading growth and profitability for the industry driven by its disruptive direct-to-consumer model. Third, demand for Salomon's unique outdoor sneak offering is inflecting globally but the brand still only has a small share of the very large global market. Fourth, our worsened and the winter sports equipment franchises -- have leading market positions, which we believe will deliver slower long-term growth except for weather soft goods, which we believe is unique in the marketplace and has significant potential. And fifth, we believe we have a strong and differentiated platform in Great China and APAC where we continue to deliver best-in-class performance across our offering.
Before I turn it over to Andrew, I will briefly recap key highlights from our 3 segments. Starting with technical apparel. Arc'teryx delivered another great quarter with broad-based strength across regions, channels and categories, including another exceptional performance from women's strong momentum in the direct-to-consumer channel continued driven by 19% Omni-comp. We continue to envision Arc'teryx as a truly global brand with significant runway in all major markets, and we are encouraged that the brand is generating strong double growth across all 4 regions, including a notable acceleration in North America, with this momentum continued in Q1, growing faster than any other category for Arc'teryx.
Our confidence in the women's opportunity is rising as we are both on attracting new female consumers to the brand and to driving higher engagement and spend with existing female consumers really see brand affinity with women rising as we improve fit style and function while building expanded assortments, leveraging our unique design advantage. Our decision to redesign core ABCD models for her while also expanding family -- is working well. We also believe that success is bottoms with franchise sector, Clarkia, Leutia and Nia pants is also helping us unlock the female consumers. On the men's side, we are excited to welcome a new Arc'teryx designer -- joined us most recently from Mountain Hardware and the North pace prior to that. His leadership will be instrumental as we continue to push the boundaries of our men's offering when it comes to corn problems for the Mountain assets with technical performance and a beautiful design.
Footwear had another great quarter with strong growth across regions, led by both existing styles and a new launch. Popular existing starts include Norvan LD 4 trail shoes, which has strong consumer affinity and is our biggest volume drivers, followed by the Gore-Tex hiking shoe. And we launched the 2 in Q1, which is a technical call relationship. Looking forward, we are confident Arc'teryx has an exciting pipeline of full release for the upcoming years. We are investing in our design capabilities and the commercial teams on the ground in the U.S. and building a strong infrastructure for both direct-to-consumer and wholesale channels. Our Veilance sub brand also had a strong double-digit growth in Q1. We expect 2026 to be a year of impact for the brand as we invest in units further develop our collections and expand distribution, all of which is creating excitement and engagement in the marketplace.
Circularity and ReBIRD continue to be at the heart of Arc'teryx. In Q4, we increased the credit guests receive when they trade and use Arc'teryx products, and this continue to drive strong triple-digit growth in trade in activities in North America albeit of small bags. Our on-mountain -- remains a critical role in community management and the memo Mountain Academy we hosted in February was again a great success with 22,000 attendees over the weekend and the 42 clinics caused by Arc'teryx assets. Academies are becoming a key platform for ReBIRD, generating consumer awareness, interest and the rebar service.
Big performance, our other technical apparel brand delivered solid growth in Q1. After the brand returned in 2025 the turnaround remains on track so far in 2026 with sales increase across key channels and regions. The brand also continued to improve profitability driven by our concentrated efforts to reduce promotional and increase full price selling, especially in the Nordic market. Moving to the outdoor performance segment, which was led by another outstanding quarter from Salomon Softgoods, the investment we are making to grow Salomon brand awareness and the distribution footprint are paying up. at Salomon Footwear momentum is expanding across regions channels and in both portal and the performance. We are also excited to share that we are seeing a clear acceleration in North America as we leverage rising brand awareness to expand distribution with both new and existing wholesale partners.
We also saw solid performance from our Winter Sports Equipment franchise which continue taking share despite challenging market conditions. As you know, Salomon footwear has become a very important growth engine, not just for Salomon, but for Amer Sports Group. We are excited to see a demand inflection for Salomon unique outdoor sneak offering, especially since the brand still only has a small share of the global sneak market. I'd like to highlight a few factors that give us the confidence that Salomon is well positioned to achieve its growth potential and diligent in the life way. Number one, global sports time momentum continues. We believe Salomon is connecting with younger consumers and the female consumers in our way traditional outdoor brands haven't. Sports style is critical to developing Salomon's position as the modern outdoor sneak brand. including franchises such as XT6 and XC Whisper.
Second, our performance and the running lines are also working well. We continue to believe our new GRVL franchise is happy to unlock the run category for salmon like never before. Salomon is gaining traction in the run specialty channel in South America and recent running launches included SLAB Phantom 3, which is ultra lightweight raising shoe engineered for elite performance as well as the -- Third, is Salomon amazing brand in -- Great China, Asia, where we believe we operate the most productive and profitable sneak shops in this industry. With China was Salomon fastest growing region in Q1, driven by both postal and performance as well as strong growth in apparel. Salomon is also experiencing surging demand in Korea and Japan both large sneak markets. Fourth, our epicenter strategy is working -- our strategy to open a handful of brand stores alongside strategic elevated wholesale distribution in key metro markets around the world is critical to elevating Salomon's presence and awareness.
Our Tier 1 global epicenter cities include Paris, London, Shanghai, Beijing, Tokyo, New York. We have seen both rising brand aware and accelerating revenue in our epicenter cities. Fifth is the strong pool demand we are seeing from consumers in Europe, Salomon's home market, driving strong preorders and sell-through. Sportstar continued to be the growth driver, but we have also seen a real inflection in global in Europe supported by marketing campaigns, in-store events and the running event activations. Also, we are seeing high e-comm demand growth in Europe even as we expand our retail and wholesale footprint, 6 in North America, which is the largest sneak market in the world, but it's still a small business for us in the U.S. we are seeing a clear growth inflection driven by sports star and the performance.
Not only are we expanding our shelf space and sell through existing wholesale products but we are also now starting to move Salomon footwear into key wholesale partner in the U.S. As you know, there is a strong demand for Salomon sneakers in the U.S. We're still very limited distribution for consumers to find our products. Moving to board and the rakes highlights. On records close 13% in Q1, driven by continued strength in Softgoods, and the -- sports. Our -- products continue to resonate very well with consumers from performance racquets to tennis, and footwear and the worse Softgoods continued its exceptional trajectory with very strong growth an increasing number of the worst top -- wearing head to toe kits at key events, including Martha -- winning the Madrid Open and the men's top 10 player -- In Q1, we launched a version 10 of our iconic great racquet -- has been well received in the market across all channels with reorders from key customers coming in already.
We are also seeing strong validation of the BB10 onto with world #1 Aryna Sabalenka who won India West and Miami Open, paying with a racquet our version of the new brake before it was launched publicly. With that, I will turn it over to Andrew.
Thanks, James. Q1 was a great start to the year with strong sales, margin expansion and EPS growth. The investments we've been making behind our biggest opportunities are paying off in terms of both sales growth and margin expansion. Today, we are experiencing exceptional trends across each of our 3 biggest growth engines, Arc'teryx, Salomon Softgoods and Wilson Tennis 360, which are all still relatively small franchises with significant room to expand. Turning to our Q1 results. Amer Sports grew sales 32% in Q1 on a reported basis or 26% ex currency. The strong group sales performance was led by outdoor performance and technical apparel. All in racquet also had impressive double-digit sales growth. By channel, the group continues to be driven by DTC, which grew 45% led by Salomon and Arc'teryx. At the group level, D2C represented approximately 50% of revenue in Q1.
Wholesale grew 21%, led by Salomon. Growth was also very strong across all geographies. Regional growth was led by Asia Pacific, which increased 53% and China, which grew 45%, EMEA accelerated to 27% and the Americas grew 18% in Q1. As it relates to our EMEA region, I wanted to touch on the Middle East conflict which thus far has had relatively low impact on our business. The region represents less than 1% of our global sales and the impact on both consumer demand as well as our supply chain and logistics operation has been immaterial thus far. We recently renegotiated our annual shipping contracts, and this has also been incorporated in our latest guidance. That said, we continue to closely monitor this rapidly evolving situation, which could create some logistical and cost headwinds should the price of oil remained elevated longer term.
Turning to profitability. Adjusted gross margin increased 200 basis points to 60% in Q1, primarily driven by favorable channel, geographic, product and brand mix. Adjusted SG&A expenses as a percentage of revenue increased 60 basis points and represented 43.2% of revenue in Q1. This is a better SG&A rate that was implied in our previous guidance as we were able to leverage the higher sales growth against fixed costs. SG&A leverage in both technical apparel and outdoor performance was offset by deleverage in Ball and Racquet due to ongoing investments in Wilson Tennis 360 and higher corporate expenses. Led by strong margin expansion, we generated a 160 basis point increase in our adjusted operating margin from 15.8% last year to 17.4% in Q1.
Corporate expenses was $52 million, up from $27 million in Q1 of last year, mostly related to higher IT personnel and deferred compensation expenses. D&A was $103 million, which includes $50 million of ROU depreciation. Adjusted net finance cost in the quarter was $30 million, which comprised primarily of $25 million from interest expense with the remaining $5 million driven mostly by FX losses associated with the revaluation and settlement of monetary balances. In the quarter, our adjusted income tax expense was prior in the year. Adjusted diluted earnings per share was $0.38 compared to adjusted diluted earnings per share to $0.27 last year.
Now turning to segment results. Technical apparel revenues increased 33% to $885 million, led by Arc'teryx. Growth was fueled by 41% D2C expansion, including a 19% Omni-comp. Technical apparel wholesale revenue revenues grew 16%. Regionally, the technical apparel growth rate was led by Asia Pacific and a course continue to be central to Arc'teryx growth aspirations, and we plan to open 30 to 35 net new Arc'teryx stores in 2026 across all markets. Our store opening plan in corporate is a similar level of gross new stores as in 2025 and partially offset by the continued closure of certain outlets and other suboptimal locations. We are planning 10 to 12 net new store owns in Greater China in 2026 with openings weighted towards H2 and Q4. After multiple years of optimizing the fleet, we are excited to resume new store extension in this large and important consumer market. In Q1, we had 5 openings in China, offset by 5 closures.
Key new locations include the Grand Gateway 66 store in Shanghai, a great example of the benefit when we relocate from a third flow location to the ground level with much higher traffic and more premium locations amongst the luxury brands. In Q1, Arc'teryx growth accelerated in North America, and we delivered strong double-digit Omni-comp in the U.S. We are seeing significant progress in brand awareness in the U.S. with unaided brand awareness growing to 12% from 8% last fall, led by our top of funnel marketing strategies. We believe brand experience and community are still untapped areas for Arc'teryx to unlock higher conversion rates in the U.S. market, and we will be doubling down on these activities in 2026. One new store worth highlighting is our latest San Francisco area location in Burlingame, which opened in March. It has performed very well so far and will play an important role in continuing to develop Arc'teryx in warmer markets.
I also want to highlight our Rockefeller city store, where we are encouraged by the building sales trajectory over the course of this past winter. Also, our Mountain strategy continues to resonate as our new stores in Aspen and Park City got off to great starts despite low snow in the Rockies this past weather. Technical adjusted operating margin expanded 250 basis points to 26.4%, driven by both gross margin expansion due to positive region and get as well as modest SG&A leverage on strong sales. Moving to our Outdoor Performance segment. which saw revenues increase 42% to $714 million driven by very strong performance in Salomon footwear, apparel and bags and socks. By channel, outdoor performance DTC grew 57%, led by new doors and higher productivity across markets, especially Greater China, APAC and the Americas. Outdoor performance achieved a 29% omni-comp with strength in both stores and e-commerce. E-commerce is continuing to grow across regions driven by higher traffic, especially in the Americas and APAC.
Outdoor Performance Wholesale grew 34%, driven by strong sell-through and reorders and soft goods. Regionally, the outdoor performance growth rate accelerated across all geographies, led by Greater China and APAC followed by the Americas and EMEA. The popularity of solid and footwear continues to inflect globally, and we are doing everything we can to ensure we are well positioned to fully develop this large opportunity in the right way over time. Salomon is positioned for significant growth in all major consumer regions, where we are working hard to build the right team, operational, go-to-market and brand-building functions to support our growth. In Asia, D2C continues to be the critical growth channel for Salomon led by our highly productive Salomon shops. We opened 9 net new Salomon shops in Greater China this quarter, including both owned stores and partner stores, bringing our total count at quarter end to 302 doors.
For the full year 2016, we now expect to open 45 net new stores in Greater China, a slight increase from the 35 we communicated last quarter as more high-quality locations have become available to us and our partners. Keep in mind, although our net new store openings are slower than nearly 100 new doors the last couple of years, we are focused on upgrading the fleet by opening larger format, highly productive doors and the highest traffic shopping set with more space to incorporate apparel and accessories. This is a very similar playbook to what we followed for Arc'teryx the last few years again in China. A great example of this is the new Salomon flagship we've recently opened in Beijing's highest footfall shopping center, Chaoyang Hopson One known for its premium trend-driven retail with over 8,000 square feet, the new flagship offers a full range of footwear and apparel and a highly elevated consumer experience.
In APAC, another region where Salomon has experienced an explosive growth we opened that 5 new Salomon stores in Q1. These were all in Japan and Korea, both very large and sophisticated sneaker markets. Salomon's overall brand awareness and desirability continues to grow very rapidly across Asia. The Americas, as James mentioned, Salomon footwear is seeing a material growth acceleration. The brand is seeing great D2C demand in both stores and e-com, and we are also excited to share that we are beginning to expand U.S. wholesale in a more meaningful way. Not only are we improving sell-through and expanding shelf space within existing wholesale partners such as Nordstrom and RAI, we are also now starting to move Salomon footwear into key doors with new U.S. retailers like Foot Locker and JD Sports. There is growing demand for Salomon sneakers in the U.S., and we are strategically sequencing our U.S. wholesale rollout to align with our epicenter market strategy. Keep in mind, this expansion into new wholesale accounts will include a small number of doors initially.
Accordingly, we are seeing very strong North America order books for fall/winter 2026 with growing demand across a variety of high-quality existing and new retail partners. And we have improved our inventory person to respond to this growing demand. In terms of own retail in North America, we are further strengthening our presence in New York City and just recently opened a Salomon brand store in the Upper West side of Manhattan and in Q3, we will open a Salomon store in the Flatiron District of New York.
We also opened our first Salomon shop in Mexico City as the brand is also enjoying accelerating awareness and desirability across Latin America markets. We will continue to focus on our epicenter strategy in 2026 and beyond, particularly New York, Los Angeles, Miami and San Francisco. We currently plan to open 7 to 10 new Salomon shops in the Americas this year. In EMEA, we continue to expand our store fleet in key epicenters, and we will further develop our Europe epicenters into Spain, Germany and other key U.K. cities in 2026. In Q1, we opened our first brand store in Copenhagen, Denmark, which has delivered a very strong positive start. Lastly, our Winter Sports Equipment franchises had a solid Q1 despite challenging weather and market conditions.
While the market for cross country and touring remains pressured versus the COVID highs, the core Alpine on-piece market remains healthy despite low snow in certain regions. Outdoor Performance adjusted operating profit margin expanded 480 basis points from last year to 20.4% in Q1. The margin expansion was led by gross margin, thanks to positive channel, region and product mix as well as SG&A leverage on strong growth. We are pleased to deliver strong margin expansion in Q1 after making the decision last quarter to accelerate investments to support Salomon's long-term growth, including marketing, retail expansion and talent acquisition. We believe these types of investments are critical to deliver the kind of results we saw in Q1 as well as position the brand for high-quality long-term growth.
I would add that we believe this is one of the advantages of our portfolio. The strong sales growth and margin expansion at the group level gives us the flexibility to invest behind early-stage growth opportunities such as Salomon Sneakers and also Wilson Tennis 360 in a way they could not as stand-alone entities. Moving to Ball & Racquet, where revenues increased 13% to $347 million, driven by Softgoods and racquet sports. We continue to see very strong momentum in Tennis 360 globally. By category, the growth was led by Softgoods, up very strong double digits with continued momentum in all regions. Strong racquets growth was driven by China and EMEA. Beyond Tennis, we saw solid growth in golf, driven by commercial clubs and golf balls, while inflatables were slightly down. Baseball also declined, impacted by the timing of shipments in bats and gloves, partially offset by growth in baseball uniforms and apparel.
Regionally, the Ball & Racquet growth rate was led by Greater China, APAC and EMEA. We opened 1 net new Wilson brand store in Q1 in Korea. We have extensive store opening plans for China this year, given the performance of existing Wilson Tennis 360 shops. For the full year, we now plan to open approximately 40 net new Wilson Tennis 360 shops in China between owned and partner doors.
APAC also continues to drive meaningful Wilson Softgoods growth. We are seeing strong growth -- and inflatables in baseball last year. We also continued to expand our Tennis 360 offering into more DICK'S Sporting Goods locations, including House of Sports. We are planning to expand our DICK's footprint from 250 doors to 400 doors by the end of 2026. Ball & Racquet segment adjusted operating profit and margin decreased 370 basis points to 3.6% as positive product, channel and region mix was more than offset by higher SG&A as we made the decision to make...
Turning to the group balance sheet. We ended the quarter with $539 million of net cash and exited the quarter with inventories up 33% year-over-year, slightly higher than that 32% sales growth. We are very comfortable with the level and quality of our inventory, this high inventory growth is primarily related to the same factors we've previously disclosed. Number one, earlier receipt of seasonal Arc'teryx merchants to prepare for the better in-stock positions. Two, higher Arc'teryx goods and transit resulting from the greater use of ocean freight versus air freight, three, FX translations from the weaker U.S. dollar and four, the addition of the Arc'teryx Korea inventory following the recent acquisition.
We expect inventory growth rates to normalize in the second half of 2026 when we start to cycle our improved in-stock positions and the higher use of ocean freight driven by strong profit growth and disciplined working capital management, we generated $172 million of operating cash flow in the first quarter compared to $164 million last year. And for the full year of 2026, we expect to generate solid operating cash flow growth versus 2025 levels. Now moving to guidance. A couple of housekeeping items before I walk through the details. First on tariffs. Our new updated guidance today assumes that the higher IEEPA tariff rates that were in place before the February Supreme Court really remain in place for Q2 and the remainder of 2026.
Regarding tariff refunds, we have filed our submission and last week received a small portion of our total submission amount, which does not have an impact on our guidance as presented. Second, as we mentioned last quarter, Beginning in Q1, we discontinued allocating certain corporate expenses to our reportable segments that are not directly attributable to the operating performance of the segments. There is no impact to the overall group adjusted operating profit margin. It is simply reallocating certain costs from -- to corporate. Included in our press release and the earnings deck, as an exhibit that details the cost reallocation from each segment to corporate for each quarter of 2025.
Let's begin with our updated full year 2026 outlook. The second quarter is off to a strong start. And given the continued momentum from our highest-margin Arc'teryx franchise, accelerating Salomon's Softgoods growth plus the solid foundation of our equipment franchises, we have the confidence to raise our 2026 sales, margin and EPS guidance. We are raising 2026 revenue growth guidance from 16% to 18% to 20% to 22%, which includes a 200 to 250 basis point benefit from favorable FX impact at current exchange rates. By segment, we are raising our technical apparel 2026 revenue growth guidance from approximately 18% to 20% to 22% to 24%. We are also increasing our outdoor performance sales growth expectations from 18% to 20% to 22% to 24%.
Our Ball & Racquet sales growth guidance goes from 7% to 9%, and to 10% to 12%. We are also raising our full year adjusted gross margin guidance from approximately 59% to a range of 59% to 59.5%, and we're also -- adjusted operating margin of approximately 22% for technical apparel. For outdoor performance, we are raising adjusted operating margins guidance from $14.5 million -- we are assuming full year net finance cost of approximately $70 million and an effective tax rate of 28%. Other operating income will be approximately $30 million for the full year, with approximately $20 million coming in Q2. Net income attributable to noncontrolling interest will be approximately $20 million for the full year. We now expect adjusted diluted EPS of $1.18 to $1.23 versus our prior guidance of $1.10 to $1.15, which is based on 586 million fully diluted shares.
We are also assuming D&A of $400 million, including approximately $200 million of ROU depreciation. CapEx is still expected to be approximately $400 million primarily to support our retail expansion and IT infrastructure investments. Turning to second quarter guidance. We expect reported revenue growth for the group in the range of 22% to 24% which assumes a 200 to 250 basis point benefit from favorable FX impact at current exchange rates. We expect adjusted gross margin to be approximately 59.5% in Q2 of 2026 and an adjusted operating profit margin of 6% to 7%. Other operating income for the quarter would be approximately $20 million. Net finance costs will be approximately $15 million and our effective tax rate will be approximately 28%.
We expect adjusted diluted EPS of $0.08 to $0.10 per share in Q2. Lastly, I would note that should strong trends continue and better-than-anticipated demand materialize, we believe we are well positioned to deliver financial performance ahead of our expectations. With that, I'll turn it back to the operator for questions.
[Operator Instructions] Your first question comes from the line of Michael Binetti from Evercore. Michael.
2. Question Answer
Great quarter, and thanks for all the detail today. So just on the guidance, the second quarter revenue guidance signal is really good here. I think 20% to 22% is the biggest forward quarter growth rate you've given us since the IPO. Obviously, we're all staring a difficult macro right now. So maybe just double click a little bit on what's driving your confidence? I know you said current trends are continuing. But maybe just double clicking on that a little bit. And then I guess, on thinking about the product and the road map for Salomon maybe you could just help us think about the road map for distribution there as you look at the running specialty channel in the U.S. and how we should think about some of the channels willingness to adopt. Some of the key initiatives like Salomon, the GRVL and road products that you guys have coming out anchoring the brand on the performance side.
Michael, this is Andrew Page. It's a pleasure. Thanks for the question. Obviously, one of the things that you definitely want to keep in mind is that we believe that given current rates, the second quarter is going to have about 200, 250 basis point tailwind on revenue. The other thing is that obviously, it's May 18, May 19, so we are meaningfully through the second quarter, we're excited about the trends we see so far, and that's given us confidence to continue to believe in the momentum that we had exiting Q1.
Again, remember, we have a differentiated set of products and portfolio. Our products continue to have premium innovation a lot of technical elegance to them, performance, visible technology and functionality. And they are highly differentiated. So when you think about even the macro, as consumers continue to prioritize...
We have a continuous pipeline of product making sure that they get the full support from people trending about Salomon organizing events and make sure that we are driving sales through and the -- third signal of '26 looks very strong for us, of course, small scale, but a very high level of confidence in this environment.
Your next question comes from the line of Matthew Boss from JPMorgan. Matthew, your line is now open.
Congrats on a great quarter. So a 2-part question. James, first, could you elaborate on the strong momentum, which you cited as continued into the second quarter. Have you seen any moderation in any global region tied to this geopolitical backdrop. And if you could touch on real-time trends that you're seeing in China? And then Stuart, at Arc'teryx, could you break down drivers of the Omni-comp acceleration in the first quarter or any signs of softening at all that you've seen so far in the second quarter relative to that 19% in 1Q?
Matt, thank you for your questions. Okay. First of all, I would say -- from this global platform, I mean, -- we are in the middle of the Q2, and we continue to see strong momentum across global regions across of all our 3 brands and the momentum still carry on coming from the outstanding Q1 results. So I think the management has a very good level of confidence to deliver whatever guidance we give to you guys in Q2. I think it's a great momentum for the group, okay, so far. And China is still on track, okay? So I think Q1, we benefited a lot from CNY and because the CNY date is pretty late this quarter, which gives a good opportunity for our business to expand the kind of hot season in Q1. In Q2, we continue to see strong momentum, especially past Labor Day on May 1 and a long weekend. We also see a good momentum for our brands. So I think it's -- so far, we -- especially in our segment, I see still a bit bullish on the overall development of our business in China market.
And Matt, it's Stuart Haselden, to respond to your question on the Arc'teryx Omni-comps. Yes, the trends that we saw in the first quarter, I would just say sort of very directly, we continue to see those trends extend into the second quarter. We're really excited for what we're seeing across all our regions, and that's reflected in the guidance that Andrew shared with you. In terms of the drivers, I would say we saw a really healthy traffic-driven comps in the first quarter and now extending into the second quarter. And I would attribute that to just the ongoing brand awareness efforts, top of funnel and just the community engagement that we have across all our regions really paying off. And I think James and Andrew mentioned some of the brand awareness improvement we saw early this year that continue.
The conversion trends are also quite healthy and positive. And I think that reflects the strength of the product offerings, the assortments that our guests are finding as they shop our websites and our stores. And we're also seeing really strong guest acquisition. Our guest file is growing at a healthy pace, strong acquisition and retention, also really healthy and growing average spend per guest. So the guest metrics look quite good. And finally, our stores as they begin to comp, we're seeing really healthy continued growth in our store productivity as our stores mature and season. So across the board, we're seeing really strong drivers of that comp performance.
Matt, this is Andrew. Great color. Yes. Matt, just to wrap up on the first point that you talked about around the macro. I mean, obviously, we don't live in a bubble, and we are aware of the risks and the -- some of the decisions that consumers need to make associated with all the geopolitical factors out there. To that point, though, we're not seeing any signs yet with our consumer. We continue to -- you saw our results up in Q1 up in all of our regions. We continue to see momentum as we exited Q1 into Q2. And the thing that we really appreciate is that the premium sports and outdoor market, it remains one of the healthiest segments and all of it. So we do benefit from that.
Your next question comes from the line of Laurent Vasilescu from BNP.
I have a question for Guillaume regarding the Americas wholesale expansion. I think it was called out that JD and Foot Locker are early innings. But curious to know, are there any limitations for the brand to go into DICK's Sporting Goods. And I think, Guillaume, you mentioned that you're in 1/3 of run specialty stores currently. Is there an opportunity? Or is there a limitation for you to get to 1/3 of the big box accounts in the U.S? And then Andrew, a question really on input costs. I appreciate that you called out that you locked in freight for the year, which is great. But you did mention that if oil prices do maintain at these levels, you could see an impact potentially on freight or potentially raw materials. If that's the case, any chance you can quantify that for the audience?
Let me take the first part first. I did mention the fact that with as oil prices have continued to see pressure, it's important to note that the point that I want you to take away from is that it's almost a nominal impact, if at all, any on us right now. we believe, and I thought it was important to let you guys know that we have locked in our freight and logistics costs for the next year. That being said, wrapping it up with if oil prices persist for an elongated period of time, it undoubtedly will have some trickle down effect on the consumer and could possibly have impact on us. But there's nothing to quantify. I wasn't signaling that there's a quantification or a Mendoza line that could trip us.
Right now, again, we see the increased cost, and it's had nominal impact on us, if at all any, and that's what we see for the foreseeable future. But again, we are aware of the macro and if there's a seismic shift in oil and cost over time, this could have some longer-term effect, but we're not seeing anything right now, and I wasn't seeing that something is to come at a particular time of the future.
So if I come back to salmon wholesale in North America, we have a clear playbook, which is where the consumer demand. So we are not looking at business opportunity outside of where we can get traction and having consumer agreement. So when you speak about running specialty distribution, we have a pipeline of innovation. This is supported by the store, which is also selling performance project and understanding the Salomon product. So with limited aided awareness, we can still have quite success in running space. When we are coming back to a large partner and big boxes, then the challenge is we need to build this awareness in order to drive the sell-through and have the consumer demand. This is why we didn't want to deviate from our original strategy, which is starting from epicenter, starting from largely -- and working together with these big boxes, door by door and opening the door in a very cautious way in order to make sure that we are building success. And from what we learned, we are starting to develop so being said, clearly, we have kind of -- we will see an acceleration at JD and Footlocker.
So we are strong at RAI and Nordstrom today, we are developing fast. And for sure, the next 2 biggest target is Footlocker and JD Sports where full winter will start to think forward and we are looking at accelerating the playbook, thanks to our brand momentum. But once again, demand -- consumer demand first, playbook with large city where we are building awareness before we start thinking about kind of numeric developments with a lot of doors in North America.
Your next question comes from the line of Jay Sole from UBS.
Great. Maybe, Stuart, I'd like to ask you about Arc'teryx, especially the progress in the U.S. You talked about women's. Maybe just give us an idea of where you're at stores wise, what you see as the opportunity now and how you see overall sales trend given some of the new categories you penetrated and the progress you've made over the last 90 days.
Jay, it's Stuart. So yes, thanks for that question. So first, on the U.S., we're seeing really exciting acceleration in the comp business and the underlying traffic and conversion that I mentioned earlier, definitely. We're definitely seeing -- unlock during the IPO, we had shared -- we saw the potential in North America, we've got to reach 200 stores. We still see that potential. We're still not even halfway and as we continue to develop our view of the markets, I would expect that potential could even expand. But we're on track. We're seeing great traction and momentum in the U.S. and in North America broadly.
For women's, just to turn to that question, we saw really strong continued strength in women's. In the first quarter, our women's business was up over 40%. We saw a 200 basis point increase in penetration our overall sales to almost 25% to total revenue. We believe our Women's business can be over 30% of our total revenue by 2030. So we feel like we're ahead of schedule effectively towards that goal. And as James mentioned in his prepared remarks, we're seeing great momentum both in our core model redesigns, the beta SV in the first quarter was a fantastic selling product, and that's very much at the bull's eye of who we are as a brand. And the other categories such as pants, and James mentioned the ongoing success we're seeing the Clarkia, the Nia, the Leutia. This is giving us a lot of energy and excitement around the potential we really see women's as offering us a vehicle to transform the brand from not just being a men's brand or a men's bias brand, we see the potential to really transform and become a dual-gender very balanced brand. So yes, thanks for the question.
Your next question comes from the line of Brooke Roach from Goldman Sachs.
Great. Your guidance today indicates a nice step-up in Salomon profitability for the year. However, it looks like you're planning for a little less improvement for the rest of the year despite some easy comparisons? Can you unpack how you're thinking about reinvestments in Salomon as you continue to expand the key epicenter city strategy as well as profit improvement for the brand ahead. On a medium-term basis, what do you think the right profit margin is for the Salomon brand that's achievable as you continue to fuel continued long-term growth. Thank you.
Thanks, Brooke. This is Andrew. Yes, on the sales, we were very methodical in selecting where and how we expand the Salomon footwear, especially our sports valve offerings. Also, there are some sourcing constraints when you tried it, we grew 42% in the first quarter. And so they're obviously sourcing constraints you can't plan a business throwing a debt kind of rate for the rest of the year. So we believe that the guys are responsible, it's prudent. And on the margin, we're leaving room for brand building and investments in our global sports. Our campaigns, our GRVL campaigns, our local activations. We're making key infrastructure investments in technology and people.
We have an exciting pipeline of influencers and event partnerships that you'll hear more about later in the year. And we have more brand store openings globally and especially in Asia. And so we believe that with all of those qualitative points, I'd just add on top of 42% growth in Q1. We believe that the guidance is prudent and it reflects the investments that we want to make, and also it reflects some of the increased demand against some of the supply constraints that we would have to service that demand. So it's a really good problem to have.
Your next question comes from the line of Lorraine Hutchinson from Bank of America.
Speaking with Salomon, can you discuss the momentum of sports style versus performance? And how you're working to ensure that, that mix doesn't become too skewed towards one versus the other?
Yes, thanks for the question. It's, of course, when you look at ground success of Salomon is for time when this category was not existing like 5, 6 years ago. Of course, this is a legitimate question. One thing is -- one thing we have to keep in mind on this model. The first one is why people are choosing Salomon for -- and this is one of the reason of belief of people moving to sports type. This is one point. The second one is -- and you hear about that is, today, we are investing a lot in road running and gravel running, which is our key story for all running -- and this is about how we can mitigate and having the right balance between the performance development and sports style. Sports style, of course, is developing much faster than performance today. But if you look at this niche -- Salomon. But if you look at gravel and -- which is still small, this is the fastest-growing category inside Salomon on small scale, but with a very big traction in terms of consumer demand still in the core distribution and so on.
And this is what it makes us believe that we have today, we will be able to manage our portfolio and our life cycle development of projects in the future.
Your next question comes from the line of Paul Lejuez from Citi.
I wanted to understand your tariff assumption a little bit better for 2Q and the rest of the year. Just curious how you're treating the inventory that you already brought in at the 10% rate, if you were attaching actually a higher tariff rate to that product? Or do you assume it just doesn't flow through in the second quarter. And then second, curious if you can talk about what did change within your second half guidance by region or brand?
Yes. Paul, it's Andrew. Thanks for the question. Just -- let me just re-anchor and orient on the tariffs. Our guide does not contemplate any change in tariffs since before the Supreme Court ruling. That being said, obviously, the tariffs have come down a bit. And to the extent that the tariffs come down, that lower tariff rate runs through our gross parts, all right? And -- but the delta is rather minimal. Remember, we have a small exposure to the U.S. consumer. We believe that, that delta between the IEEPA rates and the current Section 122 rates on our small U.S. space is relatively it's relatively small. It's not a big differential from a gross margin perspective, but it does run through operations.
To the extent that we have applied for refunds and to the extent that we get refunds, we got a small amount late last week. It was inconsequential as it relates to our guide, it would not have impacted we did about guidance. And that is the only visibility that we have to future tariff refunds. We're not -- not booked a receivable for future tariff amounts. We've not booked, we've not booked an upside or contingent gain because we just don't have enough visibility to understand the realizability of those refunds. So I hope that's helpful. And to the extent that we get them, we will deal with any realization as it comes in.
Pardon me, please go ahead.
With regard to the 2H -- with regard to the 2H guide, we're not necessarily going to get into that level of detail. I believe that the second quarter guide, qualified by operational segment and the full year guide was very robust and very detailed with regard to what we're seeing. The biggest driver is the visibility that we had into the first quarter and the visibility that we've had exiting the first quarter after right now. That's the change in our full year.
We have now reached the end of the Q&A session. I would like to turn the call back to management for closing remarks. Please go ahead.
Thanks, everyone, for joining. I look forward to seeing you in about 90 days on our second quarter call. Have a great rest of the week.
This concludes today's call.
Amer Sports — Q1 2026 Earnings Call
Amer Sports — Shareholder/Analyst Call - Amer Sports, Inc.
1. Management Discussion
Hello, and welcome to the Annual Meeting of Shareholders of Amer Sports, Inc. Please note that today's meeting is being recorded. [Operator Instructions]. It is now my pleasure to introduce the Chair of today's meeting, James Zheng, Chief Executive Officer and Director of Amer Sports, Inc.; and Jutta Karlsson, General Counsel of Amer Sports, Inc. and Inspector of Elections and Secretary of today's meeting.
I will now turn the meeting over to James. James, the floor is yours.
This meeting is officially called to order. Good morning, and welcome to the 2026 Annual General Meeting of Shareholders of Amer Sports Inc. I'm James Zheng, Chief Executive Officer and the Director of Amer Sports, Inc. In accordance with the second amended and restated memorandum and Articles of Association of the company and with the consent of the directors present at this annual meeting, I will be present as the Chair of this annual meeting.
I'd like to acknowledge that we are hosting this annual meeting virtually. With the virtual format, we believe that we are able to provide all of our shareholders with the opportunity to participate in today's meeting. Joining me today are members of our Board and the members of our Executive Team. In order to conduct an orderly meeting, we ask that shareholders abide by the procedures set forth in the Rules of Conduct posted to the meeting online platform.
We will conduct the formalities of our Annual Meeting first. The polls are open for voting. All shareholders present in person or by proxy who are entitled to vote at this meeting have the ability to do so online. Please remember that if you have appointed a proxy to vote for you, but you have now attended this meeting virtually in person, any such proxy is deemed revoked and your proxy will not be able to vote on your behalf or such vote will not be counted. Only your vote in person will be counted.
After Secretary's description of the proposals to be voted on today, we will close the polls and provide the Inspector of Elections' preliminary report. After the close of voting, we will adjourn the formal portion of the meeting and immediately convene a question-and-answer session. Questions may be submitted following the procedures described in the Rules of Conduct. Though we may not be able to answer every question, we will do our best to provide a response to as many as possible. Will the Secretary please report on the proof of notice of meeting and the determination of quorum.
Thank you, James. The Board of Directors fixed the close of business on March 20, 2026, as of the Record Date for determining shareholders entitled to vote at this meeting. The quorum for this meeting is one or more shareholders entitled to vote and present in person or by proxy, or in the case of a shareholder being a corporation by its duly authorized representative, representing not less than 1/3 of the total votes attached to all issued and outstanding shares of the company throughout the meeting.
We have been informed by the Inspector of Elections that a quorum is present in person or by proxy for purposes of transacting business. As a result, we can proceed with the business of the meeting. An affidavit from Computershare Communication Services has been delivered attesting to the distribution of the notice of the meeting, the Proxy Statement, and the 2025 Annual Report to all shareholders as of the record date and will be incorporated into the minutes of this meeting. I propose to dispense with the formality of reading the notice of the meeting. If any shareholder disagrees, please make your objection known at this time.
Since there is no objection from any shareholder, I declare the notice convening this meeting be taken as read. The first purpose of this meeting is to lay before the meeting the audited financial statements for the year ended December 31, 2025, and the reports of the Directors and Auditors of the company thereon. I will now present the 2 proposals to be voted upon. Details for these proposals have been provided in your proxy materials. If you have any questions regarding these proposals, please save your questions until the 2 proposals have been presented, after which we will leave time for questions.
Proposal 1 is the election of directors by way of plurality of votes. The Board of Directors has nominated Bruno Salzer, Dennis J. Chip Wilson, Kin Wah Stephen Yiu and James Zheng. In accordance with the Second Amended and Restated Memorandum and Articles of Association of the company, shareholders are required to provide advanced notice of their intent to nominate candidates for directors. No such notice has been received. Therefore, the director nominees named in the company's Proxy Statement are the only persons eligible for election at today's meeting.
The Board unanimously recommends you to vote in favor of each such nominee. Proposal 2 is the approval and ratification of the appointment of KPMG LLP as the independent accounting firm of the company for the year ended December 31, 2026. Approval of Proposal 2, which is an ordinary resolution, requires a simple majority of the votes cast at this meeting. The Board unanimously recommends that you vote in favor of ratification of the appointment of KPMG LLP.
Is there any question regarding the audited financial statements for the year ended December 31, 2025, or any of Proposal 1 or Proposal 2? As there are no questions, I now put Proposal 1, as set forth in the Notice of this Meeting, to be voted by way of the plurality of the votes, and Proposal 2, as set forth in the Notice of this Meeting, to be voted by way of an ordinary resolution, which requires a simple majority of the votes cast at this meeting.
I will now turn the meeting back to the Chair.
Thank you, Jutta. The polls have been open and are about to be closed. If you wish to vote virtually online, please follow the instructions on the screen. We will pause for a moment to allow shareholders an opportunity to submit their votes.
[Voting]
Yes. Now that everyone has had the opportunity to vote, I declare the polls closed for the 2026 Annual Meeting of Shareholders.
We have been informed by the Inspector of Elections that the preliminary vote report show that each of the 4 nominees for election to the Board have been elected to hold office for terms expiring on the date of the third Annual Meeting of Shareholders following this annual meeting and until their successors have been duly elected and qualified or until such persons resign, retire, or are removed in accordance with the terms of the second amended and restated memorandum and Articles of Association of the company. The selection of KPMG LLP as the company's independent Registered Public Accounting Firm for the fiscal year ending December 31, 2026, has been duly approved and ratified. We will report the final vote results in a Form 6-K to be filed with the SEC.
Thank you, Jutta. This concludes the formal business of today's meeting. Since there are no other matters to come before the meeting, the official portion of the 2026 Annual Meeting of Amer Sports, Inc. is now adjourned.
Thank you, James. We will now turn to the question-and-answer session. And as no questions have been submitted, this concludes our question-and-answer session.
Thank you, and thank you all for participating. This concludes our meeting, and we will now close this call. Thank you very much.
Amer Sports — Q4 2025 Earnings Call
1. Management Discussion
Thank you for standing by. My name is Jay, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amer Sports Fourth Quarter Full Year Fiscal Earnings Call. [Operator Instructions]
I would now like to turn the conference over to Omar Saad, Head of Investor Relations. You may begin.
Hello, everyone. Thanks for joining Amer Sports Earnings Call for the Fourth Quarter of Fiscal Year 2025. Earlier this morning, we announced our financial results for the quarter and year ended December 31, 2025, and the release can be found on our IR website, investors.amersports.com.
A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. 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. Please see the safe harbor statement in our earnings release and SEC filings. We will also discuss certain non-IFRS financial measures. Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to the most comparable IFRS financial measures.
We will begin with prepared remarks from our CEO, James Zheng; and CFO, Andrew Page, followed by a Q&A session until approximately 9:00 a.m. Eastern. James will cover key operational and brand highlights, then Andrew will provide a financial review at both the group and segment level and also walk through our guidance for the first quarter and full year 2026.
Arc'teryx CEO, Stuart Haselden, Salomon's CEO, Guillaume Meyzenq will join for the Q&A session.
With that, I'll turn the call over to James.
Thanks, Omar. Fourth quarter was a great finish to a breakout here for Amer Sports. Our growth was led by our flagship Arc'teryx brand and the rising star Salomon, which recently surpassed USD 2 billion sales mark.
In 2025, we generated 27% revenue growth to $6.6 billion and 170 basis points of adjusted operating margin expansion to 12.8% with double-digit growth across all segments, regions and channels. In the fourth quarter, with gross sales 28% and the strong momentum continues into Q1.
Our performance was led by technical apparel and outdoor performance with solid contribution from winter for the equipment and the [ boring ] record. All four regions achieved solid double-digit revenue growth.
Although we generated solid gross margin expansion in Q4, adjusted operating margin declined 110 basis points. This was entirely due to accelerated SG&A investments to support key growth opportunities, particularly for Salomon. Looking forward, we believe we are well positioned for strong and profitable growth within the premium sports and outdoor market, which continues to be one of the healthiest segments in all of consumers. Several factors give me confidence in our outlook.
First, we own a unique portfolio of premium innovation-driven sports and outdoor brands. Second, Arc’teryx is a breakout brand with leading growth and profitability for the outdoor industry, driven by its disruptive direct-to-consumer model. Third, Salomon Footwear has a comparing and unique brand position but still only a small share of the global [ SNC ] market. Fourth, our Wilson and Winter Sports Equipment franchisees already have leading market position. We'll deliver slower long-term growth except for Wilson [ Westeros ] which has significant growth potential. And fifth, we have a strong differentiated platform in Great China where we continue to deliver best-in-class performance across brands.
Before I turn it over to Andrew, I will briefly recap key highlights from our three segments, starting with technical apparel. Arc’teryx delivered another excellent quarter of broad-based strength across regions, channels and categories, especially footwear and women's. Technical Apparel generated a very solid 16% of income, driven by strong full price growth and also healthy segment margin expansion year-over-year. Technical Apparel sales plus 34% was our highest growth quarter of the year. We continue to envision Arc’teryx as a [ jewelry ] global brand with significant runway in all major markets, and we're encouraged that the brand is generating double-digit [ counts ] across all four regions. [ Wim ] was a [ departing ] category in Q4 were 40% growth. We continue to enjoy rising brand awareness with women across regions as we improve bid-style, color function and annuities. We created a significant amount of [ newness ] in women's this platform which drove notable incremental growth in key product categories.
We saw especially strong momentum in ski and integration with the [ CMS ] and also the new [ Endesa ] down jacket, which is a warm [ on-roof ] de-jacket at a pinnacle price point. Women's bottom also continued to be popular following the successful launch of the Clarke Ute and Nepes in 2025. Moving to footwear. -- which grew nearly 40%, driven by strong growth in all markets. Top-performing models toward Northern ALDI the shoes, our most successful launch today, followed by the [ Cecotec ] hiking shoe, -- looking forward, Actares has an exciting pipeline of 2 launched for 2026, and we continue to believe footwear will be a large and profitable growth avenue for Atari -- our balance sub-brand is still small, but the growth strong double digit in Q4, and we are very excited for the future of this unique brands.
We enter a lot of interest at the Paris Fashion Week, with showroom [ on ] tripling from last year. We expect strong double-digit growth from variance in 2026 as we further develop our collections and expand distribution. [ Secularity ] and [ River ] continue to be at the heart of our brand. We opened eight new rebar centers in Q4, bringing the total to 43%. In Q4, we increased the credit net gas receive when they trade in used access products to 30% from 50% privacy, which has driven a notable jump in trading activity.
I would also like to highlight recent initiative announcement at Arc’teryx. First, we welcome every [ Baker ], our first-ever Chief Brand Officer, who joined most recently from [ Palmhager ]. Every is stepping into a newly created enterprise-wide low that will bring together global marketing strategy as well as consumer experience, insight and analytics team. We also welcomed [ Covia ] Private Darryl, our new Head of EMEA. [ Tobia ] brings more than 20 years of international leadership experience across EMEA and APAC most recent at [ Citi ] and Gucci.
I would also like to mention peak performance, our other technical apparel brand, which delivered solid growth in Q4. 2025 market brands returned to growth with sales increasing across all region and channels. The brand also continued to improve profitability, driven by our concentrate efforts to reduce promotions and increase full price selling.
Moving to the outdoor performance segment, which was led by another outstanding quarter from Salomon footwear and apparel and a solid performance from winter sports equipment. 2025 was a breakout year for the 79-year-old Salomon brand, which grew 35% to more than USD 2 billion of sales. Salomon footwear momentum continues across all regions, especially Asia with high demand for sports [ tire ] and performance. There are several ongoing factors that give us the confidence that Salomon footwear is well positioned for significant profitable growth in the years ahead.
Number one, global sports [ fire ] momentum continues. When of Salomon's unique strength as an outdoor brand is that we are connecting with women and the younger consumer in our way traditional outdoor brand, [ Haven ]. Sports style is critical to Salomon's position as the modern outdoor [ SNC ] brand. And the success of [ XT ] Whisper is the first example of how we can successfully expand [ spotty ] beyond the XT6 franchise.
Second, our performance and the running lines are also having great success. We continue to believe our new [ grew ] franchise is helping to unlock the loan category for Salomon like never before. Salomon is gaining traction in the run specialty channel in North America and EMEA and even China, which has been a sports-centric market is seeing strong traction in performance products. Third, Salomon is amazing branded in Great China and Asia, where we believe we operate the most productive and profitable [ SNC ] shops in the industry.
In 2025, Salomon's growth [ sales ] very strong double digits in -- great China driven by both sports [ tile ] and the performance as well as strong growth in apparel. Beyond the Great China, teams experiencing certain demand in Korea and Japan, both large [ SNC ] markets. Fourth, our epicenter strategy is working. Our strategy to open a handful of brand stores around strategic elevated wholesale distribution in key metro markets is critical to elevate Salomon's presence and awareness globally. Epicentral cities include Paris, London, Shanghai, Beijing, New York, L.A., Milan and [ Motoco ].
Fifth is a strong pool demand we are seeing from consumers in Europe. Salomon's home market, driving strong reorders, preorders and sell-through. For styles continues to be the growth driver, but we have also seen a real inflection in rival in Europe supported by marketing campaigns, in-store events and the running event activations. We are seeing especially strong performance in European epicenter like Paris and London, with strong double-digit [ ambition ]. Also, Salomon opened its first ever office and showroom in Paris, which is designed to elevate our brand presence in the city, strengthen our connection with buyers and the community, as well as support top talent acquisition.
Sixth is North America, which is still a much smaller sneak market for us compared to Europe or Asia. North America growth accelerate in Q4, driven by Sports [ Star ]. We remain focused on ramping up our North America direct-to-consumer footprint and the wholesale expansion with the key strategic partners. Early signs are positive as our North America order book is experiencing strong growth. Salomon is also making key investments in leadership.
In January, we appointed our first ever creative director [ Hecky ] Salomon. [ Heck ] arrives following tenure at diesel and the most recently, MM6, and will lead both product design and the brand creative direction. [ Lastly ], I also want to mention our winter sports equipment franchise, which had a very strong Q4 despite challenging weather conditions. The market remains healthy despite the low snow in certain regions. Bookings participations and the enthusiasm for ski and snowball are at record levels at this winter.
The recent Milano [ Cortina ] Winter Olympic games were a big moment for AMR Sports Group, especially salable who upfit all 27,000 official staff and volunteers had too. Between salmon Actaris peak performance, Hamada and also appoint which is already 1 of the most successful [ PSCIraising ] brands in history. Our brand sponsored more than 200 assets at the game, winning an incredible 59 metals are dominant performance. Congratulations to our [ Sand ] teams.
Moving to [ Boranda ], which had a strong sales grew 14%, driven by continued strength in softwood and return to growth in baseball and acceleration in golf. [ Worten Softgoods ] continues its explosive growth summary in 2025, including very strong double-digit growth in Q4. Our [ Wessoftgoods ] offering is resonating with consumers in both wholesale and direct-to-consumer channels and across all major regions. Wilson is unique in its ability to offer Tennis assets from [ petite ], including racks and accessories, and we are excited to have signed 6 new Worten 1360 assets on to, including [ Woop10player ], Arixtra, bringing our total account to 16 players. Beyond pens, we also saw a return to growth in baseball. -- driven by strong bet sales, led by the Louisville Slater and 5 other banks among the top 10 this season.
Lastly, before I turn over to Andrew, I'm pleased to announce Carrie Ask as the next President and CEO of Western brands, effective March 1. Carrie is a proven brand CEO and the seaside executive with great experience in the global soft goods, sports and auto industries, including Harry Hansen, Lewis and Nike. She began her career as an officer in the United States Navy serving both in the U.S. and abroad. We are excited to welcome Carrie to the Wilson and [ a ] sports team.
With that, I will turn it over to Andrew.
Thanks, James.
We had another strong performance in Q4 with healthy sales growth, gross margin expansion and EPS despite our decision to accelerate investment behind Salomon. The strong sales and profitability of the Amer Sports portfolio allows us to accelerate resources behind the large Solomon sneaker opportunity while still delivering great results at the group level.
Let's first take a moment to reflect on the key highlights of 2025. Amer Sports Group delivered 27% growth in 2025 with broad-based strength across brand segments, regions, channels and categories. Arc’teryx continued its very strong trajectory. Salomon Softgoods entered rapid growth mode and Wilson Tennis 360 move the needle in our Ball & Racquet segment. We delivered meaningful adjusted operating margin expansion from 11.1% in 2024 to 12.8% in 2025. We also continued to reduce our leverage ratio effective tax rate and annual interest expense, leading to strong operating and free cash flow generation.
Now turning to our Q4 results. Amer Sports grew sales 28% in Q4 on a reported basis and 26% in constant currency. The strong group sales performance was led by technical apparel and outdoor performance, while Ball & Racquet also delivered solid growth in the quarter. By channel, the group continued to be led by [ DTC ], which grew 38% led by Salomon Softgoods. Wholesale grew 18% globally, which was led by Arc’teryx. Regional growth was led by Asia Pacific, which grew 53%, followed by Greater China, which increased 42%. EMEA grew 21% and the Americas generated 18% growth.
Moving down the P&L. Adjusted gross margin increased 140 basis points to 57.8% in Q4, primarily driven by positive segment, regional and channel mix shift. Adjusted SG&A expense as a percentage of revenue deleveraged by 220 basis points and represented 45.5% of revenues in Q4 versus 43.3% of revenues last year. The deleverage was primarily driven by outdoor performance as Salomon made the decision in Q4 to accelerate investments to support healthy long-term growth.
Also, the strong growth of Wilson Softgood continues to drive elevated SG&A investment within Ball & Racquet. These factors were partially offset by Technical Apparel, which achieved SG&A leverage in Q4. Driven by the higher SG&A investments, as well as lower other operating income, our adjusted operating margin declined 110 basis points from 13.6% last year to 12.5% in Q4. Corporate expenses were $40 million, up from $12 million in Q4 last year, driven by higher share-based compensation.
In addition, last year in Q4, corporate expenses benefited from certain onetime accounting reclassifications related to net finance costs. D&A was $106 million, which includes $48 million of ROU depreciation. Adjusted net finance cost in the quarter was $21 million, which comprised primarily of $20 million of interest expense. In the quarter, our adjusted income tax expense was $65 million, which equates to an adjusted effective tax rate of 27%. Adjusted net income was $176 million in Q4 compared to $90 million in the prior year period. Adjusted diluted earnings per share was $0.31 compared to $0.17 last year.
Turning to segment results. Technical Apparel revenues increased 34% to $1 billion, led by Arc’teryx. Growth was fueled by both 37% wholesale growth and 34% D2C expansion. Technical Apparel generated a strong 6% omnicom, led by full-price selling as we intentionally pulled back our participation in key promotional events, including Black Friday and Double 11.
Regionally, the Technical Apparel growth rate was led by Asia Pacific, Greater China, the Americas and EMEA. All regions grew strong double digits. Q4 was the first full quarter post the Korea distributor acquisition, which contributed a low- to mid-single-digit percentage to technical apparel's growth rate in Q4. In Q4, Arc’teryx opened 15 net new stores with 21 openings offset by the closure of 6 legacy locations as part of our ongoing strategy to optimize the quality and productivity of our store fleet.
New store openings included the new Arc’teryx outlet store in Rockefeller Center in New York City and Mountain Town stores in Aspen and Park City. Arc’teryx also opened stores in Canada, Japan, Australia and China in the quarter. Looking back at full year 2025, we opened 24 net new stores, excluding the Korea acquisition, and we plan to open 25 to 30 net new Arc’teryx stores in 2026, with the largest number coming in North America and also China.
Our store opening plan incorporates a similar level of gross new stores as in 2025, partially offset by the continued closure of certain outlets and other suboptimal locations. In Greater China, as planned, we had slight net store closures in 2025 which includes partner stores. However, we still grew our own store count and overall square footage in China by opening larger format, higher quality, more productive locations. In North America, I want to highlight our second New York City [ Alpa ] store, which opened in October on Fifth Avenue at Rockefeller Center.
The store is the most pinnacle expression of the brand in the U.S. and we are encouraged by the strong sales this winter. The newly opened Mountain town stores in [ Aspen ] and Park City are also off to great starts. We were very pleased by Technical Apparel strong operating margin expansion in Q4. Adjusted operating margin expanded 160 basis points to 25.9% driven by strong flow-through of revenue upside in the form of SG&A leverage. This is a great proof point behind our confidence in the scalability of Arc’teryx highly productive store model as they comp positively over time.
Moving to our Outdoor Performance segment, which saw revenues increased 29% to $764 million, driven by very strong performance in Salomon footwear, apparel, bags and socks and also supported by strong double-digit growth in Winter Sports Equipment. By channel, outdoor performance D2C grew 55% led by new doors and higher productivity across markets, especially in APAC and Greater China. Outdoor performance generated a 28% omni comp with strength in both stores and online.
Wholesale grew 17%, driven especially by strong results in Greater China and EMEA Regionally, the outdoor performance growth rate was led by APAC in Greater China, followed by EMEA and the Americas. The popularity of Salomon footwear continues to inflect globally, and we are doing everything we can to ensure we are well positioned to fully develop this large opportunity over time. Salomon is positioned for significant growth in all three consumer regions, and we are working hard to build the right team, operational, go-to-market and brand-building functions to support our growth.
In Asia, D2C continues to be the critical growth channel for Salomon led by our highly productive Salomon compact shop format. We opened 33 net new Salomon shops in Greater China this quarter, including both owned stores and partner stores, bringing our total count a year in to 286 stores, adding nearly 100 new doors in 2025. In 2026, we expect to continue store expansion in Greater China, but at a more moderate rate, adding approximately 35 net stores to the fleet. In December, we reopened the Salomon flagship store in Chendu. The store design is inspired by local [ Sechin ] mountain scenery and it is the first flagship store combining winter sports and trail ready.
In APAC, we opened eight new Salomon stores in Q4, including Japan, Australia and Korea. The region finished the year with 113 Salomon stores, including partner stores with 44 net new openings in 2025. Overall brand awareness and demand for Salomon footwear is growing rapidly across Asia. In the Americas, Salomon's Softgoods growth further accelerated as we continue to lay the groundwork to support significant future growth. We are excited to see very strong order books for both spring/summer and fall/winter for 2026 with growing demand across a variety of high-quality retail partners, including RAI, Nordstrom, JD Sports, run specialty shops and other specialty retailers.
We also have improved our inventory position to answer the growing demand. Our brand awareness continues to rise across the Greater New York area as our shop in Soho continues to show great traction with consumers and we opened our second New York store in Williamsburg, Brooklyn in Q4. The Williamsburg location strengthens our presence in the core New York Epicenter performing very well out the gate. Globally and in North America, we will continue to focus on our Epicenter Strategy in 2026 and beyond, particularly New York, Los Angeles and Miami. We currently plan to open 7 to 10 new Salomon shops in the U.S. this year.
In EMEA, we continue to expand our store fleet and key episodes, including a third brand store in Milan and a fourth in London. And we will further develop our Europe epicenters into Spain, Germany and other key U.K. cities in 2026. For our Winter Sports equipment brands, Q4 was a strong quarter with double-digit growth despite lower snow levels in the [ ALP ] and the Rockies. In addition to strong market share in our core ski, boot and binding franchises, we continue to see incremental growth opportunities in areas such as snowboarding and protective equipment.
Moving to Outdoor Performance P&L. Adjusted operating profit margin contracted 490 basis points to 6.2% as Salomon made the decision to accelerate SG&A investments to support its significant growth opportunity in the global softgoods market. Outdoor Performance gross margin continued to expand, driven by positive mix shift across product, region and channel. This was more than offset by higher SG&A in Q4 driven by key investments to fuel Salomon's long-term global growth.
These investments include impactful marketing campaigns to drive long-term brand awareness, including XT-Whisper and gravel, the MECO Olympics-related marketing, Also, we accelerated retail expansion, especially in China, where we opened 25 net new brand stores in Q4. And Lastly, we increased investment in talent and operations, including higher incentive compensation given Salomon's performance versus plan, new talent acquisitions, such as our new Creative Director, [ Endostim ], and opening Salomon's new Paris hub.
I want to emphasize that we are seeing tangible benefits and high returns from our accelerated investments, including meaningful uplift in Salomon's brand awareness since 2023, which has increased 15 points globally, including plus 15 points in Paris and plus 10 points in London.
Moving to Ball & Racquet. Revenue increased 14% to $337 million, driven by soft goods, baseball and golf. We continue to see very strong momentum in Tennis 360 globally. By category, the growth was led by soft goods, up very strong double digits with continued momentum in all regions. Softgoods now represents approximately 15% of segment revenue.
Racquets had slower growth in the quarter due to timing of product launches and wholesale shipments, while underlying demand remained strong, with double-digit growth 2025 was a great year for rackets, and we have exciting performance racket launches in 2026. Baseball returned to growth driven by strong performance in bets, driven by successful product launches in fall of 2025 and golf ended the year with improved margins and solid growth, especially in EMEA and APAC driven by a strong product offering.
In other categories, we saw inflatable stabilizing in Q4 and returning to slight growth following a challenging first 9 months. Regionally, the Ball & Racquet growth rate was led by China, followed by meaningfully accelerating growth in Americas, EMEA and partially offset by a slight decline in APAC. We had 10 new owned Wilson brand stores opening globally in Q4, split between Greater China and APAC. Wilson Tennis 360 shops are performing well in China, and we opened 13 new shops in Q4, including partner doors. This brings the total owned and partner store count 77.
And in 2026, we plan to open approximately 30 Wilson Tennis 360 shops in China between owned and partnered doors. APAC also continues to drive meaningful Wilson Softgoods growth. Our first store in Japan in Tokyo's Marinucci District and two stores in Melbourne, Australia are off to great starts. In North America, improving Ball & Racquet growth was led by baseball and softgoods. In softgoods, we saw strong e-commerce comp growth in the region. Our expansion into warmer southern markets is continuing to drive strong results.
Our Dallas NorthPark Mall continues to perform very well, and we continue to expand our new Tennis 360 concept store into more Southern and coastal locations including our new shops in Beverly Hills and Miami. We also continue to expand our Tennis 360 60 offering into more [ Dick ] sporting goods locations, including House of Sports. Ball & Racquet segment adjusted operating profit margin improved 110 basis points to negative 2.6%, driven by solid gross margin expansion related to less promotional activity and better regional channel mix. This was partially offset by SG&A deleverage due to investments in softgoods.
Now turning to the group balance sheet. Ending 2025 with $291 million of net debt and only 0.3x net leverage, our financial foundation has never been stronger. We generated $730 million of operating cash flow in 2025 compared to $425 million last year driven by strong profit growth and disciplined working capital management. Additionally, given our strong financial position, post year-end in January, we announced a redemption of $80 million of our outstanding $800 million, 6.75% senior secured notes at a redemption price of 103.
We ended 2025 with inventories up 33% year-over-year, slightly elevated compared to our 27% sales growth as expected. We remain very comfortable with the level and quality of our inventory. The higher inventory growth is primarily related to four factors. Number one, earlier of seasonal arctic merchandise to prepare for better in-stock position two, higher Arc’teryx goods in transit resulting from the greater use of ocean shipping versus airfreight. Three, FX translation from the weaker U.S. dollar and four, the addition of Arc’teryx Korea inventory following the recent acquisition. We expect inventory growth rate to normalize beginning in the second half of 2026 when we start to cycle our improved in-stock positions and the higher use of ocean freight.
A quick housekeeping item as we turn to guidance. Beginning in Q1 2026, we would discontinue allocating certain corporate expenses that are not directly attributable to the operating performance of our reportable segments. There will be no impact to our overall group adjusted operating profit margin it is simply reallocating certain costs from segments to corporate. For the full year of 2026, we expect group corporate expenses to increase by approximately 60 basis points or approximately $50 million related to costs reallocated from the segments. These cost reallocations to corporate will most benefit the outdoor performance and Ball & Racquet segment margins and have a much more muted benefit to technical apparel.
Now turning to guidance. Guidance assumes the latest tariff rates on all countries will stay in place for the remainder of 2026 and beyond. 2026 is off to a strong start, and given the continued momentum from our highest-margin Arc’teryx franchise, accelerating solo and soft goods plus the solid foundation of our equipment franchises, we are confident in our ability to deliver another very strong financial performance in 2026. For the full year, we expect reported group revenue growth between 16% and 18%, which assumes a 200 basis point benefit from favorable FX impact at current exchange rates.
We expect group adjusted gross margin of approximately 59% for the full year with the margin expansion continuing to be driven by mix shift benefits, as we said in the past, we are confident in our position to manage through a variety of tariff scenarios given our relatively low exposure to the U.S., strong brand portfolio with pricing power and clean balance sheet. We continue to expect an immaterial impact on our group P&L from higher tariffs in 2026. We expect adjusted operating margin of 13.1% to 13.3% towards the low end of our long-term guidance of 30 to 70 bps of improvement, primarily due to the accelerating Salomon investment, opting for long-duration profitable growth over near-term profit flow-through.
We are committed to investing behind the large growth opportunities in front of our Arc’teryx, Solomon and Wilson Tennis 360 while still delivering against our long-term financial algorithm. Our tariff size and profitability and our strong sales growth and gross margin expansion at the group level allow us the flexibility to invest behind Salomon and Wilson Tennis 360 in a way they could not as stand-alone entities. We believe this is a unique advantage of our portfolio. Corporate expense is expected to be approximately $225 million, which includes approximately $50 million of costs previously allocated to the segments that I mentioned above.
We assume full year net finance costs of $105 million to $110 million, higher than 2025 due to a normalizing FX impact on the revaluation of certain nonmonetary assets as well as higher imputed interest expense on store leases as our retail network grows. The effective tax rate is expected to be approximately 28%. And this is an increase from 2025 as we generate a higher percentage of our taxable income and higher tax jurisdictions and also as we cycle a onetime discrete tax benefit in the second quarter of 2025.
We expect adjusted diluted EPS of $1.10 to $1.15, which is based on approximately 564 million fully diluted shares. Also, we are assuming depreciation and amortization of approximately $400 million, including approximately $170 million of ROU depreciation. CapEx is expected to be approximately $400 million versus $310 million in 2025. The increase is mainly driven by increasing key investments in IT infrastructure and retail expansion.
Turning to the segments. Our full year sales forecast incorporates 18% to 20% growth in Technical Apparel, 18% to 20% growth in outdoor performance and 7% to 9% growth in Ball & Racquet. For Technical Apparel, we expect adjusted operating margin of approximately 22%. We expect Outdoor Performance segment margin of 14.5% to 14.8% and we expect Ball & Racquet margin of 4.7% to 5%. All 3 segments should generate gross margin expansion driven by mix shift, partially offset by higher SG&A reinvestment.
While we don't usually provide quarterly segment guidance, given the Q4 2025 margin fluctuation in outdoor performance resulting from accelerated Salomon investments, I want to provide a little extra margin color for Q1 2026. Although we will continue to invest heavily to support Salomon's growth, we do expect outdoor performance to return to modest year-over-year margin expansion in Q1.
Turning to first quarter guidance. We expect reported revenue growth for the group in the range of 22% to 24%, which assumes a 500 basis point benefit from favorable FX impact at current exchange rates. We expect adjusted gross margin to be approximately 59% in 1Q 2026 and adjusted operating profit margin to be 14% to 14.5%. Our net finance cost for the quarter will be approximately $27 million, and the effective tax rate would be approximately 28%. We expect adjusted diluted earnings per share of $0.28 to $0.30.
Lastly, I would note that should strong trends continue and better-than-anticipated demand materialize, we believe we are well positioned to deliver financial performance ahead of our expectations.
With that, I'll turn it back to the operator for Q&A.
[Operator Instructions] Your first question comes from the line of Michael Binetti of Evercore ISI.
2. Question Answer
I appreciate all the help. A couple of technical ones for the model here. The fourth quarter gross margin is usually a little bit above third quarter in the past. I'm just curious because there's a lot of moving parts here. Was there something structural that we should consider going forward in fourth quarter were any one timers in one of the segments that we should consider as we model going forward?
And then I guess, Andrew, the Salomon investments in 4Q, it sounds like those are the reason for the margin -- operating margin guidance in 2026 to be at the lower end of the long-term algorithm. So those investments in 4Q continue in the first quarter. Just curious, and maybe you could walk us through what some of the investments are in the first quarter?
And then bigger picture, as you think about the Salomon investments, incremental growth to the algorithm you presented, are the investments incremental to the algorithm that you've talked about with us? Or it sounds like there was at least an element of it being pulled forward. And I'm wondering if you're stepping up these investments, is that means there's an element of gating the margin expansion today because you can imagine a bigger brand revenue level for Salomon than what you've kind of talked about with us in the past?
Yes. A lot to unpack there, Michael. Happy to address a bunch of the [indiscernible]. Yes, I'll go to address a much [indiscernible] as I think -- as you think about the fourth quarter gross margin, one of the things that you talked about was the trend from third quarter to fourth quarter.
Keep in mind that the fourth quarter, as you think about outdoor performance is our largest quarter for Winter Sports Equipment. Winter Sports Equipment actually outperformed as well in the fourth quarter. And so that is going to create a bit of a drag on gross margin. Obviously, strong business, but the fact is it's a lower gross margin business. And when it outperforms, it affects it.
The other thing that you also want to think about is on a comparative basis, recall that in 2023, we stood up a cost optimization program. We started to see the impact of that cost optimization in outdoor performance in the back half of 2024. And so when you -- as you get through and anniversary itself, so you stop in the fourth quarter 2025, you saw the anniversary of that cost optimization. So if you think about all of 2025, you saw a material margin expansion and outdoor performance and then anniversary itself because now you kind of reset the gross margin to its new go-forward perspective.
As you think about your first question really around the Salomon investments. In the fourth quarter, given that we opportunistically made key investments behind strong momentum of Salomon. Over recent -- over the recent years, we've had one big brand. Arc’teryx has been on fire, and we've made key investments behind that growth. Now we have multiple high-return opportunities to invest in, especially as you think about the Salomon really inflecting right now.
Also keep in mind, in Q1, you will see Salomon margins return to moderate growth. Again, Q4, we opportunistically made the right investments behind that accelerating momentum. The other thing is that this is the power of our portfolio. We run this what we call our brand direct office and because of that, we can get behind accelerating momentum in our brands in ways that these brands can't do on an individual stand-alone basis. We continue to be committed to investing appropriately behind large growth opportunities in front of our tariff. Salomon, Wilson Tennis 360. And we'll continue prioritizing long-duration opportunities over near-term profit flow-through.
The last thing I want to say about that is that the gross margin mix including outdoor performance, that continues. That mix benefit continues. Q4 -- including Q4, Q4 had healthy gross margin mix shift and at the product region and the channel level. Full year op margin for the portfolio just recall 160 basis points expansion for the full year, and this is after consideration of the key investments that we made in the fourth quarter.
So to wrap it up before I turn it over to Guillaume to give you some real color on it. Long term, we still expect to have SG&A leverage. So I'll turn it over to Guillaume and he'll give you some real key points on some of the discrete investments we made.
Yes. Good morning, everybody. So yes, maybe we can go a little bit more into details. We take this opportunistic decision to shoe Salomon long-term expansion in Q4. We have few -- I have very few strong examples. [indiscernible] would take quitely to accelerate our positioning in the market. The first one is we are driving a few marketing campaigns in some key areas, supporting [indiscernible], which is, as James explained, we need to build a portfolio of key franchise products. And on the top of , we need to have kind of variety of product. And if [indiscernible] like really a very promising opportunity. So this is why we are pushing the same for gravel running, which is also our point of difference in the market.
And finally, also, we are preparing the [indiscernible]. So now you see the results. Certainly, you have seen the momentum we have been able to create during the sale biggest. And of course, it was kind of preparation [indiscernible] in Q4. On the top of that, we continue to have this retail expansion. We opened stores in China. In the quarter, you certainly mentioned what was happening in Los Angeles, where we opened this store in [indiscernible] and at the same time, we were building a campaign. So it's how much we are building this ecosystem in every city where we open a store.
We partner with our B2B partners. So I think about [indiscernible], for example, which are through presence in Los Angeles and then we are driving major and [indiscernible] to attract this consumer, and it was really successful. So this type of model require also some resources at the beginning just to have it starts in the epicenter.
The last one is about talent and operation investments. You just hear that Salomon was growing by 35% in '25. And of course, we need to structure the company for a new scale and we had to support our cost incentive compensation, but also, we were starting to acquire some new talent acquisition, the example of 87 is a very good example of the level of ambition we put into Salomon.
Another one was the opening of the Salomon Paris app. So we have a new office -- you know that we are in base in [indiscernible], which is a kind of small city in the middle of the half, [indiscernible] well. But of course, the scale of the company requires also a little bit more facility in different places. And Paris is very obvious. We are a company -- a French-based company. So Paris was kind of obvious opportunity for us.
And of course, it was requiring also this type of investment. It's also a place where we can capture trends. We can capture also world-class talent in the future.
Okay. Michael, I'll just wrap on the one point because I think the last one we talked about was there something structurally different about our algo. It's not. Like I said, we delivered 160 basis points to the bottom line after that investment. Algo does and has consistently been 30 to 70 basis points plus on the bottom line. We opened this year with our guide at 30 bps. We believe that that's responsible.
It does not reflect a structural change in our investment -- our investments as just highlighted, we will opportunistically get behind growth momentum while still continuing to maintain our earnings algo. It's early in the year and should strong trends continue and greater demand materialize, we see no reason why we can't outperform our guidance as it. I just want to clarify, 30 to 50 bps in the range.
Your next question comes from the line of Matthew Boss of JPMorgan.
Congrats on another nice quarter. So James, so James, following the breakout year that you cited for the portfolio, could you elaborate on the current momentum entering the first quarter? Maybe what opportunities do you see for the Salomon brand to accelerate market share further in '26?
And Stuart, have you seen any change in top line momentum at Arc’teryx relative to the fourth quarter or what's embedded to moderate within the 18% to 20% full year forecast relative to mid-30s that we just see here exiting '25?
Matt, we're going to have Guillaume answer your question on Salomon. James will talk kind of global outlook for the space, including China, and then Stuart will finish [indiscernible] a remote on our tariffs.
So when we think about the momentum in sales of course, we see a very strong outcome. So '25 was really the year we confirm that we're doing in all regions. You see the traction in China and Asia Pacific, but our domestic market, which is Europe was really coming back strongly all the investments we have been doing in epicenter strategy with Paris, with London and now we are looking at Milano started it, of course, but we see that we have the right strategy in order to drive momentum in both sports tile and performance.
And lately, we see also that U.S. is becoming a new place of growth. Of course, we are still quite small compared to the market, which is on one hand, a challenge, but also a great opportunity for us, but we see that we have early momentum in the sports tile category, you will see that this epicenter strategy in New York, L.A., we opened a store in Chicago as well, which is doing -- performing very well.
And we see also that to data that there is some other good city where we start to pop up. And the last one is we have also in U.S. early signal of positive trend for running, thanks to [indiscernible]. And you can imagine that if we are able to combine sports [indiscernible] and running in U.S., then Salomon could have very promising growth.
Yes. Matt, thank you for your questions. As I mentioned, okay, I still believe strong trends have continued each cross board. And you already gave out the guidance for our Q1 and top line will grow between 22% to 24%. So our three segments, basically, they all have very good forecast to achieve the target we set for them, okay? So it's a pretty good trend for time being.
And specifically, I just want to specifically mention about the performance in China during the Chinese New Year. So we see a very positive consumer trends during the Chinese year in our brands. And also, okay, not in our brands and also for the coal sports market overall, okay? So the consumption is very, very strong. And I think later on, you also will get a certain color from the other brands. annual report, okay? So I think it's a quite good movement for us.
However, I still want to say, okay, still a bit too early for us to say, okay, this is a very bullish situation in China market. Okay. So -- but at least we offer good start in 2026.
Matt, it's Stuart. So off to a fast start in the first quarter, really pleased with the trends that we're seeing across all our regions. And we're seeing especially strong momentum in North America over the last few weeks. So that's contemplated in the guidance that Andrew shared. And then your question versus the 18% to 20% guide. What I would say is -- this is consistent with our prior practices. We view this as responsible in terms of the guidance we're offering investors -- and there's nothing structural that would prevent us from capturing higher sales should demand materialize.
We're well positioned, strong inventory position, as Andrew noted, to really convert upside should it materialize. So we're happy with the trends we're seeing and confident for the outlook for the -- for 2026.
Your next question comes from the line of Paul Lejuez of Citigroup.
If you could talk a little bit more about the wholesale expansion opportunity in the U.S. within the Salomon business and what sort of growth should we expect with Solomon wholesale versus DTC this year? And then, Stuart, also curious if you're thinking about adding any new wholesale partner doors for Arc’teryx year? How should we think about growth there?
Yes. Thanks, Paul, for asking. So clearly, our strategy is about omnichannel. So we know that if we want to become a large [ secured ] footwear brand in the U.S., we absolutely need to partner with the key players. So we speak a lot about our D2C. We speak a lot about e-com because we think that this is where we can expand the best expression of Salomon, but of course, the strategy is really becoming omnichannel and partner with the key player. We have renew support with REI, which used to be our historical partner in the U.S. when we were very focused on winter sport equipment and outdoor.
And now we see that we are back on track with them. And then in parallel, we have more strong JD Sport and most of the running specialists, which are today our current targets in order to drive the growth. We -- what we try to do so is not building a very big push, but things [indiscernible], city by city, having close partnerships, make sure that we have a very close partner good foundation of business. We are driving demand with them. And then we think that this is the best way to, first of all, win the ship share battle in the market but as well as expansion in terms of number of those.
So we have this type of very accurate strategy in North America. The key driver at the end is really the consumer demand and how we partner with them to drive this consumer demand.
Yes. Thanks, Paul. From an [indiscernible] standpoint, wholesale is emerging as an important channel for us across three of our key name strategies, footwear, valence and women's and footwear this is an important channel of distribution different than apparel. So we see the need to have a stronger strategy here. We've been building a sales team as part of our footwear business unit in Portland.
And we're engaging with specialty run accounts, big box retailers as well. On the premium high end, I would say, very technical positioning that will be an evolution within our footwear business. For Valence, premium wholesale, Tier 0, as we call it, will help create higher brand awareness for Valence and just drive the business there.
And for women's, we see it as an interesting expansion of our distribution footprint just to be relevant where she shops female guest shop. So across those three strategies, where we continue to evolve our wholesale strategy. So I hope that helps. Thanks.
Your next question comes from the line of Brooke Roach of Goldman Sachs.
At Salomon, I was hoping that you could unpack the proportion of growth that you expect to realize by region for the brand in 2026? And then if there are any specific regions that will receive an outsized SG&A investment this year.
As a follow-up, how much of the growth at Salomon do you expect to come from existing distribution partners versus new distribution partners in 2026?
So we expect to have growth in all regions in the world. So clearly, we the very good and positive sign today is Asia Pacific and Greater China continued to show very strong momentum. But now, EMEA is really back on track, where I think every product EMEA also that we also qualify high-quality sales. So you know that sometimes in Europe, the price point is sometimes an issue, but we feel very good and what we have been able to build in the long run, so keeping quite premium positioning.
And the last one, which is a good news, is North America, we're definitely small scale today, but very high growth and high demand and especially from the last quarter, and we see that this momentum is really engaging for '26.
The second one? Yes. So -- so once again, it's -- there is a few areas where we can look at -- so the existing distribution is growing with the momentum. We have, of course, a new kind of strategy in Europe and in U.S. because we enter also the sneaker market with sports style and [indiscernible], it requires some new type of doors. I just can name in Europe sport, for example, which was not a customer of Salomon 5 years ago and now it's becoming one of the strategic partners.
So we have as well new distribution and in Europe despite the fact that our numeric distribution is already very strong. And of course, in U.S., but I will -- I will replace the same as I did for the producers. We are building distribution right now in U.S.
Your next question comes from the line of Ike Boruchow of Wells Fargo.
Thanks, Congrats, everyone. So obviously, revenue is solid, some questions this morning on the margin. Andrew, can we just dive in a little bit on the cadence of the investment you've got about 200 basis points plus of deleverage in Q1. But based on the full year, it does seem like you should start to be scaling the investments, especially in the ones you kind of talked to for 4Q. Can you just comment on that? Like does it seem like the business should be scaling and leveraging the expense base in the back half of the year, specifically in Q4? And does that kind of give us some visibility to scale in the out years and beyond?
Also, one of the things that -- one of the things that is probably embedded does not easily see, but Q1, as you -- some of the deleverage is driven on a comparable basis, driven by the fact that Q1 last year in Ball & Racquet was a quarter with meaningful pull forward because of the threat that tariffs. That was on the horizon. So Q1 last year compared to Q1 this year.
Q1 this year is more normal. Q1 last year at [indiscernible] so you saw more profitability. So it looks like a deleverage. But underneath that, as we talked about, both our tariffs and outdoor performers are performing well. You can see -- and I talked about you see margin expansion for outdoor performance. It is -- it's much more of a quarter 1 over quarter one comp issue related to Ball & Racquet in the prior year. Is that helpful?
No. It is. But I guess my bigger question is about the pacing of the expenses into the back half. And are you planning to start scaling those as you exit the year? And because that might give us some better visibility into the SG&A leverage potential as you're kind of exiting into fiscal '27.
Yes. Yes. I mean, like I said, in Q4 of 2025, we invested a lot. We invested opportunistically a lot in Q4 of 2025. So inherently, it would suggest that Q4 2026 comparative is going to be pretty easy.
Your next question comes from the line of Jay Sole of UBS.
Great. My question is for Stuart. So just give us a little bit of update on how some of the initiatives around, say, the women's and footwear has gone for Arc’teryx in the fourth quarter and which your outlook for this year? And also just with all the news on tariffs over the last few weeks, how has the landscape changed and how might impact the company?
Yes. Thanks, Jay. It's Stuart. On your second point there, tariffs, it's more of a modest impact on our tariffs. It's not nothing, but it is not influencing in any way how we're pricing our products or operating the company, and we see it as an opportunity to take share from companies that might respond in that manner.
So feel -- we're in a good spot from a managing of the tariff situation. As you -- and then your other question, women's and footwear, as James mentioned in the prepared remarks, saw a really healthy growth across both of those categories, both growing 40% in the fourth quarter. Women's, continued strength across some of the new products that we introduced, the women's-only products, the pant category in particular, has been really strong.
The Clarke, the Lucia and the [ Neopantare ] offering us a new sort of lever of growth within the women's business. We also saw strength in our ski and insulation, the [ AMS ] and [ DSA ] down two new products that we introduced in the quarter performed really well. And we're just excited to see women's continue to grow faster than the overall company. We expect to see it exceeding 30% of the total sales of the company by 2030.
And footwear, 40% growth in the fourth quarter as well. Top models included the Norvan LD4, that's our top seller and fast sales in our [ Copechike ] shoe I also just mentioned, we're going to launch the new silent on March 6. This is our Pinnacle trail running -- so really excited about the evolution and the feature set there and the performance of so. A lot of great feedback from it already from our athletes. And then within footwear, the business unit we've stood up in Portland. We're excited for how that's coming together, the sales team, the marketing capabilities we're building. So very bullish on footwear. We see this as an important pillar of growth for us for some time. Hope that helps, Jay.
This is Andrew. Just to wrap up a little bit on tariffs. At the group level, we're confident, as I said, we're confident in our position to manage through a variety of tariff scenarios given a couple of things, just remember, a low level of U.S. exposure, I've seen wrong brand portfolio and pricing power in our clean balance sheet. The two -- obviously, the two businesses that are most impacted would be Ball & Racquet and want a sports equipment. And yes, while -- I mean, we are aware of the recent Supreme Court decision and follow-up decision by the President to pose to 15% tariff. Looking at high-level scenarios, our position has not changed.
Okay. We have time for one more question. I know it's the fourth quarter, so we're taking a little bit longer time this quarter call.
Your last question comes from the line of Lorraine Hutchinson of Bank of America.
Andrew, now that the leverage is down to 0.3x. Can you talk a little bit about your expectations for the capital structure and uses of cash going forward?
Yes. I mean -- and you could see, you saw in 2025, you heard my guy, we're talking about being approximately $400 million in 2026. So we still believe a high -- a high return use of our cash and allocation is to grow our business from -- to the point that we still believe that it is an efficient use of our cash to pay down the inefficient debt as it does not provide the requisite tax shield. But we are -- we'll continue to focus on that. We'll continue to focus on the growth of our business. We're continuing to focus on paying down inefficient debt. And we -- we like our leverage position as it stands right now being close to zero.
That concludes our Q&A session. I'll now turn the conference back over to management for closing remarks Thanks, everyone, for joining. We'll see you in 3 months. Have a great spring.
This concludes today's conference call. You may now disconnect.
Amer Sports — Q4 2025 Earnings Call
Amer Sports — Q3 2025 Earnings Call
1. Management Discussion
Thank you for standing by, and welcome to the Amer Sports Third Quarter Fiscal 2025 Earnings Conference Call. [Operator Instructions] I'd now like to turn the call over to Omar Saad, SVP, Capital Markets and Investor Relations. Please go ahead.
Welcome, everyone. Thanks for joining Amer Sports Earnings Call for the third quarter of fiscal year 2025. Earlier this morning, we announced our financial results for the quarter ended September 30, 2025, and the release can be found on our IR website, investors.amersports.com.
A quick reminder to everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only. They are subject to certain risks and uncertainties that could cause actual results to differ materially. Please see the safe harbor statement in our earnings release and SEC filings. We will also discuss certain non-IFRS financial measures. Please refer to our earnings release for important information regarding such non-IFRS financial measures, including reconciliations to the most comparable IFRS financial measures.
We will begin with prepared remarks from our CEO, James Zheng; and CFO, Andrew Page, followed by a Q&A session until approximately 9:00 a.m. Eastern. James will cover key operational and brand highlights, and Andrew will provide a financial view at both the group and segment level and also walk through our guidance for the full year 2025 as well as an initial high-level sales and margin outlook for 2026.
Arc'teryx CEO, Stuart Haselden, and Solomon's CEO, Guillaume Mazak will join for the Q&A session. With that, I'll turn the call over to James.
Thanks,Omar. Amer sports strong momentum continued in the third quarter as our unique portfolio of premium technical brands continues to create white space and take share in sports and outdoor markets around the world. All 3 segments performed extremely well, led by exceptional Salomon footwear growth and Actaris Omnicom reacceleration and solid growth from Wilson 360 and our winter sports equipment franchise. We delivered strong results across the P&L, including 30% growth 130 basis points of adjusted operating margin expansion and more than doubling our adjusted EPS.
Our performance was led by very strong growth and the profitability out of performance led by Salomon footwear and technical appeal led by Arc'teryx. We also had solid contribution from the Board and Rack segment, led by worse than Tennis 360. Our 4 regions accelerated in Q3 and achieved double-digit revenue growth and that strong momentum has continued into Q4. We believe Amer Sports is a uniquely positioned company within the global sports and outdoor space. Our specialized, highly technical brand serves the premium sports and outdoor market which continues to be one of the healthiest segments across the global consumer landscape.
Several factors give me confidence for our near, medium- and long-term outlook. First, we own a unique portfolio of premium innovation-driven sports and outdoor brands. Second, Arc'teryx is a breakout brand story with leading growth and the profitability for the outdoor industry, driven by its disruptive direct-to-consumer model. Third, Salomon footwear has unique products and brand position and a very strong demand, but still a small share of the global [indiscernible] market.
Fourth, worsened equipment and our winter sports equipment brands already have leading market share and will deliver slower long-term growth except for worsen softgoods, which we believe has significant long-term growth potential. And fifth, we have a strong differentiated platform in -- great China where we continue to deliver best-in-class performance across our 3 big brands.
I want to take a moment to address September fireworks incident. We regret our involvement and are working closely with the local authorities to address the impact. We remain deeply committed to our community and the consumers and are taking actions to ensure we do better going forward. Before I turn it over to Andrew Page, allow me to briefly recap key brand highlights from our 3 segments, starting with technical apparel, which is led by Arc'teryx. Arc'teryx delivered another quarter of broad-based strength across regions, channels and categories, especially footwear and women. We are encouraged by technical apparels continued momentum in the direct-to-consumer channel where Omnicom reaccelerated to 27% from 15% in Q2. We envision Arc'teryx as a true global brand with significant runway to grow in all major markets. And we are particularly encouraged by the meaningful Q3 acceleration in North America and Europe as well as continued strength in Asia and China.
Strong winning momentum continued in Q3, growing 40% and was 1 of Arc'teryx fastest-growing categories. We continue to see a large opportunity to serve women in the [indiscernible] in a different way, focusing on clinical design and performance. The new women's [indiscernible] fans was a standout performer in the quarter and was a top 5 model across all U.S. epicenters.
Our women's climbing plan, the [indiscernible] also continues to be widely popular since its launch last year. For full winter 2025, we are expanding our focus on color and have launched new models like the [indiscernible] and women's only share jacket styles like Amyris and our care. We continue to experience rising brand awareness and affinity with women in the U.S. and Europe as we have improved the fit style and function. As we discussed at our recent Investor Day, weighings will represent approximately 25% of global Arc'teryx sales in 2025, and we expect it to become 30% of sales by 2030. Footwear also continues to be a key growth driver with 35% growth, shoe models launched in the for included concern, modern take on the classic approach shoe, which is like [indiscernible] and beautiful long technical missions. We also launched Northern [indiscernible] a winterized evolution of the Northern L4, delivering high-performance running in coal conditions with both modern site. Looking forward, Arc'teryx has an exciting pipeline of shoe launch for next year, and we continue to believe footwear will be a large and profitable growth avenue for Arc'teryx. Footwear will represent approximately 8% of global brand sales this year, and we expect it to reach 13% by 2030.
Our balance sub-brand is still small but growth strong double digits in Q3, and we are excited for the future potential of this brand. Veilance is expanding into new high-end wholesale partners in North America and you can now find a balance in North Stream in the U.S. and the whole retro in Canada. Veilance will represent approximately 5% of global brand sales in 2025 and we expect it to reach 7% in 2030. Security and [indiscernible] continue to be at the heart of our brand. We now have 32 [indiscernible] centers which support our successful September trading initiative, whereby guests receive a 30% credit for returning their used [indiscernible] jackets. I would also like to mention peak performance, the other brands within our technical apparel segment. We are pleased to share that peak performance is seeing stabilizing sales and profitability in its core European business as well as early green shoots in North America.
We introduced the Peak to II in September, and we are also opening a Vancouver flagship store in the previous Arc'teryx space in time for this winter season. Moving to the outdoor performance segment, which was led by another outstanding quarter from Salomon footwear and apparel as well as a healthy performance from winter sports equipment.
Salomon footwear momentum continues across all regions, especially Asia with strong demand for both sports style and the performance products. In addition to sneakers, bags and socks are also growing strongly across regions. There are several ongoing factors that give us confidence that Salomon footwear is well positioned for significant profitable growth in the year ahead. Number one, global sports style momentum continues. One of Salomon's unique strength as an outdoor brand is how well we are connecting with younger consumers, especially women. Our sports style offering is critical to Salomon's unique position as the modern outdoor sneakers brand resonating with women in our way, traditional outdoor brands have not. Second, our performance and the running lines are also having great success. Our gravel franchise is unlocking the loan category for Salomon like never before.
Salomon is gaining traction in the run specialty channel in North America and the EMEA and even China, which has been a sports-centric market is seeing traction in performance products. We are also seeing a benefit from improving capability to launch globally coordinated marketing campaigns to support our sports style and the performance launch. Third is Salomon continued amazing brand came in -- great China and Asia, where we believe we operate the most productive and profitable sneaker shops in the industry. Beyond the great China, Salomon is also experiencing surging demand in Korea and Japan, both large [indiscernible] markets. Fourth, our epicenter strategy is working. Our strategy to open a handful of brand stores alongside the strategic elevated wholesale distribution in key metro markets is critical to elevating Salomon's presence and awareness globally. [indiscernible] cities include Paris, London, Shanghai, Beijing, New York, LA, Miami and more to come. Fifth, we are seeing accelerating demand in Europe, Salomon's home market. Salomon is experiencing strong pull demand from consumers, which drives strong reorders, preorders and sell-through for both sports style and performance, 6 in North America, which is still a much smaller sneaker market for us compared to Europe or Asia is growing at a solid double-digit rate with under the surface.
We can see that it's growing even faster. We are still exiting certain retail and e-comm channels that work right for Salomon, while we simultaneously ramp up our North America direct-to-consumer footprint and wholesale expansion with the key strategic partners. Lastly, as we continue to elevate Salomon's brand [ awareness ] we are excited about upcoming Milena Cortina Olympic where Salomon is a premium partner of fitting all volunteers. This will be a great moment for the brand in its home market. I also want to mention our winter sports equipment franchise, which had a very strong Q3 with healthy shipments to start a season and [indiscernible] our books for the winter season overall.
We were [indiscernible] by the outstanding performance from atomic assets in the World Cup in Southern Austria. The event represents a great start for the season in Europe, with record attendance and the broadcast viewership, which is a positive indicator of the engagement and the passion people in Europe have for winter sports. In 2025, winter sports equipment is expected to represent only 28% of the outdoor performance segment, down from 46% in 2022.
Moving to [indiscernible] record highlights. For [indiscernible] had strong sales in Q3 with 16% growth, driven by continued strength in softgoods and [indiscernible]. Our tennis 360 products continue to resonate very well with consumers from performance records to tennis, apparel and footwear. [indiscernible] and soft goods continued its explosive growth more than doubling in the quarter with very strong growth across all 3 major regions. The brand has some big moments at this year's U.S. Open. Both on and off the call. Western Coast brand activations across New York cities during the tournament, including a 4-day Wilson tennis Club pop-up in SoHo and our on-site U.S. open shop again posted record traffic and sales.
Oncor Arina Sabeco won her for single titles at the U.S. open playing with Wilson Brad V9. On the pronside, in July were unveiled ultra recline. This is the most diversified orchard like yet designed for intermediate to advanced players seeking both power and precision. Beyond the tennis 360, we saw slight growth in Gulf driven by EMEA and [indiscernible] line and the infinite quarter. Baseball was essentially flat as growth in [indiscernible] was offset by a decline in [indiscernible] and the gear. Inflatables were down due to continued challenging market condition and tariff-driven price increase. U.S. retailers and the consumers are showing some price sensitivity in this category, and we plan to introduce a slightly lower price point premium next year to make sure we are well positioned at the sweet spot on the price spectrum.
With that, I will turn it over to Andrew.
Thanks, James. The headline is that our strategy is working. Our brands are firing on all cylinders, allowing us to exit Q3 with momentum and setting us up to enter 2026 with confidence. Before I get into Q3 results, I want to personally thank our more than 13,000 employees around the globe for their obsessive focus on the consumer and continued push toward operational excellence. These results are only possible through their efforts.
Now to our results. Salomon footwear continues to add a strong second leg of profitable growth to our [indiscernible] already exceptional trajectory, significantly elevating the financial profile and long-term value creation potential of the Amer Sports portfolio. All 3 operating segments delivered both sales and margin ahead of expectations in the third quarter. And given our strong third quarter results and continued momentum, we are raising our full year revenue margin and EPS expectations. Amer Sports grew sales 30% in Q3 on a reported basis or 28% ex currency. The strong group sales performance was led by outdoor performance followed by technical apparel. [indiscernible] and racket sales also accelerated and delivered double-digit growth.
By channel, the group continues to be driven by direct-to-consumer, which grew 51% led by Solomon in Greater China and APAC. Wholesale grew 18% at the group level, also led by Solomon. Growth accelerated across all regions. Regional growth was led by Asia Pacific, which increased 54% and China, which grew 47%. EMEA accelerated to 23% and the Americas accelerated to 18% in Q3.
Turning to profitability. Adjusted gross margin increased 240 basis points to 57.9% in Q3, primarily driven by favorable channel, geographic, product and brand mix. Gross margin also benefited by approximately 50 basis points from onetime inventory reserve adjustments. Adjusted SG&A expenses as a percentage of revenues was flat year-over-year and represented 42.3% of revenues in Q3. The technical apparel SG&A leverage on strong growth was offset by slight deleverage and outdoor performance in Ball and Racket due to ongoing investments in Solomon soft goods and Wilson Tennis 360.
Led by strong gross margin expansion, we generated 130 basis point increase in our adjusted operating margin from 14.4% last year to 15.7% in Q3. Corporate expenses were $38 million, up from $23 million in Q3 of last year. D&A was $119 million, which includes $43 million of ROU depreciation. Adjusted net finance cost in the quarter was $18 million, which comprised primarily of $26 million of interest expense, partially offset by $7 million of FX gains on the remeasurement of certain monetary assets.
In the quarter, our adjusted income tax expense was $68 million, which equates to an adjusted effective tax rate of 26%. Adjusted net income in Q3 was $185 million, compared to $71 million in the prior year period. Adjusted diluted earnings per share was $0.33 compared to adjusted diluted earnings per share of $0.14 last year.
Now turning to segment results. Technical apparel revenues increased 31% to $683 million, led by Arc'teryx. Growth was fueled by 46% direct-to-consumer expansion, including a reacceleration in our omnicomp to 27% from 15% in Q2 of 2025. Technical apparel wholesale revenues grew 11%. Regionally, the technical apparel growth rate was led by Asia Pacific, followed by the Americas, Greater China and then EMEA. All regions grew strong double digits.
Arc'teryx stores are critical to the brand's growth, especially how we engage with local consumers and community. Our stores include a mix of different formats ranging from multilevel large-scale alpha flagship stores to small format very distinct mountain town shops. In Q3, excluding the recently acquired stores in Korea, which I will discuss shortly, Arc'teryx opened 4 net new stores with 10 openings offset by closures of 6 legacy locations as part of our ongoing strategy to optimize the quality and productivity of our store fleet.
New store openings included the Arc'teryx flagship in Vancouver at Robson Street, Arc'teryx also opened brand stores in Manchester, U.K., Canberra Australia and Takanawa Tokyo. We have opened 12 net new stores year-to-date, and we continue to plan to open approximately 25 net new Arc'teryx stores for the full year, with the largest number coming in North America.
Our store opening plan incorporates a similar level of gross new stores as in 2024, partially offset by the closure of certain outlets and suboptimal locations. In Greater China, we continue to focus on optimizing Arc'teryx retail footprint. This year, we will have slight net store closures, including some legacy partner doors. However, we will still grow our owned store count and our overall square footage in China with larger format, higher quality and more productive locations.
A good example of this is our upgrade of the original Arc'teryx flagship in Shanghai at the Alpha Center, which will reopen this month after expansion and renovation. Looking ahead to 2026, we are planning for Arc'teryx to have net store openings in China after years of rationalizing the store fleet in the region. In North America, I would highlight our second New York City Alpha store which recently opened on Fifth Avenue at Rockefela Center. This store is the most technical expression of the brand in the U.S., and we are encouraged by the strong sales in the first few weeks with nearly 12,000 square feet, it's 1 of the largest stores in North America and a bold step forward in Arc'teryx retail expression designed to educate, inspire and connect more people to the mountain through immersive story talent and product innovation.
In Q3, we also closed our asset purchase agreement with Nelson Sports, Arc'teryx is distributed in Korea since 2001. This deal effectively converted 46 partner stores into our own fleet, which include a number of small format shop-in-shop locations. The revenue and margin impact in Q3 was negligible, bringing Korea in-house will benefit our top line and operating profit dollars as we convert from wholesale partner revenues to D2C revenues. Bring a career in-house will have an immaterial impact on both the segment and group operating margin. This acquisition will contribute approximately $25 million of incremental sales in Q4.
On an annualized basis, Korea is expected to generate approximately $120 million of total sales at retail in 2025. Beyond 2025, we believe Korea is a large high potential market for Arc'teryx, given its strong consumer affinity for the sports and outdoor category and premium global brands. Technical apparel adjusted operating margin declined 100 basis points to 19.0% as SG&A leverage was offset by approximately 125 basis point headwind from a timing shift related to government grants.
Moving to our Outdoor Performance segment, which saw revenues increased 36% to $724 million, driven by very strong performance in Salomon footwear, apparel and bags and socks. By channel, outdoor performance D2C grew 67%, led by new doors and higher productivity across markets, especially Greater China and APAC. Outdoor performance achieved an impressive 33% omnicomp with strength in both stores and e-commerce.
E-com is growing across regions driven by higher traffic. Wholesale grew 26%, driven by strong sell-through and reorders and soft goods. Regionally, the outdoor performance growth rate was led by Greater China and APAC followed by accelerating growth in both EMEA and the Americas. The popularity of Salomon footwear is inflecting globally, and we are well positioned to fully develop this unique opportunity over time.
We believe we have very significant growth opportunities in all 3 major consumer regions and have the right talent and team structures in place to take a meaningful share of the global sneaker market. In Asia, direct-to-consumer continues to be the critical growth channel for Salomon led by our highly productive Salomon compact shop format. We opened 19 net new Salomon shops in Greater China this quarter, including both owned stores and partner stores, bringing our total count to 253 doors. We are on track to reach approximately 290 Salomon shops in Greater China by year-end, including owned and partner doors.
We recently opened our second Salomon flagship in Shanghai, a 7,300 square foot pinnacle expression of the brand located in the French Concession district known for its boutique shopping. The 3-level store offers a more immersive experience for consumers and has performed very well in its first few months. In APAC, we opened 12 new Solomon stores in Q3, 6 in Korea, 4 in Japan and 2 in Australia.
Our overall brand awareness and demand for Salomon footwear is rapidly growing across Asia. In Americas, Salomon soft goods grew strong double digits in Q3, and we continue to lay the groundwork to support significant future growth. Our first U.S. store in New York City continues to show incredible traction with consumers and we are on track to operate 4 stores in Greatest New York by the end of Q1. As well as continue to expand our presence in key wholesale accounts.
New locations in Q3 include Woodberry Commons in New York, the trendy Bucktown neighborhood of Chicago. And later this week, we're opening our second New York store in Williamsburg Brooklyn. And I also want to mention our first Los Angeles store on Melrose Avenue in West Hollywood, which opened at the beginning of Q4. The opening has been a huge success with very strong brand buzz in the area, high-traffic and long lines outside the store. We were thrilled to welcome many first-time Salomon buyers, especially so many young female consumers.
We will continue to focus on epicenters in 2026 and beyond, including New York, Los Angeles, Miami and San Francisco, and we are planning to open 7 to 10 new stores next year in the U.S. Looking at U.S. wholesale, Salomon is seeing growing demand across a variety of high-quality retail partners, including REI, Nordstrom and run specialty shops.
In EMEA, we continue to expand our store fleets in key epicenters, including Milan and London. We recently opened our second brand store in Milan and will open a third one in Q4. And we will open a fourth store in London in Q4. In 2026, we will further develop our epicenters into Spain, Germany and other key U.K. cities. For our Winter Sports Equipment brands, Q3 was a strong quarter with double-digit growth across brands and regions. Sales also benefited from approximately $20 million of shipments that were planned in Q4 but went out in Q3. Order books for the season are solid, and our brands continue to take meaningful market share globally.
In addition to strong market share in our core ski, boot and binding categories, we see incremental growth opportunities in areas such as snowboarding and protective equipment. Outdoor performance adjusted operating profit margin expanded 420 basis points from last year to 21.7% in Q3. Margin expansion was led by gross margin, thanks to positive channel, region and product mix as well as favorable product costs driven by our footwear cost optimization initiatives.
Gross margin expansion offset the very slight SG&A deleverage due to continued investments in growth. Moving to Ball & Racquet, where revenue increased 16% to $350 million, driven by soft goods and Racquet Sports. We continue to see very strong momentum in Tennis 360 globally. By category, the growth was led by soft goods, which more than doubled in the quarter with strong momentum in all regions.
Softgoods now represents approximately 15% of segment revenue. Racquet Sports also grew strong double digits, driven especially by very strong growth in EMEA and China. Regionally, the Ball & Racquet growth rate was led by China, followed by APAC, EMEA and slight growth in Americas. Globally, in Q3, we had 10 net new Wilson Brand store openings, mostly in Greater China. Wilson continues to excel in China, and we are planning to open approximately 35 Wilson Tennis 360 shops in China this year, including both owned and partnered doors, bringing the total to around 80.
In Q3, Wilson celebrated the opening of its urban concept store, Brick House in Wuhan, which integrates American Tennis Club aesthetics with local Wuhan culture, attribute to Olympic Champion [indiscernible] hometown. In North America, our expansion into the warmer southern markets is continuing to drive strong results. Our Dallas NorthPark Mall location continues to perform very well, and we continue to expand our new Tennis 360 concept store into more Southern and coastal locations, including our new shop in Beverly Hills, and an upcoming shop in Miami.
We also continue to expand our Tennis 360 test in new DICK'S Sporting Goods locations, including House of sports locations. In APAC, we are excited to expand our retail format into 2 new markets: Japan, with our first store in Tokyo's Marinucci District and Australia with our first 2 stores in the Melbourne area. Ball & Racquet segment adjusted operating profit increased 70 basis points to 7.6%, thanks to strong gains in gross margin driven by favorable product, region and channel mix and pricing. Ball & Racquet profitability also benefited from the above-mentioned onetime inventory reserve revaluations. These gains offset higher tariff costs and slight SG&A deleverage on continued soft goods investments.
Turning to the group balance sheet. We ended the quarter with $800 million of net debt. Using the midpoint of our 2025 adjusted operating profit guidance our net debt to adjusted EBITDA ratio was approximately 0.7x at the end of Q3. We exited the quarter with inventories up 28% year-over-year, slightly lower than our 30% sales growth.
We are very comfortable with the level and quality of our inventory. This higher inventory growth is primarily related to 4 factors: number one, earlier receipt of seasonal Arc'teryx merchandise to prepare for better in-stock positions.
Number two, higher Arc'teryx goods and transit, resulting from the greater use of ocean shipping versus airfreight. Three, FX translation due to the weaker U.S. dollar and four, the addition of Arc'teryx Korea inventory following the recent acquisition. We expect inventory growth rates to normalize in the second half of 2026, when we start to cycle our improved in-stock positions and the higher use of ocean freight. Driven by strong profit growth and disciplined working capital management, we generated $104 million of operating cash flow in the first 9 months compared to $18 million last year. And for the full year of 2025, we expect to generate solid operating cash flow growth versus 2024 levels.
Now moving to guidance. The updated guidance assumes the latest tariff rates on all countries will stay in place for the remainder of 2025 and beyond. We remain confident that we are well positioned to manage through a variety of tariff scenarios given our low exposure to the U.S., our pricing power and our clean balance sheet. We continue to expect negligible impact to our group P&L from higher tariffs in 2025 and beyond.
Let's begin with our updated full year 2025 outlook. Given the upside in Q3 and our continued momentum, we are raising our full year revenue operating margin and EPS expectations. We are raising 2025 revenue growth guidance from 20% to 21% to 23% to 24%, including an approximate 100 basis point benefit from favorable FX impact on current exchange rates. By segment, we are raising our technical apparel 2025 revenue growth guidance from approximately 22% to 25% to 26% to 27%, including continued strong omni comp growth.
We are also increasing our outdoor performance sales growth expectations from 22% to 25% to 28% to 29% and Ball & Racquet racket from 7% to 9% to 10% to 11% growth. We are also raising our full year adjusted gross margin guidance from approximately 57.5% to approximately 58% and we're also raising our adjusted operating margin guidance from approximately 11.8% to 12.2% to 12.5% to 12.7%.
By segment, we continue to expect an adjusted operating margin of approximately 21% for technical apparel. For outdoor performance, we are raising adjusted operating margin guidance from 11% to 11.5% to 13% to 13.5%. For Ball & Racquet, we are maintaining our adjusted operating profit margin guidance of 3% to 4%.
We are now assuming full year net finance cost of $85 million to $90 million and an effective tax rate of 27% to 28%. The lower effective tax rate is primarily driven by higher profit generation from lower tax jurisdictions. Other operating income will be approximately $20 million for the full year, and net income attributable to noncontrolling interest will be approximately $15 million. We now expect adjusted diluted EPS of $0.88 to $0.92 versus our prior guidance of $0.77 to $0.82, which is based on $563 million of fully diluted shares. We are also assuming D&A of $350 million, including approximately $180 million of ROU depreciation. CapEx is expected to be approximately $300 million primarily to support new store expansion, ERP optimization and distribution and logistics investments. As we have 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 our expectations.
As we begin to look beyond 2025, we are also confident in our initial 2026 outlook. At the group level, we expect to deliver revenue towards the high end of our long-term algorithm of low double-digit to mid-teens annual sales growth and we expect to deliver adjusted operating margin expansion within our long-term algorithm of 30 to 70-plus basis points.
With that, I'll turn it back to the operator for questions.
[Operator Instructions] Your first question today comes from the line of Brook Roche from Goldman Sachs.
2. Question Answer
Have you seen a sales impact in China following the fireworks incident -- if so, when do you expect sales to recover? Do you think there could be any longer-term brand repercussions?
Brook, it's Stuart. Thanks for your question. Arc'teryx China sales trends were softer at the beginning of Q4, but have since rebounded as weather has cooled. We are confident in our charge as brand position and equity with consumers across all of our markets. We are most focused on connecting with our consumers and communities and delivering great products and store experiences.
Great. And as a follow-up for Andrew. How did this event impact guidance for 4Q?
It did not have a factor in our Q4 guide.
Your next question comes from the line of Matthew Boss from JPMorgan.
Congrats on a nice quarter. So James, could you speak to your confidence in guiding 2026 revenue growth to mid-teens, which is the high end of your long-term algorithm and then Stuart, at Arc'teryx, could you break down the cadence of the third quarter 27% omni comp? And if you could elaborate on the strong global momentum that you've seen in the fourth quarter? Or just any change in demand that you've seen as we head into holiday for the brand.
I'll just highlight our forecast for coming years. So we -- given the very solid foundation, we built up '25. I think we have managed a very good level of confidence to deliver what we guide in 2026. I think mid-teen growth patterns can be secured in 2026.
Yes, Matt, it's Stuart. So yes, the Omnicom, we're really pleased to see the momentum in the third quarter. The overall revenue increase at 46%, we think is really healthy. The 27% Omnicom also reflects a strong 2-year trajectory, and it's definitely factored into how we thought about guidance into the fourth quarter. The -- as we look at Q3 specifically, the retail performance was -- from a KPI standpoint was driven by traffic. So we saw really healthy traffic increases more modest increases in conversion and AOV and EPT. Also worth mentioning, markdown levels were pretty consistent year-over-year.
So it was not a markdown driven sales increase. As you look at your -- and your question around the global demand, strong momentum around all of our regions, it was great to see an acceleration in our North American business in the third quarter, where they moved up in the ranking after Asia Pacific, which continues to be the leading region for us. But we still saw some very strong growth in China and in Europe. So we're not really seeing weakness in any of our regions. And it makes us optimistic as we look at fourth quarter and beyond, and yes, so I think feeling really good for how we've now stepped into the fourth quarter and the trends we're seeing quarter-to-date.
Your next question comes from the line of Ike Boruchow from Wells Fargo.
Let me add my congrats. I guess a higher-level question on next year's outlook, just maybe potential additional info on door growth for both technical, basically, both for Salomon and Arc'teryx. And then would love to hear a little bit more about the progress on Salomon in the United States specifically, Andrew, can you give us an update of where you are in penetration there? There seems to be a lot of appetite for the brand locally here.
Just kind of curious how you're measuring that, balancing the growth with the pushable model.
We'll have Andrew actually take the first question, then we have [indiscernible] here, who's the CEO of [indiscernible]. -- we'll take the all-in question.
Yes, thanks for the question. start to detail of store growth. I will provide more of that update as we. [indiscernible]
Can I think that we have to put salmon into the context and the current momentum we have. So I'm convinced that we hold a truly distinctive position in the market, and we fully to shape what's come next. We have an incredible opportunity to define any in the modern mountain sports movement in the market. And if I identified a few strengths of Salomon, the first one is the [indiscernible] moping performance, which is what consumer is looking for is authoticity. We are true to what we are doing. We have a global recognition of design language led by innovation. What we are doing and developing is really true for performance, for function. And we have a growing cultural relevance reaching the mountain, the city and the modern lifestyle. And this quarter, definitely, the good example of the potential of Salomon in the market, and we believe that this is just a start. If I move on the U.S. case because this is a question, of course, this is today the region that we have to build the fundamentals. So we -- we are showing a little bit of strength in EMEA. We are very -- growing very fast in Asia Pacific and China. And today, we are focusing on U.S. and the U.S. provision is coming from -- this leading position in winter sport and outdoor was Salomon has high market share and high recognition in the market. And now we have to move to the city. And this is what is currently happening by true epicenter strategy so that we started in New York a few quarters ago.
Now we have LA, the new shop opening we have in [indiscernible] is a good example of a long line at consumer looking at this product. We have also good traction in running specialty distribution and performance. And now it's how we all this good signal and insight, which is coming with the new consumer [indiscernible] very often a female consumer, how we are transitioning and translating into a bigger scale in U.S. And this is why we look at more epicenter, more shop opening, having a curated media investment in the right spaces and of course, working with our B2B partner to drive the numeric distribution will expose Salomon to more consumers. And we feel very confident that we are on the right path to accelerate into [indiscernible]
Your next question comes from the line of Lauren Hutchinson from Bank of America.
Just sticking with Salomon, your putting back some of the distribution there, which is causing a pressure. Can you talk about when that pressure will abate and where you are on U.S. awareness at this point for the Salomon brand?
I still speak about U.S. And of course, as I explained, we had this leading position in winter sport and outdoor performance. And footwear. And this outdoor performance footwear led us a few years ago to go to places and some distribution that we think they are not any more relevant and we think -- and also a partner sometimes also is looking for other purity -- this is why we have this kind of looking like negative -- some negative building block, which show finally kind of growth, but not growth expected as we would -- we think that the end of H1 '26 will be the last time that we will not have any more anniversary sales, and we will have completely fresh and new setup for distribution.
So we still wait for the -- for 2 quarters, but I would say that the most of the change has been already implemented.
Your next question comes from the line of Jay Sole from UBS.
I want to ask about Wilson, specifically the Tennis 360 stores. It sounds like -- I think you said you're up to 80 stores in China. Can you just talk about the -- so big picture long-term opportunity in China. And I think you also mentioned that the store in Dallas, I think you said is off to a good start, you're opening some Board Tennis 360 stores in the U.S. Can you just talk about the Tennis 360 opportunity outside of China and how that's developed over the last 90 days in your view?
Sure. Thanks, Jay. So you mentioned the Tennis 360 contract outside of Greater China. So we have 14, 15 stores in North America. I mentioned the Dallas Park store that's doing really well. We will focus really around mil-space think about where you can concentrate teas in the Southern Smile in the U.S. starting in the Georgia down to Florida, around the south and then back up through California.
So that's what I would expect to see from our retail format episodic concentration we are still -- we're in the early phase of that. We're excited and we're super motivated about where it's going is really gravitating core of the product, but we're still in the early stages of really optimizing and formulated our -- our total owned retail format.
In addition to our own retail format, we've also seen success in our [indiscernible] in short. So we are able to present the full patent of our Tennis 360 concept that is to hand and the consumer is early resonating with the consumer there. So you'll start to see the expansion even in the Dick's and house of sports format for the [indiscernible] locations.
Your next question comes from the line of Paul Leslie from Citigroup.
On the margin guide for next year, I'm curious how much of the expansion is simply a function of business mix versus improvements that you might be seeing within each segment. And then I just wanted to ask a clarifying point on soon. Could you just say what are the number of doors that you're actually exiting in the -- within the selling wholesale business? And then what are you adding over the next 12 months.
Thanks. Yes. Paul, thanks a lot. The same drivers of our mix shift as before, it's going to be primarily driven by gross margin expansion. We will continue to make the proper investments in SG&A to continue to drive growth. So margin expansion that you see will be driven primarily by gross margin expense and net gross margin expenses driven primarily by mix shift, both channel and product and recap. As it relates to the number of doors, we're not necessarily going to comment. It's a bit of nuances as [indiscernible] talked about exiting some holes doors that could tell a full expression of the brand and get into more strategic partners. But as we talked about, start to think about clearing that through H1 of next year and then you start to see as we get into the third quarter effect you start to see the brand release show up in the strategic process that we [indiscernible].
Your next question comes from the line of Anna Andreeva from Piper Sandler.
We wanted to follow up on the Americas. Nice to see the region accelerate to high teens -- can you provide more color on what you saw by channel? And how did U.S. perform within that? I think you mentioned slight growth at Wilson in the U.S. And as you look into '26 and the high end of the algo, should we expect Americas as a double-digit grower next year? And then we just had a quick follow-up. The TA Omnicom acceleration, great to hear about strength in traffic. The debt headwind from outlet that you saw last quarter begin to moderate? And just remind us, when do we anniversary that outlet dynamic in '26.
So we'll have Stuart answer the comp and talk about the Archer. We really think about your first question by brand not at the group level. So we have each of the brand CEOs here will let each of them answer it.
Yes, it's Stuart. The acceleration in North America for tariff is really a function of success of our brand awareness investments Unity and different forms, brand marketing and with the growth of our store footprint. The stores are providing critical catalysts for driving guest engagement and where this across our key markets.
So we're pleased to see the success of that reflected in the Omnicom funds with regard to the sale the traffic counter question that you had, it traffic really reflects what I just mentioned. We saw a meaningful reduction in markdown revenue in the first half of the year. So into Q3, we saw our [indiscernible] basically are consistent with prior year. So as we think about next year, obviously, we would be getting to later. And then Andrew [indiscernible] in gas design commentary on channel and then the trend there on if you want to make a comment I think you've covered it pretty well.
Yes. I mean, to your point around the uptick in North America is primarily driven by Tennis 360 concept, both Footwall and [indiscernible], very strong growth in the quarter. And the other categories in Wilson also were strong, notably rapid sports cut strong bats were strong, although baseball was relatively flat because it was offset by challenges with growth. But that -- we're really excited about what we're seeing and how that really elected and returned to a strong growth is [indiscernible].
Your next question comes from the line of Jonathan Komp from Baird.
Can I follow up just the initial 2026 view, would you expect technical apparel to be at least in line with the algorithm from September, mid-teens growth with China at least low double digits. Any color there.
Yes. So, this is Andrew. As you pointed out, we have reaffirmed the full algorithm from Investor Day, both at the brand level as well as at the group level.
Great. And then a follow-up just on the Q4 outlook, Andrew. Operating profit growth has been very strong in the first 3 quarters, over 60% it looks like you're embedding a single-digit growth rate in profit for the fourth quarter. So could you just share any more detail anything unique in the fourth quarter impacting the margin outlook? And is there anything we should expect into the first half of '26 in terms of margin headwinds?
Yes, definitely, no. And as I'll point out. Obviously, really strong third quarter. We're excited about it. You see what happens when we're able to over deliver topline rate to drop that through to the bottom line. In the fourth quarter, as you said, as you start to think about what we're seeing, we still believe and we're excited about our full year in guidance for the fourth quarter. But as as [indiscernible] talk about solid we're in the early phases of a good question point.
Fourth quarter will be the first full quarter of tariffs. We also have investments that were mailing in the things and invested in, obviously, a continued market around our basis. So we believe the guide for the full year and the guidance for the fourth quarter is responsible and will continue to say demand materialize there's no structural reason why we won't be able to overdeliver against our [indiscernible]
Your next question comes from the line of John Kernan from TD Cowen.
Congrats on another strong quarter. Andrew, just kind of follow up on Jonathan's question. The guidance for the outdoor performance segment margin is for a decline in Obviously, there's been a ton of upside to your guidance this year and the incremental margin you've been generating on the soft goods really seems to be falling through. I'm just curious why the conservatism here in outdoor performance and how you're thinking about the margin performance, outdoor performance into next year?
Yes. I mean a couple of things. As I talked about, there were some early shipments into the third quarter on sports equipment. We have some meaningful investments we want to make in the fourth quarter in marketing increased awareness in our North America footwear, and we end the it. We believe that as the business continues and the demand continues to show up as a spend if there's opportunities in the fourth quarter. But again, we're in the early stages of that inflection plan.
So we don't know the ad and demand at this play.
Got it. And maybe just a quick follow-up on technical apparel and the segment margin there was down year-over-year on really impressive top line growth. I think you said there was a timing of government grants that affected the type profitability. Any comments on how you're thinking about fourth quarter, the drivers of operating margin expansion into next year for [indiscernible]
Sorry, the repeat the last part.
Yes. Any thoughts on the technical apparel segment margin in Q4 and then into fiscal '26.
Yes. Okay. So segment apparel margins in Q4. I see those margins are in line. They are relatively strong. We've not for the full year, I see this margins being in the low 20s to technical apparel talked about the [indiscernible] market in the fourth quarter. The timing of the government rent. The [indiscernible] was making there is that in the third quarter of last year, we received a higher portion of our government brands than we did this year. So it created a drag on the third quarter margin this year on a comparable basis.
Your final question comes from the line of Alex Straton from Morgan Stanley.
I just wanted to focus on the China growth acceleration in the quarter, it definitely stands out versus a more somber narrative from a lot of your peers. So can you just help us square that difference between you and maybe the broader sports or group and then how you're thinking about industry dynamics in China into the fourth quarter and then next year.
Okay. Thank you for the questions. So I mean Basically, we are quite pleased about the Q3 results in China, and we closed right now or the pattern we like we projected and all brands, especially Salomon and worsen they're growing extremely well and in China market. So I think based on the Q3, we think we got a good level of foundation the whole year in China with a very solid growth matters for Q4, I just want to color 2 major seasons city in Q4, which is bone and the 1.
So overall, our overall achievement for these 2 major events are quite satisfied, okay, reach our locations. And I think pretty much we have a very good confidence or even China and this year and we will have a very brief result in 2025 and the -- so download for next year, I think it's the foundation is there. I mean, as we already mentioned, with our 3 million brands, they all got the unique proposition in China, which really attract a lot of younger consumers in different segments and we are in a very easy position to compete in markets, okay?
So we are quite optimistic also for 2026 than in China [indiscernible]
And that concludes our question-and-answer session. I will now turn the call back over to management for closing remarks.
Thanks, everyone, for joining. We'll see you in 3 months for our fourth quarter results. Have a great day. This concludes today's conference call. Thank you for your participation. You may now disconnect.
Amer Sports — Q3 2025 Earnings Call
Amer Sports — Analyst/Investor Day - Amer Sports, Inc.
1. Management Discussion
Good morning, everyone. To everyone here in person and online and the webcast, thanks for joining us for the Amer Sports 2025 Investor Day. My name is Omar Saad, and it's my pleasure to welcome you here to the [ Nest ], the most recent addition to the Arc'teryx headquarters in North Vancouver. This dynamic community space was created to inspire the team, connect people across the functions and showcase the brand. Perfect for large meetings, company events and conveniently an Investor Day. I would especially have you take notice to the climbing wall to your right. This inclines down to a 70-degree angle and the Arc'teryx design team is full of expert professional climbers who can go up and down that wall at any angle. Maybe some of you get to try it later.
So first, the safe harbor statement. A quick reminder that during today's Investor Day presentations, you'll hear forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only. They are subject to certain risks and uncertainties that could cause actual results to materially differ. Please see the safe harbor statement in today's press release and SEC filing. We will also discuss certain non-IFRS measures. So this will be our first Investor Day since returning to the public markets last February. The idea to hold an Arc'teryx-focused meeting here in Vancouver began about a year ago when the global leadership team was here for Board meetings. The Arc'teryx team put together a great day of presentations and product tours. Personally, I was blown away by the quality and experience level of the Arc'teryx team, their ability to frame the commercial opportunity by category, by region, and of course, the amazing products and innovations as well as the unique culture and community here.
Before the day was over, I'm pretty sure I had James, Andrew, Stuart, the Arc'teryx CFO back there, Chris Tham, who many of you may know already, and our Arc'teryx Head of Comms, Lindsey, signed up to come back here a year later and do it for the public. So here we are very excited for you to experience the investor version today. Before we get to the content, a few points of order to consider. First, please hold your questions for each speaker until the end of the day. We should have time for about 45 minutes of Q&A after all the presentations with the entire management team available to answer. Also hold your applause as well.
You don't need to clap after every presenter. We have a ton of people coming to the stage today. And for those online, please e-mail [email protected] with your questions, and we'll try to incorporate those as many of those as we can. And also just for those of you in person, we're going to be conducting guided product tours right after the lunch hour. We'll break you into 6 different groups, 1 for each of the product stations. Please check the back of your lanyard card [indiscernible] start at the station marked by that colored sticker next to which station you're going to start back -- start at. There's also a map of the space here on the back of the lanyard with your 6 stations.
So now I'm going to turn it over to our Group CEO, James Zheng. As many of you know, James has a great track record from adidas to ANTA and now Amer Sports. He's one of the most experienced and successful executives in the global sports and outdoor industry over the last 20 years. James?
Okay. Thank you, Omar. Hello, everybody. So good morning, guys. Thank you. Okay. Welcome. Warmly welcome everybody to Amer Sports Investor Day. So I'm very excited to be here. And I mean this is the first ever Investor Day since our IPO last February, okay? So -- and as you saw in our recent -- latest press release this morning, we expect Amer Sports to deliver another very strong third quarter's results across all 3 segments, led by continued exceptional growth from Salomon Softgoods and an Arc'teryx acceleration. So this is the track record we built up, a very still small period of time, only 6 quarters. Obviously, this is the -- we are in the seventh quarter since IPO. So I think the company is really doing a great job to deliver what we committed to the street, and we all have the good level of confidence to continue to carry on the same track record in the past 6 quarters.
So that's a pretty good milestones for us. So I would say the -- later on, in addition to our strong near-term performance, we also expect great things from our unique portfolio of premium sports and outdoor brands long terms. So we are, at the end of the meeting -- before the end of meeting, we are also happy to share our updated long-term financial goals. Okay. So I know -- I mean, today, we are in Vancouver, the headquarter of Arc'teryx, our flagship brands, as you guys are aware. So Stuart and all the Arc'teryx executive team has planned an excellent and informative day for you guys.
But before I turn it over to them, I'd also like to take a moment to share with you guys my perspective on the Amer Sports journey since I joined the company in 2020. So I think it's a very unique 5 years journey I have experienced in sports industry in my career. So I mean, I'm very happy to report to all of you, we really made a tremendous milestones and a successful story in the past 5 years. First of all, obviously, we more or less more than doubled the size of the business to over USD 5 billion in 2024. And based on that, we also built up -- make our major 3 brands, Arc'teryx, Salomon and the Wilson exceed USD 1 billion [indiscernible] in 2023, and Arc'teryx brands achieved $2 billion in 2024, which is more or less 4x bigger than in 2019. So it's a tremendous achievement in the past 5 years.
On top of that, we really strengthened our direct-to-consumer business substantially and now direct-to-consumer channels represent more or less 50% of Amer Sports business versus only 15%, 1-5 in 2020. And right now, the company, the group operating approximately 550 owned retail stores globally. And another big story is all about China. We really accelerated our business in China markets. And by the end of last year, Amer China represent 1/4 of the whole group of sales. And I mean, 5 years ago, it's less than 10%. And obviously, the last but not least, we had a very successful IPO on the New York Stock Exchange in February 2024.
And beyond this, okay, we also execute a second capital raise at the end of last year, which helped to significantly reduce company debt leverage. Okay. This is pretty much the 5 major achievements in the past 5 years. So how we do that? Okay. I will call out 4 major measures to help us to achieve this kind of milestones. First, so I always say, okay, the portfolio brand we own, there is one distinguished advantage, or I would say, competitive edge we own is all about the products. So products is always the root of our brands.
So in the past 5 years, we have been heavily investing in high technical innovative product pipelines so that we can always distinguish ourselves from peers by consistently offering the best technical and design products to satisfy, not only satisfy and lead the consumer needs in defined sports segments. This is obviously the competitive edge, the group and our brands own. And obviously, Arc'teryx is the role model for this. So later on, the Arc'teryx team will give out more detailed introduction to you throughout the day about how we create the very compelling innovative product pipelines in-house so that make the brand become one of the most distinguished favorable brands in outdoor segments.
Second, I think it's also -- I always mentioned in our road show before IPO that the major unlock for our business is coming from the change of our business models. So we really make a big change -- after acquisition, we really make a big change from our business model from [ matrix management ] structure to what we call the brand direct operation models. Now the brand CEOs in the company owns full responsibility and accountability for whole brand business result and end-to-end value creations, which also including product innovation, design development, brand marketing, go-to-market, strategy development and implementations and relevant sourcing management.
So in our portfolio, each brand is unique. So there's no one-size-fits-all models that can apply across our portfolios. So group functions, as you guys also know, are acting an enablers to support the brands to deliver the best business outcomes. This is the most critical change we have made for us to unleash the brand potential in the market. So that's the fundamental base for us to make the successful story for Amer Sports in the past 5 years. The third one, I still want to re-enhance the successful story we made in China, starting from Arc'teryx followed by Salomon and Wilson Tennis 360. Our business in China today is 10x bigger than we acquired the company in 2019.
We have built up the most advanced retail and marketing operation infrastructures and the best team in China market with strong digital and supply chain backbone to support commercial activities there. So today, Arc'teryx has become the #1 outdoor brand in China markets since 2024. And Salomon is becoming the fastest-growing outdoor sneaker brands in China right now, outperforming all the major sneaker brands, including some rising -- new rising competitors in China markets. So let's -- this is the cornerstone for the group in the past 5 years to help us to make a successful story in the world.
Last but not least, I still want to enhance one important matters. So no matter how effective business -- how efficiency or efficient business strategy you build up, it's all about execution, quality execution. So quality execution coming from what? Coming from the organization, coming from people. So I also will be very proud to say we have assembled most innovated and talented leadership team across the portfolio. We incentive them -- have a very good incentive mechanism to motivate our people to maximize the long-term brand value creations. 80% of our top management teams are new to the organization and have joined the company since 2020.
So we are still the new team, but we are very committed for our future. So this is the kind of a 5-year past journey for us. So I still want to mention one more thing here. So we made a great story, but we still believe our brands are still -- are truly still in the early stage of growth. So our top 3 largest brands are still small-to-medium players in the sporting goods market. They all have relatively lower brand awareness in key markets including Arc'teryx in United States and Europe, Salomon in North America and Wilson in China. So there are still a big runways for us to unleash the potential for these brands in the future if we can really amplify our brand awareness and equity in these kind of important markets.
Secondly, I think we also see a very strong commitment from the management team. Given the successful models we've built, management team has a very high level of confidence to continue to implement defined strategic pillars with high-quality outputs so that the company double-digit growth pattern can be well secured for coming 5 years. And last, as I always say, okay, we will continue to develop and elevate our overall organization capability and capacity to support our future development needs. So these are kind of things I also want to enhance in front of you guys, I mean, because you are great analysts and investors, and you really like to understand how we want to move forward in the future.
Before I turn the stage over to our Arc'teryx CEO, Stuart Haselden, I still like to take this opportunity to thank you -- thank all the Arc'teryx executive teams here. Thank you for your great efforts and the contribution to creating such incredible business journey for Arc'teryx brand and exceptional leadership from Stuart. And also really appreciate your preparations and the support to make this event more impactful for our investment community today. So with that, it's my pleasure to introduce Arc'teryx CEO, Stuart Haselden. Thank you very much.
Okay. Welcome to North Vancouver. It's great to have everyone here and excited for this day. I've been looking forward to it for a while. As you heard the story from Omar, we've done a version of this for the Board last year and immediately thought, wow, this would be a great format to share with investors. And so you're going to see a version of it today. And you've seen the agenda. It's a great agenda. You're going to get to meet the team. I'm excited for that in particular. You're going to hear the details of our story.
I did want to just begin also with acknowledging that we're meeting today on the ancestral and unceded lands of the Squamish, Tsleil-Waututh and Musqueam people. And so this is a tradition or a practice we have in Canada to acknowledge the indigenous community in that manner. So I'm going to get us going. I'll have some introductory remarks, and then we'll dive into the more substantive discussions with each of the areas. And I'm old school, so I'm going to use my notes. I've been in the business for 25 years in the industry, I should say. And I've been a part of some great brands, some good growth stories. Arc'teryx is special. And I hope you'll get a deeper understanding of that today. It's a unique brand with a unique market position.
We do not see a direct competitor for Arc'teryx in how we're positioned. We span at least 3 distinct market segments. We are the pinnacle of the outdoor market. We compete and win share in the luxury and premium outerwear segment. And we are entering and taking share in a new way in the broad athletic footwear and apparel market. So it creates a very large TAM for us. The potential for this brand is large. And we're going to talk today about targets. We're going to talk about a $5 billion 5-year goal to reach that number in top line sales by 2030. The potential of this brand is well beyond that. It's a compelling growth story.
And the word I would use to describe it is structural. So we'll be able to articulate the building blocks of how we will build the business over the next several years across channels, geographies and categories. And again, we still see this as the early innings of the potential for Arc'teryx. And you'll -- again, the team that you're going to hear from today, these are seasoned veterans. Many of them have been with brands, built brands that are multibillion in scale. So not rookies. And I view it as really an all-star team. So I think you will as well.
Okay. Next slide. So a little bit about the -- where we began, the origin story of Arc'teryx. And so some of you may know this, I'll share a bit just -- it's important context for where we are today even. So we were founded by 2 climbers, 1 really good climber named Dave Lane and his business partner, Jeremy Guard. Dave was the engineer. He built the first harness that Arc'teryx produced in his basement. He is a passionate climber and was a figure in the '80s and '90s in British Columbia in opening the sport, and he opened many routes across British Columbia. Again, he was the engineer. Jeremy was more the brand visionary, the business leader who helped partner with Dave to really create Arc'teryx as we know it.
It's -- they were -- the 2 of them together, the tension that existed between them has really been noted as what really made Arc'teryx possible in that any -- either of them on their own couldn't have really created the brand as we know it. And so Dave's passion and how he built that first harness to solve a problem, to create a product with a solution that he couldn't find in the market. It's really at the very heart of the company even today. And so that uncompromised manner in which we design products for the mountain athlete, for the mountain sports that they love is really very much who we are.
I've gotten to know Dave. He's still around here. He's 66 now and still climbing at a high level. And I saw him at the beginning of the summer, we went climbing together in Squamish. And he had just gotten back from Greece, where he's been climbing for 6 weeks. And he's worked with us over the last 3 years on a couple of different projects. So it's been great to have him in the business and to hear his feedback on what we're doing and the validation that he's offered us and some sharp criticism as well. So he's not a shy guy. But he -- many of the people that Dave recruited are still with us. And so in our design center today, you could find folks that have been here for 25 years who helped build these products in an uncompromised way aimed at solving problems for the mountain athlete.
And oftentimes, it's themselves. And so our design team is composed of world-class athletes across all the disciplines that we focus on, which creates a very unique design process where they're building products. Our design center looks more like a factory floor than a design studio. But they're building products. There's stuff everywhere. They're taking it on the mountain, they're beating it up, they're breaking it. They're coming back to the design center and they're improving it. They're iterating on it. So this is part of the secret sauce and that focus on solving problem for the mountain athlete is central and seminal to our identity, and it is what creates the appeal of Arc'teryx.
And so if we fast forward to the current chapter of the business in the last 5 years, I would say, we have continued to build on this position as the pinnacle outdoor brand in the world. And in 2021, we declared a vision that was aimed at this specifically to lead the world in climb, snow and trail products for the mountain athlete everywhere. And so embedded in that vision was the focus on the mountain athlete, was the focus on climb, snow and trail. And this importantly enabled our teams to say no to things. We were, at that time, making flannel shirts and dresses and lots of things that didn't fit within that definition and that vision, and it enabled us to divest ourselves of things that didn't fit within that vision.
And that continues to be the case, and it's an important part of how we operate the company. But that authenticity of focusing on the mountain has -- I am more convicted than ever that, that is what is creating the appeal of the brand. The world does not need Arc'teryx to make athleisure products. We -- the appeal of our brand is that we are focused in a disciplined way, in a committed way to making these performance products. And as we have expanded aggressively in China, I believe very deeply that, that is part of our success and that, that is part of the appeal to our Chinese guests the same way it is in North America, Europe, other parts of Asia.
Okay, next slide. And this is really aiming at that exact point. So the authenticity that we -- is a -- central part to our identity is really how we earn the trust of our customers. And the broad appeal that we have is not only to folks who are hanging off the side of a mountain, but it's to folks who are never going to see a mountain, but the appeal of the brand is such that they still want that bulletproof hard shell jacket just to keep them dry as they work away across Midtown traffic. So it is central and integral to who we are. Next slide. Okay. So inside the company, my team has heard me say this a lot. I see Arc'teryx on a journey, and we're now at the end of the second phase and entering the third phase to become a truly global brand.
The first phase started really when the consortium of investors led by ANTA took the company private in 2019. And you heard James describe the brand direct strategy that emerged. That was the investment thesis that dismantling the old matrix structure that Amer had operated in creating these stronger autonomous brands would create more agile businesses that could really capture and deliver the potential of the brand. And so a part of that was recruiting new leaders. And so as you heard James mentioned as well, there's -- in the last 5 years, we've recruited a lot of new leaders into the company. And that's been an important part, not without its own challenges, but an important part of how we have created this new direction under the brand direct strategy.
The second phase for Arc'teryx has been from 2020 to 2024, the vertical transformation, the D2C transformation to take the company from 80% wholesale distribution to 80% direct-to-consumer was a monumental effort and remarkable in its own right and the success of which has been the catalyst for our accelerated growth trend. We've always been a great product company. In this phase, we became a great retailer. And that is the difference in the trajectory of our business. So now after -- as we've largely completed that transformation, we now turn our attention to growing globally as a truly global brand, creating greater consistency in how we execute, investing in a stronger brand voice around the world and also investing in the infrastructure, supply chain, technology as well as the structure of our teams that will enable us to continue to scale.
Culture. You hear a lot of companies talk about this. I was just in New Zealand. And I was in Auckland, and I met with one of the legends of the All Blacks, Ian Jones. I don't know if there's any rugby fans in the room. But the All Blacks are arguably the greatest sporting franchise of all time. And it's a country of 5 million people that dominates the global rugby scene. And I was intrigued to learn more in the homeland there of the All Blacks. And there's a museum that's an experience that Ian actually manages, and he took us through it. And the theme that came out over and over again in his talk in describing how the All Blacks have achieved their great success is culture, is that the culture of the team is more important than the individual. And it was informative, instructional and it validated, I think, our focus on building culture here at Arc'teryx.
For a growth company, culture is critical. As we were in the early parts of this D2C transformation, we were struggling with how do we convey the message of who we are, to recruit talent, how do we compete and secure the best talent in the market and Delaney Schweitzer, who unfortunately is not here today, her daughter is getting married on Saturday. So you'll hear from her in a video later. But she made a comment of we need to start a movement. And what was embedded in that comment was if we are creating something that's bigger that has purpose and a part of that is the culture of the company, it will make it easier for us to attract the very best and to retain them and to grow them.
And so we invest in culture and leadership development for everyone in the company at all levels. And this is an important part of how our growth story has been sustained in order to attract the amount of people and integrate them into the company in an efficient way, we need to have a very strong culture, and it's something we invest intentionally. And I'll mention next week, we're hosting in Vancouver, our Annual Leadership Summit. We'll have 300 leaders from around the world that are coming to Vancouver. We do this every September, all of our store managers and all of our director and above leaders, and it's 3 days of not only understanding what the business is but really leaning into our culture.
Strategic priorities. So you're going to hear the deep dive on each of these from the leaders in each of these respective areas today. You've heard about these as we've shared the overarching business strategy for Arc'teryx in the past. Our investment in footwear has been a big success. We began that in 2021 and 2022 with the new office that we established in Portland. You're going to hear from Renée Augustine today, our new GM. And this year, we have established a business unit inside the company speaking to the structure that we need to create to continue to scale. That's emblematic of that future. And so you'll hear from Renée and excited to hear more of the details on our great footwear business.
Veilance. Veilance is not a new concept. Veilance was created over 10 years ago as a vehicle to leverage the know-how and the technical excellence of our performance products into city apparel, everyday lifestyle apparel. And so we're excited for this business. We've likewise created a new business unit around Veilance, recruited a new leader, Marissa Pardini, who you'll hear from later today, recruited new design talent, Ben Stubbington, someone I worked with previously. So we're really bullish on Veilance and the potential for this business into the future and excited for you to hear more about it today.
Women's. We've talked about this on the call as we have footwear in particular. It's a fast-growing category. We really view Women's in many ways as the deep end of the pool in terms of the potential growth within the apparel category. And we're excited at the momentum and the traction we're gaining by expanding the assortments and the Women's only designs that Katie and team have brought to market. So you'll hear from Katie Becker around our Women's business as well. So a really exciting area for us also.
And then circularity. You'll hear from Kyle Wood, who leads our circularity effort inside the company. We launched ReBIRD in 2021 is our branded care and repair program. It's been really successful. And why we're excited about this is that something that's personal for us as folks who are passionate about the mountains, live in British Columbia, preserving the environment is preserving what we love. And from a business standpoint, our D2C footprint gives us a platform to really bring this concept to our customers or guests directly. This is -- most of our competitors in the industry don't have an 80% owned distribution model.
Because we have this, we've created this unique point of engagement with our guests which is -- it is resonating around the world. As you visit our stores in China, in Australia, in Europe and all across North America, this is an important way in which we're engaging with our guests. We will be -- we've been working for the last 3 years on more circular technology and designs. I'll be in New York next week announcing an exciting new evolution of our circular design efforts. And I won't be able to share all of those details with you today, but suffice it to say, we're super excited about what we're going to unveil.
Okay. So growth and transformation. I mentioned that I view our growth story, the word I would use is structural. And what I mean by that is we can break down the building blocks of how we're growing across channels, across geographies and across categories in a way that is very objective and measurable. There's not a lot of hope in this plan. There's a lot of substance. And so as we look at our channel growth plans, we're looking to double our store count for around 150 stores, brand stores this year to over 300 or approaching 300 by 2030. We see the potential for our brand stores globally at 500 to 600. So we're not yet -- in the next 5 years, we'll begin to approach the halfway point of what our full brand potential is from a store rollout standpoint.
E-commerce business in North America is 39% today. So it's not a small business. It drafts off of our store expansion. So where we open a new store, we see our e-commerce business increase. Importantly, it's also part of how we drive brand awareness. We are just getting started in the United States. Part of the focus we've created has been on brand awareness, and you'll hear more from Karl Aaker around this in a bit. We focused on New York, Los Angeles, San Francisco, as you might imagine, and where we invested with increasing our store footprint, increasing our brand marketing investments, we've seen our brand awareness follow, and we've seen strong results.
So we're confident we have a really successful algorithm that will continue to show an accelerating trend in the United States. This is an important market for us. As a Canadian brand, everyone knows us here in Canada. It's sort of the hometown, the home market for us. You got to whistler, I'd say, I'd argue about 1/3 of the folks on the mountain are going to be in Arc'teryx and that's pretty much true across Canada. We enjoy that strong brand awareness. The U.S. is more competitive, and that's a big focus for us to overcome.
From a region standpoint, kind of along those lines, we see an accelerating trend in North America and Asia Pacific. Asia Pacific has been our fastest-growing region, really incredible numbers. The acquisition of our Korea franchise partner opens the door for us to invest in Korea in a new way. You'll hear more about Korea from Ken Lee, our APAC leader a little bit later. But it's a fantastic outdoor market that we're just scratching the surface on now. We have a great business in China.
Given how fast that business is growing, we do expect to see growth rates moderate in our China business, which over the next 5 years, we'll see a very balanced picture regionally between China and North America, in particular. We expect those businesses to be about the same size by 2030. And Europe remains a fantastic opportunity. We only have 12 brand stores in Europe today. So again, really just getting started, huge potential there. And from a category standpoint, we've already hit on the priorities around footwear, Women's, Veilance. Those investments, building out the strategies around those product categories creates the building blocks, if you will, the structural growth in our comp.
So that we're not only opening new stores, entering new geographies, we're building the business momentum within the stores that we already are operating.
Next slide. Yes. So the opportunity ahead. Really exciting. As I've mentioned, we're focused on this $5 billion number into 2030. Again, that's not the end of the story. The potential for the brand beyond that is significant. Structural growth and leadership, proven track record, really what I would call an all-star team that I'm excited for you to meet today. And with that, I think we should get started and dive right into the next part of the agenda. We're going to hear from Katie Becker on our design vision.
Interesting music choice. Thank you. Okay. Just teeing this up real quick. First off, my name is Katie Becker, and I am the Chief Creative Officer here at Arc'teryx. I like to say that I have the best job not only here but in the industry. You're going to hear from others today. They're going to say they have the best job too. We debate this all day long. But since I'm going first, I get to say it first. I've been here for 5.5 years, leading the charge of the creative team and the strategic initiatives that Stuart talked about up there. I'm really excited because, obviously, product creation is embedded into every single one of those. So I've been in this industry my entire career, and I like to think that Arc'teryx is the best brand in the industry. I've always thought that.
The first time I was introduced to Arc'teryx was back in 1998. It was at the SIA, the Snow Industries of America Trade Show. I was in the snowboard industry. I was making big, baggy, bold, printed product. It was a fun time. It was crazy. And the last day of the show, I would always go walk around and just see what else is happening out there. And I remember stumbling across this little, tiny booth and there was a jacket on a pedestal, and it was kind of ergonomically set, and it was really unique. It was simple. It was clean. It was modern. It was monochromatic. It was very different. It was really disruptive in the industry.
And as I went in there, the people that were in there were just so excited about what they made. They started telling me everything they were doing. They had invented a new material with [ Gore ]. It's called [ GORE Pro ], invented here with Arc'teryx. They had waterproof zippers, never ever been seen before, created with Arc'teryx and YKK. They had micro seams. Everything about it ergonomically designed was disruptive. It was so unique in the industry.
And I remember that being a game changer, and it was the brand that everybody in design, anybody who is obsessed with product would always go every year to get into the Arc'teryx booth to see what was happening there. So it's pretty cool. And that way of making hasn't changed. It's actually still the heartbeat of the brand today. So what Stuart was talking about Dave Lane, Jeremy Guard, the whole team here, that way of making and that soul is still here. Super excited. So you're here in Vancouver, you're at our offices. We have our design center across the street. Unfortunately, we can't get everybody over there. So I've got a video to show you that just kind of shows a little bit about how we create and how we're set up here.
[Presentation]
I love that video. If you go on YouTube and you look up Arc'teryx obsessive design, you'll see many other videos as well, all different product types. So I want to thank the brand team. They did an amazing job of that. And it's actually a true representation of how we create. It's really exciting. So Stuart talked about Dave Lane and the founder coming back 3 years ago. He's actually came in and just kind of started being a little grumpy about some of the products we were making. And so I challenged him to come in and actually make some stuff. So he's back in there, and he's innovating. He's working with some of his old buddy.
He's also inspiring some of the new team as well. So the team as a whole is -- consists of designers, makers, tinkerers, athletes, engineers. We have cut and sew experts. We have pattern makers, and we have developers, all sitting together, all working collectively on product. Not one person works on product. It's usually a collection of people. We are focused now. We've got a footwear team set up in Portland, really excited about that. We've got a hard goods team, accessories team, an in-line apparel team, and we have an advanced concept team. When I started, we had a city director and we had a mountain director. As Stuart said, city is really focused in Veilance, and now this gives us an opportunity to really focus and be set up to get after mountain product.
We have 17 people on the design floor that have been there for over 15 years. People come and they stay. They love the way we make. We get to get out, we get to actually experience the activities that we make for as well. And we also -- as we're growing and evolving and bringing in new locations and we're getting into more product, the team is evolving. We've got a lot of new talent joining the team, and they're both inspiring each other. It's really cool to see them solving problems together. So we are evolving, we're becoming a global brand, and we're making product for 365 days a year.
We're one team. We have multiple locations. The first one, obviously, being here in North Vancouver. This is where we were born. The coast mountains are where we test our product. It's a harsh environment, and we couldn't make the jackets that we make anywhere else in the world. And like the video said, we also have Squamish 45 minutes away, some of the best climbing in the world. We added Portland 4 years ago. We started talking about footwear and how we wanted to evolve our product offering. And if we were really in the outdoor industry, we wanted to think toe-to-head, head-to-toe. And so we knew that opening up a creation office in Portland was where we needed to go. It is an epicenter globally of footwear. That's where the talent is, and that's where we were going to open up an office. So Renée is going to talk about that a little bit more and how that's turned into a full business unit. We're really excited there. But that will be really focused on footwear and innovation.
And then Tokyo. We opened up a Tokyo Creation Center about 1.5 years ago. We're really excited about that as well. Tokyo is such an inspiring place for the design team around make and craft. And when I first mentioned that to some of the people on the team, I was a little nervous about what some of the people would think about opening an office there. And they were all like, sign me up, I want to go do a stint there. I love it. It's creative. It's Innovative. So the synergy between these teams has been amazing. And Tokyo also gives us that reach to really focus on what we need to do to win in the mountains in APAC and China and looking at hot and humid as well. So again, 365 days a year, focused on mountain.
So we build product with our athletes. I think a lot of brands say that, and I've been at brands in the past that say that. And I think it's really different here. We don't just build product for our athletes to go out and shoot campaigns and the newest product. They're actually embedded into our design process. They wear first round protos, second round, all the way to 13, 14 round protos. We'll give an athlete a 50-50 jacket. It might be half in one material and half in another material. And they're out there crushing it, thrashing product, but we don't always give them the finished piece. And we like to say that it's ready when they don't want to give it back. It's time to commercialize it now.
So like I said, the athletes, the pro community, search and rescue, best in the world at Arc'teryx, and they are embedded into this team. We even have 4 of our athletes that have transitioned into full-time design positions, and it's amazing to see them really be part of the team. And the design team, we have a lot of quiet crushers right there that can get out and actually do the activities with our athletes. So when I came in, as we're evolving and growing and we had a lot of new people coming into the brand and into the design team, we wanted to make sure that people could get grounded in who we are quite quickly.
So I created really 4 very simple design principles. And these echo back to that -- how we created that first harness. This isn't wavering. It's actually narrowing and focusing. So the entire design team is hyper focused on these and obsessed with the details. These are guidelines. They are not rules for new people that come into the brand.
So we also apply these to everything we make, whether it's footwear, it's harnesses, it's accessories, it's a new innovation, it's an in-line product. This is for the entire team. And this is an evergreen approach to how we build product. So first, our very first filter, is it authentic? Should we, at Arc'teryx make this product? We have a lot of ideas that we kind of come up with and we actually kind of have to check ourselves and say, no, we shouldn't make that. Let's not make it. So we want to make sure it's authentic and that it's focused within climb, snow or trail on the mountain.
We want to engineer solutions to real problems and our design needs to persist to stay on the test of time. This way of creating, it's unique to Arc'teryx. And we know we can make a harness in a day. We can make a waterproof breathable jacket. We can make a down jacket, and we can go right out here and test it. And then we can come back, and we can iterate and test and iterate and test as many times as we want. The second one is very important. Is it functional? We're solving problems, and we want to make sure we're solving the right problem. We start with the needs and then we drive with purpose.
And we prototype, we test, we validate. We prototype, we test, we validate. I'm going to say that over and over again because it's a pretty cool way of making. And our connection to the athlete and the user and our own intuition is really important as we're thinking about function. We never compromise. We push to advanced materials, construction and manufacturing processes. Function is what drives the value of our product and our brand. Beautiful. This is really important as well. Our aesthetic is clean and it's minimalist. Beauty is achieved when all resistance has been removed, and the pure form remains. We use beauty to host new ideas and evolve technology.
We keep stripping away everything that's not necessary. We'll go into a design review, and I'll ask somebody, do you really need that cut line? What is that function? What is it for? And we go back and we keep stripping it away. You know that Alpha Jacket that I saw back in 1998, it wasn't the function that drew me to it at first. It was actually the beauty, and beauty carries innovation forward.
Fourth is responsible. This is a big one. Our products need to be built for longevity, for durability and repairability. We're committed to circularity and through innovative materials, construction and end-of-life solutions, we're obsessed here. This is our approach to everything that we make. And you saw there with ARC'One that designers have the ability to go to the factory and actually see all the product that's returned, every single thing that's wrong and they obsess on that, and that's part of how we actually build better product into the future. And we've got ReBIRD. So at retail, we're also finding out what's coming back, what needs to be repaired, how quickly can we change, how quickly can we check and adjust. And with ReBIRD as well, part of that being born was we have a lot of people that bring product back.
They don't want to return it and get 30% off on something new. They actually -- they want us to repair it. We have a cult-like following and people want to keep their gear. They can tell you where they bought it, how much they bought it for, where they bought it and all the experiences that it has had. My husband has a Gamma MX 2000 Jacket that he keeps having repaired and it's really old, but he loves it, and he will not let go of it. And we all have people that we know within the brand that are like that, that [ covet ] their old product. So it's pretty exciting. We think of our product as an investment to people, and we want to make sure that they can keep it in play as long as possible.
So on top of those 4 filters and principles, we have what's called our design DNA. So this is a visual DNA, and it's also really important. There's deliberate proportions, balanced symmetry. We actually design product in a 360-degree way. We don't design a flat front and a flat back. Every designer has a body form right there at their workstation and a cutting table. And we really design in this 360-degree approach. And we're also obsessed with the inside out. If you take our jackets or any of our product and you turn it inside out, it's just as beautiful on the inside. And color. Color is really important. One of our main color designers has also been with the brand for 18 years.
We do have some interesting color names, but we're also known for our color and the depth and the monochromatic. It's inspired by the mountains around us, and we also look at safety as a really important thing. So we're building a consistent DNA across fall/winter and spring/summer as we expand and also that 365 days a year. So that same care and attention we took that Alpha Jacket, we're taking it to everything we make, even including footwear.
So then there's one final filter. And that's always in every final design or proto review is if we take the bird off, would you know it's Arc'teryx? If you don't, we go back to the drawing board. So our activity vision or positioning, Stuart talked a little bit about this, with being really clear that Veilance is that city expression, it gives us this opportunity to really hone in on the activities that we want to focus on around climb, snow and trail. Our environment inspires everything we make. We're experts in building for our environment.
We have access to test the products right here the day we make it. We have a sharp point of view, a pinnacle within each one of these activities that also gives us insights that we can take down into the others. And we know that these sports are evolving. We know that the athletes are evolving, and we know that the product constantly needs to evolve with them. We always say we're never done, and we're always looking at new insights on how these activities are evolving, how our athletes are evolving. We're solving problems for them. We're solving problems for ourselves, and we're looking at a full 365 days a year across climb, snow and trail. So system of dress. We were known for items. And that was great.
But as we grow and as we have this D2C opportunity, we get to show up -- we get to pick the product that shows up. We don't have a wholesaler dictating where the line is going. We don't have to make 5 different beta jackets for different wholesalers. We get to decide. And in that gives us the opportunity within climb and snow and trail to really look at what's needed, what's the product needed from the outside in and from the inside out. Now we can obsess every detail how the product nests, how it functions, how it works together. So for climb, we're really focused on safety, durability and mobility.
For snow, it's all about this concept of hot, cold, repeat, earning your turns. What's that ecosystem? What's that thermal regulation needed? And for trail, we're focused on lightweight solutions. Our athletes are going faster and further. We've got athletes here that do the Stein Valley Traverse, a part of it that's supposed to take 3 days, they're doing it in a day. What's that kit they need? How are they evolving? How are we evolving with it? And we can look at that whole system as one. So full kits, full system of dress.
Okay. So that's the evergreen approach to how we create product today and how we've always created product in my mind. And I just wanted to ground you, if you're here, I'm really excited. One of the areas we have for product is some of our archive products. And this product that we have were really disruptive, innovative game changers throughout this time line. And so we're excited to show that. We've got Darren here. He's our -- I call him the librarian, but he's actually an archivist and he's been with the brand a long time. But I just wanted to ground us in some of this.
And starting in 1989 with rock solid in that harness that Dave Lane made. He made it out of seatbelt material and aluminum from airplanes. It was so overbuilt. It was unbelievable, and that kind of created this little cult-like following. And then comes our Arc'teryx.
And in 1992, they created the vapor harness, this 3D molded harness. Everything was patterned flat before that. Now we were creating 3-dimensional products. And Dan Jackson, who actually worked on that with Dave and a couple of the other guys is still here on the design team today. Now he's obsessed with digital, but he's still here, making and creating. And kind of a fun fact there is they actually made that harness and they created that thermal molding out of a pizza oven. So very inventive. And then from that, they started looking at packs. Well, the shoulder and the waste belt, we could actually 3D form that too. So this is all new to the entire industry, born right here, the Alpha jacket. I talked about that.
The vision, it's a laminated synthetic insulation. So you think of our Atom jacket. A lot of people have -- sorry, hanging synthetic insulated pieces. It started here. You used to have to put that just like down into a baffle construction, but they figured out a way how to laminate it to a scrim and let it hang naturally. The Alpha Glove, first-ever GORE, pro glove articulated, never been done before. Your gloves actually leaked before that.
And then LEAF in 2004. So starting -- the special forces started looking to Arc'teryx in the Alpha jacket and then wanting our garments in these harsh environments. So we started actually creating product for that. And then the Alpha pack lamination, putting it on the outside of a pack, making it truly waterproof pack. And then we started making LEAF packs that were actually submersible. So again, you can see how this is -- we call it kind of like this concept of surprise and delight. You never know what we're going to do or where we're going to innovate. It's not a linear line here.
And then warp technology, you saw the video there on the harness in 2008. And then we got into footwear. The Acrux FL is also out there. It was a first approach shoe with a removable GORE liner. And then the Alpha Blade jacket, which is also out there. It's a baffle down construction where it's a box construction where you have no cold spots. And then we also have the Alpha SL30 pack, which some of you might have seen that we launched this year. It's a lightweight repairable, no glue pack that we also have out here. So this is just a little bit of a time line.
And Alex is going to come up here after, who is the Head of Advanced Concepts to kind of talk you through a little bit about where we're going and what we're doing now. But I also just wanted to let you guys know that Fast Company just ranked us as 1 of their top 10 workplaces for innovators. So that's really exciting. And it's not just in design. It's in every aspect that Stuart talked about earlier. So it's marketplace, it's brand, it's product, it's all of it coming together. It's really exciting. So as a collective, we're always evolving, and we're always finding a better way. As we grow, creative thinking and innovation is happening across all functions, all initiatives.
We are all problem solvers here at Arc'teryx. We're all passionate about the evolution of this great brand, and we're honoring our founding spirit. We celebrate the process. We're never done. We're always creating a new path, and that's kind of my part of it. And with that, I'm going to pass it over to Alex. So again, who's going to tell you more about what we're doing in advanced concepts and some of the future products. So thank you.
Good morning, everyone. As you can probably expect, I'm now going to talk to you about how I actually have the coolest job at Arc'teryx. I get to work with these amazing projects. My name is Alex. I lead the Advanced Concepts team.
I wanted to start by just sharing a story with you of our recent Climb Academy in Chamonix. We went there to demonstrate our new MO/GO hike assist project, which you probably have heard of. I like to call it robot legs. We went there and hosted a clinic where participants could try and do a trek with these -- with our guided ambassadors.
As we started the day, one of the ambassadors that we had hired came up to us. His name is David Sanabria. He has been an ambassador for many years, and he's a mountain guide, and he's been dedicating his entire life to the mountains. He wanted to approach us to share a story about how a few years ago, he was caught in an avalanche, and our Micon LiTRIC Avalanche Airbag saved his life. So obviously, this is something that really touched us, and it's something amazing to hear from somebody who's so dedicated to the mountain, has been an ambassador of our brand for so long.
So this guide actually was one of the guides for the trek with the MO/GO. As the day went on, he was really impressed by this MO/GO innovation and asked us if he could try it. So of course, we said, yes, he shared with us that he had been having knee pain and was worried that his guiding days were coming to a close pretty soon. As soon as he put on the MO/GO device, he got a bit emotional. He felt really supported by the device and actually immediately reduced his knee pain. He shared with us that he thought that with this innovation, he could be guiding until he was 75. Think about that for a moment. He was able to use our innovation to not only extend and increase his ability to work, but also his sense of purpose, his identity and his contribution. This is the value of our innovation portfolio. We're not just making products.
When technology changes lives this profoundly, we're not creating customers. We're creating loyalty. We're creating continued authenticity and lasting trust in our brand. So these are the kinds of objects that we get to work on in Advanced Concepts. We're solving problems on multiple ends of the spectrum, both at the point of extreme need like LiTRIC in avalanche conditions as well as creating access to the mountains for things like MO/GO.
So who is Advanced Concepts? Katie talked a little bit about our team in general. We sit on the design floor with the creative team. We're a team of problem-solving material scientists, engineers, futurists, all those original designers, including Tom, that you saw on the screen, sit within the Advanced Concepts team, so they could continue to apply that way of thinking and remove time lines from their innovation work. We really are there to solve problems until we get it right. We also have some amazing emerging talents such as Olympic, Canadian Olympian and Professional Mountain Climber, Alannah Yip who happens to have a mechatronics engineering degree. We sit here in North Vancouver, but we take a global lens to our innovation work. Our goal really is to drive disruptive innovation at the intersection of mountain athlete needs and cutting-edge design, materials and technology.
So beyond the 2 projects that I mentioned earlier, our pipeline of innovation concept spans disruptive evolution, where we're continuing to tinker and improve on our products to ground-breaking big bets that really continues to position us as the undisputed leaders in the technical mountain performance space. We work on projects across snow, trail and climb, summer and winter, hard goods, soft goods, and we play in areas in the physical realm, but also digital, as Katie mentioned as well. The Alpha SL pack was something that we worked on earlier this year, as you probably heard, and that was a partnership with a local material manufacturer, ALUULA. So those are some of the platforms that we're starting to deliver. We're excited to share a lot more in the coming months and years as well.
We're really focused on real problems, and we throw out the rule books when it comes to time lines. Our portfolio is really focused on pinnacle innovation to solve problems for the mountain athlete at the point of extreme need. It's really important for us to do that to maintain our strong credibility as the market leaders, and this is even more essential as we scale and grow and reach more guests.
Katie mentioned the professional category. This is an area that the Advanced Concepts team leads the research and design for. So this includes mountain guides, search and rescue, special operation forces. The reason this is important is it's that advanced innovation and technology for the extreme user in extreme environments, and those innovations can have a halo effect into our in-line product. We also do innovation work within the strategic priorities, as you heard from Stuart earlier today, including circularity, where we're working on product innovation and materials that exceed the expectation around performance but have no compromise to the environment, and that will help us unlock long-term value for the customer. You'll hear more about that later today from Kyle and stay tuned, of course, in the coming days. We're very excited for more information in this space.
So this world-class expertise that is within advanced concepts and our deep historical concept into the brand allows us to drive value through our new exclusive material platforms, intellectual property and even licensing our technology and patent portfolio. One example of this is the LiTRIC pack. Anyone who's doing an avalanche pack that is electronically triggered in the industry is having to license Arc'teryx technology to do that. There's much more to come in this space.
We are continuously building our IP portfolio, and this is something that will drive long-term value for our brand. I want to take us back to David's story, the Chamonix guide from earlier. This is really where innovation starts and ends in the mountains. The mountains and the mountain athlete are what really inspire us and inspire innovation. It's really the boundaries of human possibility in the mountain. That mindset has also trickled to customers and our guests. They are trying to go faster and further in the mountains. So it's really important that we keep obsessing that pinnacle a mountain athlete need and apply the same level of scientific rigor that we do to develop product as our mountain athletes do when they're trying to train for a big objective in the mountain.
This is why we are introducing a new concept called the Mountain Athlete Lab. This is not just 4 walls. This is really an approach. So it starts with the athlete on the mountain where we discover and test and prove cutting-edge technology, as technology, as Katie explained earlier. It's where we can really bring the lab to the mountains, so we can measure traction in different run conditions. We can measure the performance of a 3-layer system in the back country. This is where we prove the innovation with the athlete first. That's always been core to our brand. To complement that, we're now building a space called the Mountain Athlete Lab, where we're bringing the mountain into the lab.
This will be a physical space in the heart of our design center right across the street, where we'll be able to continue to test and iterate. But now we'll be able to do that in a lab environment as well. So we're able to do rapid in-house prototyping right next to the lab where we can visualize, test and refine our designs. We can do materials test in the same day in the same building to test the performance and durability and thermal properties of our innovations. This will really allow us to set a new standard for how we research and validate our products.
We can make cutting-edge claims around movement and climb, which is an area that isn't really highly researched right now. We can have breakthroughs around the space of women's unique physiology, where there's also a lot of opportunity in the space and thermal comfort for a range of conditions. Being right next to the Coast Mountains is an advantage for us. Having this lab will now allow us to replicate global conditions, mountain conditions, extreme conditions, so that we can test and run through hundreds of hours of athlete testing in one space to really achieve that high performance standard.
We also have the proximity to our world-class athletes here, where that collaboration on our core design approach is really part of our long-term success. That world-class expertise and our reputation for solving big problems at Arc'teryx means that we also get a lot of requests for amazing partners for outstanding opportunities. We can't always say yes, we have to be pretty choosy with the things that we do.
We want to remain a small core team of experts within Arc'teryx, but we know that partnerships, powerful partnership with the right collaborators allows us to unlock and accelerate opportunities within the innovation space. One of those is someone we all know, GORE, which is where we have a really strong partnership with them, allowing us to continue to deliver proprietary innovation with them on materials for the future.
Another example you may have heard of this company, Apple. We've been working with them as their outdoor industry partner for their spatial video content. So if you have an Apple Vision Pro at home, you can go on it right now and access Arc'teryx content in their built-in platform. You may also know Google came from a partnership -- or MO/GO came out of a partnership with Google. They came to us 7 years ago. So this has been a long time in the making for our expertise around how we can make product that's compatible with the human body and for movement. That is something they knew and identified, we were the world-class brand in and has wanted to partner with us. So we've been iterating with them. And as you know, our proof-of-concept launch last year, won Times Innovation of the Year, Fast Company Design Awards and was one of the highest audience gaining stories for us at Arc'teryx.
Another -- this is just one example, but we work with the world-class academic partners such as MIT, where we're doing research and technology work on thermal performance for the future. So these powerful partnerships really help us unlock new potential and accelerate delivery of breakthrough innovations, something that we'll continue to do, and we're excited to share more year-over-year as we introduce new partners to our collaborations. So a few things I want you to take away from this part around innovation is that innovation has always been part of our DNA, but we've taken meaningful steps at Arc'teryx to protect and scale that unique approach.
Our portfolio is really strong around the products that we've already launched, but there's a ton more in the pipeline that we're excited to share with you over the coming years, months, years, including some powerful partnerships that we've been cooking up. The Mountain Athlete Lab approach is another one I want you to take away. This is not just a space, it's also a mindset, and it's really going to solidify our world-class capabilities in the outdoor product innovation space. These things are all core to our strategy and help us with our competitive advantage and furthering what's possible for the mountain athlete and beyond.
Thanks for listening. And I think I'm the last person before coffee, but I'll invite Omar to come up to take you that.
Thank you, Alex. Okay, everybody, a 20-minute break for coffee and washroom. We'll see you back here at 10:40 a.m. Pacific Time.
[Break]
Everybody, welcome back in person and online in the webcast. We can't get enough Katie Becker. You guys can't get enough Katie Becker. I'm going to turn the stage over to her to talk about a really important women's opportunity.
[Presentation]
Hi, again, welcome back from the break. Again, my name is Katie Becker, and I am the Chief Creative Officer here at Arc'teryx. You heard me talk about Creative earlier. And now I'm excited to talk to you about the women's strategy. I'm up here actually representing a collective of passionate people who work on the women's strategy. We meet every week. It's cross-functional. And there's a lot of momentum happening inside the brand right now around women's and obviously, externally as well. Another fun fact is in 1998 when I saw that Alpha jacket at that trade show, there was a men's and there was also women's, which is really cool. So this brand has actually given making technical apparel for women ever since then.
Okay. Women's. Women's is outpacing the brand. For Q2 year-to-date, we grew over 35% year-over-year across all regions and all channels. This is a strategic white space that Arc'teryx is focused on, and we are positioned to own. So the foundation is set, and we've seen impactful results, obviously, globally and not just those numbers and those results, we're also seeing that swell happen on the mountains at our events, we're seeing 50% of females showing up to that. Kyle is going to talk more about that later, but that's extremely exciting for us. And around 45% of our global athletes right now are female. And in Mountain towns, we're outperforming our regional averages. In Banff, opened a store there. It's pretty amazing. And in Chamonix, the women's share is over 40%. It's amazing. So we've come a long way, but we also like to say we're just getting started. So the brand team and the community, the design team, everyone, we're all fully aligned.
Participation in the outdoor industry among women is growing across climb, snow and trail, the areas that we focus on, which is great, and she's showing up in record numbers. In 2024, more than half of American females participated in outdoor recreation. This is a record high. In trail running, we have never had near parity before in sub-Ultras, and now we have 47% female participants. The climbing gym market is growing, and it's being led by women. It's almost 50% women right now. This is a game changer for us because we're not only winning in the mountains, we can win in these urban environments, where there are climbing gyms. We can reach her, we can connect with her, and we can build products for her. And in snow sports, it's approximately 45% right now is female participation with a huge emphasis on free ride. And again, that's perfect for us. That's where we're positioned. So also another fun fact is that women are expected to account for 75% of discretionary household spending by 2028. That's a big deal.
So the global women's TAM right now is at $256 billion with the Outdoor segment sitting at $48 billion. That's 19%, and this is our target. We will win in the mountains. This is the soul of the brand. This is our competitive advantage. We aim to own a larger part of this part of the market than to go after anything else. We want to be authentic, and we want to be relevant. As Stuart talked about that mass active and luxury segment, they're crowded and they're generic. It's not where we're going to win. We're going to win on the mountain, and we don't need to deviate from this for women either. The brand halo, we know will follow. It's following. That's okay, but we still have an opportunity to continue to ground ourselves in the mountain.
So our guest profile, we are obsessed with our guests, and we want to make sure that we're focused on our core audience. The mountain athlete, that's where we gain a lot of our insights on how we actually create product. We're also looking to those mountain lifers and the weekend warriors. I mean most of us who have a job actually are in those other 2 buckets, but we're just as relevant, and we want just as technical products. We're all united by a purpose, the love of the mountains and a passion for performance.
So whether someone's pushing their limits like Michelle Parker, one of our athletes, who's also a Red Bull athletes, she's amazing. We had the opportunity to go out and ski with her. It was interesting. She's very thoughtful and sweet. She helped pick up all of our skis as we're tornadering down the hill, but her idea of fun and serious fun might look different but we all have an idea of what serious fun as well. And we want to make sure that our product works for her, works for us, is technical, and it also looks style. All of our athletes keep saying, "Yes, we want technical product, but we also want to look good." So we are aware of that, and we are actually creating products around that.
So we want to continue to lead with the mountains, and we know that, that halo will come along, and we want to keep reminding everybody that we are going to continue to make product for the mountain everywhere. So we'll win with one unified approach across product. We want to go from adopted from men's and takedowns to truly obsess with her needs. So we're not going to retrofit men's product. We're going to actually do women's first innovation. Alex talked a little bit about that. We're really excited where we're going there. And the women's design team is all set up, obsessed. We've got people focused on climb, people focused on trail and people focused on snow with a women's lens.
So we're prioritizing performance, fit and versatility. Not only do we have a regular fit, we've got a fitted fit, we've got a relax. We're really trying to make sure that we can do everything there. And then from brand, from product-centric marketing to connective storytelling. When we only created items, and we didn't have this D2C opportunity. I mean, we weren't building these full systems of dress. We were really having our storytelling focused on one item. Now we can actually tell a story about the whole kit, also, the community, the activity, everything, the narrative can change. We're weaving product into that full narrative.
And then from marketplace, going from transactions to consumer experiences, what Stuart talked about and Delaney is going to talk about later, is what's that experience? What's that connection? How are we using our retail platform in D2C to reach women in a different place? And the omnichannel experience is really important, and we want to curate it. We want to make it intuitive. We want to make it personal for her. And actually, ReBIRD is a really great example of our connection with women as well.
So for product, we're obsessed with her needs and every detail is informed by female-specific insights. Our DNA stays true to Arc'teryx. It's ergonomic fit, clean lines, balanced proportions, but it's also feminine and those details that are really are starting to come to life and you're starting to see this women-specific DNA happening, but grounded in those hard lines. When we have some new designers in, they start kind of designing all these crazy rounded lines. And one of the things that I always say is, how can you take the harsh sharp lines that we create, the technical way we build and actually make it feminine. And if you look at some of the bras and some of the tanks, the design teams are really looking at celebrating and making this, your back beautiful and how can we take these things and actually make it feminine. So there's a lot happening there.
And then innovation, obviously, grounded and climb snow and trail. It's going to be purposeful, beautiful, but always high performing. And like Alex said, we have a lot of females joining the advanced concept team as well and really focusing in that area. We've got Alannah Yip, like she said. We also have Kat Drew, who's one of our top mountain runners embedded into the design team as well. And then like I said before, the design team, we've got crushers throughout every activity. It's amazing to see them, and they're all really style. So I'd like to say we're bringing style to the mountain.
And next, we're going to lead with our strengths, hard shelves, soft shells and wind shells. This is her entry point to the brand. This is where we can win. This is our strength. This is where we are the most technical, the most pinnacle. We want to continue to double down on that and make sure that with fit, silhouette, we're covering that. And then we want to build loyalty through a complete system of dress. What -- how does the product nest together. We're looking at color. We're looking at everything she needs from head to toe and from toe to head. We're looking at versatility, layering, and we want to make sure we're style-driven. And then we want to have the right products at the right time. So we want to align to her preferences and our shopping journey, looking at what D2C, what wholesale partners, the whole journey, the community, how do we show up for her.
Next, around product is our product evolution. Looking at our product line architecture. So 70% of the line, we want to make sure we ground in our core. Franchises like the Atom, the beta, the Solana, they're all up over 40% year-over-year. And the Gamma soft shells are up over 120% year-over-year. So we want to continue to perfect these foundational icons and drive volume as we grow consumer awareness.
Consumer awareness, we don't need to deviate and keep making newness. Sometimes we actually need to double down on what we know and what we're known for and continue to bring that to her. And we know we have opportunity in newness. We've been doing a lot of testing lately of new product, and that's very exciting. So right now, we're declaring that 30% of the line, we want to make sure that we're bringing that newness to her. An example of a great win there is the Clarke pant franchise. It's up almost over 250%. This was born from a passion on the design team, and it's become a cult-like following not only inside the brand, but also in the industry. We've got the Andessa jacket. It's going to be 20% of our women's snow line buy, and it's going to be the #1 insulated hard shell in EMEA and North America. So there's a lot of momentum happening with this newness. And in fall '25, we have models like the Leutia pant and Nia pant, The Emaris, the Altira cropped jacket. And later during lunch, I know you guys are going to do walk-throughs.
We've got Ashley Anson here. She's our VP of Design for women's, and she's going to be walking you through some of the new styles and just looking at those full kits. So super excited there. And then color. Color is up around 40% year-over-year for fall winter '25. And our goal for women's, the average revenue per model, we wanted to grow to 150% by 2030. So we are bringing style to the mountain, but we always want to make sure that we're grounded in our DNA.
Brand, from product-centric to connective storytelling, we will lead with her voice and her story. We'll lead with authenticity. We have a commitment to our female mountain community. We're making sure, like I said, the athlete roster right now is at 45% today, and our majority of our athletes in the future will be female. And by 2026, we will double our female athlete storytelling as well. For awareness, our top of funnel spend continues to increase as we move towards 2030, and we're on a path to 70% of brand-led content centered around her by 2030. Kyle is going to talk more about that later.
So we also want to reframe what community looks like. We want to have a channel and a philosophy across all touch points, again, D2C, wholesale, online, events, everything have this unified touch point. We want to earn loyalty. We want to drive engagement. We want to establish a lasting relationship, and we're really excited on the path that we're doing there now. So also the events in the academies, like I said earlier, 50% female attendance. These are mountain academies. So we have a powerful opportunity right now to invite her into our world and create meaningful connections to earn her loyalty. Our message is a unified brand product experience, all centered around her. She's not just part of our audience. She is our audience. Our channel strategy is going to be a unified ecosystem built around our outdoor lifestyle. It's going to go from transactions to consumer experience.
Retail, D2C, it's our strongest brand platform. And like I said, this is our opportunity to really show up and show how we want to show up. It's going to be immersive, and we're really starting on that path now. We've got in-store experiences. We're building community and 50% of our staff right now at stores is female. So digital and e-com, we've got a women's first landing page, marketing and content. We're personalizing product discovery to boost conversion and AOV. We've got a seamless cross-channel experience. And with wholesale, we have elevated brand partners. We're going to where she's shopping. We've got a big plan coming there and our brand storytelling is going to remain consistent, no matter where she shows up.
Marketplace principles. So these are guiding principles for the women's growth. First, authenticity. We lead with who we are. We are a mountain brand, and we want to make sure at every touch point, it actually reflects that. Stories and experiences matter. Storytelling, both in-store and online, we want to build brand affinity and keep her coming back, that's important. And inclusive and welcoming, whether you're a crusher or you're new to outdoors, we want to make sure that you feel welcome to this brand. It's really important for us to make sure that we connect and bring new people in.
And then tune to her shopping journey. We want to tailor our assortments. We want to have immersive storytelling and smart tools like fit finders and product comparisons. So each region will drive their focus, but this will give us a grounding and a center point that everything shows up the same as. So we're weaving product, brand and storytelling that's relevant to her and curating our marketplace for her as well.
We're on track to grow the women's business overall around 25% contribution this year and almost 30% by 2023. We're going to double down on our investment in talent. We're going to expand our CRM, and we're going to have consistent product innovation and newness as well as doubling down on our core icons. We had a leadership offsite back in January, and somebody was saying, "Oh, I don't know, maybe we need to do a new Atom." And I was like, "I don't know if we need to do an Atom, I think we need to do a little test there." So I ended up giving 30 white Atom jackets to 30 different women, 2 days before the event and I said, "Hey, could you just wear this? Just show up in this, style it however you want, can you show up?" And they're like, "Okay, that's weird." So anyways, people show up, everybody styled it different, and it was really cool to see such a simple, beautiful Arc'teryx product show up in all different ways, people styling it different and everybody feeling really proud of how they brought the product to life.
So that's a really important part with women is making sure that we're not only building the product, but we're showing it how she might want to see it in herself and showing up where she might shop. So we're all committed to building this not just product, but this brand experience and this market experiences as well because we want to be the most pinnacle women's mountain brand in the world, and we want to bring her with us every step of the way. Thank you.
[Presentation]
Who's ready to go for a run? We have some mountains back here. Good morning, everyone. My name is Renée Augustine, and I'm the General Manager of Footwear here at Arc'teryx. It's a privilege to be with you today. I'm going to stand, I've got these trail running shoes on, and I feel like I just want to bounce. There's some super critical foam in these shoes. And so I'm going to stand. I hope that's okay.
So it's exciting to be here with you to share the exciting journey that we are on in footwear, where we're going to go next and why we believe this is one of the most compelling growth opportunities for our brand at Arc'teryx. At Arc'teryx, everything begins with the simple, powerful belief that the mountains make us better. Arc'teryx was born in the mountains. You've heard a lot about that today and founded on this idea that there's always a better way. That same ethos now drives our approach to footwear, where technical excellence, meets the real-world demands of mountain athletes.
Footwear, it's more than a product. It's a catalyst. It unlocks innovation, deepens our storytelling and strengthens our connection with our consumers. Footwear is, after all, the first touch point on the mountain. And so it's where performance truly begins. What began as a project has now evolved into a brand-defining category. Footwear is a natural extension of our brand and a powerful growth opportunity. It's one that we're leaning into with intention and belief because we believe that Arc'teryx is uniquely positioned to lead the future of mountain footwear.
Our credibility is forged through decades of technical mastery in the mountains. And our momentum in footwear is powered by innovative design and uncompromising standards. We're grounded in athlete insights powered by a team of footwear-obsessed experts and guided by a sharp authentic brand identity. What sets us apart, though, is our commitment to solving for the way mountain athletes are moving today. They're pushing into the environments where performance demands are the highest.
Since launching our Arc'teryx created footwear just 18 months ago, we've driven over $250 million in revenue. And for the past 3 quarters, footwear has delivered the highest growth rate across the brand, with this last quarter delivering plus 43%. More importantly, though, we've laid the foundation for sustainable, scalable growth, and we're ready to lead the next era of mountain footwear. We've been living in this golden era of mountain footwear. Participation in trail running, climbing and hiking is growing faster than the outdoor industry average, bringing in new audiences and really expanding the total addressable market in meaningful ways. Iconic races, athlete influence and strong community engagement are really fueling this cultural boom.
Trail running, in particular, is thriving on an intersection between sport, art and social purpose. And trail-running participation continues to rise. With the 5-year average annual growth rate reaching 8% in the U.S., many road runners are making the transition to the trails, seeking an escape from maybe the rigid training structure of the road. So the global trail running market is projected to reach over $12 billion by 2030, a clear signal of consumer engagement and growth.
Last month, I had the opportunity to be in Chamonix for UTMB, one of the most iconic trail-running events in the world. And what I saw was incredible. Yes, athletes incredible. They're awe inspiring, pushing the limits of distance and of verticality. But what really stood out even more this year was the atmosphere, thousands of people lining the courses, not just watching, but living it, fully geared up, ready to run, ready to hike or simply just be a part of something bigger in the mountains. This is more than a sport. It's a movement and it's growing fast.
Brands are responding by emphasizing aesthetic and emotional design, investing in storytelling and activating through races, athlete partnerships, and community-driven content. Challenger brands are capturing significant value in the space, proving that sharp brand positioning and high-performance product can cut through in a crowded market. In this environment, distinction is not optional. It's essential.
Credibility, connection and consumer loyalty will be won by those who lead with innovation, authenticity and a lot of grit. And our strategy begins with the athlete. We're inspired by this new generation of mountain athletes who are pushing the boundaries of sport, chasing fastest known times, navigating the most technical terrain and venturing into unchartered adventures. These athletes aren't just participating in mountain culture, they're reshaping it.
Today's mountain athlete defies traditional categories. Hiking, running, climbing. They're all just different ways up the mountain. This new breed of athlete is faster, stronger and more versatile than ever before. They're spending more time outside, covering more ground and demanding more from their smaller, lighter and more adaptable quiver of gear, especially footwear. Their missions, they're complex. Their terrain is unforgiving. And their expectations are uncompromising. Whether they're scrambling up granite, racing Alpine trails, or linking multiple disciplines in a single day. They need footwear that will perform. These athletes inspire us to aspire. They're embedded in our creation process, which you've heard, helping us to test, to iterate and to refine every last detail. This is athlete-led innovation, and it's the foundation of Arc'teryx footwear.
Our vision is bold, to defy human limits with the world's best mountain footwear engineered to go faster, further, harder and higher. We're building the best connection to the mountain for every type of mission in every type of terrain. And our approach to growth is clear following the tried-and-true formula. We will accelerate product innovation, create a footwear marketplace that meets the athlete where they shop and turn up brand marketing to position Arc'teryx as a leading footwear brand. This is Arc'teryx footwear engineered for the mission, led by the athlete.
Our footwear is engineered for the full spectrum of mountain terrain from Valley to Summit. And as I said, today's mountain athletes are evolving rapidly. They're going faster and further and often blending climbing and running. This shift is driving our innovation toward lighter, more adaptable, more efficient and more durable solutions. And while it starts with elite athletes, it's resonating with a broader consumer base that expects the highest performance from their gear. We launched the new era in 2024 with 3 models. Sylan built for fast propulsive mountain running. Vertex Alpine, a lightweight shoe for fast approaches from Valley to Summit and Kragg designed for crag climbing access.
In spring 2025, we expanded our Mountain running line to include Norvan LD 4, our mountain running essential. It's stable and adaptable across mixed strain and Vertex Speed, our most progressive model yet, sitting at this intersection of running and climbing inspired directly by our athletes who are pushing boundaries. Now in fall 2025, we've introduced Konseal, a modern take on the classic approach shoe, light, grippy and built for long technical missions; and Norvan Novalis, a winterized evolution of the Norvan LD 4, delivering high-performance running in cold conditions with a bold, modern silhouette.
Looking ahead, our product strategy is shaped to balance innovation and growth. Our product pillars focus on what matters most, creating edges, building franchises and driving choice. First, we'll create the future by pushing the edges, delivering breakthrough innovations and new concepts guided by our North Stars for innovation of faster, further, harder and higher. Models like Vertex Speed, which I mentioned, a progressive shoe that combines the specific requirements of scrambling into the efficiency of a trail running shoe. In this shoe, you can fly up technical ascents and comfortably back down, thanks to a zoned outsole that grips hard rock surfaces with traction on soft trail terrain and shock-absorbing underfoot cushion that keeps you feeling stable.
Our second product pillar, we are focused on building scalable franchises. These are brand-defining, high-volume, high-impact products that drive growth and brand strength. Our top 10 models account for approximately 80% of total footwear revenue, underscoring the strength of our core franchises. Norvan, our largest volume driving franchise and Konseal are both franchises with consumer pull today. And we believe that what we have in the pipeline will continue to scale into the future. We know this pillar of the strategy is crucial to igniting and fueling the market and driving growth for the long term. So we're heavily invested in developing the athlete and consumer right franchises of the future and going from 2 to 4 brand-defining franchises in the next 18 months.
And lastly, we create depth and breadth, driving choice through dimension and by expanding the line through end use. Models like the Norvan Novalis, which I mentioned, that extend a trusted franchise to a new use case. And this is how we innovate with intention and for scale.
Every product we create reflects our commitment to the athlete, to the terrain and to the relentless pursuit of performance. Arc'teryx footwear isn't just evolving, it's setting the standard. The next big step in our footwear journey will be transformative. We're building a curated global marketplace that meets the athlete when and where they shop for mountain terrain footwear. This is not just about selling shoes. It's about creating an elevated experience that reflects the Arc'teryx brand at every touch point.
Our goal is to create an integrated marketplace where our Arc'teryx retail stores, our digital commerce platform and our wholesale channel each play a strategic role in driving awareness and engagement. We're leading with the best expression of the brand in our own stores. These spaces will showcase the pinnacle of our brands experience in storytelling, setting the tone for the broader marketplace.
Wholesale will be a powerful accelerator for our business. We're scaling with intention, building credibility through specialty and premium outdoor partners. Over the next 5 years, we plan to add more than 2,000 wholesale doors globally. We're developing deep partnerships with specialty retailers to amplify product credibility, elevate brand awareness and drive demand for our most pinnacle footwear models, ensuring that our innovation reaches the athlete who need it most. We're also focused on developing strategic accounts that expand access points and grow our consumer base. These partnerships will help us reach new audiences while maintaining the integrity and performance-first ethos of our brand.
The response from our sporting goods partners has been incredibly encouraging. Early previews of the fall '26 product line have sparked a surge of demand. It's a clear signal that our vision is resonating and marks the beginning of a powerful shift in how the market sees Arc'teryx and footwear. We recognize that building enduring wholesale partnerships requires time, focus and investment. And we're fully committed to developing this channel as a long-term strategic pillar of our marketplace strategy.
And lastly, we're prioritizing epicenters in key mountain towns, places where our consumers live, train and explore. Here, we'll build a more pronounced on-the-ground community and service model for footwear, deepening our connection with athletes, retailers and communities and reinforcing our commitment to mountain terrain.
We're applying this marketplace strategy across our global regions, each with a distinct opportunity to lead in footwear growth. In every region, footwear is planned as the fastest-growing product category, and we're aligning resources to unlock that potential.
In China, we expect continued momentum as footwear continues to be Arc'teryx' strongest product association with consumers. In North America, we're focused on accelerating growth through targeted investment and expanded access to drive awareness. Europe remains a critical region, where our technical credibility and brand equity are strong, forming a solid foundation for accelerated growth. And in Asia Pacific, we see significant untapped potential, an opportunity we're ready to pursue with increased investment and faster deployment of regional resources. This is how we'll scale with purpose, and this is how we build a marketplace that services the mountain athlete and reflects the DNA of Arc'teryx.
Our final priority is to amplify our brand marketing efforts, elevating storytelling to spark demand, drive awareness and introduce new consumers to Arc'teryx footwear. We're shifting from a product-driven approach to a consistent pulsing always-on marketing offense. This means that we will be always on reinforcing our mountain positioning and staying true to our core identity. We'll show up across key touch points from digital to retail to community, and invest in our athlete portfolio to ensure our products are continuously authenticated through their voices, experiences and stories. This is how we build an emotional connection and long-term brand equity in footwear. This is only at the beginning. We're getting warmed up.
In April, we took a transformative leap by launching a dedicated footwear business unit, marking a major milestone in our journey. This move reflects our unwavering commitment to the category and sets the stage for focused accelerated growth. We've validated strong consumer demand, and now we're investing with conviction. The creation of this unit is a powerful signal that we believe in the potential, and we're building to win.
We've assembled an exceptional team in Portland Oregon, the epicenter of global footwear innovation. This location gives us access to the industry's top talent and positions us alongside the footwear brand, setting the pace for the global market. And we've already attracted some of the best minds in the business. The team we have assembled in Portland is world-class, bringing together deep expertise, bold creativity and cross-functional leadership. We're building infrastructure and capabilities to scale with purpose, ensuring product excellence at every step. And with a fully integrated team spanning product, marketplace and brand marketing, we're crafting a go-to-market strategy designed to fuel our next phase of growth and realize our long-term vision.
So what's next? Footwear is projected as the highest growth product category over the next 5 years, with contribution to total revenue projected to rise from 8% to 13% annually. And we'll do this by delivering more innovation. We've built a strong product pipeline, and we're poised to accelerate performance innovation, solving real problems for the mountain athlete and unlocking new opportunities for growth. More presence. As we build out our global marketplace, Arc'teryx footwear will become increasingly available in the places our mountain athletes shop, train and explore and more connection. With elevated brand efforts, we'll deepen our relationship with the consumers, building community and creating meaningful engagement that lasts.
We're not just building a footwear business, we're shaping the future of performance in mountain terrain. With relentless innovation, expanded presence and deeper connection, we're creating something enduring. A brand that moves with the athlete, inspires the community and leads with purpose. Arc'teryx footwear is here now, and we're just getting started. Thank you.
[Presentation]
Good morning, everyone. So my name is Marissa Pardini, and I'm the GM of Veilance and I started at the beginning of the year, so it's excellent to be here with you all. I'm really excited to share with you how Veilance is building on its heritage, tapping into a powerful market opportunity and charting a clear path to become a major growth engine for Arc'teryx. I'll take you through where we are today, the size of the opportunity, who our consumer is, how our product and our brand strategies are evolving, the proof points that we've already seen in the marketplace; and finally, the investment needed to unlock the next stage.
Let's start with the numbers. So year-to-date through Q2, Veilance is up 22% versus last year. Today, we make up about 5% of total Arc'teryx sales, and we see a clear path to grow to 7% within the next few years. This is meaningful growth. Every percentage point of penetration translates into significant incremental revenue, broader consumer reach and stronger cultural relevance for the brand. And it's more than just top line growth. It reflects Veilance's evolution. We're moving from a niche product line with really limited communication into a sub-brand with its own identity, a holistic city expression rooted in design, performance and culture. We've established a dedicated business unit with full P&L ownership to really steward Veilance's long-term growth and contribution to Arc'teryx. What began as a passion project transforms into a growth driver.
So where does Veilance play? The lines between outdoor performance, fashion and everything in between, those lines are blurring. Consumers no longer live in silos. They want products that flex from the mountains to the city and everything in between. They need product that takes them from day to night, sunshine to rain, from work to traveling, and Veilance is uniquely positioned to meet that need. We design precision crafted versatile garments that transition seamlessly across those environments. Versatility is a key word here. In this space, it's underpenetrated. There's no true direct equivalent, and that's what makes Veilance such a compelling white space.
So on to our consumer. Our consumer isn't defined by demographics. They're defined by mindset. They live at the intersection of movement and expression, nature and city. They value design, function and self-expression in equal measure. They're tastemakers. They are the people that others look to for what's next. Women's represents a critical growth driver for Veilance. Within 5 years, we expect women's to represent roughly half of the Veilance business, their desire for newness and self-expression makes them a natural fit for the Veilance business. At every touch point from product to storytelling to our retail environments, they must connect authentically to these aspirations.
So Veilance is, it's positioned to win in a really unique space. Veilance combines Arc'teryx' minimalist aesthetic, the technical mastery and the modular approach to dressing. We occupy a unique space between fashion and performance, form, function and city and the outdoors. And this duality is our edge. It makes Veilance culturally resonant while staying true to that DNA that built Arc'teryx, and it positions us for unparalleled growth potential.
I want to talk about the images that you see on this slide. So these are from our most recent campaign that was shot in London. And this year, we've been connecting with communities and creatives in Tier 1 cities. So we started in Los Angeles. We had a group of creatives that we participated in a campaign, but we're still connected with them. Then we moved on to Paris, and then this was our latest campaign in London. So it's a really great way for us to connect with these consumers, these communities and be able to bring them into our family.
Now on to the product strategy. I do want to introduce Ben Stubbington. He joined us about 1.5 years ago as the Creative Director, and he's had a major impact on the products that you'll see today. Veilance started in 2009 as a collection-based line. It was elevated. It was limited designs for insiders. Some referred to it as a designer's designer brand. Today, we've expanded that into a clear product architecture with 4 pillars. The first one is our fundamentals, which are elevated essentials, at more entry price points that help us to broaden reach and to drive new consumer acquisition. I'm wearing the Conic knit, and this is a fundamental piece that you'll see in the line across men's and women's, but this is an example of those products.
Next is city outerwear, which is our anchor. So we must cement our authority in technical outerwear for urban life. Hero products like the Monitor parka and the Iphora parka are some outerwear pieces that we want consumers to know from us. We want to be that go-to outerwear brand within the cities. Massive opportunity for us. We're also expanding our women's offering, and we believe it will dramatically expand our addressable market. And then finally, we're advancing our materials innovation, both natural and technical fabrications to really help to elevate from a quality perspective and sustainability. This gives us more depth, breadth and relevance than ever before, while we're able to stay true to our design DNA.
Okay. On to our commercial strategy. So our commercial strategy is about expanding reach and deepening our conversion, making Veilance more visible, more accessible and more compelling to our consumers across multiple touch points. I'm going to talk about -- so we -- during Paris Fashion Week, we had a Paris showroom this past June, and it was a major milestone for us. It was our first stand-alone Veilance space, and the results were really clear and exciting. First, our prebookings were up, media coverage was strong and our retail partners gave us highly positive feedback. And this moment was important because it helped us validate Veilance's potential as a business in its own right.
And importantly, it gave us a vision of what a stand-alone pop-up store could look like in the future. The event showed us how Veilance can express itself outside of Arc'teryx, and it gives us confidence in pursuing dedicated retail environments. We will continue to leverage this cultural moment to connect with consumers and communities moving forward. From there, our broader commercial strategy is threefold. First, stand-alone destinations. We've been exploring pop-ups environments in Tier 1 cities like New York City, Paris, Tokyo and Shanghai to really help us to serve as a cultural anchor building community, storytelling and driving brand awareness.
Direct-to-consumer is also really important to our expansion. We'll be leveraging our city-based Arc'teryx retail fleet for awareness and consumer education. And we do have larger shop-in-shops in larger stores, and we'll continue there. Digital commerce is also a massive opportunity for us, and it will help us to increase discoverability, conversion and loyalty. It also serves as that ultimate brand expression.
Finally, Tier 0 wholesale accounts. They're critical to extend our reach and to help us drive awareness. We're strategically partnering with influential retailers globally to help us drive aspiration and credibility and multi-brand environments will help us to also drive that commercial legitimacy. This multichannel approach ensures Veilance is accessible, it's visible and it's really compelling to our consumers.
Veilance creates unique enterprise value for Arc'teryx, and I'm going to take you through that -- those values. First, the shared ecosystem. Veilance is able to leverage Arc'teryx' existing global retail fleet, supply chain and digital platforms. That means that we can scale more efficiently without needing to build an entirely new infrastructure from the ground up. Second, audience reach. Sorry. Audience reach. So Veilance unlocks tastemakers, creatives and cultural curators who may not naturally buy into the mountain aesthetic. These consumers are highly influential. They drive culture and when they adopt Veilance, we're able to bring them into new spaces and new conversations for Arc'teryx. Third is brand protection, by clearly differentiating Veilance as the city and lifestyle expression, Arc'teryx can expand into new arenas without diluting its mountain core. That's really important. Valence is able to protect the purity of the Mountain brand and help extend the company's cultural footprint. And then finally, the innovation halo. Balance elevates Arc'teryx' credibility in design, in material innovation and in cultural impact. It positions Arc'teryx not just as a leader in performance, but as a leader in design, influencing both the industry and consumers' imaginations.
Together, these value drivers make Valence more than just a growth engine. They make it a strategic multiplier for Arc'teryx' long-term success. And this is where the investment comes in. Standing up a Valence dedicated business unit with leadership and resources positions us to deliver the next stage of growth. First, we can grow our penetration. We're currently at 5% of Arc'teryx sales, and we see a clear path to 7% in the coming years. Second, we'll expand across key regions particularly in APAC, North America and EMEA, where the appetite for Valence is strong and we're underdeveloped. Third, we're ready to explore new valence led retail experiences in Tier 1 cities.
These environments will allow us to express the brand on its own terms and help to build deeper consumer connection. And finally, we will build brand awareness from a low base into a global force, establishing Valence as both culturally resonant and commercially powerful. This isn't just about scaling a sub brand. We're positioned for a sustained double-digit CAGR through 2030. It's also about unlocking a new growth engine for Arc'teryx, broadening our consumer base, strengthening our cultural resonance and creating long-term enterprise value. So what began as a passion project. Today, it stands as a powerful engine for growth. It's built on design curiosity, cultural insight and technical mastery. With a focused investment, Valence has the potential to scale into a globally recognized business, amplifying the entire Arc'teryx ecosystem. Thank you so much. Now you're going to hear from Matt Bolte, our Chief Merchandising Officer, and he couldn't be with us today. So let's take a look at a video. Thank you.
[Presentation]
Hello. I'm Matt Bolte, Chief Merchandising Officer at Arc'teryx. We're going to walk you through our product strategy. For 35 years, we've been myopically focused on the same thing, the mountains and serving the people who play and live there and supporting the amazing athletic achievements that happen in the world of climbing, skiing boarding, running and hiking. Our growth is based on this commitment, stay on the mountain and serve the Mountain athlete, drive innovation and expression into every product we create. The results have followed. From approximately $500 million to over $2.5 billion, and a balanced portfolio of regions, all driving strong double-digit annual growth. As we plan the next 5 years, we see the following path to growth. First, get the brand in front of more consumers. We are still underpenetrated in many markets, and we'll expand our reach with DTC and strategic wholesale with no need to deviate from our current product strategy.
Second, centered that product strategy on our most important models, our franchise portfolio, voted on over time, over and over again by the consumer. We have an editor mindset. This allows us to amplify our investment in our foundation. Third, drive to our goal of 50% of our business coming from circularity and fourth, investment focused strategic opportunities, women's, footwear and Valence, all of whom you heard from earlier today. Let's double-click into 2 important elements of our product strategy. First, what we call system of dress. Think of a complete head-to-toe outfit every component built to our standards to support mountain athlete. Our trail athlete, this is about breathable, durable systems for fast movement in variable conditions. For our climb athletes is balance protection and mobility for varied Alpine environments. For snow, uncompromised weather protection for the stormiest of winter days.
Our core product principles, head-to-toe solutions, serving the mountain athlete in moments of extreme need, think shells, insulation, base layers and all the other components. We're technical. We're innovative. We're expressive. Our layering system for the mountain translates to everyday versatility in whatever environment our consumers are playing in. This is our secret sauce. Our Arc'teryx is authentic and commercial, 20 % of our products to 70% of our business, icons and franchises anchor the brand. This 20% is our foundation, our franchise and icons. Product born from the Mountain and athlete insight that has been adopted for use often beyond its original intent. We've earned the luxury and responsibility of having over a dozen of these models. You've seen them displayed in the room, and I hope you try them on during your store visit tonight. Many brands are born on one item. I'm not going to list them, but I'm sure you're thinking of a few of them now.
The power of our arsenal allows us to plan every quarter with financial confidence supply chain precision and DTC execution, all centered on our consumer and their favorite Arc'teryx models. Though only 20% of our model count, we orient over half of our work, our energy and brainpower on keeping this portfolio healthy and evolving. Relatively new for us is our formation, or intersections, our protocols and our global regional formation, a global to local flywheel. We balance global scale and regional relevance. Local insight informs capsules, energy, product innovation. Insights loop back to the global product creation team to shape line plans. This ensures product and storytelling meets the consumer where they are. We focus on similarities across regions first while allowing strategic space in our product plan to act on local insights and nuance. Our macro consumer insights as they want to be connected to a global brand. They also want one that sees them locally and supports that with localized product assortments.
You heard this morning about our growth zones of women's, footwear and Valence. This focus and energy will undoubtedly generate new franchise models. The 20-80 rule of the Pareto is real in this industry, and it's real for Arc'teryx, our distinct position, our competitive advantage is the breadth of this portfolio, current state and future state. Our approach is to manage these franchises and drive a strong foundation for our business while growing these at the rate of our overall growth plan. Right product, right place, right time, building the most Pinnacle Mountain brand in the world. Peak by peak, city by city. This is our mission. This is our moment. This is how we win. Thank you.
Hello. My name is Kyle Wood. I am the Senior Director of Strategy here at Arc'teryx, and I have the pleasure and the privilege to represent the large team driving our circularity strategy.
And I'm Dominique Showers, I'm the Vice President of ReBird, and I have the pleasure of overseeing our guest experience related to our service, care and repair and our circular business models, Kyle and I are here to share how circularity is our strategic advantage here at Arc'teryx. For over 30 years, we've built gear that last that's rooted in authenticity and innovation. It's designed to perform in the harshest conditions and to be repaired and not replaced.
Over the last few years, ReBird has proven that circularity is more than a sustainability initiative. It unlocks long-term value through new innovative products, revenue streams, deeper engagement and lasting relationships. Now we have the opportunity to really scale that impact. Arc'teryx is built for circularity way before it was cool. It's embedded in our origin story. There's a really great story. When I started here at Arc'teryx in 2018, where I learned that there was a mountain year that had bought an early era Alpha SV jacket. And this mountaineer had submitted all these peaks and every time he did, he would write the same of the peak on the inside of his jacket. And every time his jacket needed repair, he would send it into us. And then the team that was working on the repairs would see the new peaks that were added. And his caveat was I don't want you to replace my jacket. I want my jacket back.
For him, it held all of his memories. And this is the kind of product relationship that we designed for. Katie Becker also mentioned this in relation to the relationship with her husband and the product. This is the kind of relationship we want to build for. We want our gear to hold up. We want it to be loved, and we want to be used well past the first adventure. But making durable product is not enough. How are we going to keep it out of landfill? Arc'teryx has the credibility, the product and the customer behavior to lead in this space. But globally, the circular economy is nascent. The market is there. The expectation is rising, and we are ahead. The opportunity is to develop and scale the full circular ecosystem. This slide, this is our circular flywheel. You can see how it moves through the traditional linear model, it would be a straight line across. And what we're designing here at Arc'teryx is an evolution of this. Circularity is more than just closing loops. It's about extending relationships.
For us, it starts with the product and the design. We create beautiful, durable, high-performance gear that holds value. With ReBird then, we take the learnings on where our gear fails, and we apply that back upstream to future designs. Through care and repair, we build trust. ReBird services help our guests keep their gear and play longer, whether it's washing, rewaterproofing or tailoring. The result is increased brand loyalty, more frequent interaction and higher retention. That same approach fuels our resale program. You'll see an example of that outside our full booth. And what you'll see is that our products really last and hold value regardless of their age. We're opening new revenue and deeper engagement. ReSale brings in a younger audience, often more female and often first-time buyers to the brand. We're turning end of life into the beginning of the next cycle. And then membership ties it all together.
Carl will talk about the ReBird membership program in the brand presentation, and we will be rewarding circular behaviors, turning action into a lifetime value. We've made significant investments into our own repair innovation in partnership with our Advanced Concepts team. We've made significant investments in our circular sourcing and advanced recycling and end-of-life material processing to ensure that gear doesn't just end. It comes back into the system. The more that guests engage, the more we service, the more inventory we recover, the more value we generate, and that's the power of the circular flywheel. Durability and repair has been in our DNA since the beginning. And in 2020, we learned something. It was a bit of an aha moment for us. The most searched question in Google was how do I wash my Arc'teryx jacket.
People don't know how to wash Gore Tex. And the question told us 2 things. Our guests wanted to care for their gear and we hadn't done enough to empower or educate them. When we launched ReBird in 2021, we brought this product care education into our circular services under one platform, with a goal to deliver and scale key services globally. So now we offer technical wash, rewaterproofing in our stores. We offer resale and we are moving into upcycling, all under one guest-facing experience. The demand has grown significantly. Year-to-date, we've serviced over 150,000 products, driving the highest level of engagement to our brand, while extending the life of our gear. ReBird is now more than a service, it's a relationship with our guests. It's how we show up post purchase. It's how we keep it out of landfill and it's how we improve our gear is worth the investment. Again, in 2020, we had another problem to solve. Our best case repair return time was 46 days, let that land for a minute. You're living in New York City, you're going on a ski trip, you pull your jacket out, you realize my zipper is broken. What am I going to do? You have to send it to Vancouver, British Columbia to ARC1, 46 days later, you get your jacket back, wasn't a great experience at the time.
We were replacing more than half of the products that were coming through warranty. Tied to that, the only accessible solution that we had at the time was a red Milwaukee toolbox, and you'll see that toolbox at the ReBird Service Center outside. This red box is really our quick fixed repair kit and existed in every single one of our stores. And that was the aha moment. That was a realization that we really needed to put our repair and care services at the forefront and make it more accessible, and to make it more efficient. So the good news. In the last 4 years, we've opened over 30 front-of-house service centers, embedded directly into our retail store footprint. We've also established over 10 regionalized third-party repair centers to handle more complex repairs more capacity, more volume, you get your jacket faster, turn times for complex repairs are now under 14 days.
And we've also created our own innovative solutions with the ASC team that will get you in and out of the door in under 15 minutes. In the last year, we've added complex repairs to 2 key stores in North America, our New York City 580 Broadway store and our 50 Bloor store, which you see here in the video. This means that you can come into the store and take care of all of our complex repairs at our quality standards within 2 key stores, and we offer a resale inside of those stores as well. The ReBird platform has already serviced hundreds of thousands of units with a clear trajectory to serve over 1.5 million products by 2030, which is exciting. We've also launched ReSell in 2019 and rolled it into ReBird. We learned a ton through the North American e-commerce business, and we pushed it into our retail stores, as I mentioned. It's also become a cultural moment for our brands, bringing in this younger audience that I mentioned, it's become something that our guests really follow and look for, especially in our academies and events. And with that, I'll pass it over to Kyle, who's going to talk about how we scale.
Thanks, Dom. I have the opportunity to meet Dom a few years ago before I worked with the brand. I've been a customer of Arc'teryx for a number of years, but through a mutual collaborator in the U.K. I went to this design studio, and he had been working with a bucket full of excess material that he obtained from Arc'teryx and he was redesigning lots of cool things with this material, and I asked them where he got it and he mentioned this woman Dom at the time. And I reached out to Dom, this is about 4 years ago, and I learned about the beginnings of ReBird, and it really set off a lightbulb for me of like an aha moment that, yes, I was familiar with the brand.
They made amazing products. but they also thought about design and circulating and sustainability in a very different way, and we're years ahead of where most of the industry was at, and really excited me not just as a customer but as a potential place to be a part of. And I've been here for about 1.5 years now, and I'm so excited about all the things that are coming because really, the future does demand better systems, not just more product. And Arc'teryx circularity is no longer optional. It's a strategic imperative where our guests expect more from the brands, care, accountability and meeting along with great products. As Dom highlighted, we're already seeing the shift with a growing demand for wash, repair and resale. But this is more than a value shift, we see as a true business opportunity. The brands that win in this space will scale the full circular ecosystem linking products, service and community to drive loyalty, innovation and long-term value.
We believe Arc'teryx is uniquely built for this with our vertical D2C model and unmatched access to speed insight around our guests, our innovation engine and brand trust put us in a position of leadership and our products retain value, making resale and repair profitable. So for us, this isn't a pivot. It's part of our growth strategy. So circularity is how we transform our business and will lead the industry, and this is our formula for growth. Number one, we'll lead to circular performance products. We're going to lead through innovation and embed circular design principles throughout our most iconic products. By 2030, our highest volume styles will be reengineered for circularity, leading with durability, reparability and recoverability to end of life. There'll be no trade-offs, just performance with smarter design.
Number two, we'll obsess the guest journey in turn, circular into an engagement and loyalty engine with ReBird care, repair and resale, scale globally across retail and e-commerce. Our ReBird membership will reward behaviors and build deeper guest connection. The supply chain will act as a circular accelerator. We're already scaling preferred and next-generation materials on the front end, and we're investing in take-back systems, repair and sorting infrastructure to enable downstream recycling at the end of life. And fourth, tech and data will power the system. Digital product Passport will launch in 2026, providing greater transparency, but also will connect to every customer with their products to care, trade-in and membership rewards. Together, these pillars will form a connected circular ecosystem and power the future of Arc'teryx.
This isn't just a strategy on paper or plans that we've been talking about. This transformation is underway. ReBird is scaling quickly, more stores, more repair capacity, shorter turnarounds and new in-store services like Wash and DWR. We've secured leading partners like Aqua fill and Amber cycle to unlock circular materials in closed loop recovery. As I mentioned, digital Passport will launch next year and ReBird membership soon to follow, making product service and loyalty into one connected user experience. Our future product pipeline is already being shaped by circular principles durable, reparable and recoverable by design. And the next chapter begins next week. When we launch our most advanced product yet, a pinnacle piece that proves performance and circularity cannot only coexist, but can accelerate each other. So look out for some news early in the week starting in New York, and then look out for more news thereafter.
By 2030, this new system will drive significant business growth while also reducing environmental impact across every partner of Arc'teryx. Our 2030 circulator will be embedded across product, service, supply chain and our guest experience powering revenue, retention and responsibility. As you've heard from Dom, ReBird resale will reach new heights with over $10 million in resale this year, but our vision for the future is far bigger, and we're building toward it. By 2030, over 50% of our apparel revenue will come from circular products and business models with over $100 million coming through ReBird resale alone, powered by over 1.5 million units through Arc'teryx ecosystem. Two million-plus members will be actively participating in the circular system, resulting over 37,000 tons of CO2 avoided. What began as a repair counter and the Milwaukee toolbox, will become a full-scale business model. This isn't incremental, it's transformational, and that's how we grow.
So in closing, prioritizing circularity wasn't a small decision as a brand, and we recognize we have lots of work ahead. We're positioned to lead this transformation, and we've set a bold goal of 50% revenue by 2030. But we're not just building better products. We're truly building a better system, a system designed for longevity, built for connection and engineer to scale. At Arc'teryx circularity isn't a pilot, it's not a side project. It's a platform, it's how we grow, it's how we lead, that's how we win. Thank you. With that, I think I'm passing to Omar for some instructions for the lunch hour here. Don't forget there's going to be a ReBird repair demo out in the parking lot.
Thanks, Dom. Thanks, Kyle. So just a quick announcement before you guys get up to eat. For those on the webcast dialed in, it's time to take a break. We're going to have an hour for lunch and an hour and 20 minutes for product tours. Join us, please rejoin us around 2:20 Pacific Time, 5:20 for those in the East Coast. We have a lot of great content in the afternoon, brand regions and, of course, the financial section and Q&A. For those of you in the room, grab lunch. We have about an hour for lunch. We don't have much seating, so please feel free to use this space to eat. We'll all work together to make sure it gets cleaned up before we restart. And then 1:00 head to your product station, as indicated on the map on the back of your card. As Kyle mentioned, the ReBird station is outside. There we go. Thanks, everyone.
[Break]
Thanks, everybody. That was just to get you excited for ski season. We're days away from dropping product. I know there's a few skiers. I heard some people talking about avalanche packs out there. So I love ski season. That's why we worked Gore Tex jackets in the middle of summer. So any time we can show a little bit of snow, that's good for us. My name is Karl Aaker. I lead the brand marketing function here, been here for the last 5 years. And a theme you're hearing, I hope, is that we all feel very lucky to be in these roles that we're in. Because this is an easy brand to fall in love with. It's personal for us. These are sports that we would be doing products that we'd be making with or without the paycheck. I mean, don't take that seriously, Stuart. I like the paycheck, but we'd be doing this anyway.
So I hope in this section in the next 15, 20 minutes, I can share a little bit about why I think this is a one-on-one brand. There's just nothing like this out there and maybe spend a bit more time on why I believe our opportunity is so strong. Before I do that though, I do want to share a quick video. I'm the brand guy, I've got to show some videos. But I think you like this one.
[Presentation]
All right. They're pretty intense. For the first cap of the day. This is awesome. I didn't like Omar as a rule of no clapping. So I think we should break that. Actually, when we watched this video yesterday, Omar told me, he said, "Man, that looks a lot like the way I get in and out of my bed every day. Is that what you said? I don't know if I got that right. So no, I mean, if that video doesn't move you, I don't know what will. That's Amity Warme, who's one of our incredible mountain athletes. She's a world-class climber, as you can see, something you've been working on for a long time. And when I watch that video, when you watch that video, I hope you -- I'd like you to kind of ask yourself, what is it that we sell as a brand, right?
You've spent all morning listening to our product, team talk about the incredible design process and capabilities of this brand, which are very true. I fall in love with that every day. I hear it. But it's so much more than that, right? What we sell, what we do as a brand is so much more than just jackets and hard goods and shoes, right? They unlock an experience that I think as you can see, is transformational. She's gone through something right there. And I think we're all lucky when we get to a moment like that, even if it's getting in and out of your bad Omar. So in my 5 years here, which has been great, when I think about what we sell, I've gotten to a point where I truly understand that we sell experience, dream experiences. And I get the great benefit of being on the brand team, I get to share that with people. So absolutely a world we're living in today where people are seeking this out more and more. So I think we're in a great position as a brand just because of where we exist and what we do.
And I think over time, by delivering those experiences, what we become expert at is the real thing. That's, I think, what I hope you hear from our brand is that we are expert in the real thing. There's no smoke and mirrors here. My job as a marketer is not to make something up. It's just to tell the truth of this brand, share those life-changing experiences and bring it to the world in an interesting and unique way, right? So it's really special. What's important to understand though, who we do that for, which we've talked about. We'll spend some time. Five years ago, when we got here, Stuart talked about it this morning, we were wondering as a brand. Our line was proliferating, our strategy, maybe lack some clarity. At the end of the day, culturally, we lack some focus and in the process of resetting our strategy, understanding who we are, we looked right in front of us. What are the things that we've made that have been most powerful in our time? What are the things that resonate most deeply with the consumer? And for us, it got really clear. All of those tools for the mountain athlete are what's bubbled to the top of our business.
So at the end of the day, our job became very clearly focused on delivering things for the mountain athlete. If we serve them, everything else tends to work. Why is that? With laser focus on the mountain athlete, one of the benefits, I would say, is that it gave us the courage to step away from the temptation that kind of every brand was facing. By focusing on doing a few things really well, it allowed us to deliver with specificity to deliver with purpose, best-in-class hard goods, layers, footwear. That focus on the mountain athlete really sharpened our strategy, again, as you've heard. But the idea that kind of is most important, I think, in understanding why that resonates so deeply, are these 2 principles that sit in our brands to have talked about them at the beginning of the day today. But as a brand leader, this is a true gift for us. When we look at how we resonate, there's a simple formula. When we design for the mountain athlete with performance in mind, if we deliver on that promise, we build credibility as a design powerhouse.
And as we design beautiful, minimal, aesthetically-driven product that revalidates the performance. And that exchange has really been the secret sauce of this brand from the very early days, and committing to that is what's opened the doors for us. So why does that lead to broad appeal? When we look at our guest profile, which, again, I know you've heard versions of today, by working with that core user group, the professional athlete, it really validates and builds trust with the outdoor community. By serving now to our community in a way that's unique to us, by delivering beauty and performance, we kind of plug into 2 audiences, the performance obsessed audience, right? Many of you, like I said, I know you're in the mountains on the weekend or you're maybe leaving the city to go on a ski trip. I don't want to assume I know where you live, but there's athletes in this room, right, the value performance.
Simultaneously, by delivering beautiful product, it allows us to resonate with people who prefer and considered design and understand the beauty of product, understand the status and the relationship with the design community. And so by winning in those 2 spaces, we earn brand fans around the globe. In luxury, in streetwear and fashion, that's where that broad resonance comes for us. So when we say we're committed to the mountain athlete, that chain of influence becomes really critical for us. So in doing that, what is it that makes us truly distinct from a brand reputation standpoint. I hope these themes are consistent. But it goes without saying authenticity for us is our lifeblood. And how do we do that? We've talked about that all day. That's kind of a loose term. A lot of brands use it, a lot of people use it.
For us, it starts with committing to the professional community. So it's not just athletes, we have incredible relationships in the guide community, search and rescue teams, professional mountain operators. We have a fleet of stores that connects to ambassadors throughout the world and by serving them, working with them, and most importantly, like Katie said, ingraining them in the way we do business, not just in product design, but in the way we work with communities make decisions of where we invest our money in building infrastructure, the way we validate and reiterate our storytelling. This is so important to us. And frankly, they keep us authentic by creating an accountability structure.
So when we make decisions, we know that we're serving that community well. And it's an incredible formula for us to be able to do that. So authenticity, number one, that's the most important brand distinction for us. Number two, you've heard about this performance. Our ability to continue to win in innovation is one of the most fundamental pillars of our brand identity. So after a long history, 36-year history of iterative design, delivering new technologies, new evolutions, and hard goods, outerwear, harnesses, now footwear, we bring that DNA with us into every story that we tell, right? So that is critical to our identity and foundation.
And three, this is where a third element of our kind of distinction as a brand. Community is a philosophy we talk about a lot of times. What does that mean, though? When we say community, what do we mean by that? For us, it's a currency that we build relationships with one-to-one organization to organization, community to community. And we have created a formula that we think works incredibly well. One of the biggest barriers to outdoor sports is skill set and learning. It's -- these are sports that require a lot of time and energy put into developing the right understanding to travel safely and to have the right knowledge and tools to experience that. So we have a huge gift as a brand, having access to this expertise. So we've made it a pillar of our community to create learning experience for people across the board, whether you're a first-time trail runner, or your 30-year trail runner. There's still things you can develop. So progression learning is number one.
Number two, we know that at the end of the day, people want to do things with each other. They want to experience the mountains in a group. They want to be part of a community that shares an affinity. So we focus on impact projects, community development in terms of access to sport. And we've built a really amazing connection around service as we lean into those local communities around our store. And three, everybody wants to have fun. Luckily, the outdoor community is an incredibly vibrant one. So music or culture, story towing have become a pillar. Every time we say community, we try to bring these aspects into an event or a series or a partnership in any way that we can.
So where do we bring that to life? You heard Stuart talk about our academies. We have 5 academies globally. And these are 3- to 4-day events that happen around the world. We have Shamini, France; Mammoth, California; San Anton, Austria; the Lake District in the U.K. and Yangzhou, China. And these are -- span the spectrum from Alpine climbing, backcountry skiing to rock climbing. We embed trail running within many of the experiences. And these are often lifetime experiences for people where they travel around the world to a unique place to have a once-in-a-lifetime moment in the mountains. Our guide communities, our professionals, our athlete team travel to these events. I would highly recommend any of you that want to get out. You can reach out to me directly, I'll make sure you get in. This -- in the last year alone, we've had these deep learning experiences for over 2,500 people, 30,000 come through the events on an annual basis, engaging in some way, whether it's through our film nights, our storytelling or on mountain experiences.
And to give you a little bit of perspective on why we believe this is such a powerful idea, last year in Mammoth in March when we were coming off the mountain, I ran into, at the end of the day, I ran into a women's clinic that was coming out of the back country. And they're intimate small groups with a guide and an athlete. And of the 7 women in the clinic, 4 of them told me it was the best day of their lives in the mountain. And so you don't hear that kind of sentiment often in a brand event. That's pretty rare. And this is something I hear all the time. Every time I show up to an academy. It's the same sentiment shared. So we know we have some magic there. And our efforts into the future will be to unpack that in a scalable way. Here's a little overview.
[Presentation]
All right. Thank you. Incredibly fun to be at these events. Again, I hope some of you can take it time to get out and see one of these. From our top-tier academies, these major global moments, we create dozens of events at a local level that capture that same energy, and we do it with brand partners like Natural Selection Tour. If you've seen that, any of you skiers or snowboarders out there might have seen that. All Rise, which is an amazing climb partner. This is an All Rise event here, tons of youth energy, it's a collision of kind of music and art culture and the movement around gem climbing.
We've been working with them for 3 or 4 years at this point. We have gym climbing partnerships around the globe. So we create one day experiences that capture that same energy and bring it to local markets. And that's been a key for us as we've scaled our store fleet. It's allowed us to step into community in really powerful ways throughout the market. And maybe the most important aspect of community, when we think about this, and this is why I wanted to spend a little bit of time talking here as a brand leader at Arc'teryx, it's an incredible gift to be able to look inside the company and see the same culture internally that we promote and we engage with externally. So our employee experience is often blurred with our consumer experience. It's pretty special.
Many of the same activations, even at an academy, we know that it's very similar to what we do with our employees. So learning, celebrating the culture, creating moments of connection in the mountains, very much part of the same DNA. All right. Beyond community, our fourth kind of pillar of distinction is our storytelling. It's central to our women's strategy, our footwear strategy, our Valence strategy. And we've got an incredible story to tell, whether that's through our design process and our design efforts or the incredible films we have. We produce dozens of films a year that, I think, stand out in the market as narratives that drive culture in the outdoors and they're very unique and special. They're varied. We focus on localized storytelling. So film storytelling is where we develop our point of view. And we're recognized broadly, we've received many, many awards in the last couple of years for the work here. So it's something we're going to continue to do deep into the future.
So from this kind of distinct identity, that's great. We've gotten to this point, but why are we so optimistic especially from a brand side on what's ahead of us? Why do we see such a powerful ramp? 36 years of steady growth have been great. Five years of incredible growth have been even more exciting. And we see a series of trends, consumer behaviors that signal we're just at the beginning. I think that's when we see huge upside, I want to unpack a little bit about why that is. So across the board, we're seeing an incredible movement from our consumer to spend more on experience. And that's validated through multiple surveys. Mastercard has done some great work here. We see obviously people willing to spend experience. But more importantly, there was one study in the -- with MasterCard in the U.K., 80% -- over 80% of consumers in the U.K. have, at the top of their list outdoor experience as one of their main priorities of purchase, right?
So as I said, we don't just sell products. We sell experience. And our position in this industry is prime to kind of capture that behavior in the consumer. Let's see if I can click forward, too. brands that deliver products that last are winning right now. And there's a good reason. Obviously, sustainability is a big part of that. But at the end of the day, people want stuff they can trust, things that are going to simplify their lives. And so across the board, we're seeing great indicators that this is not just a trend. Obviously, this is part of people's value system as part of the way they're choosing to spend their dollars.
And this is not new to us. We've been in this game since day 1 as a brand that delivers exceptional quality. And so we're really confident that we're in prime position to be the answer, kind of give them what they're looking for.
And then lastly, I think Stuart touched on this, 15 years ago, you saw the explosion of athleisure. And with that, many brands in the industry kind of migrated to the middle, into this very homogenous space. Out of category brands we're making apparel in new places. And we were even influenced by that at a time. But I think our long-standing commitment to delivering exceptionally specific performance product has kind of been on the opposite of that trend. And as we see consumers react, start to move back into a space of buying things for performance. Even within the luxury space, we see behaviorally, just quality and craft don't do it anymore. You've got to deliver performance. So we're in an awesome spot to be able to leverage that position that we have.
And it goes without saying, our biggest opportunity is awareness. We are just scratching the surface with the folks that we know need our brands, very few of them actually know we exist in certain markets. So this is the most exciting thing I can present as a brand leader because I'm super proud of where we are today. I'm incredibly proud of what we're doing, and we have all this ahead of us.
So what does that look like? When we look across our markets, what we're seeing is a formula that works. In China, in Canada, we have incredible traction. Our brand awareness is strong, our relationship and the community, our position is incredibly strong. And as we look to grow our business in the U.S., specifically, and Europe, you can see the incredible upside. Now it could -- I could be ashamed of these numbers because they're so small. The reality is we've doubled brand awareness in both of these markets in the last 12 months. We've doubled brand awareness, and we have this much more to go. So we've got a formula that works. We have momentum that's moving and -- but we're just at the beginning. So this is super exciting for us.
It's -- I want to talk for -- just for a minute, I know I'm running out of time here, about why the formula that we've unpacked that really seems to work for us. So how are we winning in these markets? New audience, obviously, is an important thing for us. But the way we're doing this is by investing disproportionately in top-of-funnel brand awareness, leveraging key narratives, product stories, great product -- cultural story telling to be in the right place and the right time in front of the consumer.
We have select, very select and specific brand partnerships that elevate who we are and why we're in this game, and we've worked closely with them on a local level to be able to drive great brand awareness. I think most importantly, the way we build our store infrastructure in our new markets is maybe the most important driver of brand awareness for us because it's real. And our desire to do this in a quality way is really important. So that fleet of stores, that infrastructure really pays off with presence in market.
Two, when we get people into our funnel, into our experience, we know we do incredibly well. Our digital team, our retail teams do exceptional work in maintaining customer loyalty. So we're going to extend on that, grow beyond that. I think one of the key elements there is developing our service model around care and repair. That allows us to move our relationship beyond the transaction and develop a much closer partnership with the consumer.
Third to that is how we leverage a new membership program. And in the coming year, we're going to be introducing a new revamped membership program for the brand that allows us to connect the dots between ReBIRD, community and our constant flow of innovative products. So we're really excited about how we build loyalty as a bigger focus within the company. But we're winning in that game right now.
And then third, community for us is going to be a pillar wherever we go. We know that's how we separate. And so creating distinction and how we scale those academy experiences, bring them to market, it's working. It's working in markets like L.A., New York, Chicago, Paris, London, markets where we have huge upside. We're seeing that growth and brand awareness, and that growth and business outpace the rest of our business. So great indicators that we're in an awesome spot.
So thank you -- yes, thank you for sticking with me. I appreciate you watching all the videos. I love this brand. I'm excited to talk to you about it. I hope you walk out of this building with a little bit more passion for the [ BIRD ]. If anybody needs to get out into the mountains. I mean a lot of beautiful suits here. We'd love to get them dirty, gets you up into these mountains right behind us, and maybe next time you come. But I'm going to hand it off to our regional GMs to talk about their businesses because they are the ones that are bringing this to life. So thank you.
Hi. I'm Delaney Schweitzer. I'm the General Manager of the North America region. Arc'teryx is born in North America, forged in the mountains, built for the athletes who live to explore them. From our earliest days in Vancouver, we've been defined by an obsession for performance, precision, the relentless pursuit of better, and a deep understanding of our guests and the mountain athlete.
Today, we stand on the edge of our next summit. We began as a wholesale company rooted in climbing with a deep trust in the market for the most pinnacle gear for the mountains. Over time, we transformed, from solely a wholesale business to a thriving direct-to-consumer brand. But we will always remain focused on growing in a way that keeps that trust and remains the #1 choice for our mountain athletes.
Between 2019 and 2025, we've reshaped our North America footprint with a powerful D2C relationship, expanding our store count, building community and a presence in key cities and inspiring our guests through physical stores and online brand experience. Today, Arc'teryx is a fully integrated retail, digital and wholesale engine, with North America at the cultural heart of the brand. North America is our biggest regional market opportunity with the largest outdoor market and low penetration and awareness in the U.S.
In U.S. retail, we have unmet demand in markets across the region with a relatively small store network. We have just scratched the surface in what's possible for new locations and markets. Within our digital footprint, we have so much untapped growth and opportunity. When we enter new markets with a physical store, we see huge growth not only in our digital business, but wholesale demand as well.
We lead with our strongest asset, outerwear. In the United States, 68% of consumers recognize us for insulation, 60% for hard shell, the categories that deliver more than half our runway. We will lead with what we're known for. Using the credibility of our pinnacle products. This allows us to invite guests and new categories like women's footwear, Veilance and more. Participation and demand for Arc'teryx continues to grow at staggering levels. We have only just begun to unlock the full potential of the brand in North America.
Our growth will be powered by 3 key opportunities. First, retail. Our stores are the most premium expression of the brand. They truly enable quality, sustainable approach to growth. When we enter a market, it's because we have something to add, something to offer, a shared vision or value. It's not just growth for growth's sake. We attract top talent in our stores, not only highly skilled store managers, but a team obsessed with our mission. These teams deliver exceptional product knowledge to our guests and can also offer mountain and trail knowledge. It's authentic and real unlike any retail experience out there. From epicenters in New York, L.A., Vancouver and Toronto, to mountain towns like Banff and Whistler, we meet the mountain athlete where they are.
Second is our digital commerce. Our digital channel extends our reach far beyond our physical footprint, delivering high-margin guest acquisition and personalized omni connected journeys. With our growing guest database and integrated D2C channels, we will find new ways to meet our guests where they are, and inspiring them with not only our pinnacle jackets, but a head-to-toe system [ address ].
Third, wholesale. Leveraging partners like REI, Nordstrom and some new ones in the future, we expect to grow our North America wholesale door footprint from approximately 730 today, to over 1,000 premium doors in 2030. Wholesale partners will be important as we grow our footwear business. Each store is strategically picked and optimized with the right assortment and brand presentation. We know that our guests might find us first in our wholesale doors. This is an important arm in building our brand awareness and reach.
We obsess over every market and find the best way to inspire our guests. With our unique store formats, our Alpha stores and mountain towns, we can deliver incredible guest engagement while executing top performance. First, Alpha stores. Named after our top pinnacle jacket. This is our version of a flagship store. Alpha stores showcase our full product range, offer unparalleled product care through ReBIRD service centers and provide a hub for community connection. Our Alpha concept shows up in key markets like SoHo in New York, Blair Street in Toronto, Robson Street in Vancouver and soon to come, Rockefeller Center in New York. These are high-traffic, visible stores that not only deliver top revenue numbers, but builds the brand authentically.
Our mountain town concept creates a fully immersive tribute to the mountains. For the athletes who travel to them, to the communities who live among them, this concept is drawing more people into our spaces than ever before and guiding people to the mountains. Our ReBIRD service center is critical in creating trust and loyalty in getting good products back in play. Banff, our latest mountain town store, second after Whistler, has traffic numbers that are far exceeding our typical brand stores, even our high street flagship locations. As well, they are delivering a profit margin well beyond our expectations. We are not only attracting new guests, but also deepening our engagement with existing guests.
Over the past 5 years, we've focused on our D2C transformation with key strategies that have been the catalyst to consistent gains over the past 5 years in productivity, profitability and revenue per store. We have improved inventory flow. We've shifted from a wholesale model of 2 seasonal drops a year to a monthly flow, meeting our guests demands and enabling them to shop how they want to. We repositioned our stores to bigger, better locations. This move allowed us to showcase the breadth of our product and create community-driven experiences for our guests.
We took on store operation transformation focusing on 3 key areas: one, top store managers that are highly incentivized for top business results; second, an omnichannel integration with new technology for seamless online in-store transaction, and product knowledge; and a product knowledge framework that brings our pinnacle design elements to the retail floor and our guests. This strategy is working. Our sales per square foot have more than doubled since 2019. Our store unit revenue had tripled and our [ 4-wall ] EBITDA margin has more than tripled since 2019.
Our success in business results is embedded in our community activations and connections. Community is who we are. Our stores and events are magnets for connection, spaces where people come to gather, learn and share stories. Even in cities that are saturated with run clubs, Arc'teryx community events are drawing in numbers double that of our competitors. Arc'teryx events bring together those at the forefront of culture, the trend setters. We combine art, music, style and mountain sport to captivate and connect. Every interaction reinforces what we stand for, pinnacle performance, timeless design and an unwavering commitment to our guests. Through localized programming, mountain academy events and a network of athletes and ambassadors, we're building cultural relevance that cannot be bought, only earned.
The North America growth will be supported by our expanding store network from approximately 68 stores at the end of 2025, to approximately 110 in 2030. E-commerce is also a critical channel for North America as we continue to grow at a similar place with our store revenues.
Looking ahead, our plans and expectations for North America are high. We'll drive growth through our continued store expansion strategy, lean into our digital commerce opportunity and the right quality wholesale partnerships. We'll expand our reach in wholesale to grow our new category offers in footwear and Veilance in specialty doors. We will continue to drive highly productive stores, high-margin digital business and bring new guests to Arc'teryx through our wholesale strategy. We'll grow margins, leverage category mix, pricing, operational efficiencies in a disciplined investment strategy.
North America is more than a region. It's a proving ground, the place where our brand was built, is tested and celebrated. With premium retail, digital innovation, authentic community and our talent pool, we will reach more guests than ever before. We are the leaders of technical apparel, mountain lifestyle and have nothing but possibility for growth.
While unfortunately, I can't be there in person, I have a couple of key members from the team that are leading the charge are in the room. Joe Granato, who leads our retail stores; and George Weetman, who leads our digital business and strategies, are both here and happy to answer questions. Thank you so much.
Okay. Greater China. So I'm filling in for [ Ivan Shi ], who is our GM of China for Arc'teryx. Ivan, unfortunately, is not able to be with us today. And so I will do my best to share with you some of the important trends and dynamics and dimensions of our China business, which is, as you know well, a really important and powerful part of the story for Arc'teryx, and I would say Amer overall.
I've helped build 3 brands in Asia and 2 in China, counting Arc'teryx. And it is a really attractive place to do business. From not only just the attractive cost to operate in China, but also the depth of the consumer market, the depth of the appetite across many categories, especially where we compete. And so that translates into a very attractive landscape for us to compete and win market share.
I would say, even within that backdrop, Amer and its brands, Arc'teryx among them, enjoys a pretty unique advantage through our connection, through our ownership, our connection to ANTA, it has afforded us specific advantages that are part of how Arc'teryx has accelerated in China. And some of the ones I would point out include access to talent. And so something that the ANTA team has been able to lend talent and help create access to talent for Arc'teryx and the other Amer brands has really accelerated us.
Also landlord relationships, the retail landscape in China is very important. And it is the primary channel for our business development. And so those relationships and being able to get into the best locations across the key cities is critical.
And then -- and finally, I would say, the -- just the understanding of the Chinese consumer is another advantage that we enjoy. And so I would say, more so than other Western brands, the Amer brands have these advantages that are, I would describe, structural, as a result of our ownership structure.
And so there's another important structural advantage that we have is just how we're set up to operate. So we have a significant Amer team led by Jeffery Ma, who supports Arc'teryx and the other Amer brands with functions like real estate, technology, logistics, human resources, recruiting. And so we have an expert team that's focused on that at the highest levels of execution across the China market, frees up our brand teams to really focus on driving market share gains. And so those advantages, I think, are important to acknowledge and understand as we think about how our business has succeeded and will continue to.
So in this section, I'm going to share additional details around the Arc'teryx business to include some pretty impressive numbers that are definitely part of the overall story. So mountain athlete. You've heard a lot about this, not only from myself, but from other members of the team, even I heard it over and over again in the breakout sessions. This is central to who we are in every region where we operate. It is -- it creates the North Star for our business, and it helps us build one brand in every region, China included.
As we began the journey 5 years ago with this latest phase of the direct-to-consumer transformation, we did a lot of work to understand our customer segments across North America, China and other markets. And what we saw was that in each market, we saw the same customer segments. Specifically in China, we saw the same mountain athlete customers that we saw in North America, just in different proportions. We saw more of the folks taking our products on the mountain in North America, but the -- we also saw these customers in China as well.
Likewise, we saw customers who might never take our products on the mountain, but we're attracted to the brand because of its authentic identity, its authentic performance focus. We saw those customers in China as well as in North America. We saw more of them in China. And as we build a very inclusive brand, all those customers are welcome and -- but importantly, why I mentioned this, it enabled us to, again, create a singular brand identity. We weren't creating a different brand in different regions. There's one brand strategy. There's one product strategy. There's one retail strategy, and this is an important way we've created that singular brand identity.
Okay. If we go to the next slide. So as we looked at the growth strategy for China, we've focused on Tier 1 and Tier 2 cities. And this is important to note that we have a very disciplined strategy to have fewer, larger, more productive stores. Our strategy is different from Salomon, where our stores will be larger, generate higher volumes, and we'll have fewer of them focused in the higher-tier cities. Salomon strategy is right for that brand. And -- but I'd note that just so that you can understand how Arc'teryx is positioned.
Currently, we operate about 60 stores -- brand stores in -- owned own brand stores in China about the same amount of franchise partner stores. And over the next 5 years, we'll look to add about 30 brand stores and -- as well as continue to convert a couple of -- 2 to 3 of the franchise partner stores each year over that time frame. So we see the potential for around 140 doors over the next 5 years in total. This excludes outlet stores. And we see the potential in China to have close to 200 stores ultimately with the full rollout of the brand.
E-commerce, it's important to note, is a smaller part of the business, about 13% of sales today. We see that growing to around 15% over the next 5 years. And that business is conducted over the marketplace platforms that we're familiar with, WeChat, Tmall and similar.
Okay. Next slide. So retail is the main event for us in China. And we have built an impressive business. If you were involved in any of the conversations that we had around the IPO, at that point in time, we were talking about really attractive 4-wall economics that had us delivering [ 6.5 million to 7 million ] of sales per unit and a 4-wall profit that was over 40%. We're pleased to report that these numbers continue to improve as we pursue the strategy of fewer, larger, more productive locations. And our stores now in China are generating over -- approximately USD 10 million per unit with a 4-wall profit of around 50%. And so this is -- these numbers are among the most attractive in the industry and a big part of the success that we continue to create in China.
Average square footage around 4,000 for those stores, and we continue to evaluate how we will continue to evolve the retail strategy. I was just in Beijing and helped open a new store format at the Peninsula hotel there, which is luxury hotel that has some very high-end retail. This is a new strategy for us that included a really interesting community space, which -- we're excited to test this new format and see where we may be able to extend it. But it's just an example of the innovation in retail that continues within our China market.
If we go to the next slide. So product innovation. So as I mentioned, across all our regions, our assortments are consistent. And the priorities that we mentioned earlier on women's, footwear, Veilance, [indiscernible] in China as well. And we actually see some of the highest growth rates for these categories. Veilance in China is the region with the highest proportion of Veilance for any region. And I think it reflects the -- again, the demand and the appetite for these premium products in that market.
We also -- we are also looking to build China exclusive products, and we do this in a few ways already. We create capsules for the Lunar New Year, the Chinese New Year each year, and you see the -- an image of the capsule of the [ alpha ] that we created last year for the year of the snake. And we've also executed a co-lab with a luxury hotel chain called Songtsam that's based in Tibet. And so we'll continue to look for opportunities for collaborations and partnerships like that across China. And we also will look for exclusive products that we can introduce that fit the climate, that fit the customer appetite, while still remaining true to the overall focus of serving the mountain athlete.
Go to the next slide. Disciplined growth, efficient growth, as you mentioned -- as I mentioned, rather, we will have a careful expansion plan in China where we will have fewer, bigger, better locations. We also have a very strong operations team there, where we are managing SG&A quite tightly and efficiently while still investing in the business for growth. We have a strong team across merchandising, and we've led some of the work around [ CRM ] and understanding our guests in China and developing programs to engage with them have been some of our cutting-edge efforts have happened in China. And so continuing to scale the business focused on, again, those Tier 1, Tier 2 cities with a really powerful expression of the brand in fewer larger locations.
Okay. And so as we look forward, the growth for us in China has been robust. Some might say [ white hot ]. It's been really exciting to see how the brand has been received and the enthusiasm for Arc'teryx and the authenticity of the brand over the last 5 years, and you see that reflected in this compound annual growth rate. We expect, just given the scale of the business today, that our growth in China will moderate to a degree, but still being very healthy and very robust. And so we see the business approaching just under [ 2 billion ] in revenue by 2030. And so we also see it balancing with our other regions. We see North America and China in 2030 being about the same size. And this is important for us as we want to have a balanced growth story globally. And so -- but really happy with the degree of growth that we've seen in China, and it remains an important part of our overall growth algorithm.
And then finally, just some statistics here. I mentioned around 60 brand stores today. We see that going to 90 over the next 5 years. Our e-commerce, going from 13% of sales to 15% by 2030. And our wholesale contribution, this reflects the franchise partner stores that I mentioned, that we will continue to gradually convert those to owned locations. And when we do that, we typically move those into a larger, better store location where we see a meaningful increase in sales for that location. So there's not otherwise wholesale distribution as we might understand it in North America in China. But a fantastic market for Arc'teryx, an important market for us, one that's been really a cornerstone and important pillar of our growth and profitability, and we're excited to see that continue into the future.
Okay. With that, I'm going to turn it over to [ Mr. Ken Lee ], who is our GM of Asia Pacific.
Good afternoon, everyone. I didn't know I have a walk-up song. I'm excited to share the story about our fast-growing market. My name is Ken Lee. I'm running Asia Pacific. Just a little bit of myself. I have been managing the retail industry for probably 25 years. I've lived in the U.S. for 8 years, recently lived in Hong Kong for 11 years. I'm stationed in Japan running this APAC region. I'm super grateful to bring the best A team to build this APAC. It's a very exciting time stationed in Japan, and we -- as a bonus, I don't know if you know, Japan is snowiest country in the world. So I get to ski when I have time. So this is around special bonus to working out with Japan.
Okay. So fastest growth is coming from definitely a D2C. Just give a brief history that our largest market, Japan, has started the journey a little bit earlier, and we have -- we just opened a new store last week. So we have 17 doors, that takes up 80% of the D2C business.
Australia is one of the newer journey. So Australia opened our very first store in June '26, it's very new. Before that, it was pretty much whole -- wholesale business to just current shift into retail. So first store in 2023 had a very healthy growth. And we opened a second store, opened another healthy growth. And now every store just exceeding the target. We have now 8 stores, and that take up another 80% of business from a D2C. And also, I'm very happy to share that we have a new family member in APAC. Formerly distributor model, Korea, recently joined our APAC team and [indiscernible] Korea.
Yes. Just sitting in Asia, I talked about Japan. Asia is undergoing such a huge outdoor awakening. Like someone like myself in Asia, normally study comes our focus and the outdoor journey tend to start later in life. And things are changing. Things are changing in such a drastic way that -- probably 2 things that I noticed that the one is few Olympics, whether it's a Tokyo Olympic or Beijing Winter Olympic, whether it's a [ bordering ] or downhill snow or ski that at -- it's -- outdoor became such a cross activities and new generation of heroes and heroines just like influence into such a wide audience.
Secondly, when we go outside, we tend to be -- just go to the gym, just maybe a CrossFit. But outdoor became such a bigger and faster movement. It's a wider audience, all of a sudden just coming to outdoor just for self expression, became a new way of a social and a new way of connecting to the community. So definitely, in a larger, faster scale to become a social currency for the region.
This is -- I mentioned we had a very intentional strategy to penetrate into the market. Instead of opening a store by store, we wanted to really hit the city strategy. So instead of opening a store, instead of opening a big store, let's win Tokyo. Let's win Sydney. So we wanted to just make sure we hit a very, very Tier 1 strategy. Even Tier 1 strategy is a very fast phase of the journey. So just giving proven record to that. And e-com at the same time, the same. It's a relatively newer journey, showing 2-digit growth. But again, it's 2-digit growth, but still a beginning of a journey to have an upside potential.
Numbers. Sure, such incredible numbers make me very humble. But we have strong financial results from the pretty much beginning of this earlier journey. So similar sales per square feet, same store productivity and store revenue is very, very solid. And one of the stores I know -- have you have ever been to Osaka, that's where I was from. We have stores in the corner location, 3 stories, it's called the Shinsaibashi. This is holding one of the highest international stores. So when we see like high-performing stores, there was a lot of Chinese stores leading the way, but this is definitely #1 stores. And wait until we open Rockefeller, but yes, it's a great place to be.
And the 4-wall profit is definitely a big focus. So we wanted to maintain the premium positioning. So inventory management or how do we liquidate our product is very, very intentional. So we wanted to just create a premium model, create a higher margin so that we get to invest for the future.
[ Karl ] mentioned the community, but I'm going to just touch a little bit that the community is also definitely our biggest secret sauce. So this is the way we will bring a local nuance to connect to really deeply with the local community. So [ lastly ], we host 1 or 2 community events per week per country. So we do a lot. So we have grassroot community activities to kind of Chamonix like a mini version of academy-style, [ clinic-style ] event to a brand event.
So this was image from Tokyo. We hosted to tell the story in a such a holistic way. Just to give you -- just to illustrate, we showcased 107 mannequins and 107 products. And the products are from actual guests, actual customers, actual Olympians, actual guide and actual ambassadors, all through that has each lenders product and shares a story. So one of the stories I remember is that there was a woman who lost in the woods and under the thunderstorm. She had to survive with just one jacket and one bread and that's how that [ Alpha ] jacket saved her life.
So it's just a story that we told that each product has story that -- particularly just sitting in Japan, we have still lower brand awareness. But if you ask if they know, people know the product, they say, "Oh, yes, I know the product. Oh, your product is the best. You have the best quality," which is great. It's awesome. It's incredible that we have the best product. We are known to be a best product. But what I'm trying to just bring is emotion or connection. So it's good to have a best product, but we are known to be outerwear company. So I wanted to be known as the best outdoor company. In order to do that, we need community activities. We need a brand story. We continue to tell the story to understand and connect more with our brand.
We have a strong momentum, and we expect to carry a stronger growth for the next 5 years. One number. Just to give -- just to articulate. So what I'm suggesting this is to double the store count, but this is for Australia and Japan only. Korea, it's a little bit tricky because we have a lot of shop in shop and other. So we recently -- Korea became part of it. So we will have a higher number to be expected, more than 50.
The last slide to just share in the summary. In such a short period of time, we have delivered such a tremendous track record and a proven result for this journey. So the -- this untapped market, whether it's a new market or new channel, new stores, digital investment, e-commerce or category growth like womens, we just have such a huge untapped market. So very excited just to share. We're going to continue to invest on the focus area and excited to share more story, more exciting results from APAC region. Thank you. Arigato.
With that, I will pass it to Sven.
Good afternoon. My name is Sven Radtke. I'm the General Manager of Europe in Arc'teryx. I've been with Arc'teryx for over a decade now, and it's been an incredible journey. I was able to watch how the brand evolved in Europe.
Europe is a region like no other. We have 450 million people living in Europe, and 120 million with a strong outdoor affinity. The addressable market is vast. If you look at the outdoor segment, it's valued at EUR 18 billion, EUR 12 billion on the apparel side, and EUR 6 billion on the footwear side, with the strongest growth in premium and technical products.
But the real opportunity isn't the size of the market, it's the mindset of the European consumer. They demand the best, pinnacle performance, purposeful innovation and design that work seamlessly on the mountain, but in everyday life. And that is exactly what defines Arc'teryx, obsessive design, uncompromising durability and continuous evolution. And this is why Europe represents such a great opportunity for us.
Arc'teryx in Europe has always been trusted in the mountains. For over 20 years, our wholesale partners in Alpine towns and epicenters helped us build the credibility with mountain athletes and their community. That trust in outerwear is the foundation of everything we have become. Today, we are evolving. With the direct-to-consumer growth, we are showing up in a stronger, more meaningful, impactful way.
In retail stores, we create immersive experiences. In e-commerce, we bring this even further beyond physical touch points and offering the full product offer to our guests. And wholesale still matters deeply, preserving our authenticity and complementing our direct growth. Together, DTC, e-com and retail are already above 60% share in Europe. And for me, this is disruptive evolution from the credibility in the mountains to high-growth direct-led future.
This future is built upon the following growth drivers. The first one I would like to talk about is our stores. Our stores are not just point of sales, they are anchors of community, storytelling and trust. In 2024, we opened stores in London, Paris, Munich and Berlin. This year in '25, we started an opening in Chamonix, Milan, Stockholm, Manchester and Hamburg in Q4. Each opening has exceeded expectations, thanks to meticulous market preparation and bespoke activations that resonate locally. Campaigns like stepping into light in Stockholm brought the brand to life with the local community.
For all of our store openings, we create integrated marketing campaigns with preopening and opening community activations, opening parties, media walk-throughs and interviews. In our last opening in Manchester that I also attended, we created -- organized the climbing gym party for over 650 participants, also invited our ambassadors and athletes. That was the biggest climbing gym party we ever organized, and for the climbing gym partner, the biggest crowd he ever had in his gym.
These initiatives are also driving real tangible results. When we look at our brand stores, our sales per square foot are $1,100 per square foot. Our store unit revenue is $4 million to $5 million, and we have a very solid EBITDA with 30% already. So really very strong retail KPIs.
But great stores are nothing without great products, our next growth driver. Our brand foundation is rooted in a strong outerwear core. Arc'teryx hard shell and insulation are known for the top quality performance and design. Building on that foundation, we are increasing our investments in the following growth drivers: women and footwear. Women is our fastest-growing category in EMEA. We designed with a unique women DNA in mind and create a complete system of dress for the mountain and beyond. We are also engaging directly with her through female-focused marketing campaigns, adding new athletes and ambassadors and community initiatives, reaching around 50% female participation in academies. Our commitment, we will continue investing to reach 40% women's share in Europe anchored in technical product excellence and authentic community building, capturing the overproportionate growing numbers of women participating in outdoor in Europe.
The next growth driver is footwear, committed growth driver with traction. We have scaled performance across all our three channels. In wholesale, we doubled our footwear share this year and are now penetrated in 200 doors. As we look in the future, we aim to reach 10% footwear share in Europe. We will achieve this through franchise expansion with athlete validation, disciplined distribution with elevated retail experiences and embedding our credibility through our wholesale partners. In addition, we will amplify our dedicated brand campaigns and category campaigns along with intentional community building.
What defines Arc'teryx in Europe is our ability to grow while strengthening and staying true to our DNA, authentic to the mountain athlete and connected to our communities through awareness, affinity, authenticity and community. In terms of affinity, we have achieved the highest results in Europe with 50% affinity score, which is outstanding result and showing the high loyalty and engagement of our guests. At the same time, as Karl mentioned, awareness is still developing, but this gives us significant headroom to grow visibility and capture new audiences. Authenticity is at the core of everything we do. And the best example is our Alpine Academy, where we welcome 15,000 guests and 1,000 participants, making this the largest global educational event in the industry.
To give you a bit more context, we had 140 mountain guides and 50 athletes that hosted our clinics, welcoming over 1,000 participants from 35 countries with a mix of 30, 30, 30 beginners, intermediate and advanced participants. Our women's guests had a special focus in terms of participation and communication plan. We had specific women clinics, more than 20 female athletes hosting these clinics, and we had an over-indexed communication plan. The result, we had a 48% women share in our clinic participation, which was a 9% increase versus the year before.
That leads me to our community work in epicenters and in mountain towns. In Europe cities, we bring the outdoor to urban communities. The Paris Climbing Gym residency welcomed alone 200,000 people, creating an exclusive space for athletes, enthusiasts and beginners. Alongside this, our film tour and culture activations bring inclusion and diversity to our community planning. We activate our marketing plans in 8 Alpine towns with Chamonix being our highlight. We have our Alpine Academy there and just opened our own brand studio. And by balancing authenticity with growing visibility and creating community in Alpine towns and also in epicenters, we are scaling the brand Arc'teryx in a way that is both authentic and sustainable.
In the last 3 years, Europe has seen a strong double-digit growth with a 28% CAGR across all channels. Today, direct-to-consumer already represents 62% of our business and a share increase of 20% in the last 3 years. Looking ahead to 2030, we target a high teens CAGR with a DTC increasing to 70%, a continuous evolution. How are we going to do this? In retail, we are expanding to approximately 40 stores by 2030 and driving double-digit comp growth through experience, service and community. In digital, we are expanding into 8 key countries, accelerating our new guest acquisition and personalized journeys. In wholesale, we will continue growing with premium partners and fueling footwear with disciplined distribution. This is not a pivot. It's scaling what works.
More high-performing doors, stronger digital, deeper service and community while preserving premium wholesale. The result is higher brand control, healthier economics and stronger guest loyalty. Europe is where outdoor culture and urban communities intersect, and this is exactly where Arc'teryx drives. We build credibility in outerwear. We are expanding in women and in footwear, and we are deepening our community in mountain towns and epicenters. Epicenter, we remain true to our purpose, building products for the mountain athlete, scaling responsibly and leaving it better. And with every new store, every new guest and every new community, we're not just growing reach and awareness, we are growing connection. Europe is becoming a growth engine for Arc'teryx and our journey here is only just beginning. Thank you.
Okay. Thanks, everybody. We're running a little bit behind. It may have been the brand guy that went wrong. I'm not sure. But we're still going to come back at 3:45. Give you a 10-minute break, about -- be back at 3:45 out of respect for the people on the webcast as well. So see you back here in 10 minutes, and then we're going to finish strong with financials and Q&A.
Good afternoon. My name is Chris Tham. I'm the brand CFO for Arc'teryx. Great to be here today. I joined Arc'teryx in early 2022. So I've been here now for just over 3.5 years, and it's been an amazing journey. Super grateful for the opportunity to be part of the journey and part of the amazing growth that the company has delivered and enjoyed.
I spent a considerable portion of my career in the consumer retail space and great to see some familiar faces that I may have spoken to in my past as well. As you've heard today across the various strategies that have been discussed and also the regional expansion plans, a really, really great story and compelling strategies. And in my section today, I'll share how that comes together in our financial outlook and also the plans going forward. So just a quick summary and highlight of the transformation we've been on, and you've heard this theme throughout the story -- throughout the course of the day today. And it's been really exceptional in terms of the growth that Arc'teryx has delivered. And I kind of highlight and characterize four key areas.
First, our product. The key theme being the continued obsession and focus in designing the best products in the world for the mountain athlete has really allowed us to stay core, authentic and it's allowed us to connect really strongly with our customers and our guests. And that really leads to our second point, our increased connection to our guests through our direct channels, both through our store expansion, digital experiences. And as Karl talked about earlier today, the activations we've done in the community across all areas of the world has really created a strong engagement and connection with the brand.
And then thirdly, the transformed retail operating model. We've made significant changes over the last several years that have really taken shape across all markets in our retail business, both in terms of strengthening our teams, creating really highly engaged and knowledgeable store staff that are driven and motivated to provide the best customer experience. That, combined with our elevated product flow and overall just retail operational excellence has increased our store productivity significantly over the last several years. And that, again, enabled by our team, our infrastructure, the investments we've made has fueled this rapid growth that you've seen kind of on the right-hand side of the chart here, which has resulted in almost a 5x of our revenue growth since 2019 from $0.5 billion to $2.5 billion this year, a significant increase in our DTC mix. So back in 2019, it was about a 30% mix from a DTC perspective, and that has more than doubled in 2025, and we expect that to be about 3/4 of the business today. And while doing that, we've delivered meaningful gross margin and operating margin expansion over the last several years.
Just moving on to the next slide with a quick snapshot of where the business is today and just some of the dimensions across the different channels and geographies. By 2025 and the end of the year, we'll finish with just over USD 2.5 billion in sales. And again, that's been a tremendous growth year-over-year. That is -- that encompasses about 200 store locations across the globe, and within that, about 168 global brand stores. And again, within those operating regions, as you can see within the chart on the right-hand side, we operate ourselves across four markets: North America, Asia Pacific, Europe and China. Each market, very profitable and really strong compelling unit economics and a pipeline for growth that really enables us for the future.
From a store productivity perspective, as I mentioned, again, the transition we made on our retail operating model, the improvements we've made has delivered exceptional results in our store productivity, almost triple the productivity since 2019. And this year, across our global brand store portfolio, we expect to deliver over $1,800 per square foot. And then just looking at the -- our channel mix as well. So this year, our DTC mix is about 75%. And then when you look at this DTC portion of the business, it's about 70% retail and 30% digital. And then within the digital component, it's weighted a little bit more towards the North America and Europe businesses where there's a higher propensity for online shopping and conversion.
And then lastly, just looking at our wholesale business, which has evolved significantly over the last several years. We're now at a place where we have really strong high-quality accounts that allows us to step into that for the future. And then lastly, just looking at the product side of things, Matt, as you've heard, kind of highlighted, really, really strong core products built on our iconic products that have really kind of fueled the growth of the business overall. And I guess I would just end by saying that the high-performing pinnacle products, the connection with the consumer, the connection with our athletes elevates our brand positioning and it allows us to be able to drive the future growth of the business.
Moving on to our 5-year targets and as shared earlier today also in our press release. As we look at our 5-year goals, we have set a revenue target of mid-teens CAGR on an annual basis, and we'll dive into some of the dimensions of that growth shortly. And then from an operating margin perspective, we expect annual operating margin expansion of between 20 to 60 basis points per year. And that allows us to deliver both profitable -- manage the business in a really disciplined manner, allowing for additional profit flow-through, but also ensuring we make balanced investments across the business to enable the future as well.
So next slide, we'll dive a little deeper into the revenue composition and some of the key drivers here. So just starting on our channels. We expect to open about 24 stores per year globally. So that's about the new store opening pace that we expect to deliver. When you look at that in combination with our annual plan to renovate and relocate our stores and increase the average size of our portfolio, that equates to about square footage growth in the low to mid-teens. That in combination, when you look at our overall store productivity, we expect our comps -- our omnichannel comps to be in the low double digits. Again, that's driven by continued productivity expectation within our stores, again, driven by brand awareness, driven by our product strategies and the overall maturation of our store base. And then in addition to that, the work that we're doing digitally to drive customers, both online and offline, we'll continue to see meaningful growth in our digital business as well.
From a wholesale standpoint, we expect wholesale to grow about 10% per year. We're at a point now in our business where the quality of our accounts is very strong. We expect to grow that at a very consistent level, as you've seen in some of the discussions earlier today. And we're also in a position now where we can leverage our wholesale business to support our new high-growth categories such as Veilance and footwear as well.
Moving on to our product categories, just extending from the themes heard earlier today across the key priorities that we've talked about, footwear, Veilance and women's will all grow at a faster rate than the company overall, led by footwear, followed by Veilance and then also women's. So those three categories will continue to grow at a rate faster than the average of the business. Our men's business, which is the highest share of the company, that will continue to grow in a very modest manner, very consistent. We expect that in the low double-digit range as well.
So when you look at the overall category mix expectations in the next 5 years, we then, therefore, see women's will be about 30% of the total business. And if you look at women's between just the men's and the women's category specifically, it's about a 40% to 60% mix between just the women's and the men's side by 2030. And then long term beyond that, as you may have heard, we expect the men's and women's business to be really balanced between the two.
Looking at some of the other categories, just to highlight and summarize what you would have heard previously, footwear, we expect to grow from 8% to 13%. We expect Veilance to grow from 5% to 7% mix by 2030 overall.
And then lastly, just across the regions. I think you've heard some of those themes just now recently, but summarizing kind of where we are setting our regional expansion plans. We have a very balanced growth story across each of the markets. We expect North America, Europe and APAC to grow at a very comparable rate in the high teens. And we expect China to modestly grow coming off obviously a high base and the significant growth that they've delivered in the last several years to be in the low double digits. When you put that all together, that basically has North America and China very comparable size by 2030.
Just moving over just to talk about some of the drivers of our operating margin expansion. As I mentioned, our expectation, our plan calls for about 20 to 60 basis points of operating margin expansion per year. I would say it's going to be probably more so on the lower end in the initial years of the plan as we make key investments to drive and deliver the growth for the future, growth with gradual margin expansion in the back part of the plan. Looking just specifically at gross margin, we expect gross margin to be slightly up to modest over the course of the 5-year plan, and that balances a couple of different components, certainly, the regional and channel mix movements that we expect to see, the category mix shifts as we grow the different categories in alignment with our overall plans. And then lastly, as the continue -- as the business continues to grow and scale, we do expect there to be opportunities both from a cost efficiency and supply chain efficiency perspective to drive margin improvement.
On the SG&A side, we expect modest SG&A leverage over the 5-year plan, leveraging our fixed cost structure, rent and occupancy, but also balancing that with key investments that we need to make to support our overall infrastructure and growth.
And in the next slide here, I'll just double-click a little bit further in terms of where those key investments are. So I'd characterize our investments in three key areas. First, let's talk about technology. From a technology perspective, we're -- I'd say we're still really in the early stages and the early stages of building an enterprise tech stack. And we've hired not too long ago, Gabriel Morgan, who leads our technology team, and he's been making significant improvements in driving the overall technology strategy. Specific to that, I call out a couple of key areas in terms of just the omnichannel experience, the in-store systems and how they connect with our digital experience and how that connects with our overall customer profile. That is -- those are investments that are underway and that will continue to be a key focal point for us as we continue to invest in those areas, both in terms of unifying our customer experience, making sure that the employee -- the store experience is very comparable to our online. Those are really critical kind of parts for us.
We'll continue to make investments in our guest data management, our CRM platform. You've heard a couple of themes today, both from Kyle and Karl around our membership program, our loyalty, and those will be digitally enabled as well, and we expect to make important investments in those areas and leveraging all the brand content, the storytelling and the overall product to really deliver a best-in-class experience.
Secondly, within our supply chain, and there are key investments to continue in that area as well with also a technology component. Within our supply chain, there are significant investments still to be made to modernize our overall tools and planning tools that will really help us to plan, buy, assort and deliver our stores and deliver product to our stores, and that's a key investment in the next several years. And again, all really with the purpose to ensure that we deliver the right product at the right place at the right time. Beyond that, within our supply chain, continue to make investments to ensure that our capacity and also our DC network continues to support the growth of the business.
And then lastly, on the -- last point I'd make is just the strategic priorities that you heard, both in footwear, women's, Veilance, those are areas that will receive a higher index of investment. So we will continue and expect to invest in those areas to drive both brand awareness and ensuring we have the teams and capabilities to support that growth.
And lastly, just in closing, a couple of points. I'd say we've delivered, as you've seen, tremendous growth over the last 5 years and we're still in the early innings. And we've been able to deliver our last strategic plan ahead of schedule. And as we look forward, we're very confident in the plans that we have ahead of us, both in terms of -- we believe they're very achievable. They're based on a robust market expansion plan enabled by the product strategies that we have in place. And we look forward to be able to share our progress in upcoming updates as we step into this work. Thank you.
And now I will turn it over to Andrew Page, our Group CFO, to share how this fits into the overall group outlook and the overall plans for the company.
All right. This is a different audience. So I won't say that I'm going to go quick so that I can -- because I stand between you and dinner. It's a different audience. So I probably -- I'm going to go quick because I'm the person that stands between you guys and Q&A.
So a couple of things. I'm excited to get up here and talk about the results and give an update on our long-term growth algo. But I do want to start off by, number one, saying thank you to the Arc'teryx team. Outstanding job bringing this to life. Thank you to the executive committee for being here. So we definitely are really excited about where we stand. And I guess the one thing I would jump into is that I know Katie was up here earlier today and noted that she has the best job in the world. I would challenge that being the CFO of Amer is great. I have a really, really, really strong team under me and then I have a really, really strong total platform that is able to deliver solid results like this. And you're going to see the same kind of solid results across every brand in the platform. So with that, let me jump right into what you guys really want to focus on.
Before I get into the financial statements and -- which will include an update to our third quarter as well as our long-term algo, I want to take a minute. I think it's really important to really take a step back and just remind you what got us here and why we have so much confidence in our future, why we have so much confidence and so much success in the things that we've done so far. It's really all about doing what we said we were going to do.
And so I'll go back to James' points this morning. I think he alluded to in the beginning of the day. Our shift to our brand direct model, which triggered the transformation of our company and really unlock the growth of our brands. For many decades prior to 2019 leverage buyout, this company, Amer Sports was -- it was a fairly steady company. It was a sports goods company. It was a slow-growing company, mostly through acquisition, but it had never been fully unlocked for its full potential. But the company always designed and created great product. And as everyone talked about today, that ethos of creating great product, that was never lost. That was something that was consistent through the transition. Everything else has changed.
When we got -- when we -- after the LBO, there were probably 3 or 4 really key things that happened. New ownership, new management of great people, and most importantly, we shifted away from an overly centralized operating structure to this decentralized brand direct model, whereby the autonomy and the responsibility for strategy, execution, financial performance, it all sits with the brands and not at the group level. And that really just unlocked the growth of these great products to get into the hands of consumers and be able to delight them all over the world.
So a couple of key factors that I'll remind you of. I talked about this at our Analyst Day literally 2 years ago, and I would just remind you. So we assembled a strong, talented and experienced leadership team, both at the brand level and at the group level. We transformed our go-to-market strategy for the brands, especially increasing our DTC penetration. We leveraged our operating platform and the advantages that we benefit from, from our outstanding team in Greater China, which accelerated our growth in that large and profitable area. And then last, we divested noncore brands and reinvested into our -- reinvested our resources into our growth drivers.
When you think about that, these changes led to a very meaningful financial unlock. Within 2 years of the LBO, this once sleepy portfolio of centralized technical brands really came alive and we experienced a sizable growth that I'm going to talk about right now. So you look at -- you see this chart right here. Our group revenues, which for decades were stalled at right around $3 billion, are now expected to eclipse $6 billion in 2025. Just let that sink in for a second. That equates to a nearly 20% CAGR over this period, which we believe is one of the best growth trajectories in the sector, and we still have a large growth runway in front of us.
So it's not just the sales that inflected, profitability also meaningfully inflected. Our operating profit dollars have nearly tripled from $271 million in 2021 to approximately $750 million at the midpoint of our 2025 range. And our adjusted operating margin has quickly gone from single digits to low double digits on a meaningfully growing revenue top line. In our view, this is the natural result you have when you put together great assets that have been undermonetized and then you put together the right organization structure and design with great teams who are well incentivized to really grow the business and return value.
Again, set aside the P&L, this also resulted in a tremendous inflection in our EPS and cash flows. Only a few years ago in 2022, we were generating negative operating cash and negative adjusted EPS. We expect to generate hundreds of millions of dollars of operating cash in 2025. And you couple that with $0.77 to $0.82 of EPS based upon our most recent guidance. It's a phenomenal change in about 3.5 years. So importantly, it's not just the P&L that inflected. If you look back to our balance sheet, our balance sheet is now fortified meaningfully better than it was a few years ago. Our net debt pre-IPO was $5.8 billion, a leverage that was well over 5. Paying down debt with proceeds from the IPO and the follow-on offering that we did in late '24 and also using our cash flows from our business at the end of 2025, we'll have about $650 million of net debt, which will be about 0.5 turn compared to 5x at the time of the IPO. And lastly, we're super proud of the work that we've done on our effective tax rate. If you recall, our effective tax rate just a few years ago approached 50%. Right now, we're projecting it to be in the 28% to 30% range.
All right. Now turning to Q3. I shared an update -- we shared an update this morning in the press release. And so I just -- since we've not finalized Q3, we're still going through our normal close process. And so we're not updating full year. I am going to give you an update of Q3, not calling the full year yet. I believe our earnings date is November 19 or somewhere right in that range. We will update full year in our regular Q3 earnings, November 18.
As you saw in our press release, we had a very strong third quarter. We now expect reported revenue growth in the high 20s versus our previous guidance of approximately 20%. We also now expect our adjusted operating margin to be at or above the high end of our range of 12% to 13%. The upside has been driven by continued very strong growth from outdoor performance and an acceleration of our technical apparel led by Arc'teryx. And again, solid growth from Ball & Racquet. So across the board, all segments.
Now moving to our long-term financial algorithm, which you also saw in our press release. We're very happy to present the updated long-term algo, which looks at 5 years plus into the future. Keep in mind that the midpoint of our full year 2025 guidance represents the base year from which this algo is coming from. You juxtapose that against the base year and the last time I provided this was for 2023. Amer Sports expects to deliver annual CAGR in low double digits to mid-teens growth. We expect the growth to be broad-based across all brands, regions and channels. This represents the same algo that we presented at the time of the IPO despite the fact that our company is almost 50% larger, having added almost $2 billion since then. As you consider the cadence of growth on the 5-year horizon, we expect growth to be at or above the high end of the CAGR in the earlier years, and we expect -- during the planning horizon, and we expect it towards the low or middle part of the range at the end of the horizon.
Switching to profitability. At the group level, we expect annual adjusted operating margin expansion to be 30 to 70 basis points or more. Margin expansion will be driven primarily by margin expansion within the segments, positive mix shift between the segments and leveraging corporate expenses, which will grow slower than group sales. Keep in mind that the margin expansion will be driven more by gross margin in the first half of the planning horizon and more by SG&A leverage in the back half of the planning horizon. Although we will always choose to make the necessary investments to maximize long-term value creation, we will also balance this against the importance of exercising organizational expense optimization and discipline during the journey.
Now moving to the segments. The technical apparel algo, Chris just went through, so I don't have much more to add to that. Again, we expect margin to grow 20 to 60 basis points during the planning horizon. If you turn to outdoor performance, as you know, Salomon footwear and apparel have driven revenue and profitability acceleration in this segment. We have elevated our long-term expectations accordingly. We now expect annual CAGR of low double digits to mid-teens. We expect that growth to be broad-based across regions and channels. And similar to the group, we think that -- if you think about the cadence of that growth over the 5-year horizon, we expect growth to be towards at or above the high end of the range of the CAGR in the beginning and towards the low end or the middle of the range in the later years.
We expect sales to be driven by Salomon soft goods, especially in footwear, both sports style and performance franchises. Salomon growth is expected to be strong across regions and channels. We expect Outdoor Performance segment to expand this adjusted operating margin 40 to 80 basis points annually. Margin expansion will be driven predominantly by a mix shift towards soft goods, which carries a higher gross margin and operating margin than winter sports equipment, which will shrink as a percentage of the total. And similar to the group, we expect Outdoor Performance operating margin expansion to be driven more by gross margin in the first half of the planning horizon and more by SG&A leverage in the back half.
For Ball Racket, we expect mid-single digits CAGR over the next 5-plus years. Growth will be driven by a mix shift toward Wilson Tennis 360. Soft goods now represents 15% of the segment sales, and it's growing at a very strong double-digit rate currently and into the future. We expect the hard goods equipment business to continue to grow at low single digits, led by Tennis and Racket Sports. And lastly, we expect annual adjusted operating margin to expand 40 to 80 basis points per year. As you know, Ball & Racquet margins have been constrained in the past few years by the investment in Tennis 360 concept. Margin expansion will be predominantly scaling in the soft goods investment globally, especially as we build out our retail expansion in DTC in China and Europe and North America wholesale.
Lastly, a few other financial considerations as you build your models. We expect our effective tax rate to approach 25% over the planning horizon. We expect CapEx to be around $400 million, which is slightly higher than our previous CapEx level, given the many high-return investment opportunities, especially as we build out DTC footprint and make necessary IT and other infrastructure investments to support our big three opportunities of Arc'teryx, Salomon soft goods and Tennis 360. We expect CapEx to be approximately $400 million in the next couple of years before leveling off to $300 million to $350 million as -- later in the planning horizon.
Now moving to inventory. As we said in our last call, inventory will remain a bit elevated through the rest of the year as Arc'teryx brings in more inventory earlier in the season. It continues -- it increases its use of ocean freight versus air freight, and we're very comfortable with our inventory as a very high percentage of it is in current season. Longer term, we will continue to target inventory growth at or below revenue growth. This will continue to be a key KPI for us. And lastly, although timing is uncertain, we expect to retire the tax inefficient $800 million senior secured notes at some point over the 5-year planning horizon. If you take all this into consideration, long-term growth rates, annual margin expansion and expectations, we expect EPS of $2.50 plus by 2030.
All right. And on that note, let me turn it over. We'll invite the leadership team up here. We'll invite some of the management of Arc'teryx up, and we'll take questions and go through the Q&A process. Thanks.
Okay. Can you just give us a minute to organize. I don't need to get out of your seats. We'll be stepping right into Q&A. So we're going to start the Q&A session. We have four of the leaders right here, Chris, Andrew, James and Stuart. We also have the rest of the Arc'teryx team nearby, especially have category and region-specific questions. On the flanks, we have Yaron from my team and Sarah from my team. We're going to pass out the microphones. Why don't we start by raising your hand. I'm just going to call on people one by one. Why don't we start right here with Laurent upfront? Yaron or Sarah, would you give them the mic, please? Please announce your name and firm so the people on the webcast.
2. Question Answer
Sure. Laurent Vasilescu from BNP Paribas. Thank you very much for such a detailed presentation. Stuart, I'd love to ask about store productivity. You have a lot of experience in that. It was interesting to see the difference between the store productivity in Asia and China relative to North America and Europe. As awareness grows from 7% to 8% beyond, where do you think store productivity can go for these -- the Western markets? And then, Andrew, I'd love to ask, I think you mentioned for outdoor performance stronger growth in the first part of those 5-year plan plus. How should we think about that the same thing for Arc'teryx as well as we think about the algo?
Yes, for sure. I think you hit on the key factor in terms of the regional performance differences. Brand awareness is really the unlock both in the U.S. and in Europe. That said, in 2020, the productivity in North America was just over $1 million per store, and we'll be around $5 million at the end of this year. So we're not going to apologize for moving store productivity from $1 million to $5 million, and we see the opportunity into the future to approach what we're seeing in Asia. So there's no -- there's nothing structural that prevents us from getting to the same numbers that you're seeing in China and in other parts of Asia. The brand momentum in China and APAC is incredible. And as we address the brand awareness challenges in North America and Europe, we expect to see similar trends.
And then just on the other question, I think your question was just around the cadence of the growth -- mid-teens CAGR that we outlined for Arc'teryx. And I guess, similar to the other brands as well, we expect in the near term in the initial years of the plan to be above the mid-teens growth rate, and that would normalize as the -- as we progress to the plan to get to a 15 GGR over the 5-year period.
Great. Really insightful. I guess just on the Arc'teryx brands potential, you talked about at some point going beyond $5 billion in revenue for Arc'teryx. I mean, like what's the long-term potential beyond the $5 billion, sorry. And how do you get there without crossing this line where the performance element is compromised that we seem like some other brands in the past tend to become more lifestyle driven? And then on the gross margin outlook for Arc'teryx, could you talk a little bit more about the mix shift considerations? Because I would think with China growing slower in future years, that might be like a negative for the gross margin?
Yes. The first part of your question, we haven't quantified the upside for our charge beyond the $5 billion target that we have offered. I would say $5 billion is within our reach. I'll just put it that way. What I would suggest is appropriate to consider is the 3 segments that I described in which we compete and win share. So we dominate the outdoor segment as the Pinnacle brand within that segment of the industry. We win share through a disruptive strategy in premium and luxury outerwear and we are a small but growing competitor in lot athletic footwear and apparel. That last category is very large. And the runway we have there, in particular, is exciting, and our footwear strategy is aimed squarely at that. And so the potential for the brand is amplified as a result of that the diversity of markets and segments in which we're winning market share.
So I hesitate to sort of put a number out there beyond $5 billion. We're very confident in that and there's growth beyond. Your second question on gross margin is a good one. And we're in that part of the year where we're setting 5-year targets, and we're building models and we're looking at how each region is going to perform. And that's a question James actually asked me through the process. So we -- we've very carefully calibrated the growth rates in a manner that where we're gaining leverage in those other markets as they grow and are able to leverage their cost structure. We tune that in a manner that ensures we're able to continue to expand our operating profit. And so the plans that we have, we believe, are very achievable both top line gross margin and bottom line.
Brooke Roach from Goldman Sachs, and then Alex Straton after that.
Brooke Roach of Goldman Sachs. Stuart, I'm very curious to hear your thoughts on newcomer acquisition versus expanding closet share of your current customers, particularly in the geographies where you have the lowest brand awareness, such as North America and EMEA. Where are you getting that incremental customer from? Is it specific demographic? What gives you confidence in that incremental customer? And how should we be thinking about that over the 5-year planning horizon?
Yes. In those markets, like the U.S. and Europe where our brand awareness is lowest, we are it is a sort of a wide open field. There's a lot of -- the football analogy. There's a lot of green space in front of us, where we're attracting customers both from those hard core mountain athletes who are discovering us in the mountain town strategy that we have sort of so that idea, Park City, for example, we're opening later this year. We'll be able to capture those known athletes. But also as people are traveling from New York and Los Angeles and other cities and vacationing in Aspen, where we're opening as well this year, [ Bouch ], Park City, Whistler, they're introduced to the ran very authentic way. And so we're able to access those affluent customers who participate in the sports by exposing them to the brand, not only in their hometown in New York and L.A., but also they see it at a place of practice, which is important and how these strategies complement each other.
And then obviously, in the major epicenters, which has been a cornerstone of our expansion strategy around the world, we focus on New York, Los Angeles, San Francisco, Chicago, we poured our community efforts, our marketing dollars into those markets, and we see strong returns. So that gives us confidence that we have a good algorithm to raise brand awareness, acquire new guests. There's so much upside in these markets as we're capturing guests across the broad economics sort of spectrum of customer segments, it's we're in a really strong position to just continue to grow share across all of the segments you heard Karl described. And we also get a question related to that around like the product assortment and our icons that you heard Matt described, is 20% of the assortment is driving 30% of the revenue. That's where we're winning as we're introducing new guests to the brand and to the products that we sell.
You look at other markets, China, in particular, where we're more or further along on the journey, that's where the assortment evolution becomes more important, where we're more known in China, so there's more of a demand on the existing icons and the demand for newness. And so the innovation and the evolution of the store becomes more important in those types of markets. A lot of runway, a lot of green space in front of us in the U.S., in particular.
Alex Straton at Morgan Stanley. Maybe for Andrew or James, just on the outdoor performance segment. It feels like that's where you've raised targets the most from a growth and profitability perspective across the business and where perhaps the story has changed the most since the IPO. So can you just talk a little bit about what's changed at that segment now versus when we met with you back then and also just to mentalize how you achieve those growth rates?
Yes. So I -- Alex, I would say that the story has definitely evolved. It's not as much change. We always anticipated that solid would inflect. I think that there are a couple of things that you can look to the European home market, we really reset our sales team there, our go-to-market there. We cut off the long tail of some undifferentiated wholesale partners. We really doubled down on our key strategic partners. We've amplified our new franchises. So it's always been a market that understood the hiking DNA of the brand. But as we've amplified sports style as well in that market. And as we've amplified the other performance products. So the -- our running platform and our gravel platform that has also helped, and it really -- and it benefits that the consumer in that market knows us and that we've gotten stronger relationships with our key strategic partner, some of the big boxes like Foot Locker and JD.
We've reset our go-to-market team, our sales team and really got a sharp point there. Additionally, as you think back to the IPO, we were in the early stages of really amplifying, especially our sports style offering in Asia, the XT6 led by the XT6 franchise that franchise resonates extremely well with that community, and it resonates. It resonates with the younger community. It resonates with the female community there. So we unlock a newer franchise that was really primed for growth in Asia. That franchise, we've reset our go-to-market strategy and teams in Europe. We've brought the XT6 franchise. I'm sorry, that sports-style franchise into Europe has been received well. And we've also introduced and expanded our performance line with our running and gravel platform.
So when you add those things up, we always had a great product and you add those -- you add all of those other assets around that great product. And we saw it coming. I mean, we always talked about Amer being -- having a 3-legged stool. And at the time of the IPO, Arc'teryx was much more mature, and we were heavily reliant upon that stool, which we still are we thought Salomon was coming, and we anticipate that Tennis 360 with Wilson will be another third leg of this stool that will inflect as we really optimize and perfect that go-to-market strategy around the globe.
Yes, I still want to enhance on critical points for Salomon specifically. So the new franchise we create in the market we call more than outdoor sneakers. We are still only player in this segment, which really give us the opportunity to serve new kind of a new group of the consumers, which is a younger female consumers. Store style, I mean, we call a store style dedicated shaft, we opened. You really look at the consumer profiles, our women consumers, we represent 50% to 55% of the total base, so which is completely different from, I would say, normal outdoor brands, okay? So this is the kind of a white space we really created and give us the opportunity to catch the sneak market share from different groups of the consumers. I'll just add on one more...
Paul Lejuez, Citigroup. Stuart, for you and then maybe, James. So when you think about the path to $5 billion in sales, how do you think about pricing architecture to get there. Like what has to happen? Do you take prices up and that's part of what helps you get to the higher numbers? What happened specifically in that product that's making up 70% of the sales do prices hold? Do they go up? Do they need to come down to attract more consumers to the brand on the road getting that big. So I'm just curious if you think about pricing on the path to that $5 billion. And then James, I asked this of a different CEO this week. When we look at all these numbers that are presented here, when we're sitting here 5 years from now, which numbers are you going to look at and be pretty disappointed if you don't exceed pretty handily?
Yes, I'll go first. So the short answer, Paul, is we don't need to change anything in our pricing architecture to hit the numbers. We will continue to refine the price architecture is probably the best way to describe it. There's no there's more movement or intentional element of the strategy to move the pricing up or down. I think there's tactical moves that we'll make across different parts of the assortment to expand certain elements of the price architecture where we see opportunities. We're always attuned to what's happening with the consumer, and we're always adjusting prices based on a range of factors, but we're reluctant to change price, particularly for our icons as we have. That's an important part of the understanding, the identity of the product in the market. We think of our alpha, we think of our Adam jackets, those prices are pretty set.
We made some changes a few years ago where we felt like the market actually caught up and in certain cases, lesser brands and lesser quality in certain cases, higher than us. And so we reset prices there. But -- and we continue to monitor and ensure that the value equation for the quality, the durability, the performance we feel is appropriately positioned versus the competition and versus where the guest is on that journey. But short answer, nothing needs to change, but we're always watching and adjusting the price architecture where appropriate.
Paul, I'll say before James answered this question. We believe that the algo is prudent and so we believe -- we feel good about the algo across the brands and during the planning horizon.
Yes. And you guys sitting here and listen the order presentation from the team Arc'teryx. So I think -- so $5 billion by 2030 for Arc'teryx brands definitely coming from the management team, we have a very high-level company to achieve that. So I think -- I mean, this is obviously but obviously, the Salomon still will also call out. I mean we don't disclose too much on these brands. But we also got a very high level of confidence to achieve our long-term strategic goals for Salomon brands.
Michael Binetti in the back and then John Kernan.
Michael Binetti with Evercore. Two questions. Maybe I'll start with the U.S. to kind of continue with what Paul was getting at. As you think about your answer about where store-level economics can go in the U.S. and the Western marks relative to the in China, have you tested your pricing architecture in some of the Tier 2 cities in the U.S.? Is that a big part of the growth component as you think about where North America will be when it's the size of China in 2030? And what do you know about how some of the secondary markets in the U.S. will absorb your pricing because you're at the pinnacle of the category, right?
We are at the pinnacle of the category. We're in markets today like Portland, Oregon and Seattle, Washington. We're in Washington, D.C., Boston, I mean, is there still strong markets -- the -- what I would say is our pricing architecture has a wide range. You think about our cover our 2 top items that are what I would describe as the entry point for most customers into our business to the Adam Hoodie and a Covert Cardigan and those range between really about $150 to $300. So the entry point is not typically a $900 heart shelf. So there's, I think, a broad enough range of products with a pricing architecture that is broad enough for us to win share successfully across the U.S. so that our pricing architecture doesn't present an obstacle for us.
Certainly, as we introduce folks to the brand and the quality, they'll see the value equation for those higher priced items. And that's been the pattern that we've seen around the world. So I think more important to our success in the U.S. across every market is not a price architecture, it's brand awareness. When people understand the brand and see the value that we bring to the table, they're willing to pay.
If I could follow up one on China then. I think at the IPO, you spoke to unit economics in 2013 with average stores at about $6 million with EBITDA, 4-wall margins in the high 50s. Today, you showed us $10 million, rolled it forward a couple of years to $10 million with EBITDA margins closer to $50 million. Can you just help us bridge that you're adding big -- much bigger revenue stores? Is there a higher cost structure? And then I'm more interested in, I guess, the incremental China unit from here, are there more $8 million, $10 million, $12 million locations? Or how do we think about the locations as you keep rolling off stores?
Yes, the numbers that we shared at the time of the IPO for China, the unit economics were $6.5 million, $7 million top line. And what we said at that time was greater than 40% 4-wall profit, 4-wall EBITDA. What we showed you today is the strong performance, the improved profitability that has occurred since the IPO, where our full wall profit is now approximating 50%. So that story holds. The stores as we evolve the strategy in China, the stores are larger, which part of the higher top line number, but they're also more productive. And there's greater flow through on the cost structure as a result of that top line number. We don't expect to see those unit economics diminish as we continue to grow and add stores in China. So as we talk about that 200 store mark brand store mark as a potential for China, that is at or above the same unit economics.
John Kernan up here. And then Jon Komp from Baird in the back next.
John Kernan, TD Cowen. Andrew and Chris, you've been very conservative with your guidance for technical apparel since the IPO, you've been reporting upside to it. When you think about the mid-teens top line, the 20 to 60 basis points of EBIT margin expansion what do you think you're being most conservative? You just used the term prudent, and you're saying that you're going to be at or above the high end early on. So it seems like very prudent and somewhat conservative. Just curious the longer-term plan and where you think you're most conservative?
I mean it was at or above the high end early on and at or below and at the midpoint or below later on as the business continues to grow. I think when you think about kind of the methodology and the thought process around our guidance, it is important for us to deliver value to our consumers. It's important to us to deliver value and return to our shareholders as evidenced by the bottom line expansion. But it's also important for us to do what we said we were going to do. And so when I combine guidance that reflects us delivering and putting confidence into the market, it reflects us returning value to our shareholders, and most importantly, it reflects us delivering delightful product and experiences to our consumers. That's -- the combination of those 3 things is what's reflected in our guidance.
I don't -- I'm not going to sit here and tell you that I have -- there's a methodology for we are conservative on top line or we're conservative on the bottom line. It's just -- we're really trying to delight our consumers do what we said we were going to do return value to the shareholders and be able to do that confidently. And that's what our guidance really reflects.
And then a follow-up for Stuart. Just on footwear, a lot of numbers got thrown out today. Can you remind us where this is going as a percent of the mix, how fast the category is going to grow. And what is the differentiating factor of Arc'teryx footwear and what's a pretty competitive landscape?
Yes. The long-term goal we would have for footwear would be 20% of sales. It's going to take us a while to get there. Likely, in our internal plans, we don't achieve that in the next 5 years, but we see very healthy expansion towards that goal. The differentiating factor is probably a lot of what you heard from Josh and the team earlier today. As a company that is built on performance and quality, the expectations that our customers have in that regard is what we strive to meet in our footwear focused on Mountain Sports. And so it's mountain running, as we call it, trail running, climbing in the footwear that supports those activities, specifically with our innovation from a technology standpoint and the highest quality available, highest performance and quality available in the market, that is the essence of our competitive position for footwear.
Jon Komp from Baird. Just first on the short term for Arc'teryx, can you comment more on the reacceleration you reported? And it seems like there's some good drivers into next year, better inventory availability, getting past some of the outlet consolidation. So just any comment there. And then, Stuart, just a broader question getting at the U.S. opportunity. When you look at the dominant share you have in the Canada market, how does that inform you about the ultimate potential in the U.S. if it does?
So yes, for sure. The reacceleration we've seen great trends in our business that fundamentally have continued. And quarter-to-quarter we've seen the comp number ebb and flow, the information that you heard in the press release reflects strong performance that we're seeing now sequentially versus the second quarter that we're excited to report fully in November. But part of that is the inventory position that we enjoy translate that into strong performance. But importantly, it's the ongoing building blocks we described in the presentation today around how we're building women's, how we're building footwear, how we're building balance and our core performance that Matt talked about as well, all those things fuel a very healthy an exciting trend in our comp results. We expect that to continue and look forward to sharing more in November.
Your second question, remind me, was -- so Canada, there's a few examples of companies that born in British Columbia that have expanded into the U.S. and in certain ways, we're following similar patterns where we have dominant awareness and market share in Canada that following a disciplined expansion plan, we're able to translate that into the U.S. We're seeing similar patterns. Just the scale, obviously, of the U.S. market is very attractive. And as we continue to drive brand awareness in those key markets that we described earlier, we're confident we're going to see an accelerating brand awareness. I think Karl described how even this year, we've seen really strong increases in brand awareness that is translating into success in our numbers and our revenue numbers. So we believe we're in a nice part of the curve as we look forward over the next few years for expanding our business in the U.S.
Chris Nardone on behalf of Bank of America. Just a couple of questions. Just one more to follow up on China. So how should we think about the step down in China growth, low double digits, especially given the recent trajectory and your comments on holding the store productivity? Is there anything from a competitive landscape you're seeing? Or is it more tied to just being aware of macro? And then just one really quick one on balance. Just what's in the plan here in terms of potential to open stand-alone stores? And what's your strategy to increase brand awareness? Because I imagine it's even much lower than Arc'teryx.
Yes. For China, we're thrilled with the performance of our business in China, it's really exceptional. And the numbers that you saw are by any perspective, fantastic. And so as that business has grown, just naturally sort of the law of large numbers, we're going to see our increasing revenue or revenue growth rates are going to moderate, just -- and that's not a negative reflection on the business or the health of it is just the business is larger and as we -- as you grow the absolute growth rate moderates.
And your second question on Veilance, you're right. And a lot of ways, Veilance is still a secret. And so part of the strategy for Veilance is to drive awareness. We believe it's important that Veilance is closely associated with our parts. And so the distribution model reflects that today. And you will recall that Marissa described how investments in marketing are an important priority for us, and that's reflecting the new strategy and the new team versus helping us build. Veilance has been on the back burner for a number of years. And so we're excited now to actually put together a coherent growth strategy under Marissa's leadership so that's happening for the first time really ever.
And we will absolutely explore stand-alone store opportunities for Veilance testing pop-up locations first. We have a couple of versions of a standalone store, one in Beijing, one in Tokyo that our mixed with some, Arc'teryx product as well, but we will definitely test stand-alone locations Marissa described and excited to see what potential that could ultimately offer.
Irwin over here.
[ Irwin Romberg ] from HSBC. Maybe just a follow-up for Stuart on brand awareness. You talked about Europe and the U.S. being in the high single digits. Can you remind us where Canada and China are? And then secondly, a question for James. If you look at the planning horizon, you're moving from being very levered to generating tons of cash and you have a really good track record at turning around brands. Is there a greater chance that you would be interested to purchase other brands in the future? Or is there a greater chance that you would return cash to shareholders?
Brand awareness for our tariffs in Canada is around 25% versus the numbers that Karl has shared with you earlier. And we see in China, a level of brand awareness that's comparable to Canada. So it's really -- and those numbers that we're quoting are unaided brand awareness. Aided brand awareness would be much higher.
Okay. First of all, just repeat my statement in my speech, and we are -- the company is still on the Phase I. And we still see tremendous opportunity for all our brands in our portfolio in the companies, they all got tremendous opportunity to grow in the future. So obviously, the change here is that we will put all the efforts, all the focus to figure out how we unlock the potential for the brands, especially Arc'teryx, Salomon and Wilson in the future. So that's number one. Number two, yes, okay. We are pretty unique in the industry, and we are the company-owned portfolio brands. They all got a distinguished position in the dedicated segment. which already approved in the past 5 years, it's workable as to give us a very good competitive edge in the market. So we will not, I mean, stop to looking for the opportunities, okay? So I think -- I mean -- but it's not the #1 priority for us today. So I mean, if something happened. I mean we don't know, okay. So I mean we will pay a good level of attention and the market dynamics and see what's the right fit for us, okay?
So -- in terms of the cash position, and I think that we are -- as Andrew mentioned, we still got $800 million debts, okay? And so if we created a positive cash flow for us is its #1 priority, how we pay down our debt in the right way. And we also, our business is still on a very healthy growth pattern double-digit growth for coming 5 years. So we will continue to utilize our cash to support other brands' development in the company.
Right here up front, Dustin.
Dustin Wei from Morgan Stanley China consumer team. So regarding the pricing differential across the region, I remember that China was probably -- the product in China is probably like 15%, 20% higher than other regions. So what's the latest update on that kind of number across the region? And then related to the competition, China is still, I think, the outdoor segment still growing very nicely amid the current macro environment with solar growth in overall sportswear but the competition is also picking up, especially they are increasingly more emerging local brands. So how do we think about longer term that strong pricing in China to maintain that but in reaction to that, I think, rising competition?
Yes. The price differential between China and the U.S. is just over 20% in total. For our core items, our icons, if you will, it's between 15% and 20%. We see that as appropriate to cover the cross-border cost of operations that we have to operate in China. It's also consistent with industry practice. We don't see that as an obstacle in any way to our competitiveness in China.
I give you the response for your second question in terms of a competitive landscape in China. For Arc'teryx, as Stuart already mentioned, we are really positioned the Pinnacle, high technical outdoor or centric outdoor positioning. That positioning, I think, today, we don't have clear competitors in China market, okay? So we need to do whatever we think it's right for our brands. But on the other side, we also see certain domestic brands like Paris. They are growing very fast recently and the -- but for us, it's also -- I mean, we need to build up a much strong competitive age, especially, I mean, the team also introduced, I mean, no matter the communities, but also the ReBIRD service, how we provide premium high-quality service to our consumers so that the loyalty can be well secured.
So that's kind of besides the high-quality innovative products to the market. So I think it's -- obviously, we are the only brands today, cross-border in the world, to grant the level of the service like the ReBIRD service to repair and the gears and give the best service to our customers. So we will continue to invest that engine to secure the loyalty of our consumers.
We have CICC team here in front.
This is [indiscernible] from CICC. I have a question in terms of the footwear business. We see like Salomon and other competitors are sponsoring lots of sports events like UTMB or something like that, but we don't see many Arc'teryx has do such a marketing plan. So do we -- can we have more picture about the Arc'teryx footwear's marketing?
I just want to make sure we understand the question, [indiscernible]. Is the question, are we going to do more sports marketing and similar to the way we do with Salomon?
Yes. Yes. Our position with athlete endorsements has been aimed at nonpodium activities to this point. Footwear is one category we're exploring what the right position for Arc'teryx should be. We have had a number of our sponsored athletes competing and winning races. And so we expect that will continue. We'll continue to add athletes to our competing in races like the UTMB. And in footwear, we expect to see more podium focused athletes than in other sportswear where we sponsor pro athletes. The degree to that, I think Salomon has a unique focus that Arc'teryx is not looking to mimic. We'll have our own approach to athlete's sponsorship. And importantly, the authenticity of performance for our guests off podium type activities is more worth the identity of Arc'teryx is. But we will participate in footwear in that part of the market where we believe it's appropriate.
We have time for one more question here in the middle.
This is [indiscernible] One question for Arc'teryx. So we were around -- so we will reach around 300 stores by the end of 2030. So if I remember right, we also mentioned that the long-term goal is around 500 to 600. So from the prospective origin, will the store expansion, the pace were quite similar after the -- I mean 2030. And another question is about the GP margin. So we are also making optimization of the supply chain and also making positive impact on -- so for the future, will the GP market like more such as the DTC contribution and also the full price strategy? Or we also like satisfy with the factory mix right now?
Yes. We haven't given details on our growth beyond 2030. And -- but really confident in what we have shared. From a margin standpoint, in many ways, we've got a lot of opportunities that are not yet tapped. So in my prior experience, supply chain opportunities to drive efficiency into our sourcing strategies are still available to us. And so there's upside from lowering our product costs just through how we partner with our suppliers that we have really not fully begun to explore or capitalize on.
So there's the opportunity for us to improve the product costing into the future that is meaningful. And the pricing architecture that we talked about earlier we're not viewing that as a meaningful part of the gross margin opportunity.
We will adjust prices based on market dynamics to ensure our products are priced where they should be versus the competition. I don't know, Andrew, you want to add anything on that?
I think you nailed it with regard to our margin opportunities. We've not given a lot of detailed gross margin expansion. Well, what I will say is if you think back to the IPO, we talked about gross margin expanding 300-plus basis points. We've done that. It's going to be driven primarily by the mix shift of Arc'teryx growing faster than the rest of the portfolio and being our highest margin. What you will see going forward is Arc'teryx gross margin expansion, not being as much of a driver of accretion because of the fact that Salomon and outdoor performance is growing. And that is a strong trend and a positive trend for the organization, but the margins are lower. And so to the extent that Salomon or outdoor performance grows faster than the portfolio to the extent that it approaches Arc'teryx growth rate, it will cause a slower growth in the gross margin expansion. But again, we see that as a positive business trend.
Okay. Thank you very much, Arc'teryx and group management team, everyone, for joining. I really appreciate your participation. This officially ends the webcast online. Thank you, everyone, online for joining.
Financial data from Amer Sports
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 7,436 7,436 |
30%
30%
100%
|
|
| - Direct Costs | 2,988 2,988 |
22%
22%
40%
|
|
| Gross Profit | 4,447 4,447 |
37%
37%
60%
|
|
| - Selling and Administrative Expenses | 3,530 3,530 |
33%
33%
47%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 1,357 1,357 |
53%
53%
18%
|
|
| - Depreciation and Amortization | 440 440 |
43%
43%
6%
|
|
| EBIT (Operating Income) EBIT | 917 917 |
58%
58%
12%
|
|
| Net Profit | 546 546 |
144%
144%
7%
|
|
In millions USD.
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Company Profile
Amer Sports, Inc. engages in manufacturing, marketing, and selling sports equipment, apparel, and footwear. It operates through the following segments: Technical Apparel, Outdoor Performance, and Ball and Racquet Sports. The Technical Apparel segment refers to outdoor apparel, footwear, and accessories. It includes the Arc’teryx and Peak Performance brands. The Outdoor Performance segment focuses on outdoor apparel, footwear, accessories, and winter sports equipment. It includes the Salomon, Atomic, Armada, and ENVE brands. The Ball and Racquet Sports segment relates to sports equipment, apparel, and accessories. It includes the Wilson, Louisville Slugger, DeMarini, EvoShield, Atec, and Luxilon brands. The company was founded on January 03, 2020 and is headquartered in George Town, Cayman Islands.
StocksGuide Premium
| Head office | Cayman Islands |
| CEO | Mr. Zheng |
| Employees | 15,400 |
| Founded | 2020 |
| Website | www.amersports.com |
