Amer Sports feeling the heat

Amer Sports Oyj, the Finnish maker of Atomic skis and Wilson golf clubs, forecast a loss this year at its winter-sports units after higher-than-average temperatures prompted retailers to order less ski and snowboard equipment.

Sales slid 41 percent in the first half at Atomic, and revenue from Salomon winter-sports gear dropped 38 percent, the Helsinki-based company said Thursday. Orders for the coming season have plunged by a quarter, according to Amer.

Amer Sports Corp. has its North American winter sports headquarters — where the Suunto, Salomon and Atomic brands are consolidated — in Ogden, with 230 jobs.

Amer said Aug. 7 annual profit would miss its forecast because of the drop in winter-season orders. Many Alpine regions had the warmest November on record last year, delaying the arrival of snow and hurting spending on ski and snowboard gear. Rival Head NV on Thursday stuck to a forecast for a decline of as much as 30 percent across the industry in orders for downhill-skiing gear.

"Preorders are down 25 percent and, therefore, winter sports will be unprofitable this year," said Peter Farren, an analyst at Bryan Garnier & Cie. in London. He cut estimates for Amer's per-share profit by 14 percent for this year and 16 percent for 2008. "They had already flagged a few days ago that profit won't reach last year's level," Farren said.

Its other units are on track, said Amer, which supplies golf clubs to British Open champion Padraig Harrington of Ireland. The net loss shrank to 10.6 million euros ($15 million) in the quarter from 10.9 million euros a year earlier as costs dropped. Five analysts whose estimates were compiled by Bloomberg expected the loss to widen to 11.5 million euros, the average shows.

"We have an exceptional year, and we don't know how this winter season will develop," Chief Executive Officer Roger Talermo said Thursday on a conference call. "It will possibly take a few years until the recovery occurs. It was a very tough winter for many players."

Preorders for the next winter season came three to five weeks later this year than in 2006, so the company was not aware until August of the decline's effect on annual profit, according to the CEO. Its brands are boosting their share of advance orders, he said.

Amer had sales of about 529 million euros last year from winter-sports equipment, or around 30 percent of the total. The company expanded in winter athletics in 2005 by buying Salomon from Adidas AG for 485 million euros. Winter-sports revenue continued to fall in this year's second quarter, though at a slower pace than in the first three months.