Profit warning slices 16% from Amer Sports stock value

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The world's largest supplier of winter sports equipment Amer Sports issued a profit warning on Thursday, indicating that the shortage of snow last winter had reduced sales during 2007 by some 27% relative to the previous year.
      This was in spite of markedly improved conditions on the pistes in December of last year. Retailers have been reluctant to place big orders, as they are anxious to avoid a repeat of last winter, when poor conditions left them with a great deal of surplus stock to dispose of.
      Investors were quick to take the hint and the company's stock went into a steep dive, shedding nearly 17% in Helsinki trading.
     
The company also announced it would be making major changes in the structure of the group's Winter and Outdoor business, which will result in a one-time cost estimated at around EUR 40 million.
      There will also be job reductions: around 400 members of staff worldwide will be made redundant or offered retirement terms during the next 12 months.
     
Another winter like last year would be hugely destructive for the company, which numbers among its brands the Alpine ski manufacturer Atomic and the strong cross-country skiing brand Salomon.
      In Amer's strongest market areas, such as the Alps and North America, the snow situation is at present quite good, but Amer is nevertheless seeking to reduce its dependence on snow, among other things by stepping up its interest in sports textiles and footwear.
     
The decline in the Amer Sport's stock price continued on Friday, albeit at a reduced pace.
      Some analysts believe the stock is now fairly valued, but worries over slowing consumer spending in the United States - which would hit leisure items - have kept investors edgy.
      By 14:00 on Friday, the share was trading at around EUR 14.50, having opened at EUR 14.77 and after dipping below 14 euros at one point.
     


Previously in HS International Edition:
  Mysterious British billionaire acquires 10% stake in Amer Sports (6.11.2007)

Links:
  Amer Sports Stock Exchange Release 10.1.2008

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