Premarket Movers｜Amer Sports Shares Slumped 9% As Arc’teryx Fireworks in Tibet Trigger Backlash And Probe

Amer Sports Shares Slumped 9% As Arc’teryx Fireworks in Tibet Trigger Backlash And Probe.

Chinese authorities launched an investigation after a fireworks show in Tibet sponsored by the outdoor gear maker Arc’teryx sparked a backlash on social media because of concern about the effect on the environment.

A team has been sent to investigate, the municipal government in Shigatse said in a statement Sunday. Arc’teryx — a brand of Hong Kong-traded Anta Sports Products Ltd. — apologized and pledged remedial actions in a statement posted on its Weibo account Sunday, acknowledging insufficient assessment of the boundaries of artistic expression.

Anta shares fell as much as 7.3% on Monday, the most in three weeks.

The incident could lead to Anta missing second-half and 2026 pretax-profit consensus by 6%, Bloomberg Intelligence analyst Catherine Lim said in a note. Erosion of consumer trust could hurt Arc’teryx’s traction among sustainability-minded urban shoppers, she said.

Anta, though, may avoid any fallout because so far the negative publicity has been limited to its Arc’teryx brand, Citigroup analysts Xiaopo Wei and Vincent Young said in a note.

Arc’teryx teamed up with Cai Guo-Qiang, a pyrotechnics artist, on the fireworks project dubbed “Rising Dragon” on Sept. 19 in Shigatse city, at an altitude of 5,500 meters (18,045 feet). A video of the show was released on Saturday, triggering criticism on social media that the event contradicted the outdoor brand’s image of protecting nature. Some expressed their intention to boycott Arc’teryx products. The video has since been retracted.

Arc’teryx will engage a professional environmental protection agency to conduct a transparent assessment, it said in the statement.

The China Advertising Association, in a statement, said it deeply regretted the incident and called on the industry to uphold ethical, ecological and social values. Ignoring ecological protections will trigger a crisis of trust for brands and the entire industry as consumers develop a growing awareness about protecting the environment and corporate social responsibilities, it said.

A consortium led by Anta acquired Amer Sports Inc. in 2019, aiming to bring high-end athletic equipment to China’s increasingly wealthy middle class. Amer owns brands including Arc’teryx and Atomic winter equipment.