Saying third-quarter outcomes on Tuesday morning, Puma listed a number of causes for its considerably sluggish efficiency up to now this 12 months.
The German sportswear model’s revenues fell 0.1 p.c to 2.31 billion euros. When adjusted for foreign money results, gross sales had been 5 p.c up. Analysts had beforehand forecast revenues of two.36 billion euros for the three-month interval and that is the second quarter in a row that Puma has introduced outcomes under consensus expectations.
As executives defined, Puma’s challenges have included foreign money headwinds, rising freight prices and weak shopper demand in China.
On Tuesday morning, throughout a web-based press convention, Puma chief govt Arne Freundt conceded that the corporate may quickly have one other concern to cope with.
Between July and September, the German sportswear model grew essentially the most within the Americas, with 11.4 p.c progress. North American gross sales grew 6.1 p.c, foreign money adjusted, and Latin America 20.4 p.c.
Nonetheless Donald Trump’s imminent return to the White Home appeared to fret shareholders in each Puma and its a lot bigger competitor, Adidas. Throughout campaigning, Trump has promised extra tariffs on imported items and traders are nervous that would trigger the German firms issues sooner or later.
Puma shares fell 4.5 p.c in worth throughout morning buying and selling and Adidas shares eased 2.6 p.c.
Adidas is probably going higher positioned to cope with new or greater tariffs, German media reported, as a result of it has beforehand diminished the quantity of Chinese language-sourced product it imports into the U.S. However round a 3rd of Puma merchandise going into the U.S. are nonetheless made in China.
Freundt argued Puma was ready for such eventualities. “It’s clear we’re following and specializing in a multi-country-of-origin technique,” the manager informed journalists. “We now have consolidated our provider base and we now have suppliers who can cater out of a number of nations. In a risky atmosphere we’re very nicely positioned to react swiftly, if sure tariffs are growing.”
For the entire second half of this 12 months, Puma expects to see progress within the Americas proceed and predicts this can land within the low-to-mid single digits.
In Europe, the Center East and Africa, Puma gross sales gained solely 0.8 p.c. The corporate blamed this on powerful comparable figures from the earlier 12 months. In Europe itself, Puma truly noticed currency-neutral progress of two.2 p.c. However in japanese Europe, the Center East and Africa, revenues fell 3.8 p.c.
Within the third quarter of final 12 months, the latter zone had seen progress of 64 p.c, Freundt identified. “We noticed reopening results in Ukraine and really robust progress pushed by the Center East and the opening of quite a lot of franchise shops in Saudi Arabia,” he defined, including that Puma anticipated a return to progress on this territory within the subsequent quarter.
In Asia-Pacific, Puma recorded a rise of three p.c. This was regardless of “softer shopper demand in Higher China,” the corporate famous.
Footwear gross sales — Puma’s largest phase — rose 9.3 p.c within the quarter, pushed by its efficiency class, the corporate stated. Equipment gross sales gained 2.9 p.c whereas attire gross sales slipped 0.7 p.c.
These numbers had been pushed by Puma’s efficiency classes and sports activities model, Freundt confirmed, earlier than elaborating on how the corporate deliberate to speed up progress within the close to future.
With its Palermo shoe, Puma is at the moment benefitting from the identical terrace development that’s led to massive numbers at Adidas. However Freundt predicted that subsequent 12 months, Puma’s Speedcat shoe can be even greater. The Speedcat, initially developed for motor racing within the Nineteen Eighties, is a part of the more and more common “low profile” development in footwear.
“For me, after being 13 years with the corporate, that is the primary time we now have entered the Lyst Index,” Freundt stated, referring to Lyst’s quarterly rankings of vogue’s hottest manufacturers. “[Speedcat] made it to a really robust quantity three place. That’s one thing that we now have by no means achieved earlier than. I believe it’s clear we’re onto one thing highly regarded.”
Puma plans extra colours for the Speedcat subsequent 12 months and, in response to preliminary forecasts, ought to have the ability to promote between 4 million and 6 million pairs throughout 2025.
Puma additionally plans to spice up what Freundt calls its “progressive trainers.” That features the Mostro and Inhale sneakers, favored by musician A$AP Rocky, in addition to the soon-to-be-released Inverse, the primary shoe designed within the U.S., particularly for U.S. customers.
All this could result in a “stronger basis” and “robust however sustainable progress,” Freundt argued.
“For This fall, we anticipate low double-digit gross sales progress in fixed foreign money as a result of our robust order e-book,” Puma’s monetary officer Markus Neubrand added.
Analysts from the likes of Deutsche Financial institution, Barclays, Jeffries and the Royal Financial institution of Canada agreed that Puma had largely carried out as anticipated and famous that the corporate’s third -quarter EBIT, which rose 0.3 p.c to 237 million euros, was barely above the market consensus. Robert Krankowski, a market analyst with Switzerland’s UBS, additionally expressed issues that Puma’s finest outcomes this quarter had been depending on gross sales improvement in America.
Puma confirmed its steerage for the complete 12 months. It nonetheless expects progress to return within the mid-single digits. Puma had lowered estimates for EBIT within the second quarter barely and reconfirmed that it expects EBIT someplace between 620 million and 670 million euros for all of 2024.
