Despite market volatility, Puma has a positive third quarter – WWD

BERLIN- Competitors like Nike and Adidas have announced problems in recent weeks, but German sportswear brand Puma continued to break its own records in the third quarter.

During the July-September period, Puma’s sales increased by 16.9%, excluding currency, to reach 2.35 billion euros. It is only the second time that Puma, the world’s third-largest sportswear company, has crossed the 2 billion euro mark in a quarter. The first time was this summer.

“Despite all the global uncertainties, the third quarter was… the best quarter in Puma’s history,” chief executive Bjorn Gulden said in a statement. “Improved product availability [was] thanks to a more stable supply chain, better than expected sales and the continued momentum of the global Puma brand,” he explained.

The company’s results were also better than market analysts had predicted.

Puma’s home market of Europe continued to be the German brand’s best territory, and sales there increased 18.5%, excluding currency, in the third quarter to 971.7. millions of euros.

North America has been a top priority for Puma over the past few years, with the brand completing its first full basketball season in 2019, with the help of music mogul Jay Z, the brand’s creative director. for the dedicated Puma Hoops line. The strategy continued to pay off this quarter. In the Americas, Puma sales increased by 18.8%, excluding currency, to reach 931.8 million euros. During this year, Puma’s sales in the Americas increased by 28.1% to reach 2.69 billion euros.

Unlike its competitor Adidas, Puma is not as exposed to the Chinese market. Previously, about a fifth of its sales came from the Asia-Pacific region. Ongoing COVID-19 shutdowns and a Chinese consumer boycott of Western goods have caused various problems for Adidas, and Germany’s biggest brand issued a profit warning late last week. Meanwhile, Puma’s sales in the Asia-Pacific region actually improved for the first time this year, rising 9.8%, excluding currency, in the third quarter to 450.9 million euros. . During the year, however, sales in this territory remained negative.

“While COVID-19-related lockdown measures have always impacted business in Greater China, other key markets in Asia-Pacific saw strong growth,” the company explained in the earnings release. positive in the third quarter.

Puma’s total year-to-date sales were €6.27 billion, reflecting growth of 18.2%.

The only negatives from the brand’s announcement were cost and the fact that Puma’s sales growth rate had slowed slightly during the year. During the first quarters of 2022, Puma had recorded an average growth of around 19%.

On top of that, the company also said it is facing higher inventory which will likely need to be refreshed later. Puma’s operating expenses also rose by 25.8% and cost the company 853.2 million euros between July and September. Puma explained that this was due to higher sales, marketing and distribution costs.

On the positive side of the ledger, the brand’s earnings before interest and taxes improved by 12.6% to 257.7 million euros.

Based on the confident third quarter results, the company reconfirmed its guidance for the year. Puma expects sales to improve in the mid-teens of 2022 and EBIT to be between 600 and 700 million euros.

“While the first nine months of the year have been strong for Puma, we continue to navigate a highly uncertain geopolitical, macroeconomic and competitive environment,” the brand’s statement said, adding that the war in Ukraine, inflation and energy prices were “leading”. uncertain consumer behavior and demand volatility.

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