After a poor first half and a solid third quarter, Puma remained on the right track in the fourth quarter of 2020, with revenues up by 9.1 percent in constant currencies to €1,520 million and a jump in the net income of 38.8 percent to €24.7 million.

The management gave no precise guidance going forward, but indicated that the worst is over and that the company will likely deliver sharp increases in operating and net earnings in 2021 on a “moderate” sales increase of between 5 and 10 percent, depending on the effect of the new vaccines on the Covid-19 pandemic.

Encouraged by a strong order backlog, Puma’s executive board will propose a dividend of 16 cents per euro at the next annual meeting, down from €1.76 last year. The company ended 2020 with a higher cash position of €655.9 million and unusued credit line of €1,373 million.

The fourth quarter started with strong sales growth in October, including a 25.1 percent jump in Europe. However, throughout November, lockdown measures were implemented across Europe, leading to the closure of around 35 percent of Puma’s owned and operated retail stores in the region. This trend continued in December with up to 50 percent of the retail stores that sell its products there being closed, resulting in flattish sales in the last two months of the year.

Puma Consolidated Income Statement
(Million Euros, Quarter ended Dec. 31)
  2020 2019 % Change
NET SALES 1,520.1 1,478.6 2.8
Cost of Sales 790.6 779.0 1.5
Royalty/Commissions 2.3 6.2 -62.9
Operating Expenses 668.5 650.6 2.8
Net Interest Expense 8.2 5.8 41.4
Pre-Tax 55.1 49.4 11.5
Tax 11.3 10.7 5.6
NET 24.7 17.8 38.8
Euro/Share (Diluted) 0.16 0.12 33.3
Source: Puma.


Nevertheless, the company registered growth of 6.1 percent in EMEA and 9.8 percent in the Americas during the quarter. Sales in Asia-Pacific surged by 11.8 percent from the year-ago quarter, boosted by China. Adverse currency shifts for the British pound and the U.S. dollar limited sales increases in terms euros to an overall growth of 2.8 percent.

A sustained momentum in basketball lifted sales of footwear by 3.8 percent, while a strong golf and bodywear business supported a 7.3 percent gain in accessories. Apparel grew by 15.7 percent, triggered by a strong demand for casualwear due to more time being spent by customers at home. Furthermore, Puma did not have much new footwear to offer during the quarter, as it had curtailed orders to the factories in the spring, in reaction to the pandemic.

The wholesale business increased by just 4.6 percent in constant currencies, reaching a level of €1,018.1 million in the quarter. Meanwhile, the direct-to-consumer (DTC) business, which includes owned and operated retail stores as well as e-commerce, increased by 19.3 percent to €502.0 million, driven by strong growth in e-commerce of 57.2 percent.

Despite a very promotional market environment and currency developments that put pressure on margins, the company was able to improve its operating results thanks to strong cost controls and more efficient marketing. The gross margin inched up by 0.7 percentage points to 48.0 percent, driven by better sell-through, lower promotional activity and good inventory management as well as a favorable mix in terms of distribution channels and regions.

Operating expenses went up by 2.8 percent to €668.5 million, due to higher sales-related warehousing and distribution costs, mainly related to the strong increase in e-commerce. The Ebit margin advanced by 0.5 percentage points to 4.2 percent as operating results rose by 14.6 percent, or 23.0 percent excluding depreciation.

Puma Sales by Region and Product Segments
(Million Euros, Quarter ended Dec. 31)
Region 2020 2019 % Change Currency 
Adjusted Growth
EMEA 492.1 468.3 5.1 9.8
Americas 547.5 566.0 -3.3 6.1
Asia-Pacific 480.5 444.3 8.1 11.8
Product Segments        
Footwear 640.9 663.0 -3.3 3.8
Apparel 641.1 583.3 9.9 15.7
Accessories 238.2 232.2 2.6 7.3
TOTAL 1,520.1 1,478.6 2.8 9.1
Source: Puma.


A tough fiscal year

For the full financial year, Puma revenues were down by 4.9 percent to €5,234.4 million, with a drop of 1.4 percent in local currencies, due to the impact of the pandemic. It grew by 1.5 percent in the EMEA to €1,982.9 million, but declined by 3.0 percent in the Americas region to €1,775.2 million and by 3.2 percent in Asia-Pacific to €1,476.3 million, all on a constant-currency basis. Sales were down by 3.1 percent in footwear and by 1;5 percent in apparel, while accessories progressed by 3.5 percent.

Puma Consolidated Income Statement
(Million Euros, Year ended Dec. 31)
  2020 2019 % Change
NET SALES 5,234.4 5,502.2 -4.9
Cost of Sales 2,776.4 2,815.8 -1.4
Royalty/Commissions 16.1 25.1 -35.9
Operating Expenses 2,264.9 2,271.3 -0.3
Net Interest Expense 46.8 22.6 107.1
Pre-Tax 162.3 417.6 -61.1
Tax 39.2 108.6 -63.9
NET 78.9 262.4 -69.9
Euro/Share (Diluted) 0.53 1.76 -69.9
Source: Puma.

The wholesale channel recorded a decline of 4.0 percent to €3,809.9 million, while DTC rose by 6.4 percent to €1,424.5 million to account for 27.2 percent of the total turnover in 2020, versus 25.4 percent last year. The e-commerce business surged by 62.9 percent, supported by higher investments in performance marketing, successful promotions and more efficient logistics.

Puma’s CEO, Bjørn Gulden, stressed that his company has no intention of maximizing its DTC operations beyond a limit of 27 percent of sales. In the course of last year, the number of its physical stores rose by 27 to 880, including 19 new ones in EMEA.

The gross margin declined by 1.8 percentage points last year to 48.8 percent, hampered by negative currency impacts and a very promotional environment at certain times of the year due to the pandemic.

As a result of the cost savings initiated at the end of the first quarter and during the second one, operating expenses were cut by 0.3 percent. There was no change in the total staff, but Puma negotiated delayed shipments with its suppliers that resulted paying its bills one month later than usual and in a relatively small 10 percent increase in year-end inventories.

Still, the operating profit (Ebit) decreased by more than half from €440.2 million in 2019 to €209.2 million in 2020, equivalent to an operating margin of 4.0 percent, and net income fell sharply to €78.9 million from €262.4 million.

Looking ahead, as of today, around 50 percent of the retail stores selling Puma products in Europe are still closed due to various lockdown measures. As a result, the management anticipates that part of its business in 2021 will be once again negatively impacted by the Covid-19 pandemic despite a 29.9 percent overall increase in orders at the end of last year due to high demand from retail partners and consumers. Orders are up in all categories, including footwear, with the EMEA and the U.S. registering increases of 26.5 percent and 47.2 percent, respectively.

Europe is the only region that is struggling now because of the retail lockdowns. Like other brands, Puma is also having problems in delivering products to the U.S. because of a logistic glut at West Coast harbors, which results in delays of two to three weeks. Like others, it is facing a global shortage in freight containers, and Puma has negotiated long-term contracts that will cause a doubling in ocean freight rates – much better than the general increases of five to ten times that other companies are subjected to.

Puma Sales by Region and Product Segments
(Million Euros, Year ended Dec. 31)
Region 2020 2019 % Change Currency 
Adjusted Growth
EMEA 1,982.9 2,001.4 -0.9 1.5
Americas 1,775.2 1,944.0 -8.7 -3.0
Asia-Pacific 1,476.3 1,556.9 -5.2 -3.2
Product Segments        
Footwear 2,367.6 2,552.5 -7.2 -3.1
Apparel 1,974.1 2,068.7 -4.6 -1.5
Accessories 892.7 881.1 1.3 3.5
TOTAL 5,234.4 5,502.2 -4.9 -1.4
Source: Puma.


New investments and initiatives, especially around women and running

In 2020, the company continued its investments on the establishment of a global ERP system, although it suffered a delay of about two months, and worked on 18 different distribution projects. It opened a new highly automated multi-channel distribution center in Indianapolis, which will speed up delivery times in the U.S. In Europe, it continued to work on its bigger multi-channel distribution center in Geiselwind, Germany, which is expected to become operational in April.

Several new initiatives are planned for this year to maintain brand heat, including a stronger focus on women’s products and the launch of a Puma app by the end of 2021. A new campaign around the theme “She Moves Us” will be launched in March with the participation of several athletes and artists.

Puma has already met strong demand from retailers for a new family of running shoes, called Nitro, which will come out in the spring, taking advantage of the current running boom. It will be initially focused mainly on women, accompanied by visuals featuring by distance runners like Molly Seidel and Gesa Krause. It will continue to invest in yoga and women’s football. Furthermore, Cobra Golf will come out with its first line of putters in April.

Recognizing that the different markets are moving at different speeds more than before, Gulden added that the company will be making available additional resources in product development and marketing to be more relevant at the local level, as it is already doing it in the U.S. with its investments in basketball. It will work with its design offices in Boston and Shanghai to bring out new regional product ranges while collaborating with them for the development of products for a wider distribution.

Of course, Puma will continue to invest in sustainability.