Puma reports strong Q3 results, maintains FY outlook

Puma is maintaining its full-year outlook, which calls for currency-adjusted mid-teens sales growth and EBIT of €600-€700 million, despite numerous headwinds that will likely weigh down annual profitability. Those negative factors include inflationary pressures from higher freight costs, persistent operational inefficiencies related to the Covid-19 pandemic and the ongoing crisis in Ukraine. The company will continue focusing on managing all short-term challenges without hurting the brand momentum, resulting in sales growth and market share gains taking priority over short-term profitability.

The group achieved the highest quarterly sales in its history in the third quarter ended Sept. 30, with currency-adjusted revenues up more than 18 percent in the EMEA and Americas and nearly 10 percent in Asia/Pacific despite continued softness in China, where 10 to 15 percent of stores were closed during the period. Total third quarter revenues rose 17 percent currency-adjusted to €2,354.4 million from €1,900.4 million. Wholesale revenues improved 19.9 percent to €1,864.6 million and were 6.5 percent higher in the direct-to-consumer channel at €489.7 million, which was bolstered by better product availability. Ebit was 12.6 percent higher at €257.7 million versus €228.9 million but the gross margin declined 60 basis points to 46.8 percent from 47.4 percent in the year-ago period. Third quarter profit was 1.8 percent higher at €146.4 million versus €143.8 million.

Inventories were up 72 percent year-over-year at €2,350.2 million at period end, including an 80 percent increase in in-transit merchandise of $698.4 million and 69 percent jump in on-hand goods at €1,651.8 million. CEO Bjorn Gulden said there is “too much” inventory within the industry currently, particularly in apparel. Puma is content with its level of footwear inventory. 

In the third quarter, the group’s footwear sales were 33.2 percent higher on a currency-adjusted basis at €1,192.5 million, fueled by continued strong demand for running & training, team sports, basketball and Sportstyle products. Apparel revenues grew 9.9 percent to €855.0 million as accessories sales declined 10.2 percent to €306.8 million on soft leg- and bodywear sales, particularly in North America. 

Through nine months, Puma sales are up double-digits in all regions of the world except for China, where they are down 36 percent from the first nine months of 2021. Sales in Europe, up 24 percent year-to-date, rose 18.5 percent in the third quarter on a currency-adjusted basis to €971.7 million. Americas’ sales improved 18.8 percent currency-adjusted to €931.8 million. North American sales, up 17 percent year-to-date, rose only 4 percent in the third quarter. Asia/Pacific revenues increased 9.8 percent year-over-year to €450.9 million. Gulden said Puma is “not counting on any short-term recovery for China.”