As expected, Kering declined to comment on its future ownership plans for Puma while discussing the exceptional performance that it had achieved as group in the third quarter, where its total sales rose by 32.3 percent on a comparable basis, driven by its two major luxury goods brands, Gucci and Yves Saint Laurent.
On a reported basis, ehe group's total revenues went up by 23.2 percent to €3.92 billion. The growth of its luxury goods segment accelerated to 26.6 percent, driven by the group's network of directly operated stores and a rise of nearly 80 percent in online sales. The Sport & Lifestyle segment, to which Puma and Volcom belong, expanded by 11.9 percent to $1,125.7 million, with growth of 15.9 percent on a comparable basis.
Puma's operating margin nearly doubled last year to 6 percent, but at 9 percent now, it's well below the exceptional margin of more than 30 percent that Kering reported last week for its star brand, Gucci, whose sales rose by 45 percent in the first nine months of this year.
The potential for further growth at Puma and speculation about its possible divestiture have led analysts to price its shares at 30 times projected earnings, well above the valuation that they are giving to Adidas. They are giving the brand a market capitalization of €4.6 billion.
Kering bought a controlling stake in Puma in 2007 at a price that valued the company at about €5.27 billion. It subsequently raised its stake gradually to 86 percent. Given the circumstances, the Financial Times feels that Kering may want to either spin off Puma or sell it outright, giving investors ‘something to purr about.”
Anyhow, it seems more likely that Kering will want to dispose of Volcom than Puma. Volcom's performance continued to be hampered in the latest quarter by the challenges faced by specialty retailers in the U.S.
Entered under “Other sport & lifestyle brands,” Volcom's sales declined by 6.7 percent to €65.6 million in the quarter, with a drop of 3.2 percent on a comparable basis.