Puma Q2 Sales Up 7 Percent After Strong Euro Performance

Puma has scored another quarter of sales growth, boosted by the Euro 2016 soccer tournament and strong demand for its women’s lines, fronted by Rihanna and Kylie Jenner.

The Herzogenaurach, Germany-based firm, which is controlled by French group Kering, said total sales rose 7 percent to 826.5 million euros, or $933.3 million, with apparel the main driver. On currency-adjusted terms, the gain stood at 13 percent.

Net earnings totaled 1.6 million euros, or $1.8 million, in the three months ended June 30, compared with a loss of 3.3 million euros, or $3.6 million, during the same period a year earlier. Meanwhile, Puma’s operating profit rose 75.1 percent to 11.9 million euros, or $13.4 million.

All dollar rates are calculated at average exchange rates for the period concerned.

The firm reiterated its 2016 guidance for a high single-digit increase in net currency-adjusted sales; a gross profit margin in line with last year’s level of 45.5 percent; and an operating result between 115 million euros and 125 million euros, or $126.4 million to $137.4 million at current exchange rates.

“We are happy with the development in the second quarter. Sales developed as expected with double-digit organic growth,” said Bjørn Gulden, chief executive officer of Puma. He noted a continued improvement in sellout as consumers are flocking back to the brand.

“We felt that our teams and players in Euro 2016 in France gave us a lot of good visibility,” Gulden added. “We now see that our women initiatives with products and marketing around Rihanna and Kylie Jenner are working very well. Finally, we are looking forward to great Olympic days in Rio where fantastic athletes like Usain Bolt will be wearing our innovative and design driven products.”

Kylie Jenner Puma Suede
Kylie Jenner in ads for Puma’s Suede sneaker.
CREDIT: Courtesy of brand.

Nonetheless, Puma’s gross profit margin declined in the quarter to 45.6 percent from 46.7 percent in the prior-year period due to the negative impact of the stronger U.S. dollar. The decrease was reflected in all product segments.

The second quarter performance was driven by strong sales in the EMEA region, up 23.5 percent in currency-adjusted terms. Revenues in the Americas rose 5 percent, while the Asia-Pacific region posted a 10.3 percent increase, mainly driven by China.

Apparel sales jumped 19.5 percent, helped by the success of the teamsport category, which was fueled by the Euro championship in which five national teams wore Puma jerseys. This suggested the high-profile incident in which four Swiss national players had their jerseys ripped on the pitch had a limited impact.

Footwear sales were up 7.3 percent in currency-adjusted terms, with sportstyle, fundamentals and teamsport posting major gains. Puma announced this week it would reissue the bestselling furry slide from Rihanna’s Fenty for Puma collection in a new gray colorway on Aug. 5 together with a third shipment of its previous colorways, which rapidly sold out.

Sales of accessories rose 14.1 percent in the quarter, driven by higher demand for backpacks and headwear, among others.

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