Puma Lifts Full-Year Guidance, But CEO Warns of a Slowdown in the Sneaker Boom

A slowdown in the sneaker boom? That was one of the observations shared by Puma chief executive officer Bjørn Gulden in a conference call with journalists on Thursday. Offsetting the trend, he said, was a spurt in apparel sales in the third quarter, especially in Europe.

The apparel segment’s revenues rose 27 percent, bolstered by product introductions from the Sportstyle, Teamsport and Motorsport categories and demand for “big logo-driven pieces” across the lifestyle and performance collections. Footwear and accessories posted high-single-digit sales gains.

But the bubble hasn’t necessarily burst. Gulden said he expects the trend to possibly spill over to the first quarter of 2019, where “hopefully” the footwear side will pick up again.

He noted a growing shift in product trends and consumer demand, moving away from core classics to more in-your-face sneaker designs. “If you go into the stores now, you will see more visible technology, more chunky shoes, more aggressive colorways,” Gulden said.

The CEO said the pre-launch in late September of the brand’s re-entry into the basketball category, fueled by Jay-Z coming onboard as creative director of the division, created a lot of “noise” with a “very positive” sell-through of Puma’s opening basketball shoe. A new version of the Clyde Court Disrupt will be released for Halloween.

“This investment in performance basketball and the ‘culture’ around basketball is a strong commitment to both the performance and the Sportstyle business in the North American market,” said Gulden, adding that the brand will also be reissuing iconic basketball shoes from the ’80s and ’90s.

In terms of market challenges, the executive cited volatile stocks and negative currency impacts in Turkey and Argentina. Ongoing trade tensions between the United States and China are “creating additional work,” and the brand has “cautiously reduced our exposure to China.”

The third U.S. tariff increase in September “did hit some of our product categories and accessories, especially in the golf area,” Gulden said. “If they go to step four, which includes footwear and apparel, it will have a big impact.”

But sales in China were sustained in a period that proved stronger than expected for the sportswear brand as it powers ahead in the wake of its split from former parent Kering. Despite the uncertain global trading environment, net profits were up 24.7 percent to 77.5 million euros in the period ending Sept. 30.

Boosted by a double-digit increase in both the Americas and the Asia-Pacific region, and high single-digit growth in the EMEA market, sales at the Herzogenaurach, Germany-based company were up 10.7 percent to 1.24 billion euros. On a currency-adjusted basis, sales rose 14 percent.

“We feel we are a better company than a year ago,” Gulden said.

Puma slightly raised its guidance for the full year, with currency-adjusted sales expected to increase between 14 percent and 16 percent, versus 12 percent to 14 percent previously.

Full-year earnings before interest and taxes (EBIT) are now anticipated to fall between 325 million euros and 335 million euros, marking an increase of at least 32 percent versus 2017.

Puma earlier this month named Adriana Lima as women’s training ambassador, with soccer stars Luis Suárez, Axel Witsel and Dejan Lovren also joining its roster of talents. Puma’s portfolio of ambassadors already includes Cara Delevingne, Lewis Hamilton, Selena Gomez and Usain Bolt.

This story was reported by WWD and originally appeared on WWD.com.

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