Puma Footwear Sales Surpass 2 Billion-Euro Mark for the First Time

Double-digit growth across all regions and product divisions fueled a more than sevenfold rise in fourth-quarter net profit at Puma SE, the company said Thursday.

Net earnings in the three months to Dec. 31 leapt 624.7 percent to 15.7 million euros from 2.2 million euros in the same prior-year period.

The German sporting goods maker’s gross margin — a key indicator of profitability — in the period remained stable at 47.1 percent, despite negative currency impacts in the quarter, the company said.

Puma reported consolidated sales rose 17.9 percent to 1.22 billion euros, following a strong performance from both apparel and footwear, with sales up 28.6 percent and 17.4 percent, respectively. In terms of markets, the Asia-Pacific region led the way, followed by the Americas.

Puma chief executive officer Bjørn Gulden, who has been steering the company’s turnaround since 2013, said there’s still “a lot to improve, but we feel we are moving our brand and company in a good direction.”

Coming off its 70th anniversary year, net profit in the full year rose 38 percent to 187.4 million euros, while sales advanced 12.4 percent to 4.6 billion euros, boosted by footwear, which exceeded the 2 billion-euro mark for the first time.

Looking ahead, Puma expects revenues to rise by 10 percent on a currency-adjusted basis in 2019 and anticipates full-year EBIT to fall between 395 million euros and 415 million euros, up from 337.4 million euros in 2018.

RBC’s Piral Dadhania highlighted in a research note that Puma’s EBIT guidance is 5 percent to 6 percent below consensus, at 430 million euros, at the midpoint, despite in-line top-line guidance.

“In the context of  Q418 [operational expenditure] expansion, which reflects high cost to compete, this is consistent with our view that consensus margin expectations for FY19E-20E are too optimistic, as top-line trends moderate,” the analyst said.

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

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