Puma Rebounds in Q3 — But Here’s What It’s Worried About in the Months Ahead

Sales and profits at Puma rebounded in the third quarter — but renewed concerns over the coronavirus pandemic has led the sportswear giant to issue caution for the months ahead.

Today, the Germany-based company posted revenues that rose a currency-adjusted 13% to 1.58 billion euros (or $1.85 billion at current exchange), as well as operating profits that improved 17% to 190 million euros (or $222.78 million). Those figures trumped analysts’ forecasts for 1.56 billion euros in sales and 174 million euros in profits.

“Retail stores reopened, sports events resumed, consumer confidence improved and our sales increased week by week,” CEO Bjorn Gulden said in a statement. “I feel this strong performance confirms the strength of both Puma as a brand and the sporting goods industry in general.”

However, the athletic firm said it could not provide a decisive outlook for the fourth quarter and the fiscal year as a recent surge in outbreaks have brought up worries over another round of government-imposed lockdowns both in areas of the United States and certain parts of Europe.

“October started well, but the recent development of COVID-19 and the number of infections we are seeing globally make us cautious for the rest of year,” Gulden shared. “We will continue to maneuver through this pandemic in the short-term without hindering Puma’s mid-term momentum.”

Over the past three months, Puma celebrated a number of big moves: In September, it inked a long-term deal with Brazilian football star Neymar Jr., who was formerly signed with rival Nike. It also launched the Ultra football boot and RS Dreamer basketball shoe; partnered with top NBA 2020 draft prospect LaMelo Ball; and saw athlete ambassadors Danny Green and Kyle Kuzma win the 2020 NBA Championship with the Los Angeles Lakers.

Separately, there has also been an increase in the free float of Puma shares after Kering sold about 5.9% of its stake in the brand. The luxury conglomerate has gradually reduced its ownership in Puma since 2018 and now retains 9.8% of its outstanding shares.

In preparation for a “potentially longer-lasting impact” of the current health crisis, Puma secured an addition 900 million-euro revolving credit facility in May, which has yet to be tapped.

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