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Despite Market Volatility, Puma Announces Positive Third Quarter

BERLIN – Competitors like Nike and Adidas have announced problems over the past few weeks, but German sportswear brand Puma continued to break its own records in the third quarter.

In the July-to-September period, Puma’s sales rose 16.9%, currency adjusted, to hit 2.35 billion euros. This is only the second time that Puma, the third-largest sportswear company in the world, has ever broken the 2 billion-euro barrier in a quarter. The first time was this summer.

“Despite all the global uncertainties the third quarter was … the best quarter in Puma’s history,” CEO Bjorn Gulden said in a statement. “Improved product availability [was] due to a more stable supply chain, better-than-expected sell-through and Puma’s continued global brand momentum” compensated for any negatives, he explained.

The company’s results were also better than market analysts had predicted.

Puma’s home market of Europe continued to be the German brand’s best territory, and its sales there rose 18.5%, currency adjusted, over the third quarter to 971.7 million euros.

North America has been a major focus for Puma over the past few years, with the brand completing its first full basketball season in 2019, together with the help of music mogul Jay Z, the brand’s creative director for the dedicated line Puma Hoops. The strategy continued to pay off this quarter. In the Americas, Puma sales grew 18.8%, currency adjusted, to hit 931.8 million euros. During this year so far, Puma’s sales in the Americas have increased 28.1% to 2.69 billion euros.

Unlike hometown competitor Adidas, Puma is not quite as exposed to the Chinese market. Previously, about one-fifth of its sales came from the Asia-Pacific region. Ongoing COVID-19 lockdowns and a Chinese consumer boycott of western goods has caused Adidas various problems, and the bigger German brand issued a profit warning late last week. Meanwhile, Puma’s sales in the Asia-Pacific region actually improved for the first time this year, rising 9.8%, currency adjusted, over the third quarter to hit 450.9 million euros. During the year, however, sales in that territory remained negative.

“While COVID-19 related lockdown measures still impacted the business in Greater China, other key markets in Asia Pacific delivered strong growth,” the company explained in the statement about the positive third-quarter results.

Puma’s total sales for the year to date are 6.27 billion euros, reflecting growth of 18.2%.

The only negatives in the brand’s announcement came in terms of costs and the fact that Puma’s sales growth rate had slowed slightly over the year. In earlier quarters of 2022, Puma had averaged growth of around 19%.

Besides that, the company also said it was dealing with higher inventories that would likely need to be discounted later. Puma’s operating expenses also rose 25.8% and cost the company 853.2 million euros between July and September. Puma explained this was due to higher sales, marketing and distribution costs.

On the positive side of the ledger, the brand’s earnings before interest and taxes improved 12.6% to 257.7 million euros.

On the back of the confident third-quarter results, the company reconfirmed its guidance for the year. Puma expects sales to improve in mid-teen percentages during 2022 and for EBIT to end up somewhere between 600 million euros and 700 million euros.

“While the first nine months of the year have been strong for Puma, we continue to navigate in a highly uncertain geopolitical, macroeconomic and competitive environment,” the brand’s statement said, adding that the war in Ukraine, inflation and energy prices were “leading to uncertain consumer behavior and volatile demand.”

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

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