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Best quarter ever for Puma

Oct 29, 2019 Germany
Best quarter ever for Puma
Best set of results posted in a quarter, both in terms of revenue and EBIT, was announced by Germany-based Puma. Footwear with 17% growth
Bjørn Gulden, Chief Executive Officer of Puma commented: “The third quarter developed very positively for us and ended as the best quarter that PUMA has ever achieved - both in terms of revenue and EBIT. Double-digit sales growth in all divisions and almost in all regions (EMEA “only” 9.7%) underlines the favourable development of our brand. Especially positive for me was the 17% growth in Footwear, which shows the strong performance of the new styles, and EMEA’s growth of almost 10%, proving a good recovery in Europe. The fourth quarter will be the first quarter where the US tariffs on China will have an impact. Currently, without price increases, this is putting pressure on EBIT, at least in the short-term. Nevertheless, the good development in the third quarter and the outlook for the fourth quarter allows us to look at a sales growth of around 15% currency adjusted and an EBIT between 420 million euros and 430 million euros for the full year 2019.”

Third Quarter 2019

Puma's strong sales growth continued in the third quarter of 2019. Sales increased by 17.0% currency adjusted to 1 477.6 million euros (+19.0% reported). The Asia/Pacific and Americas regions continued to contribute with double-digit increases, while growth in the EMEA region was at a high single-digit rate. Footwear, Apparel and Accessories all showed strong growth in the third quarter, improving by 16.9%, 18.7% and 13.4% respectively. Sportstyle, Motorsport, Golf and Running and Training were the categories with the highest growth rates.

The operating result (EBIT) increased by 24.8% from 129.9 million euros last year to 162.2 million euros due to a strong sales growth combined with an improved gross profit margin and operating leverage. Net earnings increased by 29.7% from 77.5 million euros to 100.5 million euros (earnings per share were up from 0.52 euros to 0.67 euros).


Image credits: Puma (Adriana Lima's campaign)


First Nine Months

Sales in the first nine months of 2019 rose by 16.0% currency adjusted to 4 023.6 million euros (+17.6% reported). The strong sales development was largely driven by double-digit growth rates in Asia/Pacific, where China continued to be the main growth driver, and the Americas. EMEA grew at a high single-digit rate. The growth was driven by double-digit growth in all divisions: Footwear grew 13.5%, Apparel expanded by 22.4%, and Accessories increased by 10.3%.

Wholesale continued to drive growth with an increase of 14.5% currency adjusted, supported by a strong performance of our key accounts. Puma's direct-to-consumer sales (owned and operated retail stores and eCommerce) increased by 21.3% currency adjusted to 947.3 million euros, driven by like-for-like sales growth in our own stores, the expansion of our retail store network and a continued strong growth of our eCommerce business. Direct-to-consumer sales represented a share of 23.5% of total sales for the first nine months of 2019 (22.5% in the previous year).

The operating result (EBIT) grew by 28.4% from 299.8 million euros last year to 385.0 million euros in the first nine months of 2019 due to a strong sales growth combined with an increased gross profit margin and a slight operating leverage. Net earnings rose by 39.0% to 244.6 million euros (last year: 176.0 million euros). This translates into earnings per share of 1.64 euros (1.18 euros in similar period of 2018).

Outlook 2019

Puma adjust its guidance for the full year and now expects that currency adjusted sales will increase around 15% (previous guidance: currency adjusted increase of around 13%). EBIT is expected to come in between 420 million and 430 million euros, despite the negative impact from new tariffs in the fourth quarter in the United States.

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