Puma Q2 sales strong on Euro 2016 success, looks forward to Bolt-inspired Olympics
German athletic sportswear giant Puma, owned by luxury goods group Kering, reported a stronger-than-expected Q2 sales and an improved outlook on Wednesday.
And no wonder. Latest numbers were boosted by last month’s European football (soccer) championships in France and Puma expects further improvements as it looks forward to a Usain Bolt-inspired Olympics that starts next week.
“We are happy with the development in the second quarter,” said CEO Bjørn Gulden, who noted a continued improvement as consumers are “flocking back to the brand”.
We felt that our teams and players in Euro 2016 in France gave us a lot of good visibility. We now see that our women initiatives with products and marketing around Rihanna and Kylie Jenner are working very well. Finally, we are looking forward to great Olympic days in Rio where fantastic athletes like Usain Bolt will be wearing our innovative and design driven products,” Gulden added.
Puma reported a quarterly net profit of €1.6m ($1.76m), compared to a loss of €3.3m a year ago.
Sales rose a currency-adjusted 13% to €827m, beating average analyst’s forecasts for €819m.
Apparel sales jumped 19.5%, helped by the success of the teamsport category, which was fueled by the Euro championship in which five national teams wore Puma kits.
Footwear sales were up 7.3%, with sportstyle, fundamentals and teamsport posting major gains.
Puma announced this week it would reissue the bestselling fur slide footwear (pictured) from Rihanna’s Fenty for Puma collection in a new gray colourway on August 5 together with a third shipment of its previous colourways, which rapidly sold out.
Sales of accessories rose 14.1% in the quarter, driven by higher demand for backpacks and headwear, among others.
Sales grew fastest in the EMEA region, up a currency-adjusted 23.5%, boosted by Puma’s sponsorship of five national teams at Euro 2016, including quarter-finalists Italy, plus players like Griezmann and Portugal goalkeeper Rui Patricio.
Puma also noted that its sponsored English football teams Leicester and Arsenal, which took the top two slots in the Premier League this season, helping apparel sales rise 19.5% in the quarter.
Gulden said the gross profit margin – down to 45.6% in the quarter from 46.7% a year ago – was still under pressure due to sourcing in the strong US dollar, but added Puma had managed to rein in costs.
The company confirmed it expects sales to grow by a high single-digit percentage this year, while it sees its gross profit margin remaining flat from last year’s 45.5%, with operating earnings ranging €115m- €125m.