Double-digit sales to 2022… Puma sets pace and eyes US, China markets push
Ambitious Puma plans to grow sales at a double-digit pace over the next four years and wants to take on the US and China markets in the mid-term.
The company aims to increase revenue, adjusted for currency effects, by 10% annually until 2022, the German athletic sportswear giant said in a trading update Wednesday. Ebit margin should reach around 10% of consolidated net sales by 2022, it added.
It wants sales from its own stores and e-commerce to account for 30% of sales in the medium-term, up from 23% currently, with the shift away from wholesale boosting margins.
Puma, which is now focused on core athletic sports goods after a brief flirtation as a lifestyle/fashion brand, is considered moving into the US market’s major sports arena in the mid-term, after pulling out of basketball segment 17 years ago.
Puma said it sees “substantial upside” for the brand in the US market, while it expects Greater China to be its top market by 2022, according to a presentation prepared for investors at a capital markets day.
Chief executive Bjørn Gulden has revived Puma’s fortunes over the past five years by sponsoring top football (soccer) teams and partnering with celebrities including singer Rihanna. However, its profits still lag way behind bigger rivals adidas and Nike.
A focus on the US and Chinese markets should help it boost profits as it currently lacks scale in the former, while profit margins are the highest in the sporting goods industry in China.