Puma's Q1 sales increase 21.5 percent, EBIT expands 59.9 percent
In the first quarter of 2018, Puma’s sales increased by 21.5 percent currency-adjusted and 12.5 percent reported to 1,131.1 million euros (1,381.9 million dollars). The company said, due to the strength of the euro against all other major currencies during the first quarter, there was a 9 percent negative difference between sales growth in euro and constant-currency terms.
Commenting on the first quarter trading, Bjørn Gulden, Chief Executive Officer of Puma SE said in a media statement: “We started the year with both first-quarter sales and profitability (EBIT) coming in stronger than we had expected. Because of an uncertain business environment caused by volatile currency rates and the difficult economic trade environment, we raised our outlook for the full year only slightly.”
Puma witnesses strong growth across core markets
The company said, all regions and product segments supported sales growth with a currency-adjusted double-digit increase. Particularly our Asia/ Pacific region, driven by China, Puma achieved a sales growth of 34.8 percent in the first quarter. Footwear continued to be the main growth driver followed by apparel and accessories and running and training as well as Sportstyle were the categories with the strongest growth rates.
The gross profit margin improved by 110 basis points from 47.1 percent to 48.2 percent. The increase, the company said, came from a favourable regional sales mix, higher sales of new products with a better margin and further sourcing improvements. Operating expenses (OPEX) grew by 7.5 percent to 437.3 million euros (534.1 million dollars) in the first quarter.
The operating result (EBIT) increased by 59.9 percent from 70.2 million euros (85.7 million dollars) to 112.2 million euros (137 million dollars) in the first quarter due to a strong sales growth, a higher gross profit margin and an improved operating leverage. This corresponds to an EBIT-margin of 9.9 percent compared to 7 percent in the first quarter last year. Net earnings went up by 35.8 percent to 67.4 million euros (82.3 million dollars), which translates into earnings per share of 4.51 euros (5.51 dollars) compared to 3.32 euros (4.06 dollars) in the first quarter 2017.
Puma expects 10-12 percent revenue growth in FY18
The company said, though the first quarter saw a strong increase in sales and profitability, several uncertainties in the business environment have recently developed, which includes adverse and volatile currency developments, political instabilities as well as the uncertain trade environment between the USA and China. Therefore, Puma has adjusted its guidance for the full year only slightly. Puma now expects that currency-adjusted sales will increase between 10 percent and 12 percent against previous guidance of currency-adjusted increase by approximately 10 percent.
The operating result (EBIT) is now anticipated to come in between 310 million euros and 330 million euros (378.5 – 403 million dollars) compared to previous guidance of between 305 million euros and 325 million euros (372.5 and 396.9 million dollars). In line with the previous guidance, the management still expects that net earnings will improve significantly in 2018.