By Thomas J. Ryan
Continuing its hot streak, Puma saw revenues grow 8.3 percent in the third quarter to €994.1 million ($1.08 billion) and expand 10.8 percent on a currency-adjusted basis.
The figures came from the quarterly report of Kering, which owns 86 percent of Puma. Kering also owns the Volcom skate brand as well as Gucci, Yves Saint Laurent, Bottega Veneta and a number of smaller luxury brands. Puma will report its full results on November 10, 2016.
Puma’s performance in the quarter builds on gains on a currency-adjusted basis of 13 percent in the second quarter, 7.3 percent in the first quarter and 11.5 percent in the 2015 fourth quarter.
Kering’s statement said Puma is benefiting from “innovative products and renewed appeal.” The footwear category “performed particularly well,” posting 17 percent growth on a currency-neutral basis, fueled by the success of new models such as Ignite, Fierce and Fenty. Apparel was up 10 percent for Puma, while accessories eased 2 percent.
With the exception of Japan, Puma achieved double-digit growth across all geographic regions with “strong performances in Europe and the Americas, and sustained expansion in Mainland China.”
Puma’s turnaround efforts are focused on a repositioning around competitive sports after a prior heavy focus on lifestyle fashion. That shift is marked by its long-time sponsorship of Olympic sprint champion Usain Bolt and its mega-investment in 2014 to replace Nike as the sponsor of Arsenal in the English Premier League.
But lately, much of the buzz around Puma is coming from collaborations with non-athletes such as the singer Rihanna, who launched the Fenty collection, and reality star and model Kylie Jenner, who is the face of Fierce. Along with alliances with model Cara Delevingne and Snapchat personality YesJulz, as well as its “The Future is Female” campaign, the focus is helping Puma reach the female consumer, a task that remains a challenge for many of the larger sports brands.
Taking a cue from Adidas and its successful collaboration with Kanye West, Puma in September signed Abel Tesfaye, aka The Weeknd, as its new global brand ambassador and creative collaborator. The singer will support Puma’s Ignite Evoknit and Ignite Limitless footwear, Evo Apparel and eventually bring out his own sneakers and apparel collection like Rihanna, with the aim of bringing some street buzz to the men’s side.
Puma is by far the largest part of Kering’s Sport & Lifestyle segment, which also includes Volcom.
Sport & Lifestyle segment sales were up 6.5 percent in the quarter to €1.06 billion ($1.16 billion) and gained 9.3 percent on a currency-neutral basis. By region, gains on a currency-neutral basis for the segment were seen in Western Europe, ahead 11 percent; North America, 7 percent; Asia Pacific, 13 percent and the Rest of the World, 14 percent. Japan saw a decline of 3 percent.
Volcom’s revenues were down 13.6 percent in the quarter to €70.3 million ($76.7 million) and off 7.7 percent on a currency-neutral basis. Kering said Volcom “continued to be impacted by the challenges facing action sports retailers in the U.S.”
Photo courtesy Puma.
