Puma SE anticipates it will report 2023 full-year sales growth of approximately 1.6 percent in euro terms, or 6.6 percent on a currency-adjusted basis, to achieve preliminary 2023 sales of approximately €8.60 billion ($7.95 billion), compared to €8.47 billion ($8.05 billion) in 2022.
The company’s previous outlook called for growth in the high-single-digit range on a currency-adjusted basis.
Puma has pointed to the extraordinary 54 percent devaluation of the Argentine peso in December 2023 and the application of hyperinflationary accounting for a miss on its bottom line.
According to IAS 29, hyperinflation accounting requires an adjustment for inflation and the currency translation with the year-end currency rate instead of using the average currency rate of the full year, and the impact needs to be fully recognized in the respective quarter.
EBIT is forecasted at approximately €622 million ($575 million), in line with the previous forecast range of €590 million to €670 million for the year. EBIT was €641 million ($610 million) in 2022.
Sales were said to be “broadly in line with the outlook and EBIT,” and despite the significant devaluation, they were entirely in line with the outlook. The devaluation mainly affected the bottom-line result.
Net income is expected to be reported at approximately €305 million ($282 million) for the year. The prior outlook had the year-over-year change corresponding to the EBIT.
Excluding the extraordinary devaluation of the Argentine peso, Puma said it delivered currency-adjusted sales growth above 8 percent and an EBIT above the prior year.
Although Puma achieved underlying operating sales growth, the application of hyperinflationary accounting led to a sales decline in the fourth quarter.
On a currency-adjusted basis, sales declined by approximately 4.0 percent for the fourth quarter, with reported sales declining by approximately 9.8 percent to approximately €1.98 billion. Puma reported prior-year Q4 sales at €2.20 billion.
Fourth quarter EBIT was said to have come in strongly at approximately €94 million, compared to €41 million in Q4 2022. The devaluation of the Argentine peso especially impacted the fourth quarter financial result, resulting in a net income of approximately €0.8 million, far short of the €1.4 million EBIT in Q4 2022.
Puma stated that both sales and net income are below the analysts’ consensus, but the consensus does not consider the negative effects of the extraordinary devaluation of the Argentine peso.
Puma expects mid-single-digit currency-adjusted sales growth and EBIT in the range of €620 million to €700 million in the 2024 financial year. The company said the outlook assumes that the future devaluation of the Argentine peso will be fully compensated by corresponding price increases in Argentina.
Image courtesy Puma
