Puma reported sales accelerated to 5 percent growth in the third quarter but missed analysts’ targets as double-digit currency-neutral gains in the Americas offset modest gains in the EMEA and APAC regions. Puma confirmed its outlook for the year.

Third-quarter sales grew currency adjusted (ca) €2,308.2 million, below the €2.36 billion expected on average by analysts, according to LSEG data. The 5 percent gain marked an acceleration of growth from a 2.1 percent (ca) gain seen in the second quarter. Currencies continued to be a headwind, negatively impacting sales in euro terms by approximately €100 million in Q3 2024 (-0.1 percent reported growth rate).

Arne Freundt, CEO of Puma, said, “I’m pleased with the progress on our brand elevation journey as we are building the foundation for accelerated and sustainable growth. We know this takes time, but we have made strong strides in enhancing our brand equity and desirability, stepping up our performance business, and building up consumer relevance in the Sportstyle Prime market.

“Our new Speedcat Go-to-Market Strategy is performing very well, and I am excited about the commercial launch of the Speedcat in a few weeks. I am also pleased that our wholesale business has returned to growth.

“With accelerated sales growth in Q3 and EBIT meeting expectations as well as a strong orderbook for Q4, we’re on track to meet our full-year 2024 outlook. This success is due to the great engagement of the entire Puma Family and its incredible partners.

“I’m looking forward to shaping the next chapter of Puma’s growth together with the Management Board team, which has recently welcomed Markus as our new CFO,” concluded Freundt.

Region Summary

  • Sales in the Americas region increased by 11.4 percent (ca) to €872.2 million, with the U.S. and Latin America contributing to the growth. As anticipated, the U.S. market returned to growth in Q3. Latin America grew during the quarter while continuing to be impacted by the ramp-up of warehouse operations.
  • The Asia/Pacific region recorded sales growth of 3.0 percent (ca) to €430.4 million, showing a sequential improvement despite softer consumer demand in Greater China.
  • In the EMEA region, sales increased by 0.8 percent (ca) to €1,005.5 million, driven by continued growth in Europe, which was partially offset by a decline in EEMEA due to muted consumer sentiment in the Middle East and a strong prior-year quarter (EEMEA grew +64 percent ca in Q3 2023).

Channel Summary

  • Puma’s Wholesale business returned to growth, improving by 1.5 percent (ca) to €1,728.2 million. The strong focus on sell-through in the first half of 2024 laid the foundation for a stronger sell-in in the second half of 2024.
  • Puma’s direct-to-consumer (DTC) business grew 17.0 percent (ca) to €580.0 million, in line with the strong year-to-date trajectory, reflecting the continued brand momentum. Sales in owned and operated retail stores increased 12.8 percent (ca), and e-commerce increased 26.4 percent (ca). This resulted in an increased DTC share of 25.1 percent (Q3 2023: 22.7 percent).

Category Summary

  • Sales in Footwear increased by 9.3 percent (ca) to €1,240.3 million, driven by growth in Performance, led by Football and Running, and in Sportstyle, led by Core and Kids. Sales in Accessories grew by 2.9 percent (ca) to €304.2 million.
  • Apparel decreased by 0.7 percent (ca) to €763.6 million.

Income Statement Highlights

  • The gross profit margin improved by 80 basis points to 47.9 percent (Q3 2023: 47.1 percent). The continued improvement was based on a favorable product mix, freight and sourcing prices, partially offset by ongoing currency headwinds and higher promotional activities in certain markets in Latin America and EEMEA.
  • Operating expenses (OPEX) increased by 1.1 percent to €873.4 million (Q3 2023: €863.7 million). The increase was mainly driven by the continued growth of its DTC business, warehouse ramp-up costs and digital infrastructure projects, partially offset by lower bonus-related marketing payments and a shift of marketing investments to Q4 2024. Non-demand generating costs continued to be strictly controlled. Currency headwinds also weighed on the OPEX ratio, which increased by 50 basis points to 37.8 percent (Q3 2023: 37.4 percent).
  • The operating result (EBIT) increased by 0.3 percent to 237.0 million (Q3 2023: €236.3 million), mainly due to an improved gross profit margin. The EBIT margin was 10.3 percent (Q3 2023: 10.2 percent).
  • The financial result amounted to €-46.7 million (Q3 2023: €-45.5 million), aligning with the prior year.
  • Net income decreased by 3.0 percent to €127.8 million (Q3 2023: €131.7 million) and earnings per share amounted to €0.86 (Q3 2023: €0.88). This was mainly due to a higher net income from non-controlling interests due to a stronger socks and bodywear business in the U.S.

Outlook 2024
Puma said, “The first nine months of the year were characterized by a volatile environment with continued currency headwinds, stressed supply chains and muted consumer sentiment globally. In this challenging environment, Puma continued to make progress on its brand elevation journey and in building the foundation of accelerated and sustainable growth by enhancing its distinctive brand equity and desirability, strengthening its performance business, and building up consumer relevance in the Sportstyle Prime market.

“Based on the results of the first nine months of the year and supported by building brand momentum as well as by our strong orderbook for the remainder of the year, Puma reiterates its outlook for the financial year 2024 of mid-single-digit currency-adjusted sales growth and an operating result (EBIT) in the range of €620 million to €670 million (2023: €621.6 million). We continue to expect net income (2023: €304.9 million) to change in 2024 in line with the operating result.

“As in previous years, Puma will continue to focus on managing short-term challenges without compromising the brand’s medium- and long-term momentum. The very positive feedback from our retail partners and consumers on our upcoming Q4 2024 product drops, 2025 product line-up and go-to-market strategies gives us confidence for the medium and long-term success and continued growth of Puma.

Image courtesy Puma