The German sporting goods supplier Puma SE was able to defy the challenging market conditions in the third quarter of 2022: The company achieved a significant increase in sales, and profits also exceeded the corresponding level of the previous year. In the interim report published on Wednesday, CEO Bjørn Gulden celebrated “the best quarter in Puma’s history”.
The sports goods retailer reached a new sales record. In the months of July to September, sales amounted to 2.35 billion euros, which corresponds to an increase of 23.9 percent compared to the same quarter of the previous year. Adjusted for exchange rate changes, the growth rate was 16.9 percent.
“Our performance categories such as running, football and basketball continue to develop very well, and we also see continued strong demand for shoes,” explained CEO Gulden. “However, we are also observing that retailers are ordering more cautiously than a year ago due to the high stock levels in the market, especially for textiles.”
In all market regions, the sports goods retailer recorded strong sales growth
In the past quarter, Puma achieved solid growth in all market regions. In the EMEA region, which includes Europe, the Middle East and Africa, revenues increased by 19.4 percent (currency-adjusted +18.5 percent) to EUR 971.7 million, in America by 33.1 percent (currency-adjusted +18, 8 percent) to 931.8 million euros.
Despite continued Covid-19 protective measures in parts of China, sales in the Asia-Pacific region also exceeded the previous year’s level thanks to strong increases in other important markets. They grew by 16.6 percent (currency-adjusted +9.8 percent) to 450.9 million euros. Puma emphasized that the region had “sales growth for the first time this year”.
Higher costs and negative currency effects are holding back earnings growth
According to the company, the result was burdened by “higher procurement prices due to raw materials and cost increases for incoming freight as well as a negative distribution channel mix”. However, these factors were partially offset by “price adjustments”. The gross margin only fell from 47.4 to 46.8 percent.
Other operating expenses increased 25.8 percent year-on-year as a result of higher marketing spend, newly opened stores and increased sales-related selling expenses, as well as “continued operational inefficiencies due to Covid-19, particularly in supply chain and warehousing.”
Despite this, earnings before interest and taxes (EBIT) reached a new record high. At EUR 257.7 million, it was 12.6 percent above the level of the same quarter of the previous year. Because the financial result declined due to negative currency effects. the net profit attributable to the shareholders grew by only 1.8 percent to 146.4 million euros.
The management confirms the forecast for the year
In the first nine months of the current year, Puma increased its sales by 24.4 percent (currency-adjusted +18.2 percent) to 6.27 billion euros. Consolidated earnings reached EUR 352.1 million, exceeding the previous year’s level by 16.7 percent.
In light of the recent record numbers, management confirmed its guidance for the full year. Despite the “very uncertain environment”, the company continues to expect a currency-adjusted increase in sales “in the mid-teens percentage range” and an operating result (EBIT) of between 600 and 700 million euros as well as “a corresponding improvement” in the consolidated result.