The German sporting goods provider Puma SE closed the third quarter of the current 2023 financial year with losses in sales and earnings.
However, the current figures that the company presented on Tuesday were better than the analysts had previously expected. Management also confirmed its annual forecasts.
Negative currency effects are weighing on sales development
In the period from July to September, sales amounted to around 2.31 billion euros, which corresponded to a decrease of 1.8 percent compared to the same quarter of the previous year. Adjusted for exchange rate changes, revenue grew by 6.0 percent.
Things went up in the EMEA region, which includes Europe, the Middle East and Africa. There, Puma achieved an increase in sales of 5.0 percent (currency-adjusted +9.9 percent) to 1.02 billion euros.
In America, revenue fell by 8.3 percent to 854.6 million euros, but after adjusting for currency effects they exceeded the previous year’s level by 2.5 percent. Exchange rate changes also impacted results in the Asia-Pacific region. Sales there fell by 3.3 percent to 435.9 million euros; adjusted for currency effects, they increased by 4.6 percent.
Despite the higher gross margin, earnings are falling
The gross margin improved slightly. It reached 47.1 percent, after being 46.8 percent in the same quarter of the previous year. Negative currency effects were more than offset by “lower procurement prices and freight costs, price adjustments and a favorable regional and sales channel mix,” the company said.
However, due to higher operating expenses, earnings before interest and taxes (EBIT) fell by 8.3 percent to 236.3 million euros. The reported net profit shrank by 10.0 percent to 131.7 million euros compared to the same quarter of the previous year.
Management is sticking to its annual targets
In the first nine months of the current year, sales amounted to 6.62 billion euros, which represented an increase of 5.6 percent (currency-adjusted +10.3 percent) compared to the same period last year. Net profit fell by 13.6 percent to 304.0 million euros.
In view of the available figures, the company confirmed its annual forecasts. For 2023, it continues to expect “currency-adjusted sales growth in the high single-digit percentage range.” The target corridor for the operating result (EBIT) is still between 590 and 670 million euros.
“An improvement in profitability is expected in the fourth quarter, primarily due to a significant improvement in the gross profit margin as a result of lower procurement prices, freight costs and lower sales promotions,” Puma said.