The German sporting goods provider Puma SE expects continued headwinds in the coming months.
“The market environment will remain difficult for 2024,” admitted CEO Arne Freundt on Tuesday when announcing the results for the past financial year. “As we continue to manage this challenging trading environment together with our distribution partners with a clear focus on sell-through and prudent pure selling, particularly in the US and Europe, we expect a weaker first half of the year.”
The “persistent negative currency effects” would “continue to put pressure on profitability in the first half of the year,” the Puma boss explained in his statement. However, the company expects “an improvement from quarter to quarter”. Management stuck to the forecasts for the full year published in January: it continues to expect sales growth in the “mid-single-digit percentage range” and an operating result of between 620 and 700 million euros.
In 2023, Puma’s annual sales will increase by 1.6 percent
The results for 2023 presented by the sporting goods retailer corresponded to the preliminary figures published a few weeks ago. At the time, the company had already announced that it would apply accounting for hyperinflationary countries due to the massive devaluation of the Argentine peso.
Accordingly, annual sales amounted to around 8.60 billion euros, which corresponded to an increase of 1.6 percent compared to 2022. Adjusted for exchange rate changes, revenue grew by 6.6 percent. In the EMEA region, which includes Europe, the Middle East and Africa, Puma achieved an increase of 9.8 percent (currency-adjusted +13.4 percent) to 3.42 billion euros; in the Asia-Pacific region, sales increased by 7, 7 percent (currency-adjusted +13.6 percent) to 1.79 billion euros. In America, however, things went downwards. Revenues there fell by 8.0 percent (-2.4 percent adjusted for currency effects) to 3.39 billion euros.
Despite the decline in profits: the annual dividend remains constant
In the fourth quarter, however, the company suffered losses in all regions. Overall, sales in the months October to December amounted to 1.98 billion euros, 9.8 percent (-4.0 percent adjusted for currency effects) below the level of the same period last year.
As announced in January, the sporting goods provider ended 2023 with a decline in profits. According to the figures now presented, the operating result fell by 3.0 percent to 621.6 million euros. “Slightly higher operating expenses” were “partially offset by an improved gross profit margin,” the company said. Net profit fell by 13.7 percent to 304.9 million euros. As in the previous year, the dividend proposal for 2023 is 0.82 euros per share.