Puma Q1 performance meets expectations

Sportswear giant Puma has revealed its Q1 performance has fully met expectations with currency-adjusted sales increasing by 0.5% to €2.1bn (£1.8bn). Puma said the sales performance comes amid a strong quarter in the previous year (Q1 2023 grew +14.4% ca and reported), and that currencies have continued to be a “major headwind” since Q2 2023, negatively impacting sales in euro terms by approximately €100m (£86m) in Q1 2024. The Americas region recorded positive sales growth for the first time in four quarters, growing by 1% to €790m (£680m). Sales in the Asia/Pacific region increased by 0.6% to €456.6m (£393m), driven by continued growth in Greater China. In the EMEA region, sales were flat at €855.7m (£736.7m), with Europe coming in better than previously expected. Meanwhile, Puma’s wholesale business declined by 2.9% (ca) to €1.6bn (££1.37bn), reflecting the “continued focus on good sell-through and prudent sell-in to improve inventory levels in the market”. However its Direct-to-Consumer (DTC) business grew by 13.5% to €494.2m (£423m), driven by continued brand momentum and scaled back promotions. This resulted in an increased DTC share of 23.5%. Sales in Footwear were also up 3.1%, largely driven by continued strong demand for its Football and other performance categories. Sales in Apparel and Accessories declined by 2.4% and 3.2% respectively. In addition, its operating result decreased by 9.4% to €159m (£136m). Looking ahead, Puma said it expects to achieve mid-single-digit currency-adjusted sales growth and an operating result (EBIT) in the range of €620m to €700m (£533m to £602m) for the financial year 2024. Arne Freundt, Puma CEO, said: “We delivered our first quarter results fully in line with expectations. While the market continues to be volatile, we delivered growth and gross profit margin improvement despite significant currency headwinds and high prior year comparables. “Our retail partners are still working through elevated stock levels, but as our sell-through was higher than our sell-ins, we jointly improved the inventory levels in the wholesale channel. We expect that we will improve sell-in in course of Q2. Our double-digit growth in DTC with fewer discounts confirms the continued strong demand for the brand and thus continued good sell-through.” He added: “Our strong momentum in performance categories driven by exciting innovations and newness is ongoing and we are further growing our market shares. For our Sportstyle category, 2024 is a transition year to build the future success in the elevated distribution. Our go-to-market and demand creation processes are starting to improve and are crucial as a foundation for the success in Sportstyle. “We already see that sales of our trending terrace and skate styles Palermo and Suede XL are accelerating month over month and we are very excited to launch our vintage running franchise Easy Rider and low profile shoes Mostro, Speedcat and Inhale this year. With our good order book for the second half of the year and the great start of our brand campaign, I feel very confident about our sequential quarter-over-quarter improvement in 2024.” He concluded: “We are focusing our efforts on building the foundation for the next chapter of growth based on increased brand desirability. The launch of our first brand campaign in a decade was an important first step and the first results came in above our expectations. I could not imagine a better year than the 2024 Year of Sport to advance Puma’s brand elevation journey. We are looking forward to celebrating this summer’s events with our employees, consumers, retail partners and brand ambassadors.”