PARIS — Apparel continued to outperform footwear in the first three months of the year at Puma SE, which remains on a growth track, delivering its strongest quarter ever.
“The women’s product is selling very well and, even on the performance side, we have an increase on apparel [sales]. We are selling a lot [more] apparel than ever,” Puma chief executive officer Bjørn Gulden said during a conference call with journalists on Friday.
Growth for men’s and women’s products is now more balanced, following a recent outperformance of items for women through around mid-2018. “Don’t forget, we’re also selling a lot of unisex product, so sometimes it’s not easy to [monitor],” Gulden said.
For footwear, though, the chunky styles continue to reign, indications are that the low-profile motorsport trend is coming back. Though still in the early stages, Puma is seeing interest from retailers and consumers on its BMW, Ferrari and Mercedes lines, as well as the recently inked multiyear partnership with Porsche Motorsport, Gulden said.
In terms of breakdowns, footwear represents around 50 percent of the company’s business, followed by apparel at 35 percent and accessories at 15 percent.
The German sporting goods-maker maintained its full-year guidance coming off a solid first quarter boosted by continued growth in all regions and product divisions. In terms of markets, the Asia-Pacific region, notably China, and the U.S. were the fastest-growing zones, posting double-digit growth. There was a slower performance in Europe, Africa and the Middle East among ongoing geopolitical unrest.
“There are political uncertainties still between the U.S. and China. We have the Brexit discussions; we accelerated product to have it in the market in case of a hard Brexit. We still have a lot of volatility in the currencies,” Gulden said.
The trade war between China and the U.S., which led to a change in sourcing for Puma, with a move to local production in China, has actually given the brand an advantage compared to two or three years ago, allowing it to be more reactive in terms of supply chains, the executive said.
The Herzogenaurach, Germany-based sporting goods giant said like-for-like net profit advanced 40.1 percent in the three months ended March 31, to 94.4 million euros. Meanwhile, Puma’s gross profit margin — a key indicator of profitability — gained 80 basis points to 49 percent from 48.2 percent the year prior.
Puma said earnings before interest, taxes, depreciation and amortization improved by 27 percent to 142.5 million euros, marking “the highest absolute EBIT the company has ever achieved.” Revenues were up 15.3 percent on a currency-adjusted basis year-on-year to 1.31 billion euros.
The company announced the nomination of Héloïse Temple-Boyer and Fiona May as new members of the supervisory board.
Gulden said the halo effect of Puma’s recent relaunch of the basketball category in the U.S., with the release of the Clyde and the Uproar Charlotte models in 2018, is paying off in terms of image and “creating noise” in social media, with growing interest from retailers and consumers. The category in the third quarter will roll out to other markets, including China, where the 2019 FIBA Basketball World Cup will be held this summer.
In terms of full-year outlook, Puma said it expects sales growth of around 10 percent in currency-adjusted terms, a “significant improvement” in net earnings and a slight improvement in the gross profit margin, which fell by 48.4 percent in 2018.