While sales for Puma increased in the Asia Pacific and EMEA regions, they fell marginally in North America but the biggest pressure on bottom line came from a 19% hike in operating expenses.
Puma results in brief
- Group sales increased 14.4% to €2.2bn ($2.42m)
- Operating expenses increased by 19.0% to €848.3m driven by higher sales-related distribution and other variable costs, mainly associated with strong e-commerce growth, a higher number of retail stores in operation as well as higher marketing expenses.
- Operating income fell to €176m from €196m.
- Net income fell to €117m from €121m.
- DTC business was up by 22.5% to €465.5m driven by continued brand momentum and improved product availability.
- APAC sales improved by 27.4% on a return to growth in Greater China for the first time in two years.
- Sales in the Americas came in at €827.9m, with strong growth in Latin America offset by a decline in North America due to a lower sell-in to the Wholesale distribution channel, particularly to off-price retailers, as a result of high inventory levels in the market.
Arne Freundt, the chief executive officer of Puma SE said: “Our Q1 growth was a strong start to 2023. In line with our strategy to be the best partner to retailers, we grew our wholesale business in a challenging environment and further strengthened our performance credibility with strong growth in our strategically important performance categories. Our significant growth in DTC demonstrated Puma’s continued brand momentum globally, including in North America and Greater China.
“We benefited from our geographically diversified business, as strong growth in other regions more than offset the decline in North America. The current development of our North American business confirms the importance and necessity of our new strategy to grow more desirable distribution channels and to contain the off-price business in North America as well as to further elevate the brand. It is reassuring that we returned to growth in Greater China after more than two years of declining business and we are cautiously optimistic about an ongoing positive development.
“We consider 2023 to be a year of transition. In line with our expectations, the year started with pressure on gross profit margin and profitability. For the second quarter, we expect low to mid-single-digit sales growth due to high inventory levels in the trade and continued headwinds in the market. For the full year, we confirm high single-digit sales growth and EBIT of €590 to €670m. With our continued momentum we are fully on track to normalise our inventory levels and to achieve our full-year guidance.”