Puma said negative currency effects hit margins

Puma said negative currency effects hit margins

German sportswear brand Puma is maintaining its guidance for the full year, despite the negative impact of currencies on its first-quarter margins.

Earnings in the three month period improved 4% to reach EUR25.8m (US$29.4m) from EUR24.8m a year earlier. 

Gross profit margin, however, remained flat at 46.8% due to the negative currency impact from the stronger US dollar in 2016 compared to last year. Puma said it was able to successfully implement selective price adjustments and its improved product mix to help mitigate this. 

Footwear gross margins improved from 42.9% to 43.5%, while apparel margins declined from 50.7% to 49.9%. Accessories margins, meanwhile, softened from 49.6% to 49.2%.

Group sales increased by 3.7% to EUR852m, with footwear being the main growth driver for the quarter. 

"The first quarter of 2016 developed as we expected," said CEO Bjørn Gulden. "We saw organic growth in all segments and all regions. The development in certain currencies slowed down the reported growth in both top and bottom line.

"Both in our own retail and with our retail partners we see a continuous improvement. This is especially strong in our women's business, where the launches of new products and new marketing concepts have started to show excellent results. Despite the negative impact of currencies we confirm our outlook for the full year."

Puma said it expects a currency adjusted high single digit increase of net sales, a gross profit margin on the previous year's level of 45.5%, and an operating result (EBIT) of between EUR115m and EUR125m.