German sportswear brand Puma has raised its full-year guidance on the back of double-digit growth across all regions in its third-quarter and strong footwear sales.
Net earnings for the quarter surged to EUR62.1m (US$73m) from EUR39.5m in the prior year period. Group sales improved 17.4% to reach EUR1.1bn, compared to EUR990.2bn in the previous year with all regions showing a double-digit increase. Footwear continued to be the main growth driver, while accessories also increased double-digit, but apparel grew at a more modest rate.
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Gross profit margin improved, despite negative currency effects, by 230 basis points from 45.8% in the second quarter last year to 48.1%, thanks to further improvements in sourcing, higher sales of new products with a higher margin and selective price adjustments.
Meanwhile, Puma’s operating result (EBIT) for the period increased from EUR60.3m last year to EUR101.2m due to strong sales growth combined with an improved gross profit margin.
“The third quarter was another good quarter for us with double-digit growth in all regions and strong growth in all product segments,” said CEO Bjørn Gulden. “With gross profit margin exceeding our expectations and a continued focus on operating expenses, we were able to deliver a very positive and better than expected operating result (EBIT).
“This development in the third quarter combined with a good orderbook for the fourth quarter made us raise the outlook for the full year.”
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By GlobalDataFor the nine month period, net earnings almost doubled and came in at EUR133.6m, compared to EUR67m last year. Group sales were also up, climbing 16.4% to EUR3.1bn and were above expectations. All regions showed double-digit growth with footwear being the main growth driver and major gains achieved by the running and training and sportstyle categories, with Platform, Suede, Basket Heart, Fierce and Ignite Limitless footwear styles performing well.
Including e-commerce, Puma’s own and operated retail sales rose by 22% currency adjusted to EUR673m, representing a 21.7% share of total sales for the nine-month period, compared to 20.6% last year. Puma said the performance was achieved by positive like-for-like growth in its existing retail stores, opening of new stores and strong growth in its e-commerce business.
Meanwhile, gross profit margin improved by 120 basis points from 46.1% to 47.3%, while EBIT improved from EUR113.5m last year to EUR214.8m in the first nine months of 2017.
Puma now expects currency adjusted sales will increase between 14% and 16% and full-year operating result (EBIT) to come in between EUR235m and EUR245m.
In line with the previous guidance, management still expects that net earnings will “improve significantly” in 2017.
