• Puma has upped its FY guidance on better than expected third-quarter sales and profitability.
  • Net earnings increased by 24.8% to EUR77.5m (US$88.4m) in Q3.
  • Sales jumped 13.9% currency-adjusted to EUR1.24bn.
Apparel was the main growth driver in Q3

Apparel was the main growth driver in Q3

German sportswear brand Puma has raised its full-year guidance on the back of a better than a expected third-quarter in which sales and profitability remained strong.

Net earnings in the three month period increased by 24.8% to EUR77.5m (US$88.4m), the company said in its quarterly statement today (25 October). This compared to net earnings of EUR62.1m in the year-ago quarter.

Meanwhile, Puma's sales growth continued in the third quarter of 2018, with revenue climbing 13.9% currency-adjusted (and 10.7% in reported terms) to EUR1.24bn in the period.

The Americas and Asia/Pacific regions contributed with double-digit increases, while growth in the EMEA region was at a high single-digit rate.

The apparel product segment was the main growth driver in the quarter, knocking footwear off the top spot, supported by new product launches in the sportstyle, teamsport and motorsport categories. Footwear and accessories grew at a high single-digit rate.

Gross profit margin improved by 150 basis points from 49.6% to 48.1%. The increase is due to more sales of new products with a higher margin and further sourcing improvements as well as positive effects from the product mix related to apparel.

In addition, Puma's operating result (EBIT) rose by 28.4% from EUR101.2m last year to reach EUR129.9m. The increase was due to a strong sales growth combined with an improved gross profit margin, the company said. This corresponds to an improvement of the EBIT-margin from 9% last year to 10.5% in the third quarter this year.

CEO Bjørn Gulden said the third quarter ended a little stronger than expected with sales growing organically.

"We still see large shifts in product trends and consumer demand, but feel we have reacted fast enough to continue our growth," he added, noting the prelaunch of basketball for North America at the end of the quarter created a lot of 'noise' and although it is very early days, the sell-through of the firm's first shoe model has been very positive.

"Given the slightly stronger than expected third quarter and despite the uncertain business environment, with volatile currencies and an uncertain global trade environment, we now see our full-year organic sales growth between 14% and 16% and our full-year EBIT between EUR325m and EUR335m, which is a growth of at least 32% compared with last year."

The revised forecast compares to previous guidance of full-year organic sales growth between 12% and 14%.