Puma kicks off 2017 with upbeat outlook after winning run
today Feb 9, 2017
Retro sneakers and endorsements by stars like Usain Bolt and Rihanna helped German sportswear firm Puma deliver strong sales growth in the fourth quarter and make a confident forecast for 2017 on Thursday.
Puma Chief Executive Bjorn Gulden has led a gradual turnaround of a brand that had fallen far behind market leaders Nike and Adidas.
"I feel extremely confident about 2017... I have seen the order book and the reaction from the trade," Gulden said.
Shares in Puma, which rallied last month on analyst upgrades and renewed speculation that majority owner Kering might consider a sale, were up 0.6 percent by 0953 GMT.
Like its bigger German rival Adidas, Puma is benefiting from a shift away from sports performance shoes and towards retro models, a trend that has hurt newer players like Under Armour and has also dampened Nike's success.
Puma posted a quarterly net loss of 4.6 million euros ($5 million) on sales of 958 million euros, a rise of 9 percent, both of which were slightly better than forecasts in a Reuters poll.
By comparison, Under Armour last month saw its shares slide by a quarter after it reported a big drop in holiday-quarter sales growth and issued a glum forecast for the year, admitting that its products are not fashionable enough.
Sales at Puma rose 10.4 percent in Europe and 9.9 percent in the Americas, with total footwear sales jumping 15.3 percent, helped by the popularity of lifestyle shoes like its women's basketball Heart line, tied with a large ribbon bow.
The German company had 6 percent of the U.S. casual sportswear market in December, more than tripling its share compared to a year ago, market intelligence firm NPD said.
Puma expects currency-adjusted net sales to increase at a high single-digit percentage rate in 2017 after a rise of 10 percent in 2016, and earnings before interest and tax (EBIT) of 170 million to 190 million euros, up from 128 million in 2016.
Sales in 2016 were helped by the Olympic Games and the Euro 2016 soccer championship, whereas growth in the industry is traditionally slower when there are no major global events.
© Thomson Reuters 2019 All rights reserved.