Puma Achieves Slight Growth in Q1 Amid Market Challenges
Puma has reported a modest growth in its first-quarter sales for 2024, achieving a 0.5% increase in currency-adjusted terms, reaching 2,102.3 million euros. Despite facing persistent geopolitical and economic headwinds, the company anticipates mid-single-digit sales growth for the year and targets an operating result (EBIT) between 620 million and 700 million euros. Net income is expected to align with these operating results.
Arne Freundt, CEO of Puma SE, expressed optimism in the face of market volatility, attributing the company’s resilience to strategic brand initiatives and a robust order book for the latter half of the year. “While the market continues to be volatile, we delivered growth and gross profit margin improvement despite significant currency headwinds and high prior year comparables. With our good order book for the second half of the year and the great start of our brand campaign, I feel very confident about our sequential quarter-over-quarter improvement in 2024,” Freundt stated.
The Americas have shown a positive trajectory, marking the first sales increase in four quarters with a 1% rise to 790 million euros, led by a sequential improvement in the US market. The Asia/Pacific region also saw gains, with sales up 0.6% to 456.6 million euros, largely due to ongoing growth in Greater China. However, sales in the EMEA region remained unchanged at 855.7 million euros, via Financial Times.
A shift in business dynamics was noted as Puma’s wholesale segment declined by 2.9% to 1,608.1 million euros, while its direct-to-consumer (DTC) sales surged by 13.5% to 494.2 million euros. The footwear segment enjoyed a 3.1% increase, primarily fueled by strong demand in football and other performance categories, although apparel and accessories experienced declines of 2.4% and 3.2%, respectively.
Financial indicators showed mixed results. The gross profit margin improved significantly by 100 basis points to 47.5%, but the operating result dipped by 9.4% to 159 million euros, leading to a 50 basis point decrease in the EBIT margin to 7.6%. Additionally, the financial results declined to 26.8 million euros, with net income falling by 25.5% to 87.3 million euros and earnings per share reducing to 0.58 euros. Despite these challenges, Puma’s leadership remains confident in the company’s ability to navigate through the turbulent market and achieve sustained growth in 2024.