Puma sportswear finds traction with footwear
German sportswear brand Puma achieved double-digit growth in all regions and in both footwear and apparel in the second quarter.
CEO Bjørn Gulden says the company’s gross margin improved 90 points and sales grew 16 per cent on a currency-neutral basis. He credits the success to re-establishing strong traction in the footwear category and success with its women’s lines.
In Asia/Pacific, sales increased 19.5 per cent on a currency-neutral basis in the quarter to €229 million (US$268.8 million).
Overall sales jumped to €968.7 million (US$1.14 billion), footwear leading the way with sales of €463 million, up 27.2 per cent on a currency-neutral basis.
Apparel revenues were €334.8 million, up 11.4 per cent, while accessory sales reached €170.9 million, up 1.3 per cent.
Despite negative currency effects, the gross profit margin improved from 45.6 per cent in the quarter last year to 46.5 per cent, thanks to improving sourcing and price adjustments.
EBIT increased from €11.9 million to €43.4 million, or 4.5 per cent of sales.
Gulden says Puma started its turnaround plan four years ago with a mid-term aim to re-establish the brand “stone by stone”, but says revenues grew faster than expected.
He says footwear is leading the way, which is critical for a sports brand because that’s where innovation and technology lie “and that’s where you get a niche for your brand”.
But Gulden says there is still much that needs to improve, with the turnaround still a work in progress. But it is a step in the right direction as its operating margins still significantly lag competitors.
“We feel more comfortable now than a year ago, and a year ago we felt more comfortable than the year before.”