Nov 6, 2015
Puma hopeful for 2016, shrugs off report of Kering sale
Nov 6, 2015
Puma is optimistic that new products like Rihanna women's wear and running shoes promoted by Usain Bolt could restore the German sportswear firm to health in 2016 as it dismissed reports of a sale by majority owner Kering.
"We will start to see an improvement in the numbers next year," said Chief Executive Bjorn Gulden, who was appointed by the French luxury goods group in 2013 to restore Puma's focus on sport after sales were hurt by a shift into fashion products.
Shares in Puma were up 4.1 percent at 1015 GMT after Bloomberg reported late on Thursday that France's Kering was open to selling its stake after struggling for eight years to turn Puma around. Kering declined to comment.
Noting that such reports have repeatedly surfaced in the last year, Gulden told an earnings call he had seen no indication Kering was poised to sell, adding he was two-thirds of the way into a turnaround plan agreed with Kering.
After slipping further behind market leaders Nike and Adidas, under Gulden, Puma has focused on the world's most popular sports like football, running and motorsport and launched a new drive to tap into booming sales of women's sportwear by appointing Rihanna as creative director last year.
German rival Adidas has also given celebrities input into product design, with collaborations with Kanye West and Pharrell Williams helping drive strong quarterly results.
Global sales of sportswear for women are growing faster than sales to men as the "athleisure" fashion trend booms, helping drive the rise of yogawear chain Lululemon Athletica Inc and power strong demand for the Adidas Originals brand.
Nike said last month it expects to almost double sales to women by 2020, growing the business to $11 billion to account for 22 percent of sales from almost 19 percent now.
Puma said the first shoe by Rihanna, named the "Creeper", had sold out within hours or days it plans a full collection of shoes and apparel in 2016.
Gulden said very positive feedback from retailers made it optimistic for other products too like the "Ignite" shoe promoted by Bolt, allowing it to confirm its guidance for the full-year. Bolt will have a high profile in 2016 when he defends his Olympic sprint titles in Rio.
Third quarter net profit fell 31 percent to 20 million euros (14 million pounds) on sales up a currency-adjusted 3.1 percent to 914 million, both at the low end of analyst forecasts.
Puma expects the strong dollar to push 2015 operating earnings down to between 80 million and 100 million euros from 128 million in 2014. It said measures it has taken to counter the currency hit, like raising prices, meant it now expected a slightly softer drop in the gross profit margin.
The sportswear industry sources most of its products from Asia in U.S. dollar contracts, but Puma makes a bigger portion of profits than its rivals in emerging markets where currencies have tumbled against the greenback.
© Thomson Reuters 2023 All rights reserved.