Frankfurt - Puma SE, the German athletic-gear maker that sponsors sprinter Usain Bolt and English soccer club Arsenal, reported sales and profit that topped analysts’ estimates as consumers bought its Ignite running shoes and Evo soccer cleats.
Earnings before interest and taxes were 6.8 million euros in the second quarter, Puma said Friday, beating the 4.3 million-euro estimate of analysts surveyed by Bloomberg. Sales rose 18.5 percent to 773 million euros, also topping estimates. The shares rose as much as 3 percent in Frankfurt.
Chief Executive Officer Bjoern Gulden is trying to revive the faded sportswear brand with new products, splashy athletic sponsorships and edgy ads, yet the turnaround has been slow going. On May 6, Puma sliced its profit outlook, as the costs of buying dollar-denominated shoes and jerseys are rising with the US dollar strengthening against the euro.
“Growth in footwear is key for us to turn the company around,” Gulden said in a statement. “The investment in new and innovative products is starting to pay off.”
The Norwegian CEO, a former soccer pro in Germany, said the adverse currency effects won’t slow down efforts to improve Puma’s marketing, store layouts and technology. The company is also moving some of its product sourcing to local markets and raising prices in some markets.
Puma rose 1.9 percent to 156.9 euros at 9.33am in Frankfurt, trimming its loss this year to 9 percent.
Puma’s operating margin has narrowed by more than 10 percentage points in the past decade and is set to fall to a record low of 2.6 percent this year, Citigroup analyst Thomas Chauvet said. A sale by Kering SA of its 86 percent Puma stake is an “increasingly credible scenario” in the next 12 to 18 months, he said.
Gulden has sought to reposition Puma, based in the Bavarian town of Herzogenaurach, from a maker of sport-lifestyle wear that often discounted its products into a more desirable supplier of sneakers and gear for soccer, running and other sports. He’s adopted an irreverent advertising approach featuring sprinter Bolt, soccer star Mario Balotelli and the singer Rihanna.
In late June, Puma sold Tretorn, a Swedish maker of rainboots and other footwear, to Authentic Brands Group, the owner of Juicy Couture and Frederick’s of Hollywood.
Bloomberg