Currency adjusted sales at Puma for the third quarter 2023 increased by 6.0% to €2.31bn ($2.46bn) despite the negative impact on sales in euro terms (-1.8% reported).
The growth in sales can be attributed to all regions performing well. The Europe, Middle East, and Africa (EMEA) region recorded a sales growth of 9.9% (ca) to €1.02bn, which was driven by strong performance in the region.
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While, the Asia/Pacific region grew by 4.6% (ca) to €435.9m, supported by a continued trend of recovery in Greater China following the market reopening, as well as ongoing growth in Japan and India.
Sales in the Americas region increased by 2.5% (ca) to €854.6m, Puma said in line with expectations and the year-to-date trend, North America declined due to macroeconomic headwinds and its relative dependency on the off-price Wholesale business, while Latin America continued to show strong growth.
However, the operating result (EBIT) decreased by 8.3% from €257.7m to €236.3m in Q3 this year. Consequently, the net income fell by 10.0% to €131.7m which was previously reported at €146.4m.
Puma points out that the recent conflict in the Middle East, the war in Ukraine, persistent inflation and the risk of recession are weighing on consumer sentiment, resulting in volatile demand in the retail sector.
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By GlobalDataBut Freundt believes the sportswear brand outgrew the market despite the continued significant impact of macroeconomic headwinds, calling 2023 a transition year.
He says: “We once again demonstrated our sustained brand momentum and gained market share. We remain fully on track to achieve our full-year guidance. In the remainder of the year, we will deliver a lot of exciting product newness to the market and celebrate the biggest brand moments of this year. Our strong partnerships with our retailers, athletes and suppliers, supported by the fastest and most agile team in the industry, were again crucial for our success.”
Pippa Stephens, senior apparel analyst at GlobalData, is of the view that sportswear overall is being impacted by financial pressures.
She explains: “Ongoing macroeconomic challenges have weighed heavily on Puma’s performance in Q3 FY2023, with total sales falling by 1.8% to €2.3bn. The decline was largely driven by unfavourable exchange rates, with currency adjusted growth of 6.0%, however the deceleration reflects that consumers are now more carefully considering their purchases as strong inflation continues to hit their discretionary incomes.”
Although one consolation according to Stephens is that its key competitors NIKE and adidas have also recently experienced slowdowns, highlighting that sportswear overall is being impacted by financial pressures, with Nike’s revenue growing by just 2.0% in its Q1 to the end of August 2023, and Adidas’ declining by 6% in its Q3 to the end of September 2023.
Puma adds that as in previous years, it will continue to focus on overcoming short-term challenges without compromising the brand’s mid- and long-term momentum, prioritising sales growth and market share gains over short-term profitability.
