The German sporting goods supplier Puma SE was able to present surprisingly good figures for the third quarter of 2021 on Wednesday. Thanks mainly to strong growth in America and Europe, the results exceeded analysts’ expectations despite persistent delivery bottlenecks and pandemic-related problems in Asia. In view of the generally positive development, the company raised its sales forecast for the entire financial year.
CEO Bjørn Gulden praised another “very strong quarter” and highlighted the difficult framework conditions: “In the third quarter we had to face a variety of challenges such as production losses due to a Covid-19 lockdown in South Vietnam, a problematic situation in the freight sector with high freight rates, inadequate capacities and Cope with congested ports and a very difficult market situation in China, ”he said in a press release.
Thanks to good business in America and Europe: Sales increase by 20 percent
Despite these adversities, the company was able to significantly improve its sales: in the period from July to September they amounted to 1.90 billion euros and thus exceeded the level of the same quarter of the previous year by 20.0 percent. Adjusted for changes in exchange rates, sales grew by 20.4 percent.
Business in America developed most dynamically, with sales increasing by 28.0 percent (currency-adjusted +31.2 percent) to 700.1 million euros. In the EMEA region, which includes Europe, the Middle East and Africa, Puma was able to improve significantly with an increase of 22.5 percent (currency-adjusted +22.3 percent) to 813.7 percent.
In Asia, sales rose by just 3.8 percent (+1.7 percent adjusted for currency effects) to 386.6 million euros. The company justified the comparatively low growth in the region with the “difficult market environment in Greater China” and “Covid-19-related lockdown measures in markets such as Japan, Southeast Asia and Australia”.
Net profit grows by more than a quarter in the third quarter
The sporting goods company was able to improve its gross margin slightly in the third quarter, but had to post significantly higher operating expenses “due to higher expenses for marketing, a higher number of own retail stores as well as higher sales-dependent distribution and storage costs”. In addition, the company “continued to be confronted with operational inefficiencies, especially in the supply chain”.
Despite the higher expense ratio, the operating result (EBIT) rose sharply thanks to the significant growth in sales and the higher gross profit margin: Compared to the same period in the previous year, it grew by 20.8 percent to 228.9 million euros. The net profit even increased by 26.6 percent to 143.8 million euros.
In the first nine months of the current year, sales were thus 5.04 billion euros, an increase of 35.6 percent (currency-adjusted +39.1 percent) compared to the same period of the previous year. The net profit jumped from 54.2 to 301.7 million euros.
Despite ongoing difficulties: Puma raises sales forecast
The available figures prompted the sporting goods manufacturer to raise its sales forecast for the entire financial year: He now expects currency-adjusted growth of “at least 25 percent” compared to the previous year. Previously, only a plus of “at least 20 percent” had been promised. The target corridor for EBIT has been specified to be between 450 and 500 million euros. So far it had been between 400 and 500 million euros.
Puma boss Gulden referred to the persistent problems, but was optimistic for the future: “While the procurement situation will probably be difficult until the end of the year, we still expect high demand for our products,” he explained. “We will continue to master the current operational challenges in the best possible way, but at the same time we will also make future investments in our brand, products and infrastructure. The outlook for our industry in general and for Puma in particular is very positive in my opinion. “
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