PUMA’s Q1 Performance Meets Expectations as Anticipated

PUMA’s Q1 Performance Meets Expectations as Anticipated,ARNE FREUNDT, CEO ofcSE, on Q1 Performance:

“In Q1, we met our expectations, despite ongoing market volatility. We achieved growth and improved gross profit margins, overcoming significant currency challenges and tough comparisons to the previous year. While our retail partners are still managing high inventory levels, our sell-through outpaced our sell-ins, helping to balance inventory levels in the wholesale channel. We anticipate improving sell-ins in Q2. Our double-digit growth in Direct-to-Consumer (DTC) sales, coupled with reduced discounts, underscores the enduring demand for our brand.

Our momentum in performance categories, fueled by innovations, continues unabated, contributing to our market share growth. In the Sportstyle category, 2024 marks a transition year as we lay the groundwork for future success through enhanced distribution strategies. We’re seeing encouraging sales trends with our trending terrace and skate styles, such as Palermo and Suede XL, and eagerly anticipate the launch of our vintage running franchise Easy Rider and low-profile shoes Mostro, Speedcat, and Inhale later this year. With a promising order book for the second half of the year and a strong start to our brand campaign, I’m confident in our sequential quarter-over-quarter improvement for 2024.

We’re focused on fortifying the foundation for our next phase of growth by bolstering our brand desirability. The launch of our first brand campaign in a decade has yielded initial results beyond our expectations. In the ‘Year of Sport’ 2024, we’re excited to elevate the PUMA brand journey further and look forward to celebrating this summer’s events with our stakeholders.

Q1 2024 Highlights:

  • Sales increased by approximately 0.5% (constant currency) to €2,102.3 million, despite significant currency headwinds impacting sales in euro terms by around €100 million (-3.9% reported).
  • Positive sales growth in the Americas region for the first time in four quarters, with the U.S. showing improvement.
  • Sales in the Asia/Pacific region increased, driven by growth in Greater China.
  • Sales in the EMEA region remained flat, with Europe performing better than expected.
  • Wholesale business declined, reflecting a focus on improving inventory levels.
  • DTC business grew by 13.5%, driven by brand momentum and reduced promotions.
  • Footwear sales increased by 3.1%, led by strong demand in Football and performance categories.
  • Apparel and Accessories sales declined slightly.

Financial Performance:

  • Gross profit margin improved by 100 basis points to 47.5%, overcoming currency challenges through lower sourcing and freight costs.
  • Operating expenses decreased slightly to €845.3 million, with marketing investments remaining at 10% of sales.
  • EBIT decreased by 9.4%, primarily due to currency headwinds.
  • Net income decreased by 25.5% to €87.3 million, with earnings per share at €0.58.

Working Capital:

  • Working capital increased by 5.4%, driven by changes in inventories and trade receivables.
  • Inventories decreased by 16.8%, maintaining a healthy level.
  • Trade receivables increased by 12.2%, reflecting timing and regional factors.
  • Trade payables decreased by 4.7%.

Overall, our performance in Q1 sets a positive trajectory for the rest of 2024 as we continue to strengthen our brand and navigate market dynamics.

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