Puma upbeat for 2018 after solid end to last year
Reuters
Published Feb 12, 2018 09:59
Puma upbeat for 2018 after solid end to last year
By Emma Thomasson
HERZOGENAURACH, Germany (Reuters) - German sportswear brand Puma (DE:PUMG) said on Monday it expects to increase its operating profit by another third in 2018 and lift sales by 10 percent after it reported solid fourth-quarter sales and profits, helped by strong demand for its shoes.
Puma, which still far lags German rival Adidas (DE:ADSGn) and market leader Nike (N:NKE), has revived its fortunes in recent years by focusing on soccer, running and motorsports, plus its women's business, partnering with singer Rihanna.
Puma, which saw its shares tumble last month after French parent Kering (PA:PRTP) said it would spin off the brand to its shareholders, on Friday announced plans to distribute a one-off dividend of 12.50 euros per share for 2017.
Its shares were up 0.2 percent at 0936 GMT, compared with a 1.9 percent firmer German small-cap index (SDAXI).
Puma, which has been investing heavily in soccer sponsorship with top teams such as Arsenal and Borussia Dortmund, announced a deal on Monday with Italy's AC Milan, currently seventh in the Serie A league. The club had long partnered with Adidas.
Earlier this month, Puma agreed a partnership with Senegal's soccer federation, bringing to three the number of teams it is sponsoring at this year's World Cup, along with Switzerland and Uruguay, although its top side Italy failed to qualify.
Puma reported quarterly earnings before interest and tax (EBIT) more than doubled to 30 million euros (27.30 million pounds) on sales that rose by a currency-adjusted 14.5 percent to 1.04 billion euros, broadly in line with average analyst forecasts.
Sales growth was particularly strong for its core footwear business, up a currency-adjusted 19 percent. Sales rose fastest in the Europe, Middle East and Africa region, up 18.5 percent, followed by the Americas, up 14 percent.
Puma Chief Executive Bjorn Gulden said momentum that built in 2017, along with positive feedback from consumers and retail partners, made the firm positive for 2018, predicting a 10 percent rise in sales in constant currencies.
Puma expects 2018 EBIT of between 305 million and 325 million, up from 245 million in 2017.
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Gulden has said the spin-off from Kering would not affect Puma's strategy but the firm said it would give more details on March 20 at a capital markets day in London.
Written By: Reuters
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