German sportswear firm Puma's sales up 1.3% to $4.6 bn in H1 FY24

Puma, a renowned global sportswear brand, has reported a 1.3 per cent increase in sales (currency adjusted) to €4.219 billion (approximately $4.6 billion) for the first half of fiscal 2024 (H1 FY24). Despite this growth, currencies negatively impacted sales in euro terms by approximately €150 million, resulting in a reported decline of 2.1 per cent.

The Americas region led the growth, with sales increasing by 5.1 per cent to €1.677 billion, followed by the Asia-Pacific region with a 1.2 per cent rise to €868.5 million. However, sales in the Europe, the Middle East and Africa (EMEA) region declined by 2.2 per cent to €1.673 billion, the company said in a press release.

Puma’s wholesale business declined by 3.1 per cent to €3.137 billion due to disciplined sell-in and a focus on good sell-through in preparation for stronger sell-in in the second half of 2024. In contrast, the direct-to-consumer (DTC) business grew by 16.7 per cent to €1.081 billion, with sales in owned and operated retail stores increasing by 16.0 per cent and e-commerce sales rising by 18.1 per cent. This resulted in an increased DTC share of 25.6 per cent, up from 22.8 per cent in H1 FY23.

Among product divisions, footwear sales increased by 1.6 per cent to €2.278 billion, apparel grew by 3.5 per cent to €1.313 billion, while accessories decreased by 4.0 per cent to €627.5 million. The gross profit margin improved by 150 basis points to 47.2 per cent, compared to 45.7 per cent in H1 FY23.

Operating expenses increased by 1.9 per cent to €1,724.6 million, up from €1.691 billion in H1 FY23. Consequently, the operating result (EBIT) decreased by 5.1 per cent to €276.2 million, with the EBIT margin falling to 6.5 per cent from 6.8 per cent. The financial result worsened to minus €69.4 million due to higher currency-related losses and a lower interest result. Net income decreased by 25.0 per cent to €129.3 million, and earnings per share amounted to €0.86, down from €1.15 in H1 FY23.

In the second quarter of fiscal 2024 (Q2 FY24), Puma reported a 2.1 per cent increase in sales to €2.117 billion. Currencies continued to be a headwind, negatively impacting sales in euro terms by approximately €50 million.

The Americas region saw a 9 per cent increase in sales to €887.5 million, driven by growth in both the US and Latin America (LATAM). The Asia-Pacific region recorded a 1.9 per cent sales growth to €411.9 million, primarily due to continued growth in Greater China. In contrast, the EMEA region experienced a 4.3 per cent sales decline to €817.9 million due to a significant drop in Eastern Europe, Middle East and Africa (EEMEA), which had shown substantial growth in the same quarter last year. Europe, however, returned to growth.

Puma's wholesale business in Q2 FY24 declined by 3.3 per cent to €1,529.6 million, primarily due to the decline in EEMEA. Nevertheless, the direct-to-consumer (DTC) business grew by 19.5 per cent to €587.7 million.

Footwear sales remained flat at €1,097.0 million, following a strong prior year quarter. Apparel sales grew by 9.2 per cent to €705.6 million, while Accessories sales declined by 4.7 per cent to €314.8 million. The gross profit margin improved by 200 basis points to 46.8 per cent from 44.8 per cent in Q2 FY23.

Operating expenses (OPEX) increased by 4.3 per cent to €879.3 million, up from €843.4 million in Q2 FY23. The operating result (EBIT) increased by 1.6 per cent to €117.2 million, resulting in an EBIT margin of 5.5 per cent, slightly up from 5.4 per cent. The financial result deteriorated to minus €42.6 million due to higher currency-related losses and a lower interest result. Consequently, net income decreased by 23.8 per cent to €41.9 million, with earnings per share amounting to €0.28, down from €0.37 in Q2 FY23.

“With our second quarter operating performance, we fully delivered on our outlook for the quarter and are well on track to deliver on our outlook for the full year. With view to our strong orderbook for the second half of the year, we reiterate our sales growth outlook in the MSD range and are narrowing our full-year EBIT outlook range to € 620-670 million EBIT in light of these external factors,” said Arne Freundt, chief executive officer of Puma.

Fibre2Fashion News Desk (DP)