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Puma Posts Double-Digit Increase in Sales for FY18

Puma reported its financial results for Q4 and FY18 Thursday, announcing a 17.6 percent increase in currency-adjusted revenue for the year thanks to strong growth in all product categories and double-digit growth in most regions.

In a Nutshell: Puma reentered the basketball endorsement field for the first time in 20 years and launched two footwear franchises, RS-X and Cali in 2018. The brand also signed Adriana Lima as its women’s training ambassador.

Puma stepped up its retail investments, including e-commerce and sport sponsorships, during the year and saw a 17.1 percent increase in operating costs for a total of 544.9 million euros ($615.66 million) as a result. It also revamped its IT infrastructure to modernize its distribution centers and management software.

Additionally, the German footwear brand announced plans to build a new multichannel distribution center in Geiselwind, Germany starting in 2019. Puma expects the center to be operational by 2021.

Sales: Revenue at Puma in Q4 was strong, with a 20.1 percent currency-adjusted increase year-over-year, at 1.23 billion euros ($1.39 billion). The brand also said sales growth was “particularly strong” in both the Asia/Pacific and Americas region during the quarter. Apparel sales were the strongest segment in Q4, up 28.6 percent compared to Q4 of FY17, and footwear sales were up 17.4 percent, the 18th consecutive quarter of positive sales growth for the segment.

Full-year sales were up 17.6 percent over FY17 at 4.65 billion euros ($5.25 billion) in currency-adjusted terms. Without adjusting for currency, the sales increase is lower, at 12.4 percent. Puma says this is a result of trading in multiple markets that have weaker currencies against the euro. Apparel sales rose 22.2 percent in FY18 for a total of 1.69 billion euros ($1.91 billion). Footwear increased 16.6 percent to 2.18 billion euros ($2.46 billion).

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Sales were strong across all regions in FY18 for Puma, led by a 28.8 percent increase in the APAC region, which the brand says was assisted by high growth in China and Korea. Sales in the Americas were up 16.9 percent to 1.8 billion euros ($2.03 billion) but were largely held back due to the weakness of the Argentinean peso. Without adjusting for currency, the region’s sales only increased by 7.9 percent.

Retail sales were another big winner for Puma, reporting 24 percent currency-adjusted sales growth when including e-commerce. The brand says this was due to good like-for-like sales growth and the extension of its retail store network along with the growth of its online business.

Earnings: In Q4, Puma reported net earnings of 15.7 million euros ($17.74 million) up significantly from 2.2 million euros ($2.49 million) in FY17. Earnings per share for the quarter were also up significantly at 1.05 euros ($1.19) in the quarter.

For the full year, net earnings increased 38 percent to 187.4 million euros ($211.73 million) from 134.8 million euros ($152.3 million) in FY17. Earnings per share received a corresponding increase, rising to 12.54 euros ($14.17) from 9.09 euros ($10.27) in the previous year.

The brand is proposing a dividend of 3.50 euros ($3.95) per share in 2019, a payout of 27.9 percent as a percentage of net earnings.

CEO’s Take: Bjørn Gulden, CEO of Puma SE was pleased with the company’s sales and earnings performance for the year and touted the strength of the brand going forward.

“
The double-digit growth in all regions is proof that we have strengthened the PUMA brand globally and the double-digit growth in all product divisions shows that we have enhanced our product portfolio,” Gulden said. “We still have a lot to improve, but we feel we are moving our brand and company in a good direction. We see that our progress will also continue in 2019 and expect our currency adjusted sales to grow around 10% and our operating result to increase to a range between 395 million euros ($446.29 million) and 415 million euros ($468.89 million).”