Rihanna and Kylie Jenner are turning out to be solid investments for Puma.
The German footwear company announced its second-quarter results Wednesday, reporting growth in all segments, led by an increased focus on its women’s business and double-digit growth in apparel.
While gross profit margins were negatively impacted by a stronger U.S. dollar, down to 45.6%, sales grew 10 percent through the first half of the year to 1.6 million Euros ($1.76 million). Net earnings improved 27.6% for the first half of the year to 27.4 million Euros ($30 million), while reported EPS was 1.84 Euros versus 1.44 Euros during the same period last year.
As Puma continues to try to gain ground in the U.S. against rivals Nike, Adidas and Under Armour, sales in the Americas rose 5.2% on a currency-adjusted basis. However, negative currency effects in Latin America, notably in Argentina, continued to impact the sales development in Euro terms. Puma’s largest sales region continues to be Europe, Africa and the Middle East, where sales were up 14 percent on a currency-adjusted basis.
Puma’s recent efforts to draw more women to the brand have proven successful. As a part of its “Future is female” business strategy, the brand signed millennial titans Rihanna and Kylie Jenner to design their own lines of footwear and apparel, helping to bolster the company’s footwear business—by far its largest source of revenue—to 752.2 million Euros ($827.5 million), up 7.9%. This has also helped broaden its relationship with retailers like Foot Locker, who are now allotting the brand more floor space.
Speaking to Puma’s women-centric strategy, Puma CEO Bjorn Gulden said, “We now see that our women initiatives with products and marketing around Rihanna and Kylie Jenner are working very well,” adding that the 2016 Euro Cup helped give the brand “good visibility.”
Puma’s focus on performance is also paying off. The company’s report attributed the ongoing success of its Teamsport products, as well as running and training products, for helping to boost growth in Puma’s apparel division, up 13 percent.
“We are happy with the development in the second quarter. Sales developed as expected with double-digit organic growth,” said Gulden, who expressed that the company is now looking forward to the Olympics, where top runner Usain Bolt will be donning the company’s logo.
Puma reiterated its outlook for the rest of 2016, saying it expected sales to grow at a high single-digit percentage rate.