Positive 2023 for Puma, But Brand Warns of Softening Demand This Year

Puma saw sales gr0w 6.6 percent in currency adjusted terms last year to 8.6 billion euros.

“In a volatile environment that impacted the whole industry, Puma delivered strong growth and profitability fully in line with the outlook,” the German sportswear brand’s chief executive officer Arne Freundt said in a statement.

But the positive result came on the back of a difficult fourth quarter, during which Puma saw sales decrease in almost every category. Over the last three months of 2023, Puma sales fell 4 percent, currency adjusted, to 1.98 billion euros.  

Fourth quarter declines came in both of Puma’s biggest markets. In Europe, the Middle East and Africa, sales fell 5.2 percent and in the Americas, they dropped 6.4 percent, currency adjusted.

Puma blamed the devaluation of the Argentinian peso for the decrease in the Americas, explaining that this had an impact of around 400 million euros on its numbers. “Without the extraordinary devaluation of the Argentine peso, which had a significant one-off accounting impact, our results would have been even stronger,” Freundt said.

During all of 2023, sales in the Americas fell by 2.4 percent, in currency adjusted terms, to 3.39 billion euros. Puma has consistently said that North America is one of the markets it most wants to grow, particularly in sports like basketball.

The European market fared better, with sales there growing 13.4 percent over the whole of last year to hit 3.42 billion euros.

Asia Pacific was Puma’s best-performing sales territory, during the full year and over the last quarter, driven partially by the later Chinese recovery from COVID-19 lockdowns and sales in India. In 2023, sales in Asia Pacific grew 13.6 percent, currency adjusted, to 1.79 billion euros. Over the last quarter, it was also the only region where Puma saw growth, with sales there rising 2.8 percent.

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In 2023, Puma saw the return of musician Rihanna to the brand’s roster of creatives.

In terms of product categories, both footwear and apparel sales fell over the last quarter, by 5.5 percent and 5.9 percent respectively. Only accessories, the brand’s smallest sector, increased sales in the final three months of the year, by 7.3 percent.

This resulted in flattish apparel sales for the full year: They fell by 0.3 percent, currency adjusted, to bring in 2.76 billion euros last year. Footwear, Puma’s biggest category, rose 12.4 percent, currency adjusted, to 4.58 billion euros. Accessory sales increased 3.1 percent, currency adjusted, over the year to total 1.25 billion euros.

Puma’s EBIT — earnings before income and profit, a key metric — totaled 621.6 million euros last year, a decrease of 3 percent. This was due to higher operating costs and negative currency effects, the company said, even though Q4 EBIT had developed more positively. The sportswear sector has struggled with higher production and freight costs as well as mild inflation and weaker consumer demand.

Analysts have also noted that Puma is now facing increased competition from other smaller sportswear brands like On Running and Hoka. Puma shares have fallen recently and have lost around a third of their value over the past year.

For the coming year, Puma expects more of the same. In its statement, the brand predicted growth in the mid-single-digits for 2024 and EBIT between 620 million and 700 million euros. Puma also forecast a difficult first half of this year with “geopolitical and macroeconomic headwinds as well as currency volatility” causing further “muted consumer sentiment and volatile demand.”

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