Puma achieves strong sales and profitability growth despite obstacles

Germany
Published:  04 May, 2021

The German footwear manufacturer saw sales increase 25.8% to €1,548.8 million in the first quarter of 2021 despite Covid-19-related lockdown measures and delivery bottlenecks due to port congestion, especially in North America. All regions and product areas contributed double-digit currency-adjusted growth rates to the increase in sales.

America grew 38.5% on a currency-neutral basis, driven by North America. Asia / Pacific grew 28.8% on a currency-neutral basis, led by Greater China. EMEA grew 14% on a currency-neutral basis despite the European lockdowns.

The growth was mainly driven by shoes and textiles, based on strong demand for Running and Training and Sportstyle categories. Accessories grew 19.4% on a currency-neutral basis.

PUMA's wholesale business grew 24.3% currency adjusted to €1,202 million, despite the lockdown-related store closings in several markets and delivery bottlenecks in North America. The direct-to-consumer (DTC) business, which includes both retail stores and e-commerce, rose 31.3% currency-adjusted to €346.8 million, mainly attributed to strong growth in e-commerce from 74.9% (in constant currency).

The operating result (EBIT) rose significantly in the first quarter to €154.3 million compared to €71.2 million in March 2020 due to the strong sales growth, the higher gross profit margin and the continued cost control. This led to an improvement in the EBIT margin to 10% in the first quarter of 2021 compared to 5.5% the year prior.

Outlook

The brand expects the Covid-19 pandemic to have a sustained negative impact on business in 2021. Despite all these uncertainties, sales in the first quarter of 2021 rose by 25.8% currency-adjusted and EBIT by 116.7% and given the strong first quarter, Puma are now in a position to further refine their original outlook from "at least a moderate currency-adjusted increase in sales with upside potential" to "currency-adjusted sales growth in the mid-ten percent range" for the full year 2021.

Credit: PUMA