Even after the change in leadership, the world number three is doing better than its larger competitor Adidas.
(Photo: dpa)
Munich Even after the change at the top, the sporting goods group Puma is still on course for growth. In the first quarter, sales of the global number three increased by 14 percent to almost 2.2 billion euros. “Thanks to our geographically very broad-based business, we were able to more than compensate for the decline in sales in North America due to the strong growth in other regions,” said the new CEO Arne Freundt on Wednesday when the quarterly figures were presented.
At the turn of the year, Freundt took over from the long-time Puma boss Björn Gulden, who moved to the head of the larger competitor Adidas. Under Gulden’s leadership, Puma had grown significantly faster than Adidas.
Puma increased sales last year by 19 percent to 8.5 billion euros for the first time. Adidas, on the other hand, only increased by one percent to 22.5 billion euros due to bad business in China and the end of the cooperation with the US scandal rapper Kanye West. The trend is likely to continue in the current year.
However, there are also a number of challenges for Puma. Freundt is not satisfied with the development in America, where sales fell by almost one percent. In addition, inventories at dealers are still high. In the current second quarter, Freundt therefore only expects sales growth in the low to mid-single-digit percentage range.
However, Puma remains optimistic for the year as a whole. This is also due to the fact that the turning point in China was successful. After two years of sales declines, Puma was able to grow again there. “We are cautiously optimistic that this positive trend will continue,” said Freundt.
Puma should thus further reduce the gap to Adidas this year. While Adidas boss Gulden has prepared investors for a noticeable drop in sales for his first year at Adidas, Freundt is anticipating growth in the high single digits for Puma. The operating result should be between 590 and 670 million euros for the year as a whole. In the first quarter it fell slightly from 196 to 176 million euros. The bottom line profit fell from 121 to 117 million euros.
World market leader Nike grew by 19 percent
The world market leader Nike was also doing well recently. In the third quarter of fiscal 2022/23 – which is the period from December to February for Americans – sales rose 19 percent at constant currency to 12.4 billion dollars.
Freundt had played a key role in shaping the Puma strategy in recent years, including as a member of the board. But he has shown internally in the past few months that he doesn’t just want to “keep it up,” says an insider. Freundt wants to strengthen the brand and grow it above all in China and the USA, where Puma is currently less strongly represented than in other regions of the world.
“Freundt is facing a very difficult task,” said Michael Lichtinger from the management consultancy Atreus. The poaching by the larger competitor Adidas was the crowning of Gulden’s successful years.
Freundt is not allowed to make changes over the knee, but must modernize the product range. “It remains important to continue to fill the innovation pipeline and to give the brand a lasting positive emotional charge, especially for the younger generations.”
Investors are still waiting. Since the beginning of the year, the Puma share has stagnated at around 57 euros. At Adidas, on the other hand, the capital markets are hoping for a trend reversal under the new boss. The share price has increased significantly in recent months.
More: How Adidas wants to win back Chinese customers