The third largest sporting goods manufacturer in the world is currently growing, even in a difficult economic environment.
(Photo: Bloomberg)
Munich At the sporting goods group Puma, business is still going much better than at the larger competitor Adidas. “Despite all the global uncertainties, the third quarter was another very good quarter for us,” said Puma CEO Björn Gulden on Wednesday. From July to September, Puma sales increased currency-adjusted by 17 percent to a record value of 2.35 billion euros.
Gulden confirmed the outlook for the year as a whole. On the other hand, Adidas had lowered expectations three times and on Tuesday announced further charges due to the immediate stop of the cooperation with controversial US rapper Kanye West.
Puma has been more dynamic than important competitors for some time. However, Gulden also pointed out that the environment had become more difficult. Retailers are currently ordering more cautiously due to high stock levels in the market. “Improved product availability due to a more stable supply chain, better-than-expected sell-through and Puma’s ongoing global brand momentum” have so far more than offset any negative external factors.
Puma’s operating profit grew weaker than sales in the third quarter by 13 percent to 258 million euros. Looking to the future, Gulden said he would continue to invest in employees, the brand and infrastructure, because “sales growth and increasing our market share will be more important than short-term profit optimization”.
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Competitor Adidas had increased sales in the third quarter by only four percent, adjusted for currency effects, to 6.4 billion euros. The development at Puma had already been more dynamic last year. The larger neighbor in Herzogenaurach is currently struggling with a number of problems. Above all, sales slumps in China are making things difficult for the world’s number two. In the summer, Adidas CEO Kasper Rorsted announced his early departure next year.
Greater market strength in key markets
According to industry experts, Puma currently has greater brand strength in key markets. “Gulden does a lot of things right,” says a former Adidas manager. However, it is also easier for a smaller challenger to try something new, for example.
Gulden raised the forecast for the year as a whole in the summer. Since then, the group has been expecting growth in sales in the mid-teens percent range. The operating result (EBIT) should increase from 557 million euros to 600 to 700 million euros. In the first nine months, Puma has already achieved an EBIT of 600 million euros.
>> Read here: “Unacceptable, hateful and dangerous” – Adidas ends cooperation with Kanye West
On the stock exchange, the better performance of Puma has recently helped little. The stock has lost more than half its value in the current year. The price losses were only slightly smaller than at Adidas.
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