“It is reassuring that we returned to growth in Greater China after more than two years of declining business and we are cautiously optimistic about an ongoing positive development,” said Arne Freundt, who was named chief executive officer of Puma last November. He succeeded Bjørn Gulden, who was poached by Adidas.
Net income slipped 3.4 to 117.3 million euros and Puma’s gross profit margin declined by 70 basis points to 46.5 percent. The company blamed the “ongoing industry-wide promotional activity, higher sourcing and freight costs as well as unfavorable currency effects, which had a negative impact on the gross profit margin.”
Freundt cautioned that 2023 would be a “year of transition” marked by “pressure on gross profit margin and profitability.” He forecast low- to mid- single-digit sales growth in the second quarter “due to high inventory levels in the trade and continued headwinds in the market.”
Footwear was the dominant category in Q1, with revenues up 28.8 percent due to “strong demand” for specialist performance categories including football, basketball, running and training,” in addition to what it calls “sport style” sneakers.
By contract, apparel sales inched up 1.5 percent, while accessories revenues slipped 1.7 percent amid anemic demand for legwear and bodywear, especially in North America.
The numbers came in slightly ahead of consensus expectations, with RBC analysts noting that “we expect sentiment on sporting goods to improve in 2023, supported by China reopening, excess inventory liquidation and stabilization of earnings.”
This story was reported by WWD and originally appeared on WWD.com.
