Puma stated on Wednesday a return to progress within the Americas helped it meet first-quarter gross sales forecasts, sending the German sportswear group’s shares 4 p.c larger because it predicted rising demand for its retro Palermo footwear.
Revamped and newly fashionable footwear from the Nineteen Seventies and 80s like Puma’s Palermo and Adidas’ Samba have helped enhance gross sales for the sportswear manufacturers at a time when customers have in the reduction of on spending and retailers are scuffling with extra shares.
“We’re solely six months now available in the market with the Palermo, and we see how the franchises are persevering with to develop in energy month over month,” Puma chief govt Arne Freundt instructed a information convention.
Shares in Puma had been up 4.2 p.c to €47.14 by 10.00am GMT.
Puma is growing manufacturing of the Palermo footwear whereas being cautious to keep away from oversupply, Freundt stated, echoing feedback by Adidas’ CEO final week about managing the development.
“The terrace development could be very actual and is one thing that gives materials contribution to gross sales,” stated Felix Jonathan Dennl, analyst at Metzler Capital Markets in Frankfurt. “Puma was, I might say, late and jumped on that development later than Adidas did.”
Retailers, the place Puma makes most of its gross sales, are nonetheless working by means of extra inventories, however the firm sees additional enchancment within the second quarter after Puma’s inventories fell by 16.8 p.c in contrast with March 31 final yr.
Foreign money-adjusted gross sales rose 0.5 p.c to €2.1 billion ($2.26 billion), consistent with analysts’ forecasts, as gross sales within the Americas grew for the primary time in 4 quarters to €790 million, partly as a result of enchancment in the important thing U.S. market.
Whereas Puma’s wholesale enterprise fell by 2.9 p.c, its direct to client gross sales – by means of its web site and personal shops – grew by 13.5 p.c, serving to its gross revenue margin enhance to 47.5 p.c.
Puma is investing in promoting to spice up its model, and is on a drive to enhance its credentials as a efficiency sportswear maker, notably in working the place it has labored on its shoe expertise.
Finally month’s Boston Marathon, Puma-sponsored athlete Edna Kiplagat got here third, marking the model’s first podium spot at a World Marathon Main in many years.
Competitors is fierce in working, nevertheless, with newer manufacturers like On Operating and Hoka taking market share from the likes of Nike and Adidas.
“The working class is as crowded as ever,” Morningstar analyst David Swartz stated, including that Puma has a whole lot of work to do because it has a small market share.
By Linda Pasquini and Isabel Demetz.
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