EQS-News: PUMA delivers Q2 results fully in line with expectations
EQS-News: PUMA SE
/ Key word(s): Quarter Results/Half Year Results
Q2 H1 2024
PUMA delivers Q2 results fully in line with expectations
Key developments Q2 2024
Arne Freundt, Chief Executive Officer of PUMA SE: “With our second quarter operating performance, we fully delivered on our outlook for the quarter and are well on track to deliver on our outlook for the full year. I could not be prouder of our team and our strong retail partnerships, which were key to delivering this result in an environment of increased currency headwinds, stressed supply chains and macroeconomic and geopolitical challenges that are weighing on consumer sentiment around the world. With view to our strong orderbook for the second half of the year, we reiterate our sales growth outlook in the MSD range and are narrowing our full-year EBIT outlook range to € 620-670m EBIT in light of these external factors. With our continued focus on a good sell-through and disciplined sell-in, we were able to improve our wholesale business in all regions, except EEMEA. With our strong order book for the second half of the year, we will see further improvement in our wholesale business in the coming quarters. The robust demand for the PUMA brand continues to be driven by our great product newness and innovation which we launched in the past months. There is more to come in the second half of the year. On the performance side, ULTRA, PUMA’s fastest football boot, Deviate Nitro Elite 3, PUMA’s fastest running shoe, and MB.04, PUMA’s latest version of its bestseller signature shoe with LaMelo Ball will be the key newness and innovations for the second half of 2024. Together with our new design partner Salehe Bembury, we will continue to stir up the basketball market with new disruptive designs in the coming year. On the Sportstyle side, we are continuing to see strong sell-through with our family footwear retail partners, while we are making good progress in the transition of our Sportstyle Prime offer with Palermo, Suede XL and Easy Rider. We are very encouraged by the first launches of Speedcat in the elevated distribution channels globally and by the great feedback of our retail partners on our product line-up. We are very confident about the future success of the low-profile silhouette and are happy to welcome Rosé, the iconic K-Pop star, as great new ambassador for this emerging trend. We continue to focus our efforts on increasing the brand desirability for the long-term growth of the PUMA brand. With our first global brand campaign in ten years, we have done the first steps and improved our brand consideration with consumers. Delivering great innovation and newness are further pillars of that strategy. With the Euros, Copa America and now the Olympics, we have the perfect stage to create great brand visibility and credibility in our unmissable “fireglow” shoe colourway and showcase the superiority of our Nitro foam technology which enhances the performance of elite and everyday athletes. We are very proud of the achievements of our athletes and are grateful to celebrate these amazing sporting events and iconic moments together with them.”
Second Quarter 2024
Sales grew by 2.1% (ca) to € 2,117.3 million, while currencies continued to be a headwind, negatively impacting sales in euro terms by approximately € 50 million in Q2 2024 (-0.2% reported).
Sales in the Americas region increased by 9.0% (ca) to € 887.5 million, with both the U.S. and LATAM contributing to the growth and showing a sequential improvement. The Asia/Pacific region recorded sales growth of 1.9% (ca) to € 411.9 million, driven by continued growth in Greater China and sequential improvement in the rest of APAC. In the EMEA region, sales decreased by 4.3% (ca) to € 817.9 million due to a decline in EEMEA from a strong prior year quarter (EEMEA grew +111% ca in Q2 2023), while Europe returned to growth.
PUMA's Wholesale business declined by 3.3% (ca) to € 1,529.6 million, due to the decline in EEMEA. In all other regions, the wholesale business improved quarter-on-quarter, driven by continued good sell-through and improved inventory levels in the trade. Our Direct-to-Consumer (DTC) business grew by 19.5% (ca) to € 587.7 million, supported by continued brand momentum and scaled back promotions. Sales in owned operated retail stores increased 16.5% (ca) and e-commerce increased 25.6% (ca). This resulted in an increased DTC share of 27.8% (Q2 2023: 24.3%), in line with expectations.
Sales in Footwear were flat (ca) at € 1,097.0 million on the back of a strong prior year quarter (Q2 2023: +18.2% ca) with all Performance categories as well as Sportstyle Core performing very well. Sales in Apparel grew by 9.2% (ca) to € 705.6 million, while sales in Accessories declined by 4.7% (ca) to € 314.8 million.
The gross profit margin improved by 200 basis points to 46.8% (Q2 2023: 44.8%). Significant headwinds from currencies were more than offset by a favourable product and distribution channel mix as well as tailwinds from sourcing and freight.
Operating expenses (OPEX) increased by 4.3% to € 879.3 million (Q2 2023: € 843.4 million). The increase was primarily due to the continued growth of our DTC business and ramp-up costs of warehouse and digital infrastructure projects while all non-demand creating costs remained under strong control. In addition, currency-related headwinds weighed on the OPEX ratio, which increased by 180 basis points to 41.5% (Q2 2023: 39.8%).
The operating result (EBIT) increased by 1.6% to € 117.2 million (Q2 2023: € 115.3 million), despite negative currency effects on sales, gross profit margin and OPEX ratio. Consequently, the EBIT margin improved by 10 basis points to 5.5% (Q2 2023: 5.4%).
The financial result decreased to € -42.6 million (Q2 2023: € -23.0 million) due to higher currency related losses and a lower interest result.
Consequently, net income decreased by 23.8% to € 41.9 million (Q2 2023: € 55.0 million) and earnings per share amounted to € 0.28 (Q2 2023: € 0.37).
The development of the operating result and net income is fully in line with our expectations that the second half of the year, particularly in the fourth quarter, will be stronger than the first half, and that net income will improve in line with the operating result outlook for FY 2024.
First Half Year 2024
Sales increased by 1.3% (ca) to € 4,219.6 million. Currencies were a major headwind, negatively impacting sales in euro terms by approximately € 150 million in H1 2024 (-2.1% reported).
The Americas region led the growth with a sales increase of 5.1% (ca) to € 1,677.5 million, followed by the Asia/Pacific region with a sales increase of 1.2% (ca) to € 868.5 million, while sales in the EMEA region declined by 2.2% (ca) to € 1,673.7 million.
PUMA’s Wholesale business declined by 3.1% (ca) to € 3,137.7 million as a result of disciplined sell-in and focus on good sell-through in preparation for a stronger sell-in in H2 2024. Our Direct-to-Consumer (DTC) business increased by 16.7% (ca) to € 1,081.9 million. Sales in owned operated retail stores increased 16.0% (ca) and e-commerce increased 18.1% (ca). This resulted in an increased DTC share of 25.6% (H1 2023: 22.8%).
Among product divisions, sales in Footwear increased by 1.6% (ca) to € 2,278.4 million and Apparel grew by 3.5% (ca) to € 1,313.7 million. Accessories decreased by 4.0% (ca) to € 627.5 million.
The gross profit margin increased by 150 basis points to 47.2% (H1 2023: 45.7%). Major headwinds from currencies were more than offset by a favourable product and distribution channel mix as well as tailwinds from sourcing and freight. Operating expenses (OPEX) increased by 1.9% to € 1,724.6 million (H1 2023: € 1,691.7 million). The continued growth of our DTC business and ramp-up costs for infrastructure projects were the main drivers of this increase. As a result, the OPEX ratio was up 160 basis points to 40.9% (H1 2023: 39.3%), also impacted by currency headwinds.
The operating result (EBIT) decreased by 5.1% to € 276.2 million (H1 2023: € 290.9 million), mainly due to negative currency effects on sales, the gross profit margin and the OPEX ratio, which resulted in an EBIT margin of 6.5% (H1 2023: 6.8%).
The financial result decreased to € -69.4 million (H1 2023: € -30.8 million) due to a lower interest result and higher currency related losses.
Consequently, net income decreased by 25.0% to € 129.3 million (H1 2023: € 172.3 million) and earnings per share amounted to € 0.86 (H1 2023: € 1.15).
The development of the operating result and net income is fully in line with our expectations that the second half of the year, particularly in the fourth quarter, will be stronger than the first half, and that net income will improve in line with the operating result outlook for FY 2024.
Working Capital
The working capital decreased by 2.9% to € 1,643.7 million (30 June 2023: € 1,693.0 million). Inventories decreased by 8.6% to € 1,961.1 million (30 June 2023: € 2,145.9 million). The quarter-on-quarter increase mainly reflects the stronger order book for the second half of the year. The Group's total inventory remains at a healthy level, while quality has further improved. Trade receivables increased by 3.4% to € 1,394.7 million (30 June 2023: € 1,348.4 million). On the liabilities side, trade payables increased by 13.1% to € 1,647.9 million (30 June 2023: € 1,457.3 million).
Cash Flow and Liquidity Situation
The free cash flow was at € -204.4 million in the first half of 2024 (H1 2023: € -341.4 million). As of 30 June 2024, PUMA had cash and cash equivalents of
Share Buyback
The share buyback programme announced by PUMA SE on 29 February 2024 began on 07 March 2024. By 30 June 2024, a total of 700,413 shares had been bought back for around
Outlook 2024 The first half of the year was characterized by a volatile environment with persistent currency headwinds, stressed supply chains and muted consumer sentiment globally. In this challenging environment, PUMA continued to make progress on its strategic initiatives of brand elevation, product excellence and distribution quality with special focus on the U.S. and China, and focused on strong sell-through and the best possible service to its retail partners, brand ambassadors and consumers. Based on the results of the first half year and supported by building brand momentum as well as by our strong orderbook for the second half of the year, PUMA reiterates its outlook for the financial year 2024 of mid-single-digit currency-adjusted sales growth. Taking into account the external factors of higher freight costs, changing duties and continued muted consumer sentiment, especially in China, we narrow our outlook for the operating result (EBIT) to a range of € 620 million to € 670 million (2023: € 621.6 million; previous outlook: € 620 – 700 million). We expect net income (2023: € 304.9 million) to change in 2024 in line with the operating result. As in previous years, PUMA will continue to focus on managing short-term challenges without compromising the brand's medium- and long-term momentum. Our sales growth and market share gains will take priority over short-term profitability. The very positive feedback from our retail partners and consumers on our 2024/2025 product line-up and go-to-market strategies gives us confidence for the medium and long term success and continued growth of PUMA
Q2 Brand Strategy Update
Making Progress in Brand Elevation
Launch of PUMA’s biggest Brand Campaign ever in April 2024
World-class performance by PUMA’s sponsored teams and players underscores strong position in Football
PUMA Athletes set three new world records in Track and Field
Further Improvement of Brand Visibility and Recognition
Rebounding in China
Building up performance credibility with Chinese consumers
Driving Brand Heat
Business Highlights in a challenging Environment
Winning in the USA
Building performance credibility with US customer
Launching US-first product propositions
Investing for future growth
Ongoing Momentum in Performance
Continued market share gains in Football
Driving further Momentum in Running Training
Introducing innovative product newness in Basketball and Golf
Building Up Traction with Sportstyle Newness
Maximise current trends
Creating next trends
Strengthening the Foundation
Rounding differences may be observed in the percentage and numerical values expressed in millions of Euro since the underlying calculations are always based on thousands of Euro. Rounding differences may be observed in the percentage and numerical values expressed in millions of Euro since the underlying calculations are always based on thousands of Euro
Financial Calendar:
06 November 2024 Quarterly Statement Q3 2024
The financial releases and other financial information are available on the Internet at “about.puma.com“.
Media Relations:
Robert-Jan Bartunek - Teamhead Corporate Communications – PUMA SE - +49 9132 813134 - robert.bartunek@puma.com Investor Relations:
Gottfried Hoppe – Head of Investor Relations - PUMA SE - +49 9132 81 3157 - gottfried.hoppe@puma.com Notes to the editors: Reuters: PUMG.DE, Bloomberg: PUM GY, Börse Frankfurt: ISIN: DE0006969603– WKN: 696960
Notes relating to forward-looking statements: This document contains statements about the future business development and strategic direction of the Company. The forward-looking statements are based on management's current expectations and assumptions. They are subject to certain risks and fluctuations as described in other publications, in particular in the risk and opportunities management section of the combined management report. If these expectations and assumptions do not apply or if unforeseen risks arise, the actual course of business may differ significantly from the expected developments. We therefore assume no liability for the accuracy of these forecasts.
PUMA is one of the world’s leading sports brands, designing, developing, selling and marketing footwear, apparel and accessories. For more than 75 years, PUMA has relentlessly pushed sport and culture forward by creating fast products for the world’s fastest athletes. PUMA offers performance and sport-inspired lifestyle products in categories such as Football, Running and Training, Basketball, Golf and Motorsports. It collaborates with renowned designers and brands to bring sport influences into street culture and fashion. The PUMA Group owns the brands PUMA, Cobra Golf and stichd. The company distributes its products in more than 120 countries, employs about 21,000 people worldwide and is headquartered in Herzogenaurach/Germany. For more information, please visit https://about.puma.com.
07.08.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG. |
Language: | English |
Company: | PUMA SE |
PUMA WAY 1 | |
91074 Herzogenaurach | |
Germany | |
Phone: | +49 9132 81 0 |
Fax: | +49 9132 81 42375 |
E-mail: | investor-relations@puma.com |
Internet: | www.puma.com |
ISIN: | DE0006969603 |
WKN: | 696960 |
Indices: | MDAX |
Listed: | Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart, Tradegate Exchange |
EQS News ID: | 1962485 |
End of News | EQS News Service |
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1962485 07.08.2024 CET/CEST
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