Higher Prices Help Puma Almost Double Profit in Turnaround PushBy
Net income grows 92% in first quarter to 50 million euros
Company says price increases, better sourcing helped profit
Puma SE’s first-quarter profit almost doubled as the German sports apparel maker raised prices and sold fewer goods at a discount, bolstering its turnaround plan.
Net income jumped 92 percent to 50 million euros ($54.4 million), the company said Tuesday, less than two weeks after raising its full-year earnings forecast. More efficient sourcing also provided a boost.
Puma is in the fourth year of a turnaround, balancing sportswear and street styles with the help of endorsements from celebrities including singer Rihanna and sprinter Usain Bolt. While profitability is still a far cry from the record levels the company achieved more than a decade ago, revenue in the quarter topped 1 billion euros for the first time.
The “strong brand momentum” will help bring “a more normalized level of profitability” to the company, Berenberg analysts Zuzanna Pusz and Mariana Horn said in a note.
Puma shares rose 2.5 percent to 368 euros at 9.50 a.m. in Frankfurt.
The company also said Tuesday it will sponsor French soccer club Olympique de Marseille, having signed a similar deal with Germany’s Borussia Monchengladbach earlier this month.
— With assistance by Heather Burke