It is anticipated that shares of the German sportswear brand Puma (PUMG.DE) will increase on Tuesday as a result of the company’s reiteration of its full-year profit prediction. Puma’s earnings for the third quarter decreased by 8.3%, partly due to the euro’s strength.
Despite the bleak outlook for consumer demand, Puma stated that it still anticipated a “strong improvement in profitability” in the fourth quarter, which would be assisted by decreased marketing, sourcing, and freight expenses. It was anticipated that shares of Puma (PUMG.DE) would increase by around 3 percent.
“While the market continues to experience significant macroeconomic headwinds and 2023 remains a transition year, we outgrew the market,” Puma CEO Arne Freundt said in a statement. “2023 remains a year of transition.”
In September, the global leader in athletic apparel, Nike (NKE.N), reported that it was seeing unfavorable effects from currency fluctuation.
Puma reported an operational profit for the quarter of 236.3 million euros ($252.3 million), down from the 257.7 million recorded a year earlier. The company reiterated its objective to achieve an operational profit of between 590 and 670 million euros annually.
Puma, which generates most of its income through wholesale, said that its wholesale business expanded by 3.1% in terms adjusted for currency. In comparison, the company’s sales from its shops and online jumped by 17.4%.
According to Zuzanna Pusz, an analyst at UBS, Puma had gained shelf space in shops from Adidas and Nike while those two brands were pulling back from the wholesale channel to focus on their stores. However, the rivalry was more severe now that the two larger businesses were focusing their attention back on wholesale.
“Puma is a great company, but I’m just aware that the industry dynamics are changing for them,” stated the spokesperson.
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