EQS-News: PUMA delivers strong sales growth in a volatile year 2023
Source: EQS
Q4 & FY 2023
PUMA delivers strong sales growth in a volatile year 2023 Herzogenaurach,
Key developments FY 2023 & Outlook 2024
“In a volatile environment that impacted the whole industry, PUMA delivered strong growth and profitability fully in line with the outlook. Without the extraordinary devaluation of the Argentine peso, which had a significant one-off accounting impact, our results would have been even stronger. This outcome reflects the strong underlying performance of PUMA and we were only able to achieve this because of our amazing PUMA Family and all of its fantastic partners.
2023 was also an important milestone year for PUMA as we started to lay the foundation for future growth based on strengthening our brand and improving our distribution quality. We are today in a better position than we were at the start of 2023: We established a new marketing organization and started to execute our new marketing strategy to elevate the brand. We also built new management teams in the US and
Going into 2024, we see that the market environment remains challenging. As we are working through this ongoing challenging trade environment together with our retail partners with a clear focus on sell-through and prudent sell-in especially in the US and
2024 - the Year of Sports - will be another important year for PUMA in which we will launch great product innovations, such as our fastest football boot Ultra and our fastest running shoes Fast-R2 and Deviate NITRO Elite 3. In Sportstyle, we will continue to deliver exciting newness with the
PUMA’s strong underlying operating performance diluted by Argentine peso devaluation
Following the extraordinary devaluation of the Argentine peso by 54% in
Before the extraordinary devaluation of the Argentine peso, PUMA’s underlying operating performance in the financial year 2023 was strong, with currency adjusted sales growth above 8% and operating result (EBIT) above last year’s level (2022: € 641 million). In the fourth quarter, despite a challenging market environment and before the significant devaluation of the Argentine peso, PUMA delivered an underlying operating sales growth and a significant improvement in profitability, demonstrating the strength of PUMA's operating business model.
The following chapters only refer to PUMA's reported financial performance after the devaluation of the Argentine peso.
Fourth Quarter 2023
PUMA's wholesale business declined by 8.7% (ca) to € 1,355.0 million. While reported sales growth was negative due to the devaluation of the Argentine peso, the underlying sales performance was flattish, reflecting higher inventory levels in the trade, resulting in lower sell-in while sell-through remained strong. The Direct-to-Consumer (DTC) business grew by 8.0% (ca) to € 627.2 million, with underlying sales growth similar to the previous quarter (Q3 2023: 17.4% (ca)).
Sales growth by product division was diluted by the devaluation of the Argentine peso. On an underlying operating basis, PUMA continued to see strong demand, especially for its performance categories Football, Basketball, Golf and Performance Running.
The gross profit margin improved by 290 basis points to 47.0% (Q4 2022: 44.0%). Currencies continued to be a strong headwind, which was more than offset by tailwinds from fewer promotional activities, price adjustments as well as favourable sourcing and freight costs.
Operating expenses (OPEX) decreased by 9.7% to € 848.0 million (Q4 2022: € 938.7 million) due to strict cost discipline in non-demand generating cost areas and despite continued growth in the DTC channel and regional inflationary pressures. The OPEX ratio remained flat at 42.8% (Q4 2022: 42.7%).
The operating result (EBIT) was up 133.0% to € 94.4 million (Q4 2022: € 40.5 million), despite the Argentine peso devaluation, which reflects the underlying operational strength of the
The financial result decreased to € -67.1 million (Q4 2022: € -26.0 million), mainly due to negative currency conversion effects, including the valuation losses from the devaluation of the Argentine peso.
Consequently, net income decreased by 42.3% to € 0.8 million (Q4 2022: € 1.4 million) and earnings per share amounted to € 0.01 (Q4 2022: € 0.01).
Full Year 2023
The Wholesale business was up by 3.5% (ca) to € 6,468.7 million and the Direct-to-Consumer (DTC) business increased by 17.5% (ca) to € 2,133.0 million. Sales in owned & operated retail stores increased 18.8% (ca) and e-commerce increased 15.0% (ca). This resulted in an increased DTC share of 24.8% (FY 2022: 23.1%), which is back in line with the pre-Covid level.
Footwear continued to lead the growth with 12.4% (ca) followed by Accessories with growth of 3.1% (ca), while Apparel remained flat (-0.3% (ca)).
The gross profit margin increased by 20 basis points to 46.3% (FY 2022: 46.1%). Currencies and industry-wide promotional activities were headwinds to the gross profit margin. These headwinds were more than offset by price adjustments and favourable geographical and distribution channel mix effects. Operating expenses (OPEX) increased by 3.3% to € 3,403.5 million (FY 2022: € 3,295.9 million). The increase was driven by sales-related distribution and other variable costs, the growth of our DTC channel and continued investment in marketing. This was partially offset by operating leverage in other cost areas due to strict cost discipline. The OPEX ratio increased by 60 basis points to 39.6% (FY 2022: 38.9%).
The operating result (EBIT) decreased by 3.0% to € 621.6 million (FY 2022: € 640.6 million) due to slightly higher operating expenses, partially offset by a favourable gross profit margin. As a result, the EBIT margin amounted to 7.2% (FY 2022: 7.6%).
The financial result decreased to € -143.3 million (FY 2022: € -88.9 million), mainly due to negative currency conversion effects, including the valuation losses from the devaluation of the Argentine peso. Tax expenses were at € 117.8 million (FY 2022: € 127.4 million) and the tax rate was at a normalised level of 24.6% (FY 2022: 23.1%).
Consequently, net income decreased by 13.7% to € 304.9 million (FY 2022: € 353.5 million) and the earnings per share amounted to € 2.03 (FY 2022: € 2.36).
Working Capital
The working capital increased by 8.3% to € 1,177.3 million (
Cash Flow and Liquidity Situation
The free cash flow increased significantly by 107.9% to € 369.0 million in 2023 (FY 2022:
Proposal of a Dividend of € 0.82 per share
The positive net income enables the Management Board and the Supervisory Board of
Outlook 2024
We expect geopolitical and macroeconomic headwinds as well as currency volatility to persist in 2024. These conditions already led to muted consumer sentiment and volatile demand in 2023 and we expect these effects to continue in 2024, particularly in the first half of the year.
In this continued challenging environment, we are fully focused on executing our strategic priorities: elevating the brand, increasing product excellence and improving our distribution quality - especially in the key markets
Supported by the continued brand momentum and despite ongoing global geopolitical and macroeconomic challenges, PUMA expects to achieve mid-single-digit currency-adjusted sales growth and an operating result (EBIT) in the range of € 620 million to € 700 million for the financial year 2024 (2023: € 621.6 million). The outlook assumes that the future devaluation of the Argentine peso will be fully compensated by corresponding price increases in
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 exciting product range for 2024 and the very good feedback from retail partners as well as consumers give us confidence for the medium- and long-term success and continued growth of PUMA.
Brand & Strategy Update
2023 Highlights
Foundation for PUMA’s brand elevation established
Great Performance innovation underpins business growth
PUMA makes athletes to perform at their best
New Partnerships drive credibility and commercial success
Trendsetting Newness in Fashion and Sportstyle
Making huge strides on Sustainability Journey
2023 Detailed Brand and Strategy Update
In 2023, we sharpened our strategy to pursue long-term, sustainable growth across all geographies and product categories. To achieve our long-term vision of consistently outperforming the market, our highest priorities remain to drive brand elevation, increase product excellence and improve our distribution quality.
Given the relevance of these markets, special emphasis has been placed on laying the foundation for sustainable long-term growth in the
Foundation for PUMA’s brand elevation established In
We also established a Consumer Insights Team to gain a deeper understanding of our consumers across the entire organization to inform and align our marketing strategies and product engine. To be closer to our most valuable entertainment ambassadors, we complemented our entertainment marketing hubs in
The first major outcome of our brand elevation strategy will be PUMA’s biggest brand campaign ever. Set to launch in
We used 2023 to reset our
Basketball is a crucial part of our strategy to win in the important U.S. market, elevate the brand and clearly reposition PUMA as a sports brand. Our great line up of basketball ambassadors helped us execute this plan by creating exciting products with us and performing strongly on court. This led to PUMA becoming a TOP 3 signature and performance brand in the US. We are also gaining aperception impactof the halo effect from Basketballwith key teen male consumers, where we have moved to #6 favorite brand ranked in Fall 2023 after being below the top 10 in Fall 2021 according to a study by Piper Sandler in 2023.
In 2023, we strengthened our local organization and appointed
In 2023, we implemented a new
In June, we appointed
We continued to increase Sports Marketing to position PUMA as a credible sports brand. We signed relevant athletes such as national female Basketball player ZhangRu and sponsored sports events such as
With view to the advanced digital costumer journeys in
We further enhanced our local-for-local design and production capabilities to be relevant for local consumers. In 2024, around 40% of the products will be designed locally, while around 80% will be produced in
Great Performance innovation underpins business growth We have achieved significant growth through product newness and technology & design innovations, which has led to significant market share gains, particularly in sports categories such as Football, Running and Basketball.
In Football, we successfully established our Football boot franchises FUTURE, ULTRA and KING, which helped to gain significant market shares in football in all markets globally. All three franchises continue to be the strongest growing football styles in The latest release FUTURE 7 adapts to the shape of your foot, so the player can move without constraints for 90 minutes and beyond.The boot’s FUZIONFIT360 upper, a combination of different densities and mesh patterns, provides adaptable support, empowering players to experience a new level of 360-degree freedom of movement.
We made big headlines by bidding farewell to Kangaroo leather and completely redesigned our legendary
To underscore our commitment to women in sports, we were the only sports brand to offer all our football boots in women’s specific fits at the Women’s
Another key highlight of PUMA’s product newness and innovation breakthrough is our award-winning running technology NITRO, which is at the core of our efforts to become a sought-after road running brand and helps the world’s fastest athletes perform on top of their game. In the third year since the introduction of NITRO, PUMA became the fastest growing performance running brand in
NITRO foam was also introduced in our latest basketball shoe, the All-Pro NITRO, worn by NBA rookie and the third NBA Draft
PUMA makes athletes perform at their best Testament to the power of PUMA’s Running Innovation were 22 medals, including six gold medals, at the World Athletics Championships in The PUMA Deviate NITRO Elite helped
In Football, we celebrated a historic moment when PUMA team
On the national team side, we celebrated the victory of
In Basketball, In Golf, PUMA ambassador
New Partnerships drive credibility and commercial success PUMA’s strong position in Football Innovation attracted world-class players to join the PUMA family: Arsenal and
PUMA also became the long-term partner of the CAF, the and CONMEBOL, the
PUMA’s credibility as a record-winning Track & Field brand helped to sign world-class athletes such as Olympic 100m champion
We captured the increasing popularity of Formula 1, both in the
PUMA also used the setting of the much-anticipated race in
To maintain our strong position in Formula 1, we also extended our long-term partnership with Scuderia Ferrari and signed a new contract with
The return of global superstar
Trendsetting Newness in Fashion and Sportstyle In 2023, PUMA continued to pioneer the Sportleisure industry and set new trends.
First and foremost, PUMA invested in the incubation of the “Low Profile” sneaker trend, which is characterized by a flatter outsole, moving the whole silhouette closer to the ground. The Mostro and Speedcat are two iconic PUMA franchises with a distinct point of difference that are setting the path for this trend. Highlights of 2023 were the appearance of the Mostro sneaker during the
Besides the incubation of new trends, PUMA also launched great newness supporting the ongoing skate trend with models like the PUMA-180, the Suede XL as a skate-inspired iteration of PUMA’s most iconic model, the Suede OG as well as Rihanna’s plateau style Creeper Phatty. To bring additional hype and energy to the skate trend, PUMA collaborated with authentic brands like “Rip n Dip”, “Pleasures” and “Butter Goods” that have credibility in this space and resonate strongly with the streetwear driven consumer.
The football inspired terrace trend is also currently shaping the market. We were on time to launch two new strong franchises, the “
Making huge strides on Sustainability Journey In Sustainability, we made significant progress with our FOREVER. BETTER. sustainability strategy and our 10FOR25 targets.
We were able to reach two of our 10FOR25 targets ahead of schedule. For our “Plastics and the Oceans” target, we no longer used plastic carrier bags in PUMA’s owned and operated stores, we supported scientific research on microfibres and researched biodegradable plastic options with our RE:SUEDE circularity experiment.
With RE:SUEDE, we showed that we can turn an experimental version of our classic Suede sneaker into compost under certain tailor-made industrial conditions. A commercial version of the RE:SUEDE will launch with our partner Zalando on
We also reached our Human Rights target ahead of 2025 by training more than 220,000 factory workers on women’s empowerment and completely mapping subcontractors and our Tier 2 suppliers for human rights risks.
We successfully reduced our greenhouse gas emissions and introduced a new, more ambitious science-based target for 2030. Despite strong sales growth, we reached our previous science-based target, which was introduced in 2019 and based on a “well below 2-degrees” scenario, seven years early.
By using renewable energy, including renewable energy certificates, in our own warehouses, stores and offices, and by significantly investing in electric vehicles for our car fleet, we were able toreduce our own greenhouse gasemissionsby 85% compared to our 2017 baseline.
PUMA was able toreduce overall greenhouse gasemissionsby 24% in 2023 compared to 2022, as our core suppliers doubled their use of renewable energy in 2023 compared to the previous year and our logistics partner Maersk introduced low carbon shipment tariffs on our most important sea freight routes.
PUMA’s new climate goals, which were approved by the Science Based Targets Initiative, aim to reduce our emissions by what scientists say is necessary to keep global warming below 1.5 degrees. By 2030, we want to reduce our own greenhouse gas emissions by 90% and those coming from our supply chain and logistics by 33%, compared to 2017.
In 2023, 8 out of 10 PUMA products were made with a significant part of recycled or certified materials. We also scaled up the use of recycled materials. Almost 65% of polyester in our apparel and accessories came from recycled sources as did 8.6% of our cotton.
Starting 2024, all of PUMA’s replica football jerseys are now made from textile waste using PUMA’s RE:FIBRE recycling technology. The RE:FIBRE process focuses on textile waste as the primary source of material, which is broken down on a chemical level to create new textiles. The recycled material is just as good as new and can be used for recycling again and again without losing quality – making RE:FIBRE a promising and more sustainable long-term solution for recycling polyester textile waste.
Transparency and engaging with Gen Z consumers in sustainability projects is a crucial part of our sustainability communication. In 2023, we launched our Voices of a RE:GENERATION initiative, which gives four Gen-Z environmental activists access to our senior management to give their feedback on PUMA’s sustainability strategy. Three of our voices visited PUMA’s supplier factories in
Financial Calendar:
29 February –
The financial releases and other financial information are available on the Internet at “about.puma.com“.
Media Relations:
Investor Relations:
Notes to the editors:
Reuters: PUMG.DE, Bloomberg: Börse
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 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. For more information, please visit https://about.puma.com.
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Language: | English |
Company: | |
91074 Herzogenaurach | |
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 |
EQS News ID: | 1845597 |
End of News |
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1845597 27.02.2024 CET/CEST