Puma reported its third quarter earnings on Friday that beat analyst predictions, but still saw a 6.3 percent sales slide as its ongoing turnaround effort continues.
The German sportswear maker said it pulled in $1.98 billion in sales and attributed the figure to weaker consumer demand in crucial markets like North America and the Europe, the Middle East and Africa regions, a planned reduction in its wholesale business and uncertainty in the Middle East due to ongoing conflict.
At the same point last year, the brand posted $2.08 billion in revenue.
Puma noted that sales in the third quarter fell 17.2 percent in North America and 11.5 percent in the EMEA market but saw “double-digit growth” in its Asia Pacific market, supported by demand for low-profile sneakers, like the Speedcat franchise.
Meanwhile, CEO Arthur Hoeld acknowledged the prospect of Puma growing in China due to its partnership with Anta that was officially formalized early in the month.
Anta completed its $1.8 billion purchase of a majority share of Puma and is now a 29.06 percent stakeholder in a move that is crucial to a revamp that has been a top priority since Hoeld was named chief executive of Puma last April.
“October marked an important new chapter in Puma’s history as Anta Sports became our largest shareholder,” Hoeld said. “We see this as a strong vote of confidence in our strategy, our management team and our future, and we look forward to building a successful partnership together.”
Puma also revised its yearly outlook, expecting losses in the $90 million to $145 million range instead of between $56 million and $168 million.
Inventory declined 24.3 percent to around $1.8 billion as part of a push to limit excess product that would traditionally be allocated to discounting, lower margins and weaker brand positioning. Puma indicated that it will use this position to normalize its supply and distribution.
“We also made important progress on our new brand purpose, rooted in our belief that sport is the greatest force on earth,” Hoeld said. “From next year, it will sharpen our focus and strengthen how we connect with consumers around the world. Together with the actions we are taking across the business, it supports our ambition to take the podium and become a Top 3 Global Sports Brand.”
Puma’s shares ended the day up 6.58 percent on the Frankfurt Stock Exchange.
