German sportswear brand Puma anticipates a challenging first half of the year amidst a weakening market, echoing sentiments felt across the sportswear industry.
Puma’s sales during the period in the Europe, Middle East, and Africa (EMEA) region declined due to a 5.2 per cent drop in Q4 sales.
Conversely, the brand’s sales in the Americas fell by 6.4 per cent, primarily due to the devaluation of the Argentine peso, impacting profitability in the first half of the year. Emerging as a beacon of growth, The Asia-Pacific region reported a 2.8 per cent rise in sales driven by robust performance in Greater China and India.
Despite the challenges, Puma reiterated its 2024 forecast, anticipating mid-single-digit percentage growth in currency-adjusted sales and earnings before interest and tax ranging from €620 million to €700 million.
Analysts at Deutsche Bank expressed confidence in Puma's management, suggesting that the company's guidance might be conservative given the industry's outlook.
Puma's shares have trailed behind industry giants Nike and Adidas over the past year, affecting the company's valuation. Exacerbating industry-wide struggles with excess stock, Puma reported a 19.6 per cent decline in inventory by 2023-end, amounting to €1.8 billion.
In terms of product performance, the brand’s footwear sales surged by 12.4 per cent in 2023, while apparel sales experienced a slight decline of 0.3 per cent. This shift reflects consumer preferences favoring shoes over traditional sportswear items like track suits and hoodies.
