Puma sales inch higher on DTC surge

Puma's share price rose strongly on Wednesday after the sporting goods manufacturer delivered an in-line first-quarter performance, with surging direct-to-consumer (DTC) sales making up for weakness in wholesale, as the company reiterated its growth guidance for the full year.

The German sports footwear, apparel and accessories company said first-quarter sales were up 0.5% on a currency-adjusted basis at €2.10bn. However, on a reported basis, sales were down 3.9%.

FX movements have remained a "major headwind" for Puma since the second quarter of 2023, taking €100m off the top line in the first quarter.

The Americas region swung back to growth for the first time in a year, growing by 1% to €790m, while Asia-Pacific sales rose 0.6% to €457m and EMEA sales were flat at €856m.

In terms of distribution channels, wholesale sales – which accounted for 76% of group revenue – fell by 2.9% year-on-year to €1.61bn, but DTC sales jumped 13.5% to €494m which Puma said was a result of "continued brand momentum and scaled back promotions".

Currency headwinds also weighed on the bottom line, with EBIT falling 9.4% to €159m.

Looking ahead, the company is still targeting mid-single-digit growth in currency-adjusted sales for the full year, and EBIT in the range of €620m-700m, compared with €621.6m in 2023.

"In line with our expectations, the year 2024 has started with geopolitical and macroeconomic challenges as well as currency volatility. In this environment, we continued to make further progress on our strategic priorities of brand elevation, product excellence and distribution quality, particularly in the key markets U.S. and China," the company said in its outlook statement.

"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 stock was up nearly 8% at €48.77 by 1512 in Frankfurt.