Puma FY16 sales jump 10 percent, upbeat on FY17 outlook

Puma’s fourth quarter sales increased by 10 percent currency adjusted or 9 percent reported to 958 million euros (1,024 million dollars) with growth across all regions and product segments. Full-year sales also rose 10 percent currency adjusted and 7 percent reported to 3,627 million euros (3,880 million dollars). Earnings per share increased from 2.48 euros (2.65 dollars) last year to 4.17 euros (4.46 dollars) in 2016. The company now expects FY17 revenues to increase at high single-digit.

Commenting on the company’s results, Bjørn Gulden, Chief Executive Officer of Puma said in a statement, “The fourth quarter developed as expected with solid growth in both sales and EBIT. 2016 ended as we had hoped with revenue growth in all regions and product segments as well as a significant increase in EBIT and net earnings. The year has confirmed, that our strategy has been right and we will continue to invest in our mission of becoming the ‘Fastest Sports Brand’ in the World.”

Puma reports positive trading in Q4 and FY16

The company said, the EMEA region reported a double-digit growth of 13.4 percent currency adjusted and 10.4 percent reported to 298.4 million euros (319 million dollars) in the fourth quarter. For the whole year, sales in the EMEA region rose13.2 percent currency adjusted and 9.9 percent reported to 1,382.7 million euros (1,480 million dollars), with France and the DACH area (Germany, Austria, Switzerland) posting positive momentum.

In the Americas region, sales increased by 9.9 percent currency adjusted to 393 million euros (420 million dollars) with growth in North- and Latin America. In Euro terms sales grew by 6.7 percent, as the company said, weakness of currencies in Latin America, notably in Argentina, continued to have a negative impact on reported sales. For FY16, sales in the Americas region rose by 8.3 percent currency adjusted to 1,339.6 million euros (1,434 million dollars). In Euro terms sales grew only by 2.2 percent, as the weakness of currencies in Latin America, notably in Argentina, continued to have a negative impact on reported sales.

The Asia/Pacific (APAC) region sales increased by 6.8 percent currency adjusted and 11.1 percent reported to 266.8 million euros (285 million dollars). Puma said, China was the main driver of this positive development. The Asia/Pacific region was also a strong driver of the overall growth of Puma in 2016. Sales were up by 8.5 percent currency adjusted and 10.5 percent reported to 904.5 million (967 million dollars). The company said, China with a double-digit increase and India with a strong momentum supported the growth in the region.

Footwear proved to be the lead growth driver

In the fourth quarter, footwear continued to drive the strongest growth among the three product segments, showing an improvement of sales for the tenth quarter in a row. Sales were up 17.6 percent currency adjusted and 15.3 percent reported and amounted to 416 million euros (445 million dollars). For FY16, footwear segment sales amounted to 1,627 million euros (1,741 million dollars), representing an improvement of 12.6 percent currency adjusted and 8 percent reported).

Apparel segment sales improved 3.7 percent currency adjusted and 3.3 percent reported to 366.6 million euros (392 million dollars), as sales in Q4 last year were driven by the Euro Cup replica business. Sales in accessories improved by 7.5 percent currency adjusted and reported to 175.6 million euros (187 million dollars) in the fourth quarter. Apparel sales grew by 9.6 percent currency adjusted and 7.1 percent reported, while accessories sales rose by 5.9 percent currency adjusted and 4.7 percent reported during the year.

The company said, despite ongoing negative currency impacts from a stronger US Dollar, it managed to improve the gross profit margin in the fourth quarter by 180 basis points to 44.6 percent. The gross profit margin improved 20 basis points from 45.5 percent last year to 45.7 percent for the full year 2016. The company said that the fourth quarter operating result (EBIT) improved by 30 percent to14 million euros (14.9 million dollars), while full year EBIT was up 33 percent to 128 million euros (136 million dollars).

Expects high single-digit revenue rise in FY17

For the full year 2017, Puma expects that currency-adjusted net sales will increase at a high single-digit rate. The gross profit margin is forecasted to improve to approximately 46 percent and operating expenses (OPEX) are expected to increase at a mid to high single-digit rate, as Puma will continue to invest in marketing, in the modernization and expansion of the owned and operated retail store network and in IT-infrastructure.

At the current exchange rate levels, PUMA’s management expects that the operating result (EBIT) will improve significantly in 2017, thanks to operating leverage, as sales will increase stronger than OPEX, combined with a slightly improved gross profit margin. EBIT for the full year 2017 is therefore expected to come in between 170 million euros (182 million dollars) and 190 million euros (203 million dollars).

Based on Puma’s positive business development in 2016 with an improvement of profitability and cashflow, the Administrative Board will propose a 0.25 euros (0.26 dollar) increase of the dividend to 0.75 euros (0.80 dollar) per share for the financial year 2016 at the Annual General Meeting on April 12, 2017.

Picture:Puma