Asia-Pacific reported a strong 26 per cent growth, closely followed by the EMEA region with a 25.2 per cent increase. In contrast, the Americas region saw sales slide by 2.7 per cent, attributed to challenging macroeconomic conditions, elevated inventory levels, and the company’s dependency on the off-price wholesale business in the US, Puma said in a press release.
In H1 FY23, Puma’s wholesale business witnessed a solid 9.6 per cent YoY growth, taking it to €3,327.4 million, while the direct-to-consumer (DTC) business saw a robust 24.6 per cent YoY increase, amounting to €980.9 million. The company also noted the positive performance of owned and operated retail stores with 24 per cent YoY growth, and a 25.6 per cent YoY surge in e-commerce, thereby increasing DTC’s share to 22.8 per cent from 21 per cent in H1 FY22.
Puma’s H1 FY23 sales rose 12.7 per cent to €4,308.3 million, led by Asia-Pacific and EMEA regions.
However, net income in H1 FY23 fell 16.2 per cent to €172.3 million amid a decrease in gross profit margin to 45.7 per cent and a rise in operating expenses.
Footwear drove growth with a 23.5 per cent increase.
In Q2 FY23, sales reached €2,121 million.
Footwear continued to drive the brand’s growth with a 23.5 per cent YoY increase, while apparel and accessories witnessed a modest growth of 2.9 per cent YoY and 0.8 per cent YoY, respectively.
However, Puma’s gross profit margin experienced a downturn by 120 basis points to 45.7 per cent, compared to 46.8 per cent in H1 FY22. Likewise, operating expenses rose by 12.5 per cent to €1,691.7 million, causing an 80 basis points increase in the operating expenses ratio to 39.3 per cent.
Reflecting the margin squeeze, the operating result (EBIT) declined by 15 per cent to €290.9 million, resulting in an EBIT margin of 6.8 per cent, down from 8.7 per cent in H1 FY22. Subsequently, net income decreased by 16.2 per cent to €172.3 million and the earnings per share reduced to €1.15 from €1.37 in the previous year.
In Q2 FY23, sales increased to €2,121 million, driven by robust growth in EMEA and Asia-Pacific, especially Greater China. However, gross profit margin declined to 44.8 per cent due to currency impacts, sourcing costs, and promotions. With operating expenses increasing by 6.6 per cent to €843 million due to DTC growth and higher marketing expenses, the EBIT consequently declined by 21.2 per cent to €115 million, bringing the EBIT margin down to 5.4 per cent. Net income also saw a decrease of 34.7 per cent to €55 million, the release added.
At the end of Q2 FY23, inventory levels were up by 8.1 per cent to €2,146 million, a return to normalised levels.
Arne Freundt, chief executive officer of Puma, said: “On the back of our Q2 results, we are perfectly on track to achieve our full-year outlook in the transition year 2023. Puma continued to grow by double-digits, demonstrating continued strong brand momentum, despite the volatile environment. As the best partner for wholesale, we worked together with our retailers through elevated inventory levels in the market and successfully normalised our own inventory levels as planned.
“Our strategic priorities Brand Elevation, winning in the US and China are key for Puma’s future growth trajectory. We are making good progress on all levels and with the announcement of new leaderships for global marketing and Mainland China, we have put the required organisational foundation in place.”
Fibre2Fashion News Desk (DP)
