PUMA SLIGHTLY RAISES FULL-YEAR GUIDANCE FOR 2018

2018 First-Quarter Facts

• Sales increase of 21.5% currency-adjusted to € 1,131 million (+12.5% reported) with double-digit growth in all regions and product segments
  Gross profit margin up by 110 basis points to 48.2%
• Operating expenses (OPEX) increase only 7.5%, further improving our operating leverage
• Operating result (EBIT) improves significantly to € 112 million (last year: € 70 million)
• The highly exclusive Phenom Lux, the first shoe designed by Selena Gomez and released in limited quantities, will benefit the Lupus Research Alliance
• PUMA will be offical sponsor of AC Milan (season 2018/19) and of Brazilian top club Sao Paulo Palmeiras (season 2019)
• PUMA signs long-term agreements with World Cup qualifiers Senegalese and Serbian Football Associations

Bjørn Gulden, Chief Executive Officer of PUMA SE:

“We started the year with both first-quarter sales and profitability (EBIT) coming in stronger than we had expected. The double-digit sales growth in all regions and product segments, including an exceptionally high growth in Asia, led to a very strong 21.5% organic sales increase. Operating result even grew by 60% to € 112 million due to higher sales, an improvement in our gross margin of 110 basis points and a tight OPEX management. 

Because of an uncertain business environment caused by volatile currency rates and the difficult economic trade environment, we raised our outlook for the full year only slightly. We now expect our sales to grow 10% to 12% in local currency (previous 10%) and EBIT to come in between € 310 to € 330 million (previous € 305 to € 325 million).”

Sales Development:

First Quarter 2018

PUMA's sales growth continued in the first quarter of 2018. Sales increased by 21.5% currency-adjusted to € 1,131.1 million (+12.5% reported) compared to € 1,005.1 million last year. Due to the strength of the Euro against all other major currencies during the first quarter 2018, there is a 9% negative difference between sales growth in Euro and constant-currency terms.

All regions and product segments supported the sales growth with a currency-adjusted double-digit increase. Particularly our Asia/ Pacific region, driven by China, achieved a strong sales growth of 34.8% in the first quarter. Footwear continued to be the main growth driver followed by Apparel and Accessories. Running and Training as well as Sportstyle were the categories with the strongest growth rates.

The gross profit margin improved by 110 basis points from 47.1% to 48.2%. The increase came from a favourable regional sales mix, higher sales of new products with a better margin and further sourcing improvements.

Operating expenses (OPEX) grew by 7.5% to € 437.3 million in the first quarter. The increase was mainly caused by higher marketing and retail investments as well as higher sales-related variable costs.

The operating result (EBIT) increased by 59.9% from € 70.2 million to € 112.2 million in the first quarter 2018 due to a strong sales growth, a higher gross profit margin and an improved operating leverage. This corresponds to an EBIT-margin of 9.9% compared to 7.0% in the first quarter last year.

Net earnings went up by 35.8% to € 67.4 million (last year: € 49.6 million). This translates into earnings per share of € 4.51 compared to € 3.32 in the first quarter 2017.

 

Working Capital

Strong currency effects and our continued focus on working capital management led to a decrease of working capital of 1.3% to € 791.0 million. Omitting these currency impacts, working capital would have grown by approx. 10%, lower than our growth in business. Inventories rose only slightly by 1.3% to € 760.4 million and trade receivables grew by only 5.8% to € 685.0 million. Trade payables decreased by 8.0% to € 471.4 million.

Outlook 2018

The first quarter saw a strong increase in sales and profitability, but several uncertainties in our business environment have recently developed. This includes adverse and volatile currency developments, political instabilities as well as the uncertain trade environment between the USA and China. Therefore, we adjusted our guidance for the full year 2018 only slightly. PUMA now expects that currency-adjusted sales will increase between 10% and 12% (previous guidance: currency-adjusted increase by approximately 10%). The operating result (EBIT) is now anticipated to come in between € 310 million and € 330 million (previous guidance: between € 305 million and € 325 million). In line with the previous guidance, the Management still expects that net earnings will improve significantly in 2018.

Rounding differences may be observed in the percentage and numerical values expressed in millions of Euro since the underlying calculations are always based on thousands of Euro.

Rounding differences may be observed in the percentage and numerical values expressed in millions of Euro since the underlying calculations are always based on thousands of Euro.

Financial Calendar FY 2018

The financial releases and other financial information are available on the Internet at „about.puma.com“.

Notes to the editors:

• The financial reports are posted on about.puma.com.

• PUMA SE stock symbol:
   

  Reuters: PUMG.DE, Bloomberg: PUM GY,
  Börse Frankfurt: ISIN: DE0006969603– WKN: 696960

Notes relating to forward-looking statements:

This document contains forward-looking statements about the Company’s future financial status and strategic initiatives. The forward-looking statements are based on the current expectations and assumptions of the management team. These are subject to a certain level of risk and uncertainty including, but not limited to those described above or in other disclosures, in particular in the chapter Risk and Opportunity Management in the Group Management Report. In the event that the expectations and the assumptions do not materialize or unforeseen risks arise, the Company's actual results can differ significantly from expectations. Therefore, we cannot assume responsibility for the correctness of these statements.

#REFORM is directly inspired by Olympian Tommie Smith, and his “Silent Gesture” that sparked global debate around the issues of civil rights and universal equality at the 1968 Mexico City Olympics.

PUMA’s belief is that to achieve faster progress, a team is essential. Therefore, PUMA has created Team#REFORM. This is a collective of individuals who believe that progress toward universal equality needs to be achieved faster. To lead Team#REFORM, PUMA has selected Captains, including rapper Meek Mill (who will focus on criminal justice reform), and WNBA All-Star Skylar Diggins-Smith (gender equality), alongside Captain Emeritus, Tommie Smith (universal equality). The brand will also be partnering with entertainment company Roc Nation to spread the message of #REFORM through live and social engagement. Future #REFORM Captains will be named in the coming months.

On October 16th, to commemorate the 50th anniversary of the Silent Gesture at the 1968 Olympics, Team#REFORM Captains will call on PUMA brand ambassadors and all likeminded individuals to join Team#REFORM and celebrate Tommie’s achievements with the #THIRDSALUTE. The #THIRDSALUTE is a social media movement in which individuals challenge others to post an image of themselves with a raised fist, and make a donation to charities pursuing universal equality, including the American Civil Liberties Union (ACLU), an organization which has worked for more than 100 years to defend and promote the liberties enshrined in the United States Constitution. All donations from the #THIRDSALUTE will be matched by PUMA, up to $100,000 through December 31, 2018.

On the 16th, PUMA will also launch the “Power Through Peace” Collection, commemorating Tommie’s Silent Gesture, and featuring graphics designed by Lance Wyman, creator of the logo of the ‘68 Olympics. All profits from the sales of this collection will be donated to charities pursuing universal equality.

Throughout 2018/19 and beyond, PUMA will be working with #Reform Captains to launch other programs that will promote actions to further the goal of universal equality.

#THIRDSALUTE will be kicked off by Olympic Champion Tommie Smith and is directly inspired by his famous silent gesture at the 1968 Olympic Games, exactly 50 years ago. After he received his gold medal, Smith bowed his head and raised his fist in a silent gesture, which drew attention to human rights abuses and discrimination. Upon leaving the stadium, he faced boos from the crowd, but he stood by his statement and bravely raised his fist a second time. #THIRDSALUTE will bring together celebrities from the worlds of sports and entertainment to post a picture of themselves online, raising their fists just like Tommie Smith did.

“Our brand mantra, ‘Forever Faster,’ spans everything we do—from making to marketing and every discipline in between,” said Adam Petrick, Global Director of Brand and Marketing at PUMA. “We need to be faster than ever in the way we react and adapt. Somerville is a city buzzing with creative, diverse energy that will help us live out our ‘Forever Faster’ mentality.”
 
A long-term lease for the space—a soon-to-be-built 300,000-square-foot building—has been negotiated with developer and landlord Federal Realty Investment Trust. PUMA North America was represented by Michael Joyce at Cushman & Wakefield. Federal Realty was represented by Joe Flaherty at JLL. Assembly Row is easily accessible via Interstate 93 and the MBTA, providing ease of access for the company’s urban and suburban employees.
 
“We are excited and proud to welcome one of the world’s most recognizable brands to Somerville and look forward to introducing PUMA to our talented and diverse workforce,” said Somerville Mayor Joseph A. Curtatone. “An energetic, creative and forward-looking company like PUMA will fit right in with the innovation culture that is thriving here and continuing to grow.” 

To learn more about PUMA North America careers, visit our website.

Download the Media Kit below to get the press release and picture.

The picture shows an exterior rendering of PUMA’s new North American headquarters at Assembly Row in Somerville, Mass. The company will relocate there in 2021

Picture Rendering Credit: PUMA/ Federal Realty Investment Trust 

Anne-Laure Descours joined PUMA in 2012 and has been overseeing the product development and sourcing activities of all global Apparel and Accessories for the PUMA Group since then. The French national has almost 30 years of experience in the sourcing industry. Prior to PUMA, she worked for international sourcing organisations, such as Li & Fung and Otto International, all based in Hong Kong. As Chief Sourcing Officer, she will also be responsible for sustainability within the PUMA Group. She will continue to be primarily based in Hong Kong.
 
PUMA’s Chief Operating Officer Lars Radoor Sørensen has - together with the Supervisory Board – decided to step down as board member of PUMA SE, effective 31 January 2019, to pursue other interests. Lars joined PUMA in 2013 and was appointed Managing Director in 2014. As Chief Operating Officer, he was in charge of Sourcing, IT, and Logistics. IT and Logistics will now be reporting to PUMA’s Chief Financial Officer Michael Lämmermann. The Supervisory Board would like to thank Lars for his efforts and contribution to the company’s success.

Download the Media Kit below to get the Press Release and Picture.