Puma picks up the pace with yet another forecast update for 2017
German sporting goods maker Puma has increased its full year forecast for the second time in three months, sending a strong message about the brand’s turnaround this year. Puma now expects a larger jump in sales and profit for full year 2017. It says that currency adjusted revenue for the year will rise between 12% and 14%, up from its previous forecast of “low double-digit growth”. It has also increased its guidance for operating profit to a range of €205 million - €215 million. Previously, the company expected operating profit in a range of €185 million to €200 million.
Puma’s share price has already risen by 33% this year
SOURCE: Yahoo Finance
Puma is into the fourth year of its turnaround, and has rebuilt the brand through a combination of two messages: urban style and sporting performance. It’s also got the celebrity endorsements to back up both propositions, counting diverse stars like sprinter Usain Bolt and singer Rihanna amongst its spokespeople.
In the second quarter, sales rose by 17% to €968.7 million, while operating profit soared from €11.9 million to €43,4 million, year-over-year. Full results for the second quarter are expected next week. Volker Bosse, at analyst at Baader Helvea in Munich, said:
“Their marketing spend and investments seem to be paying off and the brand is attractive to consumers. Comparables will get tougher in the second half, but the turnaround is taking shape.”
Next on the company’s agenda, according to CEO Bjoern Gulden, is to raise its “ridiculously low” operating margin of 3.5% to somewhere between 8% and 10%.
Dominion holds Puma in its Global Trends Luxury Fund.
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