Following today’s release of Puma’s figures for the three months ending 30 September 2023; Pippa Stephens, senior apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Ongoing macroeconomic challenges have weighed heavily on Puma’s performance in Q3 FY2023, with total sales falling by 1.8% to €2.3bn, a significant slowdown from the 5.9% growth experienced in Q2, leading the first nine months of the year to be up just 5.6%. The decline was largely driven by unfavourable exchange rates, with currency adjusted growth of 6.0%, however the deceleration reflects that consumers are now more carefully considering their purchases as strong inflation continues to hit their discretionary incomes. One consolation is that its key competitors Nike and Adidas have also recently experienced slowdowns, highlighting that sportswear overall is being impacted by financial pressures, with Nike’s revenue growing by just 2.0% in its Q1 to the end of August 2023, and Adidas’ declining by 6% in its Q3 to the end of September 2023. Puma maintains its full year guidance of high single-digit currency adjusted growth, meaning it is expecting a further slowdown in Q4, with year-to-date currency adjusted sales up 10.3%.
“EMEA remains Puma’s strongest region, with currency adjusted sales rising 9.9% in Q3, driven by Eastern Europe, the Middle East and Africa, as Western markets continue to suffer the most from high inflation. Asia Pacific grew 4.6% after lockdown restrictions in the comparative period dampened demand. After revenue declining in H1, the Americas returned to growth, rising by 2.5%, driven by a strong performance in Latin America. However, North America continued to suffer from a step back in consumer spend and its dependence on off-price wholesalers. To reduce negative impacts from retail partners in the future, Puma continues to focus on growing its direct-to-consumer (DTC) channel, which achieved impressive currency adjusted growth of 17.4% in Q3, compared to just 3.1% growth for wholesale, and allows it greater control over its brand image. However, within its direct channels, online underperformed, growing by 8.3% versus a 21.8% rise in store sales, as consumers continue to enjoy being able to engage with brands in a physical space again.
“Footwear was Puma’s driving force during Q3, with reported revenue rising by 1.9%, compared to declines of 1.7% and 7.1% for accessories and apparel respectively. This performance will have been helped by its plethora of new launches, including the Avanti – the first product from its renewed PUMA x FENTY collaboration with Rihanna, which has been eagerly anticipated by shoppers. The brand will have also been aided by its involvement with more underserved sports, especially Formula 1. It announced yesterday that it has appointed the rapper A$AP Rocky to be creative director of its F1 partnership, with his vast fan base allowing the brand to draw in more consumers and cement its fashion credentials among younger shoppers.”
