Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

NEWS

Puma aims to boost its brand in ‘challenging’ market

Published On :

Puma aims to boost its brand in ‘challenging’ market

By Alexander Hübner and Helen Reid

(Reuters) – Puma expects a weak first half of the year in a challenging market, the German sportswear brand said on Tuesday, but its shares rose slightly as it stuck to annual targets set in January and announced a new campaign to boost its brand.

Sportswear companies including Adidas, Nike, and Puma, have seen demand weaken as customers battling with inflation cut spending on non-essential goods.

Shares in Puma gained 1% as the company kept last year’s dividend at 82 cents per share and announced a new brand campaign launching in April.

The marketing push comes after Puma has struggled to build brand strength over the past few years, Puma CEO Arne Freundt told reporters at the company’s headquarters in Herzogenaurach.

Puma aims to boost its brand by selling to more upmarket retailers, creating more products tailored to specific markets, and focusing on fewer, higher-profile, brand ambassadors.

The sportswear maker in 2023 started a second partnership with pop star Rihanna, as well as signing rapper A$AP Rocky and footballer Jack Grealish among others.

Puma reiterated its 2024 forecast for mid-single-digit percentage growth in currency-adjusted sales, and earnings before interest and tax of 620 million to 700 million euros.

“We continue to believe that management has been conservative with its guidance and a weaker industry outlook is already in the valuation,” Deutsche Bank analysts said in a note.

LAGGING RIVALS

Puma’s shares have lagged Nike and Adidas over the past year, dragging the company’s valuation down.

Commenting on the group’s share price performance, Puma chair Héloise Temple-Boyer said in the annual report: “I am convinced that it does neither reflect the actual value of our company nor the good operating performance.”

Puma’s fourth-quarter sales in the Europe, Middle East and Africa (EMEA) region dropped 5.2% to 667.9 million euros, a sharp reversal after a 9.9% year-on-year increase in the third quarter.

Puma said the slowdown was due to retailers in the region having excess stock. Puma makes most of its sales through retail partners, though revenues from its own stores have grown.

Currency-adjusted sales in the Americas fell by 6.4% to 846 million euros ($918.5 million), hit by a slump in the value of the Argentine peso. The devaluation will continue to weigh on profitability in the first half, Puma said.

Asia-Pacific, the only region that grew in the fourth quarter, saw sales rise 2.8% on a currency-adjusted basis to 468.3 million euros. Puma said it was led by strong growth in the Greater China region and India while sales in the rest of Asia were held back by weak consumer sentiment.

Freundt said he expected disproportionate growth in China this year, and saw the U.S. market resuming growth in the second half.

Overall, Puma’s footwear sales grew by 12.4% in 2023 while apparel sales dipped 0.3% as shoppers prioritise shoes over track suits and hoodies.

($1 = 0.9211 euros)

 

(Reporting by Alexander Huebner, Linda Pasquini, Ozan Ergenay and Helen Reid; Editing by Milla Nissi, Kirsten Donovan, Ros Russell and Tomasz Janowski)

 

Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts