Strong demand for sneakers designed by singer Rihanna helped Puma "achieve higher-than-expected sales growth in the fourth quarter" and the German sportswear firm said on Thursday that "a busy sports calendar should help it in 2016," according to Emma Thomasson of REUTERS.
Puma, which fell out of favor as a fashion brand for women, "made tapping into the booming female sportswear market a key part of its strategy for getting back into the race" with industry leaders Nike and adidas.
It has appointed Rihanna as creative director and the singer "launched her first clothing collection for the company last week in New York, a goth-inspired range in black and white sported by models wearing black lipstick."
Puma CEO Bjorn Gulden
said, "The future is female ... we see more and more women across the world are doing sports. We feel we can be the brand that owns the space between the gym and the runway."
Despite a busy sports calendar with the Rio Olympics, Euro 2016 and Copa América, Puma "gave a relatively cautious outlook for 2016, saying it expected sales growth of a high single-digit rate, as well as an unspecified improvement in EBIT and net earnings for 2016." Gulden said that "he had high hopes for Jamaican sprinter Usain Bolt at the Olympics and said he would continue to be a major asset for Puma even when he stops running." Bolt has said that "he will decide whether to retire after the Olympics."
Gulden said, "Usain will stay with the brand he has been with since he is 15 if he runs or if he doesn't run" (REUTERS, 2/18). QUARTZ's Marc Bain wrote Puma "was smart to sign Rihanna as its women’s creative director in 2014." Research firm NPD Group just named the singer "the most marketable of all big-name celebrities," based on the likelihood that her fans would use the brands she endorses. She is also known for a killer sense of style, "which Puma shoppers have happily embraced." The chunky soled "creeper" sneakers she helped create "sold out immediately when they debuted in September, and then again when Puma restocked them two months later" (QUARTZ, 2/18). In London, James Shotter wrote Puma posted net profit of €37.1M -- or €2.48 per share -- in '15, down from €64.1M the year before. Analysts had expected €39.4M, "according to a Reuters poll."
Stripping out currency fluctuations, Puma "posted its fastest growth in the Americas," where sales were up 8.8%. In Asia and the Pacific region, they were up 7.6%, while in Europe they climbed 3.6%. Gulden said, "Unfortunately the strengthening of the U.S. dollar versus nearly all other currencies has had a significant impact on both our gross profit margin and our operating expenses, and therefore also on our operating profits and net earnings" (FINANCIAL TIMES, 2/18).
