Changes and challenges seem to be what 2023 is made of for German sportswear brand Puma, with executives at the company conceding there may be difficult roads ahead.
“This will be a transitional year from multiple perspectives,” the brand’s chief executive officer Arne Freundt told journalists at a press conference for its third-quarter results on Tuesday.
Puma‘s third-quarter sales rose 6 percent year-on-year to 2.31 billion euros in currency adjusted terms. But at reported rates, sales in the three-month period were 1.8 percent lower, with Puma blaming the stronger euro for the slight decrease.
Coupled with a market environment where there is “too much inventory in the market and too much promotion overall,” the brand is looking at “further elevating the brand, winning in China, winning in the U.S.” to reach its goals, said the executive.
Puma’s third-quarter results were slightly ahead of market expectations. In the first nine months, Puma saw growth of 10.6 percent in currency adjusted terms, and revenues of 6.62 billion euros.
The sportswear brand did most of its business in Europe, the Middle East and Africa, where sales rose 9.9 percent on a currency adjusted basis to just over 1 billion euros.
In Puma’s home market of Europe, business was flat, with a decrease of 1.4 percent in currency adjusted terms. “There was strong momentum elsewhere,” Freundt noted, including in Turkey, South Africa, the Middle East and Ukraine.
In the Americas, third-quarter revenues rose 2.5 percent, in currency adjusted terms, to 854.6 million euros. Breaking the numbers down further, sales in Latin America rose 35.2 percent, but fell 12.4 percent in North America.
Sales in the U.S. have dragged since the beginning of the year, decreasing by 16 percent altogether, in currency adjusted terms, over the first nine months of 2023.
According to Freundt, Puma’s course correction in North America will take some time. “When we look at the U.S., we need to recognize that there’s a softness in the market and that less units are being sold than the prior year,” he conceded. The sportswear brand had previously been too dependent on the off-price segment, he suggested, which was not in line with current strategies. “So we’ve seen a certain decline there,” he said.
But Freundt believes Puma “can come back to growth [there] during the course of the year in 2024.”
Puma’s MB.02, the second version of NBA player LaMelo Ball’s bestselling signature basketball shoe.
COURTESY / PUMA
The company is focused on increasing brand heat in the U.S. and believes that investments into “triple A ambassadors” will help. These include the likes of pop star Rihanna, high profile basketballer LaMelo Ball and, most recently, musician A$AP Rocky, who was named creative director of Puma’s F1 collaboration this week.
“Brand positioning is determined by consistent behavior over time, so it does take time to change consumer perceptions of the brand,” Freundt said.
In Asia Pacific, Puma’s revenues rose 4.6 percent in currency adjusted terms to 435.9 million euros. This reflected the ongoing recovery in China, as well as new growth in strategic markets, Japan and India, the company noted.