Puma SE reported earnings that narrowly beat analysts’ estimates amid strong demand for sneakers in Europe and a recovery in China.
Third-quarter operating profit of €236 million ($252 million) exceeded the average analyst estimate. The company confirmed its earnings forecast for the full year.
Puma shares gained 4.5% in early Frankfurt trading Tuesday. The stock has been under pressure in recent weeks and had its biggest intraday drop in more than three years earlier this month after the sportswear company’s comments on a call with analysts spurred concerns about sales.
Shares of rival Adidas AG, which recently boosted its guidance for the second time in three months, rose as much as 3%.
Chief Executive Officer Arne Freundt is relying on momentum in Europe — especially eastern Europe — along with Latin America and increased demand in China to counteract shrinking sales in the US, the world’s largest sports market.
Puma’s stock tumbled more than 10% earlier this month as investors mulled whether the company could hit its financial targets. The third-quarter earnings “should help bring some calm after a couple of eventful weeks,” James Grzinic, an analyst at Jefferies, wrote in a note.
What Bloomberg Intelligence Says:
Puma’s better-than-expected 3Q sales and margin, coupled with a maintained full-year outlook despite a challenging macro and geopolitical environment, are encouraging and show signs of building brand heat. — Poonam Goyal, BI senior industry analyst
Puma’s Strong 3Q Sales Show Brand Heat Building: React
Puma highlighted the challenging geopolitical and macroeconomic environment, citing the wars in the Middle East and Ukraine, high inflation and the risk of recession that’s clouding consumer sentiment.
In the US, Puma is trying to focus on higher-priced soccer, basketball and running sportswear in the face of a weakening economy. The company previously relied on cheaper products there.
Big shoemakers like Adidas and Nike Inc. are also fending off fast-growing smaller brands like On Holding AG and Hoka, which are especially gaining ground in running shoes.
(Updates with Adidas shares in third and fourth paragraph)
