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Puma Breaks the 4.8 Billion Dollar Mark for the First Time in 2017

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Puma’s success was not surprising and remains the one commercial success that can be directly linked to the power of an influencer. Rihanna continued to propel the women’s division for Puma to strong numbers on the strength of her Fenty line which shifted interest in the brand throughout all footwear models for women’s Puma. Soccer remains a growth target and several innovative campaigns led to the brand being recognized for their marketing. I discussed several of the campaigns on the site and how Puma was looking beyond the Fenty, Heart, Fierce and Platform to capture some share of the market for men. While I still feel that the brand is missing the mark with male buyers the collaborations for styles like Coogi x Puma and the current Fubu x Puma shows that they are building on their legacy footwear in what continues to be a retro environment. Below is my prediction for Puma and the numbers from Puma’s 4th Q and 2017.

Note: Not included in my discussion is Puma’s move to public independent with the reduction in shareholder ownership by Kering.

How Will Your Favorite Sneaker Brand Perform in 2018? | Puma SE ($PMMAF)

From Puma: http://about.puma.com/en/newsroom/corporate-news/2018/february/PRESS-RELEASE-Q4-2017

PROFITABILITY IMPROVES SIGNIFICANTLY IN 2017

2017 Fourth Quarter Facts

  • Sales increase by 14.5% currency adjusted to € 1,040 million (+8.6% reported) with double-digit growth in all regions and footwear being the main growth driver
  • Gross profit margin improves by 250 basis points to 47.1%
  • Operating expenses (OPEX) increase by 11.7%, mainly driven by higher marketing and retail expenses
  • Operating result (EBIT) more than doubles from € 14 million last year to € 30 million
  • Together with Lewis Hamilton we launched 24/7 training campaign featuring new the IGNITE Flash shoe
  • PUMA wins “Marketer of the Year” Award in the US by Footwear News magazine

2017 Full Year Facts

  • Full-year sales increase by 15.9% currency adjusted to € 4,136 million (+14.0% reported), passing the 4 billion sales mark for the first time, all regions with double-digit growth
  • Gross profit margin up 160 basis points at 47.3%
  • Improved operating leverage with operating expenses (OPEX) increasing by only 11.7%
  • Operating result (EBIT) improves significantly from € 128 million to € 245 million
  • Net earnings more than double from € 62 million to € 136 million and EPS increase from € 4.17 to € 9.09
  • Free Cashflow improves strongly from € 50 million to € 117 million
  • One-off total dividend of € 12.50 per share for 2017 to be proposed
  • New lacing technology NETFIT introduced for performance and sportstyle footwear
  • PUMA Future Football boot with NETFIT technology launched for customizable fit
  • Women’s business continues to be strong, driven by HEART, FIERCE, and PLATFORM footwear styles

Bjørn Gulden, Chief Executive Officer of PUMA SE:

“2017 was a great year for us at PUMA. We grew 16% and achieved for the first time in the history sales above € 4 billion. We almost doubled our EBIT to € 245 million and showed progress in almost all areas. This momentum together with positive feedback from consumers and our retail partners makes us look positive into 2018. We expect to increase our sales around 10% in constant currencies in 2018 and we expect to increase our EBIT to between € 305 million to € 325 million (€ 245 million in 2017). We are also pleased by Kering’s proposal to reduce their ownership in PUMA by a distribution of dividend in kind to its shareholders. PUMA will then be a public independent company with a much higher free float (55%) and with two strong anchor shareholders – Kering (16%) and Artemis (29%). This will allow us to continue our positive development and make PUMA the fastest sports brand in the world.”