Puma ups outlook after Man City, basketball boost

Madiha Shakeel July 31, 2019

BERLIN: German sportswear group Puma  raised its forecasts for full-year sales growth and operating profit on Wednesday after a strong second quarter, helped by a return to the U.S. basketball market and optimism about a deal with Manchester City.

Puma shares, which have risen almost 40% in the last year, were indicated up more than 3% in early trade.

Puma, which signed a strategic partnership with English Premier League champions Manchester City in February to take over from Nike, said sales of new kits launched earlier this month were ahead of expectations.

The company, which returned to the basketball market late last year, noted that its sponsored player Danny Green had helped the Toronto Raptors win their first NBA championship, while initial sales of “Ralph Sampson” shoes were encouraging.

Puma has been growing faster than bigger German rival Adidas  and market leader Nike, helped by savvy social media campaigns and partnerships with top soccer clubs and celebrities like singers Selena Gomez and rap mogul Jay-Z.

Nike missed analysts’ estimates for quarterly profit in June as the world’s largest sportswear maker spent more on marketing, while Under Armour Inc cut its full-year revenue forecast for North America on Tuesday.

Puma’s second-quarter sales rose a currency-adjusted 15.7% to 1.23 billion euros ($1.37 billion), above analysts’ consensus forecast for 1.2 billion, while operating profit rose 39% to 80.3 million euros, ahead of a forecast 73 million.

The company said sales continued to rise at double-digit percentage rates in Asia/Pacific and the Americas, with global sales of clothing growing 22.7% and footwear up 14.5%.

It is now expecting full-year currency-adjusted sales growth of around 13%, up from a previous forecast for 10%, and operating profit of 410 million euros to 430 million, up from 395-415 million euros.

Copyright Reuters, 2019

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