Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Puma SE (PMMAF, Financial) reported a 5% currency-adjusted sales growth in Q3, supported by all three regions.
- The company achieved a stronger gross profit margin and maintained strict cost control, resulting in an EBIT of EUR237 million.
- Puma SE (PMMAF) launched a successful brand campaign, 'See The Game That We Do,' which has shown strong KPIs, especially in the Americas.
- The performance business saw strong growth, with innovations like the Deviate NITRO 3 gaining traction among athletes.
- Puma SE (PMMAF) is on track to meet its full-year outlook, with a strong order book for Q4 and a good start into the quarter in October.
Negative Points
- The apparel business showed a flattish number, indicating challenges in this segment.
- Greater China faced challenges with muted consumer sentiment affecting bricks-and-mortar retail, leading to a disciplined sell-in approach.
- The EMEA region experienced a slight decline due to a high comp base and muted consumer sentiment in the Middle East.
- Operating expenses increased by 1.9%, driven by the expansion of the direct-to-consumer business and warehouse ramp-up costs.
- Net income in the quarter decreased by 3% compared to last year, mainly due to higher net income attributable to noncontrolling interests.
Q & A Highlights
Q: Could you elaborate on the sell-through trends for sneakers in Q4 and any key learnings from your new go-to-market strategy?
A: We have seen strong sell-through, especially with new colorways like blue and coffee, leading to constant re-orders. The strategy is consistent across regions, with Asia showing readiness earlier. The Speedcat has been reworked for comfort and is appealing to both genders, contrary to our initial assumption of a female skew. We are confident in our 2025 growth targets, supported by a strong order book and the return of our prime business to growth. β Arne Freundt, CEO
Q: How are you managing inventories for the Speedcat, and can you quickly respond to higher-than-expected demand?
A: We have prepared for increased demand by blocking materials accordingly. We have a strong order book for the Speedcat in 2025 and are ready to react if demand exceeds expectations. β Arne Freundt, CEO
Q: Can you provide more details on the impact of the stronger US dollar on sourcing and gross margins?
A: We hedge up to 95% of our expected cash flows for the next 12 to 15 months, including the US dollar. We are well-positioned for 2025, minimizing foreign currency exposure. A 1% increase in the US dollar could impact gross margin by approximately 38 basis points in an unhedged year. β Markus Neubrand, CFO
Q: What are the key drivers for your Q4 EBIT guidance, and what are your plans for apparel in 2025?
A: Our Q4 guidance reflects expected low double-digit sales growth, with currency becoming a tailwind. For apparel, we are focusing on building franchise identity and innovation in performance materials, particularly in training, which is a significant opportunity for us. β Markus Neubrand, CFO and Arne Freundt, CEO
Q: How are you progressing with the local-for-local strategy in China and the US?
A: In China, over 80% of sourcing is local, with 30-40% of designs created locally. In the US, we are opening a Los Angeles design studio to complement our Boston resources, focusing on co-creation for both local and international markets. β Arne Freundt, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
