By Andrea Figueras
Shares in Puma climbed on Tuesday after the company said it is on track to achieve its full-year targets and said it is taking steps toward a normalization of inventory levels.
0913 GMT shares were up 4.3% at EUR52.98.
For the third quarter, the German sporting-goods company said it continues to expect currency-adjusted sales growth in the high single-digit percent range and backed its guidance for an operating result between 590 million euros and 670 million euros ($629.5 million and $714.9 million).
Puma said sustained demand for its products led to a further normalization of inventory levels, which fell by 20% compared with a year before and now stand at an appropriate level.
Sales for the third quarter fell 1.8% to EUR2.31 billion mainly due to currency effects, the company said. On a currency-adjusted basis, sales grew 6%, with growth in Europe, the Middle East and Asia, Asia-Pacific and the Americas. The operating result fell 8.3% to EUR236.3 million, driven by currency effects, the company said.
Puma’s 20% reduction in inventory could offer hope for bullish investors, but this is somewhat counterbalanced by slowing direct-to-consumer sales, UBS analysts said in a research note.
The global trend of healthier living, fashion casualization and people’s general interest in sports remains strong, despite macroeconomic challenges and weak consumer confidence, Baader Helvea analyst Volker Bosse said in a research note.
Puma’s results came after Nike late last month reported profit above estimates for the latest quarter, and Adidas last week upgraded its guidance for the year as a whole.
However, the sporting-goods sector still faces challenges as it grapples with muted sales, foreign-exchange headwinds and elevated cost levels, the analyst said.
Write to Andrea Figueras at [email protected]
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