Puma’s revenues for the third quarter rose by 13.3 percent in constant currencies to €1,583, leading to a 13.0 percent rise in net income to €100.5 million. This is in sharp contrast with the second quarter, when the company was hit by a 32.3 percent drop in revenues and ended in the red.
This recovery was supported by additional demand following lockdowns, with 20.7 percent growth in the Americas and a 17.7 percent gain in EMEA. Sales in Asia-Pacific declined by 1.9 percent from the year-ago quarter, because of slower growth in Greater China and a sales decline in India, Korea and Southeast Asia. In China, slower sales, which inched up by 2 percent, were due to the build-up of inventory during the first half of the year, with many discounts and promotions during the third quarter to reduce it. Bjørn Gulden, Puma’s chief executive, said in a conference call that the level of inventories in the country has now abated, with the fourth quarter looking better. In Latin America, sales gained 9 percent.
Overall, Gulden said, the third quarter developed much better than the group expected, as retail stores reopened, sports events resumed, consumer confidence improved and sales increased week by week.
Footwear, Apparel and Accessories all showed strong growth in the quarter, improving by 13.9 percent, 8.8 percent and 23.0 percent, respectively. Performance categories such as Basketball, Motorsport, Golf and Teamsport showed the highest growth rates. On the sneaker side, higher-end models are very much in demand. Consumers are also buying more running or hiking shoes. Individual sports are doing well, but sales of products related to team sports are weaker because of restrictions on such activities.
In the third quarter, the company shipped and produced normally, although Gulden said that management remains day to day and very local, to respond to local restrictions in various countries. Most of the brick-and-mortar stores – owned and operated by Puma or retail partners – were open throughout the quarter, but were still limited by many local restrictions. While store traffic remained below last year’s levels, conversion rates continued to be high. Gulden said that consumer patterns have evolved, with less people in stores and more online, producing a great surge in traffic on Puma’s website.
The company made good progress with the upgrade of its logistics network, as it opened a new distribution center in Indianapolis, Indiana, to speed up delivery times. It also continued to work on its Central European warehouse in Geiselwind, Germany, which is on track to be operational by the middle of 2021.
Gulden noted that October started well, but recent developments with the pandemic make the group cautious for the rest of year. But, the company is optimistic about its mid- and long-term perspectives.
The company presented its five objectives for 2021, which include sustainability. Puma presented this year new collections with a focus on eco-friendly materials, including First Mile, which is made with recycled yarn manufactured from plastic bottles collected in the First Mile network. It also implemented cutting-edge dyeing technologies, such as “Dope Dye” and digital printing, to reduce the use of chemicals and water. Puma also pledged to further lower its CO2 emissions and limit itself to 75 percent recycled polyester in all apparel and accessories by 2025. Other objectives include investments in digital to improve the consumer shopping experience, a greater emphasis on women through a new marketing strategy, sport boosting through innovation and an expansion of classic franchises.