Puma eyes year of major sporting events as annual profits fall

German sportswear giant Puma today (Thursday) reported a 42 per cent drop in its net profit for 2015, but has targeted a strong 2016 aided by major sporting events such as the Olympic Games and Uefa European Championships.

Puma has posted a net profit for 2015 of €37.1m ($41.4m), down from €64.1m the year before. However, the company, which is seeking to keep pace with rivals Adidas and Nike, saw full-year sales increase by 14 per cent to €3.4bn.

Puma recorded its fastest growth in the Americas, where sales were up 8.8 per cent. In Asia and the Pacific region, they increased 7.6 per cent, while in Europe they climbed 3.6 per cent. Puma chief executive Bjørn Gulden said: “We have seen progress in our performance categories, led by running and training, as well as our lifestyle business where especially our classic styles developed strongly in the second half of the year. I am especially proud to see our positive development in the women’s business where our co-operation with (pop superstar) Rihanna and a strong product offering have increased the interest from both retailers and consumers.

“Unfortunately the strengthening of the US-dollar versus nearly all other currencies has had a significant impact on both our gross profit margin and our operating expenses and therefore also on our EBIT and net earnings.

“But we feel that we as a company have made progress in 2015 and that we have laid the groundwork for high single digit sales growth as well as improved EBIT and net earnings in 2016.  We look forward to a great sports year with the Olympic Games in Rio, Copa America in the USA and the Uefa Euro 2016 in France. We feel we are well prepared with better products, more and better marketing and an even closer co-operation with our retailers.”

Rio 2016 will see Puma’s star endorsement partner, Jamaican sprint ace Usain Bolt (pictured), attempt an unprecedented third clean sweep of the 100m, 200m and 4x100m gold medals. The company will also be well represented at Euro 2016 through partnerships with Italy, Switzerland, Austria, the Czech Republic and Slovakia.

Puma plans to boost marketing efforts around both events, which, in combination with other factors means that its operating expenditure is likely to increase “in a mid to high single-digit range”. The firm expects its operating profit, €96.3m in 2015, to be between €115m and €125m in 2016.