February 12, 2018 / 9:07 AM / a year ago

Puma upbeat for 2018, sees turnaround for soccer sales

HERZOGENAURACH, Germany (Reuters) - German sportswear brand Puma (PUMG.DE) said on Monday it expects to increase its operating profit by another third in 2018 and lift sales by 10 percent, predicting a recovery in soccer sales even after top team Italy failed to qualify for the World Cup.

FILE PHOTO: The logo of German sports goods firm Puma is seen at the entrance of one of its stores in Vienna, Austria, March 18, 2016. REUTERS/Leonhard Foeger/File Photo

Puma, which still far lags German rival Adidas (ADSGn.DE) and market leader Nike (NKE.N), has revived its fortunes in recent years by spending heavily on sponsoring top soccer teams and partnering with celebrities like singer Rihanna.

Puma saw its shares tumble last month after French parent Kering (PRTP.PA) said it would spin off the brand to its shareholders. Chief Executive Bjorn Gulden said on Monday he still expects Kering and France’s Pinault family, which controls Kering, to remain long-term shareholders.

Despite the fact Italy, whose kit Puma provides, will not play at the World Cup, Gulden said he was confident that Puma’s soccer sales would recover in 2018 due to popular new shoes worn by top players, adding it hopes to sign another one or two World Cup teams.

“We think 2018 will be a turnaround year for our soccer business,” Gulden told a news conference.

Puma’s social media campaigns for 2018 will put a big focus on Formula One driver Lewis Hamilton and actress Selena Gomez, Gulden said, adding he is optimistic for collaborations to mark the 50th anniversary of its classic Suede sneaker, including with Japan’s popular Hello Kitty character.

Puma, which already sponsors top teams such as Arsenal and Borussia Dortmund, announced a deal on Monday with Italy’s AC Milan, currently seventh in the Serie A league. The club had long partnered with Adidas.

Puma last week agreed a partnership with Senegal’s soccer federation, bringing to three the number of World Cup teams it is sponsoring, along with Switzerland and Uruguay, well behind Adidas and Nike, which dominate the market for soccer gear.

Puma reported quarterly earnings before interest and tax (EBIT) more than doubled to 30 million euros ($37.8 million) on sales that rose by a currency-adjusted 14.5 percent to 1.04 billion euros, broadly in line with average analyst forecasts.

Puma’s shares were up 0.5 percent at 1053 GMT, underperforming a 1.8 percent firmer German small-cap index .SDAXI.

Puma said it expects a 10 percent rise in sales in constant currencies and 2018 EBIT of between 305 million and 325 million, up from 245 million in 2017.

Gulden said the spin-off from Kering would not affect Puma’s strategy but will give more details on March 20 at a capital markets day in London.

($1 = 0.8146 euros)

Reporting by Emma Thomasson; Editing by Maria Sheahan, Dale Hudson and Georgina Prodhan

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