Puma SE reported rising sales on demand for sneakers in Europe and its first growth in China in two years, while cautioning that profit margins will remain under pressure from higher costs.
(Bloomberg) — Puma SE reported rising sales on demand for sneakers in Europe and its first growth in China in two years, while cautioning that profit margins will remain under pressure from higher costs.
Revenue climbed 14% to €2.19 billion ($2.41 billion) in the first quarter, the company said Wednesday, slightly ahead of the average analyst estimate. Still, the gross margin narrowed on increased promotional, sourcing and freight costs.
Puma recast its forecast for the rest of the year, saying business may be a bit slower this quarter and should accelerate in the summer and fall. It warned that “recession fears in various markets, persistently high inflation and elevated interest rates are leading to muted consumer sentiment and volatile demand in retail.”
The shares fell as much 4.3% in early German trading, before paring losses. The stock is down about 2% this year.
The robust sales in Europe, its biggest market, and rebounding demand in China helped offset continued troubles in North America, where Puma is struggling to work through a huge inventory of low-price sneakers and apparel.
Chief Executive Officer Arne Freundt is looking to boost Puma’s profitability by building out its direct-to-consumer operations and selling higher-priced soccer, basketball and running sportswear, especially in the US.
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