Even though Puma recorded a first quarter dip in sales revenues, the German sportswear brand still beat market expectations. And at a press conference revealing the results Wednesday morning, Puma executives emphasized that things were going just as planned.

Puma sales dipped 3.9 percent over the first quarter of this year to 2.1 billion euros. When adjusted for currency effects, sales grew 0.5 percent.

“This is exactly what we said at the beginning of the year,” Puma chief executive officer Arne Freundt told journalists. “We expected a flattish Q1 and we are happy to report slight growth.”

January was soft for demand, Freundt noted, but March and April have been “very strong.”

“We are off to a good start in Q2,” he explained. “And that’s fully in line with our strategy.”

Analysts from the likes of Jefferies, DZ Bank and Barclays confirmed that Puma’s Q1 results beat market expectations. They had forecast sales revenues of 2.09 billion euros. It was a “less labored start to 2024 than feared,” Jefferies analyst James Grzinic wrote. As a result, Puma shares rose by 4 percent in Wednesday morning trading.

Puma’s revenues in Europe, the Middle East and Africa fell 3.2 percent to 855.7 million euros. But Freundt said sales in the region were actually better than expected with further improvement already happening in Q2.

In the Americas, sales fell 4.6 percent to 790 million euros. In currency adjusted terms, which translated to a small increase of 1 percent.

The situation in North America should be seen as a positive, Freundt pointed out. Over all four quarters of last year, sales in North America dropped by double-digit percentages. The fact that they only decreased 2.7 percent, in currency adjusted terms, in Q1 this year indicated a steady improvement, the executive argued. Puma expects to be on a “very good trajectory” in North America by the second half of this year, he added.

In Asia-Pacific, Puma sales dropped by 4.1 percent to 456.6 million euros. In currency adjusted terms, that translated to a 0.6 percent increase in Asia-Pacific. Much of this came out of growth in Greater China, the company explained in a statement.

In terms of product categories, footwear sales rose 3.1 percent, currency adjusted, to hit 1.18 billion euros. Apparel fell by 2.4 percent to 608.1 million euros, while accessory sales decreased 3.2 percent to 312.7 million euros.

Freundt spoke about the success Puma has recently had with various lifestyle footwear collections, including the brand’s contributions to the “low profile” sneaker trend — the Speedcat, Mostro and Palermo — as well as sold-out collaborations with musicians Rihanna and A$AP Rocky.

Upcoming sporting events, including the Olympics and major soccer tournaments, should also boost sales this year, as would Puma’s first global brand campaign in a decade. Of the latter, Freundt said, “We’re not disclosing any numbers but it’s the biggest media investment Puma has done to date.”

Puma did need to do some work on its apparel, Freundt conceded. “The dynamic in apparel is different than in footwear because we are competing against more competitors in this field — not only from within our own industry,” he explained. “We need to up our game on the training apparel side because we see that some of our competitors are performing better than us. So we’re overhauling our product architecture.”

Such an overhaul would see Puma moving from a more collections-based strategy to one more focused on key items, Freundt said. The overhaul should become apparent by the second half of 2025.

In other results, Puma’s earnings before interests and taxes, or EBIT, dipped 9.4 percent and stood at 159 million euros. Again, though, this beat market expectations, which had forecast EBIT of 147 million euros. Analysts reported that the result was due to Puma’s strict cost controls. The company’s operating expenses fell in Q1, inventory levels improved and costs like freight were also down.

The German activewear company confirmed guidance for the year. It predicts “geopolitical and macroeconomic headwinds as well as currency volatility to persist in 2024 … particularly in the first half of the year.” But for all of 2024, Puma still expects revenues to grow in the mid-single digits and EBIT to come in between 620 million and 700 million euros.

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