Puma achieves record sales in last year with Gulden as CEO

Puma achieved historic figures during 2022, the last year of Swiss entrepreneur Bjørn Gulden at the helm of the company (he has now left for Adidas).

The company dedicated basically to the business of making and selling sports fashion ended the year with a turnover of 8,466 million euros and an ebit that exceeded 640 million, according to the company’s latest press release.

The multinational recorded sales growth of almost 25 percent (18.8 percent if the impact of the exchange rate is discounted), with increases worldwide, with the exception of Asia Pacific, although this region has returned to the path of growth in the last three months of the year.

The American region overtook the Middle East, Europe and Africa to become the most important region for the company, with revenues of more than 3,686 million euros, representing growth of 29 percent, while in the other regions the rise was 23 percent to 3,114 million, at fixed exchange rates.

Puma reduced its sales of apparel and accessories in the last quarter, while footwear sales soared.

In contrast to the good figures in North America, sales in Asia Pacific contracted by 2.3 percent to 1,666 million euros.

In the last three months of 2022, the region has returned to growth, with an increase of 1.7 percent, albeit with a large gap to the large increases in the Americas (30 percent) and Europe (25 percent).

Puma’s full 2022 results in PDF.

Puma sales by market segment

As was the case in the regions, Puma’s sales performance was very uneven in the various product areas.

Footwear, for example, saw revenues rise by more than 30 percent to around €4.318 billion; apparel was able to advance by only 11 percent to around €3 billion; and accessories sales rose by 5.5 percent to €1.25 billion.

Only taking into account the last quarter, the gap widened: footwear grew even more, by 53.4 percent, and the apparel and accessories business saw a retraction, with declines of 1.7 percent and 6 percent, respectively.

EBIT increased by 14 percent to 640 million euros, dragged down by a slump in the operating profit margin, which moderated from 8.3 percent to 7.7 percent.

Net income came to 355 million euros, compared with 309 million euros in the previous year.

Puma’s ebit rose by 15 percent to 640 million euros.

Puma, with Arne Freundt currently CEO, points to the importance of various marketing strategies used in 2022, such as the sponsorship of the Moroccan national soccer team, which became the first African country to reach the semifinals of the World Cup.

The Herzogenaurach, Germany-based firm indicates that it continues to face a high level of uncertainty related to geopolitics, macroeconomics and trade, due to the Russian-Ukrainian war, the constant danger of recession, high inflation and interest rate increases.

For this reason, the company said that for this year they assume that there will be no further deterioration of these factors and expect market conditions to normalize as soon as possible in countries such as the U.S. and China.

By 2023, Puma expects market normalization in the U.S. and China, the brand said in the presentation of its latest financial results.

Puma estimates that its ebit could be between €595 million and €675 million in 2023, up from €64 million in 2022, with higher gross margin pressures in the first six months of the year.

The brand added that it expects currencies, transport prices and commodity costs again to dilute profitability.

On the cash register front, the forecast is for single-digit growth.

The purchase that changed the sports market

The relationship between Adidas and Puma began in 2005, when the German sports apparel and footwear world acquired one of its main rivals.

The purchase was carried out for a reported €3.1 billion, making it one of the largest transactions in the sporting goods industry in history.

At the time, analysts had mixed reactions to the purchase. Some praised Adidas for acquiring a major competitor, which would allow it to gain more market share and increase its presence in the highly competitive industry. Others were more skeptical, noting that the acquisition would be a drag on Adidas and could distract from its core business.

But time gave its verdict: despite the initial uncertainty, the acquisition has turned out to be a success for both companies.

In the years following the purchase, Adidas has experienced significant growth in both revenue and market share. For example, in 2020, even with the pandemic, the company posted revenues of $26.6 billion, up from $12.4 billion in 2005.

For Puma, the acquisition allowed the company to refocus on its core business and improve its financial position.

In the years prior to the acquisition, Puma had struggled with declining sales and had experienced notable losses.

Since the acquisition, however, the company has experienced a turnaround, with higher revenues and a return to profitability.

In addition to the financial benefits, the acquisition has also had a positive impact on the brands’ respective product lines. Adidas has been able to leverage Puma’s expertise in lifestyle and fashion footwear, while Puma learned from Adidas’ expertise in performance and technology.