Puma announces record ₹32,500 cr sales following major restructuring

Puma announces record ₹32,500 cr sales following major restructuring - InsideSport

World’s leading sportswear multinational brand PUMA SE has announced record sales by exceeding the $5 billion (₹ 32,500 crore) mark for the first time.

The brand that won the “Marketer of the Year” Award in the US by Footwear News magazine last year has reported a 14% increase to $5,118 million for 2017 with double-digit growth for all the regions.

The record-high sales have resulted in the increase in Earnings Before Interest and Tax (EBIT) from $158 million to $303 million with net earnings more than double from $ 77 million to $168 million.

Puma, with an increase in Earnings Per Share (EPS) from $5.16 to $1.25, has also proposed one-off total dividend of $15.47 per share for 2017.

The Q4 of 2017 has contributed the operating result (EBIT) $37.12 million, more than doubles from $17.32 million last year.

Puma’s Women’s business has accounted strong growth, driven by HEART, FIERCE, and PLATFORM footwear styles.

The announcement comes after Kering Group, which owns the fashion brand Gucci, decided to liquidate its share to the company’s shareholders last month. The move which is set to be put to the vote on April 26 will see the fashion group distribute 70 per cent of Puma’s shares to its existing shareholders

The move will leave Artemis – the holding company controlled by Kering founder Francois Pinault – with a minority stake in PUMA SE. Kering will now focus on luxury and catwalk brands.

According to Sport Business Group, the decision came as a setback for some investors, who were hoping that Kering would have found a buyer for the stake, which would have secured a premium on their shares. As a result, Puma’s share price took an initial hit.

Puma was acquired by Kering Group in the year 2007 for $6.56bn after it struggled for years with falling profits and sales. Since then it has recovered significantly after focusing its operations in football, running and motorsport, along with its thriving women’s business

Bjørn Gulden, CEO of PUMA SE said, “2017 was a great year for us at PUMA. We grew 16% and achieved for the first time in the history sales above € 4 billion. We almost doubled our EBIT to € 245 million and showed progress in almost all areas.”

“This momentum together with positive feedback from consumers and our retail partners makes us look positive into 2018. We expect to increase our sales around 10% in constant currencies in 2018 and we expect to increase our EBIT to between € 305 million to € 325 million (€ 245 million in 2017).”

“We are also pleased by Kering’s proposal to reduce their ownership in PUMA by a distribution of dividend in kind to its shareholders. PUMA will then be a public independent company with a much higher free float (55%) and with two strong anchor shareholders – Kering (16%) and Artemis (29%). This will allow us to continue our positive development and make PUMA the fastest sports brand in the world.”

Puma has also inked a grand multi-year deal with the Italian Serie A club AC Milan last week. The deal, which is effective from 1st July 2018, makes the sportswear brand the global technical supplier and official licensing partner of AC Milan.