Puma (ETR:PUMG) reported record sales and earnings before interest and taxes in 2022 but warned that profit is likely to fall this year as high interest rates and inflation crimp consumer spending. The German sports gear maker, which lost its chief executive Bjørn Gulden to cross-town rival Adidas (ETR:ADSGN) last year, said sales rose by 19% in currency-adjusted terms to €8.47 billion (€1 = $1.0642), while EBIT rose 15% to €641 million and net earnings per share rose 14% to €2.36. Strong consumer spending worldwide, the soccer World Cup, and the euro’s weakness all supported Puma’s business in 2022, but the group warned that it’s unlikely to match that performance this year. Currency movements and high freight rates and raw materials prices will all exert a drag on profits, it said. “We continue to face a high degree of geopolitical, macroeconomic and commercial uncertainty,” Puma said in a statement. “The war in Ukraine, the threat of recession, high inflation and high interest rates are resulting in volatile retailer and consumer demand.
It Also Warned of “increased inventory Levels Across Our Industry” That Are Putting Pressure On Margins.
As such, it gave a wide forecast range of €590M-€670M for earnings before interest and taxes this year, whose €630M midpoint is some 2% below last year’s €641M. Revenue growth is expected to slow to just under 10%. The group raised its dividend 14% to 82c a share, at the top end of its targeted payout range of 25%-35% of net earnings. New chief executive Arne Freundt said the group’s priority for the coming year will be to strengthen its position in the U.S. and China, where rival Adidas has struggled in the last couple of years. Investors were undeterred by the weak outlook and pushed the stock up 0.6% at the open in Frankfurt, slightly outperforming the DAX index which was up only 0.4%.