Puma Sticks to Full-Year Profit Forecast Despite Drop in Q3 Earnings 

Products of the Puma brand are on display at a store of the largest Russian sports retailer Sportmaster, in Moscow, Russia, 19 October 2023. (EPA)
Products of the Puma brand are on display at a store of the largest Russian sports retailer Sportmaster, in Moscow, Russia, 19 October 2023. (EPA)
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Puma Sticks to Full-Year Profit Forecast Despite Drop in Q3 Earnings 

Products of the Puma brand are on display at a store of the largest Russian sports retailer Sportmaster, in Moscow, Russia, 19 October 2023. (EPA)
Products of the Puma brand are on display at a store of the largest Russian sports retailer Sportmaster, in Moscow, Russia, 19 October 2023. (EPA)

Shares in German sportswear brand Puma were expected to rise on Tuesday after it stood by its full-year profit forecast despite an 8.3% drop in its third-quarter earnings caused in part by a stronger euro.

Puma said it still expected "strong improvement in profitability" in the fourth quarter helped by lower marketing, sourcing and freight costs, despite a gloomy backdrop for consumer demand. Shares in Puma were expected to rise around 3%.

"While the market continues to experience significant macroeconomic headwinds and 2023 remains a transition year, we outgrew the market," Puma CEO Arne Freundt said in a statement.

Sportswear giant Nike had also flagged negative currency exchange effects in September.

Puma reported an operating profit of 236.3 million euros ($252.3 million) for the quarter, down from 257.7 million a year earlier. The company confirmed its target for an annual operating profit of between 590 million and 670 million euros.

Puma, which gets most of its revenues through wholesale, said its wholesale business increased by 3.1% in currency-adjusted terms, while sales from its own stores and websites grew by 17.4%.

Puma had taken shelf space in shops from Adidas and Nike when those two brands were pulling back from the wholesale channel to focus on their own stores, UBS analyst Zuzanna Pusz said, but now that the two bigger companies were turning their focus back onto wholesale, competition was more intense.

"Puma is a great company, but I'm just aware of the fact the industry dynamics are changing for them," she said.



Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
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Hermes 2Q Sales Rise 13% on Continued Appetite for High-End Luxury

People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)
People stand with Hermes shopping bags as they wait at a traffic light in Tsim Sha Tsui, a bustling shopping hotspot, in Hong Kong, China December 5, 2023. (Reuters)

Birkin-bag maker Hermes reported a 13% rise in second-quarter sales on Thursday, demonstrating the continued appetite from wealthy shoppers for its luxury handbags, even as less affluent consumers pull back.

Sales at the French luxury group grew to 3.7 billion euros ($4.02 billion), a 13% organic sales rise that strips out currency fluctuations. The figure was in line with analyst expectations, according to a Visible Alpha consensus.

Operating profit for the first half was 3.1 billion euros, compared to a forecast from consensus provider Visible Alpha for 3.2 billion.

One of the most steady performers in the luxury goods sector -- even as economic conditions worsen -- the French group's results stand out after a string of disappointing earnings updates from peers which have raised investor concern about uncertain prospects for the sector in the coming months.

Hermes' famously classic designs and tight management of production and stock have helped reinforce the label's aura of exclusivity, and CEO Axel Dumas told reporters the company had seen "no big interruption in trends".

However, he said Hermes was seeing slightly less traffic with aspirational clients, which was impacting higher volume products like fashion accessories.