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Puma Sees Softer First Half as Currency Effects Weigh 

The logo of German sports goods firm Puma is seen at the entrance of one of its stores in Vienna, Austria, March 18, 2016. (Reuters)
The logo of German sports goods firm Puma is seen at the entrance of one of its stores in Vienna, Austria, March 18, 2016. (Reuters)
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Puma Sees Softer First Half as Currency Effects Weigh 

The logo of German sports goods firm Puma is seen at the entrance of one of its stores in Vienna, Austria, March 18, 2016. (Reuters)
The logo of German sports goods firm Puma is seen at the entrance of one of its stores in Vienna, Austria, March 18, 2016. (Reuters)

Puma on Tuesday said it expects a soft first half of 2024 as negative currency effects continue to put pressure on the German sportswear company, but stuck to the annual targets it gave in January.

"Going into 2024, we see that the market environment remains challenging," CEO Arne Freundt said in a statement.

In the fourth quarter of 2023, Puma's currency-adjusted sales in the Americas fell by 6.4% to 846 million euros ($918.5 million), hit by a slump in the value of the Argentine peso, the sportswear maker said.

Revenue in the Asia-Pacific rose 2.8% on a currency-adjusted basis to 468.3 million euros in the quarter, helped by strong growth in the Greater China region and India, Puma said.

However, it flagged sales in the rest of Asia were softer, impacted by consumer sentiment and warm weather conditions.

The group reiterated its 2024 projection for mid-single-digit percentage growth in currency-adjusted sales, and earnings before interest and tax of 620 million to 700 million euros.

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Fashion

Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
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Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)

Kering reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half, as the French luxury group struggles to revive its key label Gucci and worries grow about a prolonged downturn in high-end spending.

Sales at the French luxury group which owns labels Gucci, Boucheron and Balenciaga, fell to 4.5 billion euros ($4.9 billion), an 11% drop on an organic basis, which strips out currency effects and acquisitions.

The figure was below analyst expectations for a 9% drop, according to a Visible Alpha consensus.

It also said second-half operating income could fall by around 30%, following a 42% drop in the first half.

Sales at Gucci fell 19%, showing no improvement from the first quarter, and below analyst expectations for a 16% decline, according to a Visible Alpha consensus.

Kering has been revamping Gucci, the century-old Italian fashion house which accounts for half of group sales and two-thirds of profit.

Minimalist designs from new creative director Sabato de Sarno, which began trickling into stores earlier this year, are key to the design reset and push upmarket, in a bid to cater to wealthier clients who are more immune to economic headwinds.

Kering chief financial officer Armelle Poulou told reporters that the designs had been well received and the rollout was on track.

But the efforts have been complicated by a downturn in the global luxury market, while China's rebound - traditionally Gucci's most coveted market - was clouded by a property crisis and high youth unemployment as Western markets came down from a post-pandemic splurge.

Earnings from sector bellwether LVMH on Tuesday missed expectations as sales rose 1%, offering few signs that a pickup is around the corner, sending shares in luxury goods companies down on Wednesday. Kering traded at its lowest level since 2017.