The quarterly figures are good, but Puma still has problems, especially with high transport costs and global production. However, there is still no threat of price increases for consumers.
Problems in the supply chain and rising freight costs spoil the sporting goods company Puma’s good mood about the rapid recovery from the corona shock.
The demand is currently exceeding the supply, said CEO Björn Gulden in a conference call on Thursday in Herzogenaurach. Inventories rose at a low level. “These could be higher at the moment.” In the end, procurement was difficult, freight capacities were scarce and the ports were overloaded.
In addition to the freight bottlenecks and the associated exploding transport costs, the consequences of the corona pandemic are not yet over. On the contrary: the number of infections is rising again in large parts of the world. In South Vietnam, an important production location for Puma, restrictions have recently come back and factories have been closed. Puma is now trying to relocate production, for example to the north of the country.
Such shifts are not easy, however, since Puma only works with works known to them. And relocating production back to Europe is seldom an option, and in the case of shoes even almost impossible, since according to Gulden there are no longer any corresponding factories in Europe.
However, Puma does not currently want to pass the rising costs on to customers. According to the CEO, broad-based price increases are currently out of the question. At best, selectively, there could be increases, especially in the case of newer products.
The political tensions between western states and China, which led to calls for boycotts in the market that is important for Puma in the spring, are also not over yet. Sales there fell by 5 percent after adjusting for currency effects in the second quarter. Recently, however, the development in China has improved somewhat, said Gulden.
Despite the numerous operational difficulties, the second quarter was a very good one for Puma, said Gulden, referring to the figures, of which the most important points were already known. Overall, sales in the quarter almost doubled to around 1.6 billion euros, driven by high demand in the North American market. European business also recovered significantly after restrictions on public life were relaxed.
The growth in e-commerce slowed down abruptly: Adjusted for currency effects, it only rose by 8.5 percent, after almost 75 percent in the previous quarter. The main reason was the Chinese buyers’ strike. The net profit was just under 49 million euros. In the previous year, there was a loss of almost 96 million euros in connection with the corona pandemic. The company presented preliminary figures in mid-July and raised its forecast.
For the current year, the management around CEO Gulden now expects sales growth of at least 20 percent after adjusting for currency effects. Puma is aiming for an operating result of 400 to 500 million euros. In the best case scenario, Puma would do better than in the pre-Corona year 2019, when the operating result was 440 million euros.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
