Puma CEO Bjorn Gulden believes the company’s decision to reenter the basketball category last year has improved the brand’s sell-through rates and overall shelf space in the U.S., but he admits the Cat is “just scraping the surface” on what it could eventually do. “There is still a lot of work to do,” he said, adding, “[Puma’s basketball] strategy is paying off.”
But the U.S.-China trade war is forcing Puma to alter its supply chain and raise inventory levels ahead of potential tariff hikes. H1 inventories were up 19 percent after the company made a decision in 2019 to give commitments to suppliers to accelerate product receipts in periods it normally would order less.
“The alternative would have been to order during normal demand cycle but rise losing [factory] capacities where we needed them,” commented Gulden.
Second quarter profits jumped nearly 60 percent at Puma to the equivalent of $55.3 million as overall revenues increased nearly 17 percent to $1.37 billion for the period ended June 30. Americas’ revenues climbed 20 percent on a currency-adjusted basis to $515.4 million. Global footwear sales were up 14.5 percent to $657.1 million; apparel revenues rose 22.7 percent to $481.2 million. Puma is currently guiding for 13 percent revenue growth on a constant currency basis.