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PUMA SE (OTC:PUMSY) reported preliminary 2023 results, impacted by a globally challenging geopolitical and macroeconomic environment.
The German sportswear company reported 2023 sales growth of 1.6% (+6.6% in constant currencies) to around €8.602 billion (vs. guidance of high single-digit currency-adjusted growth), owing to extraordinary devaluation of the Argentine peso by 54% in December 2023 and the application of hyperinflationary accounting.
PUMA sees EBIT of about €622 million (vs. guidance of €590 million to €670 million).
Excluding the impact of the Argentine peso devaluation, PUMA witnessed currency-adjusted sales growth of above 8% and an EBIT above last year figure of €641 million. Net income came in at €305 million in the year.
In the fourth quarter of FY23, sales fell around 9.8% Y/Y (-4.0% in constant currencies) to about €1.982 billion, and EBIT rose significantly to around €94 million (vs. €41 million prior year quarter).
Net income fell to €0.8 million from €1.4 million a year ago due to the impact of the peso devaluation.
The company stated that both sales and net income are below the analysts’ consensus.
FY24 Outlook: The company expects a mid-single-digit currency-adjusted sales growth and an EBIT of €620 million to €700 million.
The company assumes that corresponding price increases in Argentina will fully compensate for the future devaluation of the Argentine peso.
The EBIT guidance, which equates to $676 million-$763 million in USD, is below the consensus estimate of €726 million (according to Citi analysts), said Reuters.
Puma’s below-consensus FY24 guidance led to a sharp decline in shares of over 8% to their lowest since 2018, owing to a tougher economic environment and weak demand, added Reuters.
Puma’s CEO Arne Freundt said, “For 2024, we foresee the geopolitical and macroeconomic challenges as well as highly volatile currencies to persist. This continues to weigh on consumer sentiment and demand, especially in the first half of 2024.”
Price Action: PUMSY shares are down 9.78% at $4.15 on Wednesday.
Photo Via Wikimedia Commons
Posted In: PUMSY
