Puma Expects Robust Earnings, Thanks in Large Part to Rihanna
Following a rebound year in 2016, Puma said it expects to deliver robust first-quarter results, prompting it to raise its guidance for the current year. In the first quarter, consolidated sales expanded approximately 15 percent on a currency-adjusted basis to €1.005 billion ($1.07 billion) while increasing 18.0 percent on reported terms.
In light of the strong first-quarter increase in sales and profitability as well as the positive business outlook for the current year 2017, Kering-owned Puma raised its full-year guidance for its consolidated sales and operating result. It is now expected to come in at between €185 million and €200 million versus previous guidance between €170 million and €190 million.
Management now expects that sales will increase currency adjusted at a low double-digit percentage rate, up from guidance calling for an increase at a high single-digit percentage rate. In line with the previous guidance, management still expects that net earnings will improve significantly in 2017. The company’s full first-quarter results will be published on April 25.
In his letter in Puma’s 2016 annual report, Bjørn Gulden, CEO, called out the success of the Puma Fierce collection, fronted by Kylie Jenner, in not only driving sales but helping secure shelf space and wide media coverage.
“Our Ignite franchise has put Puma back in the running and training category again and the Fenty Puma by Rihanna products have had a tremendous impact on our success in the fashion/ lifestyle area,” added Gulden. “Furthermore, our women´s business saw the launch of a series of successful styles: shoes, apparel and accessories – both in collaboration with Rihanna as well as in our inline collection. Key footwear styles sold out within weeks or days.”
He also singled out Rihanna’s footwear model, The Creeper, as the stand out last year and the singer’s runway shows during the New York and Paris Fashion Weeks were “overwhelmingly positive and created major buzz in social media.”
Matt Powell, a Sports Industry Analyst at The NPD Group, emphasized the impact that Rihanna has had on the brand since she signed on in 2015. “Rihanna made a difference. That’s real influence,” Powell tweeted on Wednesday.
Source: The Fashion Law