Puma expects its 2023 profit to be about the same as last year as expenses rise.
(Reuters)Puma, a German sportswear manufacturer, forecast operating profit for 2023 on Wednesday with a midpoint below the level of last year because it anticipates that currency impacts and rising freight and raw material costs will once again have an impact on profitability.
The sporting goods industry’s margins have been under pressure as a result of rising materials and freight costs, a stronger US dollar, inventory markdowns, and higher marketing costs.
Operating profit (EBIT) is expected to be in the region of 590 million to 670 million euros ($626 million to $711 million) this year, with high-single digit percentage sales growth after adjusting for currency.
According to Refinitiv Eikon data, it recorded EBIT of 641 million euros for 2022, up from 557 million euros a year earlier but slightly below the 644 million euros analysts had predicted.
Puma provided a profit guidance range of 600 million to 700 million euros for 2022.
According to the business, the fourth quarter saw a 420 basis point decline in gross profit margin to 44.0% due to increased industry-wide promotional activity brought on by high market inventory levels.
Early trading in Frankfurt saw a 2.6% decline in Puma’s stock.
($1 equals 0.9425 euros).