German sports product manufacturer Puma has managed to almost completely get rid of its net loss in its fourth quarter, but analysts had forecast an actual profit. Nevertheless, CEO Gulden is satisfied.
A sprint in final quarter
Puma's fourth quarter turnover grew 7.5 % to 750.8 million euro, thanks to recovering American demand and strong accessory sales, up 17.1 % to 147.1 million euro. Its shoe sales also managed a 4.3 % turnover growth, up to 310.7 million euro.
Its net loss almost disappeared overnight, dropping 96 % from 115.2 million euro to 4.6 million euro: a huge improvement over the year before, but analysts still expected a 7 million euro profit.
The number three in the market (trailing Nike and Adidas) managed a full-year turnover of 2.97 billion euro, marginally lower than in 2013, although profit grew from 5.3 million to 64.1 million euro.
"On the right track"
"Puma is at a turning point and we are now on the right track", CEO Bjørn Gulden said. "We now have a clear positioning and we have made strides in improving our product and are working with our retailers to further improve the quality of our distribution. It requires time, you cannot change a company in 12 months' time", he said.
To speed up that change, the company boosted its marketing budget in 2014, prolonged its sponsorship deal with 6-time Olympic Champion Usain Bolt, replaced competitor Nike as the main sponsor at English football club Arsenal and launched a collaboration with pop star Rihanna.
"The future is female"
French luxury group Kering owns 86 % of Puma and it expects to achieve middle-high single-digit turnover growth this year, which means somewhere between 4 to 6 %.
An increased focus on women should help generate that additional turnover. Mid-December, Puma made Rihanna Puma Women's creative director and it will launch a new collection by 2016. Gulden reconfirmed that "the future is female", which means Puma has to get on board.