Euro 2016 lift sees Puma profits top analysts’ estimates

Puma has reported second-quarter profits that topped analysts’ estimates as the German sportswear maker got a lift from Euro 2016 and a focus on the women’s market.

Earnings before interest and taxes rose to €12m, Puma said in a statement, beating analysts’ average expectation of €10.6m.

Sales rose 7% to €827m, compared with the €820m consensus.

The company fought negative currency conversion effects by keeping a lid on costs.

Chief executive Bjoern Gulden, three years into a turnaround effort, is balancing sports and style, pushing brash multicoloured boots and a partnership with sprinter Usain Bolt.

Sales of Puma sports shoes at US retailers rose 40% in May and 17% in June, helped by sales of women’s runners, according to Matt Powell, an analyst at NPD Group.

Mr Gulden has been promoting women’s designs marketed with singer Rihanna which, he said, has created a halo effect over the whole company.

“The brand-revival plan is intact as new products resonate with customers and the cooperation with Rihanna increases media coverage and visibility,” Juergen Kolb, an analyst at Kepler Cheuvreux, said in a note. He has a hold rating on Puma.

Rival Adidas, in the midst of its own resurgence, plans to report second-quarter earnings next week.

Nike last month reaffirmed its sales forecast for the year amid keener competition that’s slowing orders.

Mr Gulden said Puma has been very tight on expenses to combat a stronger US dollar that reduced its gross profit margin to 45.6%, from 46.7% a year ago.

But it’s not tapping the brakes on marketing, he said.

The company is also studying which athletes could fill Usain Bolt’s shoes once he retires, even as it plans to make more use of his time after his competitive running days end.

“There won’t be a second Usain. But there will probably be something else,” Mr Gulden said on a call with reporters.

“We’re working on the assumption that we’ll still use Usain as the face of the brand.”