Rihanna Gives Boost to Puma With Original Clothing Line
Strong demand for sneakers designed by singer Rihanna helped Puma achieve higher-than-expected sales growth in the fourth quarter and the German sportswear firm said on Thursday a busy sports calendar should help it in 2016.
Puma, which fell out of favor as a fashion brand for women, has made tapping into the booming female sportswear market a key part of its strategy for getting back into the race with industry leaders Nike and Adidas.
It has appointed Rihanna, famous for hits such as "Umbrella," as creative director and the singer launched her first clothing collection for the company last week in New York, a goth-inspired range in black and white sported by models wearing black lipstick.
"The future is female ... we see more and more women across the world are doing sports," Chief Executive Bjorn Gulden said at a news conference. "We feel we can be the brand that owns the space between the gym and the runway."
Puma also announced a deal for reality television celebrity Kylie Jenner to act as a brand ambassador, despite brother-in-law Kanye West, who designs for Adidas, having previously said on Twitter she would not sign up to the rival brand.
Puma said quarterly sales rose a currency-adjusted 11.5 percent to 879 million euros ($979 million), beating average analyst forecasts for 839 million.
Earnings before interest and taxation (EBIT) rose 2.6 percent to 10.9 million, also ahead of forecasts for 6.5 million, although a net loss of 4.3 million was a slight miss.
Despite a busy sports calendar with the Rio Olympics, European soccer championships and Copa America, Puma gave a relatively cautious outlook for 2016, saying it expected sales growth of a high single-digit rate, as well as an unspecified improvement in EBIT and net earnings for 2016.
Adidas earlier this month said it expected currency-neutral sales and operating profit to both grow by at least 10 percent in 2016.
CEO Gulden said he had high hopes for Jamaican sprinter Usain Bolt at the Olympics and said he would continue to be a major asset for Puma even when he stops running. Bolt has said he will decide whether to retire after the Olympics.
"Usain will stay with the brand he has been with since he is 15 if he runs or if he doesn't run," Gulden said.
Puma shares initially rose after the numbers but were down 1.9 percent by 1001 GMT, compared with a 0.7 percent firmer German small-cap index .SDAX.
Puma said footwear sales grew a currency-adjusted 11 percent, driven by strong gains in the running and training categories as well as the launch of the first Rihanna-designed shoes, punk-inspired, thick soled remakes of classic Puma suede sneakers.
(Additional reporting by Pascale Denis in Paris; Editing by Caroline Copley and David Holmes)