Puma reports strong sales despite port congestion, politics
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BERLIN, April 28 (Reuters) – German sportswear company Puma reported a 26% jump in first-quarter sales on Wednesday despite ongoing coronavirus lockdowns, supply chain issues and consumer backlash facing Western brands in China over their comments on Xinjiang.
Puma said sales came in at 1.549 billion euros ($1.87 billion), while net profit jumped to 109 million euros, both above average analyst estimates.
In March, Western brands including Puma and rivals Nike and Adidas faced online attacks in China over statements regarding their sourcing of cotton in Xinjiang after reports of the use of forced labour by Uighur Muslims.
Puma said on Wednesday that sales in the Asia/Pacific region jumped 29% in the first quarter, led by Greater China. However, it did note that “recent political tensions in key markets” are leading to increased uncertainty in the industry.
Puma has previously said it has no direct or indirect business relationship with any manufacturer in Xinjiang.
Western governments and rights groups have accused authorities in the farwestern region of detaining and torturing Uighurs in camps. Beijing denies the accusations.
Puma noted that about 30% of stores selling its products in Europe and Latin America were still closed due to COVID-19, while it saw new restrictions in places such as India, Canada and Turkey so the pandemic will continue to curb its business throughout 2021.
It expects to achieve full-year sales growth in the mid-teens and significantly better profitability compared with last year, although it noted it faces uncertainty due to container shortages and port congestion, especially in North America.
Nike last month reported quarterly sales that missed estimates due to shipping issues and the pandemic-related slump at brick-and-mortar stores, forecasting “low-to-mid-teens” full-year revenue growth.
U.S. container-freight traffic has slowed significantly in recent months due to COVID-19 outbreaks among dockworkers and safety restrictions while a near week-long blockage in the Suez Canal has added to ongoing disruptions to global trade.
($1 = 0.8284 euros) (Reporting by Emma Thomasson; Editing by Maria Sheahan and Louise Heavens
