Puma says boycott China, cost pressures weigh in 2022

The logo of German sporting goods company Puma is seen at the entrance to one of its stores in Vienna, Austria March 18, 2016. REUTERS/Leonhard Foeger

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  • 2022 sales increased by 10%, adjusted for currency effects
  • EBIT 2022 forecast at 600-700 million euros
  • Commodity prices, freight costs, COVID weigh on profits
  • Fourth quarter sales down 27% in China

BERLIN, Feb 23 (Reuters) – Puma (PUMG.DE) said on Wednesday it expects sales growth of at least 10% in 2022, but the German sportswear maker warned that a consumer boycott in China and cost pressures would limit earnings growth.

Puma expects operating profit of 600-700 million euros for 2022 ($679-792 million), up from 557 million in 2021 but below the 692 million expected by analysts, according to Refinitiv data. Eicon.

Its shares fell 0.9% at 10:09 GMT as analysts expressed disappointment with the outlook.

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In January, Puma reported higher-than-expected preliminary sales and core profit, including fourth-quarter sales up 14%. Read more

But he said on Wednesday that rising freight costs and raw material prices, as well as COVID-19-related constraints, would weigh on profits in 2022.

Factories in Vietnam, a major supplier to the footwear industry, closed for months last year due to COVID-19.

Puma is gradually raising prices to cover higher costs, with most of that expected to come in the second half, CEO Bjorn Gulden told reporters.

Gulden said he expected China sales to decline further in the first quarter and could not say whether they would return to growth in 2022, noting that Chinese celebrities are still avoiding marketing with Western brands. , although the athletes return.

Puma, along with rivals like Nike and Adidas (ADSGn.DE), have come under fire in China since last March for saying they would not source cotton from Xinjiang following reports of human rights abuses. man against Uyghur Muslims. Beijing denies any abuse.

Puma’s fourth-quarter sales fell 27% in China, while they increased in the rest of Asia/Pacific.

Nike said in December it was more confident supply chain issues would ease in the new fiscal year as it beat quarterly revenue and profit estimates despite sales falling 20% ​​in Greater China. Read more

($1 = 0.8836 euros)

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Reporting by Emma Thomasson Editing by Miranda Murray

Our standards: The Thomson Reuters Trust Principles.

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