"Star Effect" Is Not Perfect. Puma's Earnings In The First Quarter Are Not As Good As Expected.

Although last year took office Women's wear Rihanna, the pop star of the creative director, has made an immediate improvement in shoe sales, but has been affected by the continued strength of the US dollar. In the first quarter, the sales and profits of German sporting goods giant Puma SE Puma group were not as good as expected by the market. Even though the group maintained the annual target of the two data, Puma SE still fell by 3.7%.

In the first three natural months of 2016, Puma recorded a profit of 41 million 300 thousand euros, slightly less than the 41 million 900 thousand euro forecast, but 10.1% more than the same period last year. Net profit rose by 4% to 25 million 800 thousand euros per year, with a market expectation of 27 million euros, and EPS from 1.66 euros to 1.73 euros.

Sales increased by 3.7% to 851 million 900 thousand euros compared to the same period last year, and the growth rate was 7.8% after excluding exchange rate effect. The fixed exchange rate is the most prominent in the Asia Pacific region. China and India have led sales growth of 11.2%, and EMEA and 6.6% have increased by 5.4%.

Women's footwear has grown particularly strong because of endorsement by Rihanna Rihanna. The group has pointed out that the category has been growing for seventh consecutive quarters. Puma SE CEO Puma Bj RN Gulden also revealed Rihanna Rihanna's Fenty series is not only affected by sporting goods. Retailer Sought after, high-end department stores and boutiques also began to demand replenish.

The gross profit rate was only flat at 46.8% of the same period last year, and the favorable effects of price increases and product supply improvements were offset by the impact of the strong dollar. In fact, gross margins have been shrinking for the past three years, because Bj RN Gulden must continue to increase investment in marketing and sponsorship in order to revitalize the brand business.

In contrast, the world's second largest sporting goods group, Adidas AG, Adidas group and its international counterparts, have increased the trend of double-digit growth for two consecutive times in 3 months, raising the annual profit forecast for the two time. Puma SE performance is obviously lagging behind. Bj RN Gulden admitted to analysts at the conference call after the earnings report that the former owner Adidas AG Adidas brand Superstar and Stan Smith, and other retro style sports shoes factory Puma and Adidas Adidas were built by two Dassler brothers respectively.

Bj RN Gulden also revealed that since the group size is smaller than that of Nike Inc. Nike and Adidas AG Adidas, the group still faces challenges when it seeks sales area to retailers. He predicted that this summer's football European Cup and the Copa America will play an important role in promoting the performance of Brazil's Olympic Games.

The annual sales growth rate of Puma Puma SE after the impact of the write off rate is expected to be a high digits. The operating profit is expected to be between 1.15-1.25 billion euros, and the gross profit margin is expected to be similar to that of last year's 45.5%. And Adidas AG Adidas After the exchange rate effect is expected to be eliminated, sales will increase by about 15% this year, and net profit growth in continuing operations will be between 15%-18%.

Puma SE closed 3.68% euros on Friday, closing at 199 euros, smoothing the increase since 2016.