Puma warns of coronavirus impact to Asian operations
Puma SE
€43.07
10:00 26/04/24
German sportswear firm Puma warned on Wednesday that the Wuhan coronavirus outbreak had hurt its Chinese operations as a result of store closures and decreased tourist activity.
Puma, which makes almost a third of its sales in Asia, said it expects the outbreak to impact both sales and profits but added that it was confident of still reaching its 2020 targets.
The group posted some better-than-expected fourth-quarter results with its best sales growth in the Asia/Pacific region to-date - increasing a currency-adjusted 23% year-on-year.
Despite having more than half of its stores in China being closed, Puma also reiterated its full-year guidance. Sales in Singapore, Taiwan and Japan were also hit as a result of declining Chinese tourism.
Chief executive Bjorn Gulden said: "We should be able to fulfil February and March orders with a three-week delay."
He noted that if stores were still shuttered in four weeks time then the firm would be forced to reconsider its full-year guidance, given that China alone makes up 13% of global sales.
CMC Markets analyst David Madden said: "Puma cautioned the coronavirus emergency in China is likely to hurt sales in the first quarter, but the group is still optimistic it can achieve its full-year target, hence why the stock is higher.
"For 2020 the fashion house still expects total group revenue to rise by roughly 10% - which sparked the bullish move."
As of 1150 GMT, Puma shares were up 7.37% at €77.25 each.