German sportswear maker Puma (PUMG.DE) on Wednesday gave a forecast for 2023 profit with a midpoint below last year’s number, expecting some impact from currency effects and higher freight and raw material costs.
Rising materials and freight costs along with a stronger U.S. dollar, inventory markdowns and higher promotion expenses have pressured margins in the sporting goods sector.
The company forecast annual operating profit (EBIT) in a range of 590 million to 670 million euros ($626 million to $711 million), with currency-adjusted sales expected to grow in a high-single-digit percentage rate.
“We presume this guidance assumes limited benefit from a reopening of China,” Jefferies analysts wrote in a note to clients.
The guidance midpoint of 630 million euros compares to EBIT of 641 million euros Puma reported for 2022, which was up 15% from 2021 but slightly below analysts’ estimate of 644 million euro in Refinitiv Eikon data.
Gross profit margin decreased by 420 basis points to 44% in the fourth quarter, the company said, citing an industry-wide increase in promotional activity amid high inventory levels.
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