Puma Predicts Profit Jump as Bolt and Rihanna Assist Resurgence

HERZOGENAURACH, Germany — Puma SE said operating profit in 2017 will rise at least as fast as last year, when three big global sports events and better sales of women's wear helped the measure jump by a third.

Earnings before interest and taxes will climb to between €170 million ($182 million) and €190 million, Puma said in a statement Thursday. The company also reported sales and earnings for 2016 that beat analyst estimates, and boosted its dividend by 50 percent.

Chief executive officer Bjoern Gulden is in the fourth year of a turnaround effort, balancing sportswear and street styles with the help of endorsements from celebrities including sprinter Usain Bolt and singer Rihanna. Puma's performance is in contrast with rival Under Armour Inc., which last month forecast sales growth below expectations, sending the shares down the most in nine years and seeing its credit rating cut to junk at S&P Global Ratings.

“We feel we have some momentum and it finally shows in our numbers,” Gulden told a press conference at the company’s Herzogenaurach, Germany, headquarters. “With customers lining up outside of stores to buy our products, that’s the kind of brand you want to have.”

The shares rose 1.2 percent to €278 at 10:08 am in Frankfurt trading. The stock has gained 65 percent in the past 12 months, leading that of majority shareholder Kering SA, which advanced 49 percent.

Puma’s crosstown rival Adidas AG, in the midst of its own resurgence, plans to report fourth-quarter earnings on March 8.

Highlights of Puma’s results included:

• Full-year Ebit rose 33 percent to €127.6 million, beating the average analyst estimate of €124.9 million
• For the fourth quarter, Ebit rose 30 percent to €14.1 million
• Sales of footwear rose for a 10th consecutive quarter and growth of 15 percent outpaced advances of apparel and accessories
• The dividend is increased to €0.75 a share from €0.5 in 2016
• Puma forecast that revenue in 2017 will increase at a high single-digit rate when adjusted for currency swings

By Richard Weiss; editors: Chris Reiter, Paul Jarvis and Eric Pfanner.