The company launched its “Forever Faster” marketing push to fend off greater competition from smaller players Under Armour and Warrior Sports. The back to basics approach to marketing pulls the brand away from its previous fashion-focused efforts and appears to be resonating with sports fans in its third quarter.
Sales climbed 3.7% to €843m in the three months to September, boosted by a strong demand for the evoSpeed boot worn by several high profile stars at the World Cup. Footwear sales, which account for around 44% of the company’s total, rose 2% in the quarter when adjusted for currency effects – the first rise in seven quarters.
The performance legitimises the brand’s decision to pare back its marketing during the summer in a favour of more aggressive ads in the autumn. Puma’s sales lift also coincides with an expansion of its retail offering including a new ecommerce site and investment to show the innovation behind its products in Foot Locker stores.
Elsewhere, Puma’s apparel sales grow by a currency adjusted 11.45% to €323m in the quarter, due to the popularity of Arsenal jerseys and kits. The business ousted Nike as the London club’s kit maker this season and plans to use its brand and players alongside German team Borussia Dortmund to carve out a stronger football presence.
The increased marketing spend in the period pushed profit down 45% to €29m. As a result, the company expects a flat gross profit margin in 2014, compared to a previous target for a slight increase. A low single-digit sales increase is expected for the full year.
Bjørn Gulden, chief executive of Puma, says: The launch of the Forever Faster marketing campaign was well received by both consumers and retailers. We told our consumers that Puma is back and showed our retail partners that we deliver on our promises by investing in media campaigns.
“We feel that things are moving in the right direction, but as we have said all along: We know that the repositioning of Puma and the turnaround of the business will take time as we need to continue to build confidence in the marketplace. I am convinced that our efforts have already translated into better products, better marketing and more efficient operations.
Moving forward, Puma is introducing a new corporate-wide IT system that it hopes will lay the groundwork for a “leaner” business.