German sportswear maker Puma on Thursday reported a first-quarter operating profit that beat expectations, supported by inventory clearance and lower operating expenses.
Its earnings before interest and taxes (EBIT) rose 19.6% to 51.9 million euros ($60.53 million), compared with analysts' estimates of 43 million euros in a company-provided poll.
This was driven by a higher gross profit margin, the company said, supported by reversals of inventory reserves, lower freight costs, and a higher share of its products sold directly to consumers.
Currency-adjusted sales reached 1.86 billion euros, down by 1% but above the 1.82 billion euros forecast by analysts.
The figure was supported by the clearance of elevated inventories, mainly through selected partners in the wholesale channel, the company said
Inventories declined by 8.6% in reported terms to 1.9 billion, Puma said.
"We have managed to reduce our inventory levels faster than planned, streamlined our product portfolio and addressed operational inefficiencies," CEO Arthur Hoeld said in a statement.
The results provide an early sign of progress for Hoeld, who took the helm last July.
Puma also announced it appointed former Hugo Boss CEO and Douglas CFO Mark Langer as its chief financial officer, effective Friday.
Felix Jonathan Dennl, analyst at Frankfurt-based Metzler, noted Langer played a crucial role at Douglas in restructuring and debt management.
Under Hoeld, Puma is undergoing a turnaround after tepid demand for its sports outfits and Speedcat sneakers as well as an industry-wide hit from U.S. tariffs on imports weighed on the business.
Earlier this year, China's biggest sportswear brand and Fila owner Anta Sports Products agreed to buy a 29% stake in Puma. Over a month later, a filing showed billionaire Mike Ashley's Frasers had become the second-largest shareholder in the sportswear brand.
Frasers has in the past used its minority shareholdings in companies as leverage to push for strategic changes.
($1 = 0.8574 euros)
(Reporting by Linda Pasquini; Editing by Thomas Seythal and Christopher Cushing)
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