Puma Faces Profitability Challenges

Puma recently announced its decision to keep its dividend steady despite facing challenges in profitability due to the devaluation of the Argentine peso. The German apparel company cited geopolitical tensions and inflation as factors that are likely to impact consumer sentiment in the first half of 2024.

Dividend Unchanged

At the upcoming annual general meeting on May 22, Puma will propose a dividend of 82 European cents per share ($0.89) for 2023, in line with the previous year. This comes as the company's fourth-quarter net profit dropped to EUR800,000 from EUR1.4 million.

Impact of Argentine Peso Devaluation

Puma highlighted the significant impact of the 54% devaluation of the Argentine peso by President Javier Milei's government in December, which led to a decline in profitability. Despite an increase in earnings before interest and taxes to EUR94.4 million, sales decreased by 9.8% in reported terms and 4% on a currency-adjusted basis.

Outlook for 2024

Looking ahead, Puma anticipates mid-single-digit sales growth on a currency-adjusted basis for the current year. The company also forecasts EBIT to range between EUR620 million and EUR700 million, with expectations that price increases in Argentina will offset the effects of the peso devaluation.