(Reuters) -German sportswear maker Puma on Wednesday gave 2023 operating profit outlook with midpoint below last year’s level, as it expects currency effects and higher freight and raw material costs to again weigh on profitability.
Rising materials and freight costs as well as stronger U.S. dollar, inventory markdowns and higher promotion expenses have put pressure on margins in the sporting goods sector.
The company sees operating profit (EBIT) in a range of 590 million to 670 million euros ($626 million to $711 million) this year, with currency-adjusted sales growth in a high-single-digit percentage rate.
It reported EBIT of 641 million euros for 2022, up from 557 million a year earlier but slightly below the 644 million euros expected by analysts, according to Refinitiv Eikon data.
Puma had guided for 2022 EBIT in a range of 600 million to 700 million euros.
Gross profit margin decreased by 420 basis points to 44.0% in the fourth quarter, the company said, citing industry-wide increase in promotional activity on the back of high inventory levels in the market.
Puma’s shares fell 2.6% in early Frankfurt trade.
($1 = 0.9425 euros)
(Reporting by Linda Pasquini and Ozan Ergenay in Gdansk, additional reporting by Alexander Hübner; Editing by Milla Nissi)
