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16 Jul 2021
Q2 results: another winning quarter
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Q2 results: another winning quarter
PUMA SE (PUM:ETR) | 0 0 0.0%
- Published:
16 Jul 2021 -
Author:
Okines Warwick WO | Muir-Sands Charlie CMS -
Pages:
8
No nap for the cat: Puma pre-releases strong Q2 results
Puma today pre-released its Q2 headline results and gave more specific guidance on full year profits, ahead of full publication on 29 July. Q2 profits were EUR c.30m ahead of consensus (c.35%) driven, in particular, by strength in North America. We move our EBIT forecasts to the top of the full year guided range (EUR 500m, +9%) and maintain our outperform rating.
Q2: cat and mouse
We had raised our Q2 expectations at the pre-close stage but today Puma said Q2 EBIT would be EUR 109m, compared with consensus/Exane forecasts of EUR c.80m. This c.35% beat was driven by substantially stronger sales: +96% cFX growth (cons/Exane +75%) implying a two-year growth rate of +36% (vs +22% expected). We are encouraged to see such strong margins (c.130bps higher than expected, at 6.9%): compared with Q2 2019 sales are 30% higher (in reported currency) and we estimate that costs are c.24% higher, so leverage is coming through nicely.
A paws on upgrades?
Management gave more specific full year guidance today. It expects full year cFX sales growth of ''at least 20%'' (previously ''mid-teens''), which was already factored in (cons +23.6% and Exane +22.1% prior to today). It also guided full year EBIT of EUR 400-500m (previously only ''a significant improvement''). Prior to today consensus was at EUR 484m and Exane EUR 460m. Management acknowledged the external risks, qualifying the guidance as ''subject to continued manufacturing operations in our key sourcing countries such as Vietnam and China and no major interruptions due to COVID-19''. In recent days the industry has seen Covid-related factory shut-downs in Vietnam.
Feline good about the full year
We are not discouraged by the guided full year profit range and raise our EBIT forecast to the top of this, at EUR 500m (mostly from banking the Q2 beat). Our TP nudges up to EUR 113 since we maintain our long term margin expectation at 14%. We maintain our...