Puma will need to issue strong second-quarter guidance and prove its order book is looking healthy if it wants to impress investors, analysts believe.
At the sports clothing company’s first-quarter update on Wednesday 8 May, analysts at UBS predict “flattish” results, but reckon forward-looking guidance will be more important.
Management recently said it would be now providing quarter-by-quarter guidance and with an increase in competition, particularly in the wholesale channel, UBS thinks its near-term performance will be vital to its long-term success.
Analysts at the bank have therefore kept Puma under a “neutral” rating and believe risks still linger regarding Puma’s upcoming operations and a changing competitive environment.
For Puma’s first quarter financials, UBS forecasts sales of €2.06 billion, while underlying profits reach €151 million from a 7.3% margin.
It also expects Asia/Pacific to be the only region to experience first-quarter growth. Europe, the Middle East and Africa are predicted to see sales drop by 1%, while revenues in the Americas drop by 3%.
UBS maintains a €44 12-month share price target for Puma, flat compared to its current market value.