BERLIN (Reuters) -German sportswear maker Puma said on Wednesday it expected sales to grow at least 10% on a currency-adjusted basis in 2022 but it cautioned that COVID-19 restrictions and inflationary pressures would limit profit growth.
Puma expects 2022 operating earnings to come in at 600 million to 700 million euros ($679 million-$792 million), up from 557 million in 2021, and said net earnings should improve correspondingly.
Puma had already reported stronger-than-expected preliminary quarterly sales and core profit in January, with fourth-quarter sales up a currency-adjusted 14%.
Puma said higher freight costs and raw material prices, as well as operating constraints due to COVID-19, would weigh on profitability.
“COVID-19 is unfortunately still negatively affecting our supply chain, inflationary pressures are having a negative impact on our costs and operating margins and the geopolitical situation remains very tense,” Chief Executive Bjorn Gulden said in a statement.
“But I remain very optimistic for the future of both our sector in general and Puma in particular.”
Like other Western brands, Puma has come under fire in China for saying it would not source cotton from Xinjiang after reports of human rights abuses against Uyghur Muslims. Beijing denies any abuses.
Puma said fourth-quarter sales fell 5.4% in Asia/Pacific, pulled down by the Greater China market due to COVID-19 restrictions and “geopolitical tensions,” while almost all other markets in the region reported double-digit growth.
Rival Nike Inc said in December it was more confident of easing supply chain issues in its next fiscal year as it beat quarterly revenue and profit estimates, even as its sales fell 20% in Greater China.
($1 = 0.8836 euros)
(Reporting by Emma ThomassonEditing by Miranda Murray)
