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Puma, a German sportswear brand, raised its 2021 sales forecast on Wednesday, citing supply chain difficulties such as a coronavirus lockdown in Vietnam, port congestion, and container shortages.
Due to COVID-19 outbreaks, factories in Vietnam, a major supplier to the footwear industry, have been closed, and factory owners have stated that they plan to restart full operations only in the second half of 2022.
Puma CEO Bjorn Gulden said the company is also dealing with port congestion and container ship shortages, which are driving up freight prices, as well as a “particularly challenging market scenario” in China.
“We foresee the high demand for our products to continue, but we also see supply constraints continue to be a problem for the rest of the year,” Gulden said in a statement.
Third-quarter revenue increased by a currency-adjusted 20.4 percent to 1.9 billion euros ($2.21 billion), while operating profit increased by 229 million euros, both of which were considerably above of average expert projections.
Nike Inc (NYSE: NKE) lowered its fiscal 2022 sales forecast last month and warned of delays during the holiday shopping season, blaming a supply chain shortage. Puma sales increased by 31% in the Americas and 22% in Europe, the Middle East, and Africa.
However, because to persistent tensions in China and COVID-19 lockdowns in countries such as Japan, they only climbed 1.7 percent in Asia/Pacific. In late March, Western businesses, like Puma, experienced online assaults in China for previous remarks stating that they would not source cotton from Xinjiang due to reports of human rights violations against Uyghur Muslims.
Beijing denies any such wrongdoing. Puma now forecasts full-year currency adjusted sales to climb at least 25%, up from a previous forecast of at least 20%, and operating profit to range between 450 million and 500 million euros, up from a previous range of 400-500 million.
Story by : Norvisi Mawunyegah