Puma caution for 2019 hits shares despite strong quarter

German sportswear firm Puma gave a conservative forecast for 2019 on Thursday despite reporting strong quarterly sales helped by demand for its chunky RS-X shoes and Cali sneakers, sending its shares down more than 5 percent.

Fourth-quarter sales rose a currency-adjusted 20 percent to 1.226 billion euros ($1.38 billion), beating analyst consensus for 1.17 billion, while operating profit came in at 38 million euros, shy of analyst forecasts for 39 million.

However, Puma expects a slowdown in 2019, forecasting sales growth of about a currency-adjusted 10 percent and operating profit of between 395 million and 415 million euros. It confirmed an operating margin target of 10 percent by 2021/22.

A year ago, Puma also forecast a sales rise of 10 percent but then upgraded its targets over the course of 2018.

Puma has been growing faster than its bigger German rival Adidas and market leader Nike, helped by savvy social media campaigns and partnerships with celebrities like singers Selena Gomez and Rihanna and rap mogul Jay-Z.

Quarterly sales jumped a currency-adjusted 39 percent in Asia, shrugging off concerns about cooling demand in China, while they rose 17 percent in the Americas, helped by Puma’s launch of its first basketball shoe in 20 years in September.

Puma said it had reacted quickly to the new trend for retro sneakers with thick soles, launching the Thunder and RS styles, while shoes worn by Gomez proved a hit with women.

The Puma results come after the sector has been buoyed by strong recent results from rivals, including Nike, Lululemon and Under Armour. Adidas reports quarterly figures on March 13.