German sportswear brand Puma said it plans to rejoin the basketball market as it makes a push to grow in the US and China and bring its profitability closer to that of larger rivals Adidas and Nike.
Puma has put a big focus on soccer and running in recent years and makes the bulk of its sales in Europe.
But it has hinted for some time that it was considering returning to major American sports after pulling out of basketball 17 years ago.
Puma said it will partner with athletes and celebrities linked to basketball, noting that basketball shoes still dominate US footwear sales although Nike and Under Armour have been hit by a shift away from basketball performance shoes to more retro styles in the last few years.
Nike has the contract to supply NBA uniforms.
Puma said it sees "substantial upside" for the brand in the US market, while it expects Greater China - where basketball is also popular - to be its top market by 2022.
Chief executive Bjorn Gulden has revived Puma's fortunes over the past five years by sponsoring top soccer teams and partnering with celebrities including singer Rihanna.
However, its profitability lags well behind bigger local rival Adidas and market leader Nike.
A focus on the US and Chinese markets should help it boost profits as currently lacks scale in the former, while profit margins are the highest in the sporting goods industry in China.
Puma said today it wants to lift its operating profit margin to about 10% of sales by 2022 at the latest, up from the 5.6% it reported in 2017, and compared to the 9.8% at Adidas and the 13.8% Nike saw in fiscal 2016/17.
It also said it expects currency-adjusted consolidated net sales to grow around 10% on average per year until 2022 and said it will propose a dividend of between 25-35% of consolidated net earnings starting in 2019.
It wants sales from its own stores and ecommerce to account for 30% of sales in the medium-term, up from 23% now, a shift away from wholesale that should also support margins by cutting out the middleman of other retailers.
