Puma's 1Q slips even as sales higher
FRANKFURT, Germany—Puma AG, the world's third-biggest sporting goods and apparel company, said Wednesday that its first-quarter profit slipped even though sales were up.
Herzogenaurach-based Puma earned euro90.1 million (US$139.9 million) in the January-March period, compared with euro96.6 million last year.
Global sales, including licensed products, were up half a percent without the effects of currency fluctuations, but fell to euro741.2 million (US$1.2 billion) in the period from euro762.1 million a year ago because of the strong euro, which has risen nearly 8.5 percent in value against the U.S. dollar in the first three months of 2008.
In terms of an outlook for the year, the company said its orders are up 12 percent to nearly euro1.2 billion, and that "In a challenging market, management confirms a single-digit sales increase on a currency neutral basis."
"In the midst of an overall economic environment that continues to be challenging, Puma has shown resiliency in both growth and desirability," chief executive Jochen Zeitz said in a statement. "Despite a difficult 2008 outlook, we will continue to invest in our planned initiatives to capitalize on major opportunities with global sporting events and fully maximize Puma's long-term potential."
Investors appeared to agree, sending Puma shares up nearly 1 percent to euro228.50 (US$354.81) in Frankfurt.
The company said sales of its footwear were down 4.6 percent to euro404.1 million (US$627.5 million), led by a decline in the U.S. market, while clothing sales were equal to last year at approximately euro246.9 million (US$383.4 million) in the quarter. Accessories improved by 36 percent to euro90.1 million (US$139.9 million).
By region, Puma said that in Europe, the Middle East and Africa, sales increased nearly 10 percent to euro391.1 million (US$215.1 million) from euro360.9 million last year, with growth in all categories. The region now represents nearly 60 percent of all consolidated sales for the company.
Sales in the Americas were down 5.6 percent to euro148.7 million (US$81.8 million) on a currency neutral basis. Puma said footwear sales were below last year, but accessories and apparel were up. The region now accounts for 22.1 percent of consolidated sales. In the U.S. market, sales were down 14.2 percent to US$134.1 million (euro86.36 million), affected by the continued moderate environment in the mall-based business.
Puma also said orders for the U.S. by the end of the quarter were down 20.8 percent.
In Asia, Puma said that sales were up 13.3 percent to euro133.5 million (US$73.42 million) with orders rising 24 percent in the region, which accounts for nearly 20 percent of its sales.
French luxury goods company PPR took over Puma last year, acquiring more than 62 percent of the company's shares, but Puma continues to report separately and keep its stock market listing.
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