The global economic slowdown sent fourth-quarter profits at Puma AG down 78.8 percent.
The Herzogenaurach, Germany-based company, which marked its 60th anniversary last year, on Wednesday reported net earnings of 8.1 million euros, or $10.7 million, for the three months ended Dec. 31. Boosted by a 26 percent jump in sales of bags, balls and other sporting accessories, fourth-quarter consolidated sales grew 7 percent on a currency-adjusted basis in the quarter, to 561.3 million euros, or $739.9 million. Dollar figures have been converted from euros at average exchange rates.
Europe’s second-largest activewear firm, which is majority-owned by PPR, said net earnings for 2008 declined 13.5 percent to 232.8 million euros, or $342.5 million, below analysts’ estimates. Heavy brand investments in a highly charged sporting year, including the African Cup of Nations, the Olympic Games and the Volvo Ocean Race sailing competition, in which Puma’s entry “Il mostro” is battling for the lead, helped boost sales but weighed on profits. Parent PPR is to unveil its results today.
“Despite a very difficult market situation and a weak consumer sentiment, Puma managed to post new sales records in the last financial year,” stated chairman and chief executive officer Jochen Zeitz. “We have implemented measures in the fourth quarter to prepare us properly for the coming year and will react flexibly to further changes in the market environment.”
Those measures include depreciation of inventories, organizational expenses resulting from closing unprofitable stores, plus potential losses from endorsement agreements with athletes that have been canceled or renegotiated. The total cost of these steps was 25 million euros, or $32.9 million, in the fourth quarter.
Full-year consolidated sales grew 8.5 percent on a currency-adjusted basis, to 2.5 billion euros, or $3.68 billion. Business in the Europe, Middle East and Africa regions grew 7 percent to 1.29 billion euros, or $1.89 billion.
A 4 percent decline in the U.S., where mall business was particularly difficult, was offset by a double-digit jump in sales across Latin America to bring total business in the Americas up 8 percent to 651 million euros, or $957.8 million. Meanwhile, sales in the Asia-Pacific region grew 13 percent to 573.6 million euros, or $843.9 million, boosted by the consolidation of Puma’s South Korean subsidiary.
Puma continued to expand its own retail doors last year, maintaining jobs that would have been lost in its closed stores and growing that business by 15 percent to 460 million euros, or $676.8 million.
Given the current climate, Puma declined to forecast 2009 performance. Order backlogs, used as an indication of future sales, however, had declined 5.4 percent at yearend.
Puma has reduced its investments for 2009, with plans to spend between 65 million and 75 million euros, or $82.2 million and $94.8 million, including a 20 million euro, or $25.3 million, investment in a new company headquarters, dubbed Puma Plaza.
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye