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Puma Bullish as Full-Year Profits Surge

Reflecting an improved consumer environment, company reported record sales for the fourth quarter.

Jochen Zeitz

PARIS — Puma AG, Europe’s second-largest sporting goods firm after Adidas, seems ready to pounce.

This story first appeared in the February 16, 2011 issue of WWD.  Subscribe Today.

Reporting record sales for the fourth quarter, reflecting an improved consumer environment, Puma on Tuesday said sales in 2011 are expected to increase by mid- to high-single digits, with net earnings expected to improve in the midsingle-digit range for the years 2011 and 2012.

“I am pleased to see that our sales outlook also continues to look positive and that Puma’s organic growth is more than intact,” stated chief executive officer Jochen Zeitz.

The Herzogenaurach, Germany-based company recently presented its “Back on the Attack” strategic plan to boost sales by 2015 to 4 billion euros, or $5.34 billion at current exchange.

Puma said full-year net profits improved by 154 percent to 202.2 million euros, or $268.5 million, versus 79.6 million euros, or $111 million, in 2009. In the quarter, the firm posted net profits of 14 million euros, or $19 million, versus a loss of 7.2 million euros, or $10 million, in the year-ago period.

Dollar figures are converted at average exchange rates for the periods to which they refer.

Revenues for the three months ended Dec. 31 rose 28.2 percent to 623.4 million euros, or $848 million, from 486.2 million euros, or $718.1 million, in the year-ago period.

Sales for the year increased by 10.6 percent to 2.71 billion euros, or $3.6 billion. A 28.7 percent increase in sales in the Americas, to 855.9 million euros, or $1.14 billion, significantly contributed to the performance, boosted by positive growth in Latin America and an excellent performance in North America, Puma said. The America region represents 32 percent of the brand’s consolidated sales.

Zeitz confirmed plans to convert Puma AG into a European corporation, Puma SE, providing it gets the vote from shareholders at the firm’s annual general meeting in April.

Following the conversion, Zeitz will assume his new role as the head of parent company PPR’s future Sport & Lifestyle division, where he will also take on the role of chief sustainability officer. Zeitz will remain executive chairman at Puma SE. Puma is currently scouting a replacement ceo.

In addition to existing fashion collaborations with Alexander McQueen and Mihara Yasuhiro, Zeitz said Puma would explore further product collaborations in the area of sustainability. “We will also continue to screen the sport-lifestyle market for potential acquisition targets in order to further complement and strengthen Puma’s core business,” he stated.

Significant sporting events in 2010 for the German activewear firm included the FIFA World Cup in South Africa. Puma’s licensing business was expanded to include the cell phone segment. While Puma’s acquisitions included the Cobra Golf brand, which strongly contributed to a 53.5 percent leap in accessories sales for the firm in 2010.