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Puma Earnings Drop 10 Percent

Second-quarter earnings at the new PPR unit Puma AG dropped 10 percent on nearly flat sales, due to increases in SG&A and depreciation and amortization.

Second-quarter earnings at the new PPR unit Puma AG dropped 10 percent on nearly flat sales, due to increases in SG&A and depreciation and amortization.

PPR, which also owns Gucci Group, finalized its acquisition of 62.1 percent of Puma last month.

For the three months ended June 30, Puma’s net income fell to 45.2 million euros, or $60.9 million at current exchange, from 50.1 million euros, or $62.9 million, in the second quarter last year. Earnings per share fell to 2.82 euros, or $3.80, from 3.12 euros, or $3.92.

Sales for the quarter slid less than a percent to 542.8 million euros, or $731.8 million, from 546.6 million euros, or $686.8 million, last year, a period that included sales associated with the 2006 FIFA World Cup.

Losses in the Americas region, particularly the U.S. market, offset gains in other parts of the world. Quarterly sales in the Americas fell 15 percent to 145.3 million euros, or $195.9 million, from 171.7 million euros, or $215.7 million, in the second quarter of 2006.

While apparel revenues grew, footwear and accessories sales for the active lifestyle company declined. Apparel sales climbed 2 percent to 185.6 million euros, or $250.2 million, from 181.6 million euros, or $228.2 million, in the same period last year.

Meanwhile, the larger category of footwear fell 2 percent to 320.9 million euros, or $432.6 million, from 327.9 million euros, or $412 million. The smaller accessories business fell 2 percent, as well, to 36.3 million euros, or $48.9 million, from 37.1 million euros, or $46.6 million.

For the first half of the year, earnings slipped 1 percent to 141.7 million euros, or $188.4 million, from 143.2 million euros, or $176.1 million, in the first half of 2006. Earnings per share dipped to 8.84 euros, or $11.75, from 8.95 euros, or $11.01.

Sales for the front half of 2007 increased almost a percent to 1.2 billion euros, or $1.59 billion, from 1.19 billion euros, or $1.46 billion, in 2006.

This story first appeared in the August 10, 2007 issue of WWD.  Subscribe Today.