PARIS — Puma on Monday reported a 23.6 percent drop in third-quarter earnings and forecast a low- to midsingle-digit percentage drop in full-year sales.

This story first appeared in the November 10, 2009 issue of WWD. Subscribe Today.

The German activewear giant said it expects trading conditions to remain tough until the build up to next year’s FIFA World Cup.

“The business environment has continued to be as challenging as we had expected, which resulted in a decrease in sales and profits,” Puma chief executive officer Jochen Zeitz stated. “Despite this…we generated a profit in all three quarters so far and we expect to be profitable in Q4 again. We hope to see the first signs of an improving business environment in the run up to the football World Cup in South Africa.”

For the three months through Sept. 30, net profits at the world’s third-largest sporting goods company, which is controlled by French luxury-to-retail group PPR SA, fell to 67.9 million euros, or $97 million. Consolidated sales for the period decreased 5.5 percent to 673.4 million euros, or $962.4 million, hurt by declining demand for footwear in the U.S. and Europe. Dollar figures were converted at average exchange rates for the periods to which they refer.

Earnings before interest, taxes, depreciation and amortization fell 21.6 percent to 98 million euros, or $140.1 million.

As a percentage of sales, the third-quarter EBITDA margin softened to 14.5 percent from 17.5 percent as Puma cut prices to clear inventory and changed its product and regional mix.

“The consumer is more value driven,” Zeitz said in a conference call, adding Puma remained committed to improving its working capital management and cash generating activities.

By region, sales fell by 10.4 percent in the Americas and by 5.6 percent in Europe, Middle East and Africa. They inched up 1.2 percent in Asia-Pacific.

By category, footwear sales were hardest hit, falling 13.1 percent, while apparel sales slipped 3 percent. Sales of accessories climbed 40.4 percent. Looking ahead, Zeitz said it was impossible to give clear projections in such a difficult and volatile market, but anticipated that Puma’s reengineering and restructuring program, which should be finalized by yearend, would generate improvements in efficiency and cost savings in the future.

He added Puma had a “strong” advantage for next year’s soccer World Cup with five Puma-sponsored teams having already qualified for the tournament, and eight teams sporting the pouncing feline logo having secured spots in the Africa Cup of Nations, which will also be held next year.

Puma also outfits Jamaican runner Usain Bolt, who set a new 100-meter world record at the World Championships in Berlin, garnering intense media attention, which “cemented his reputation as a global icon,” Zeitz said.

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