PARIS — Despite ongoing challenges such as rising raw material costs, Puma SE, Europe’s second-largest sporting goods firm after Adidas, expects to achieve its full-year sales target of 3 billion euros, or $4.31 billion at current exchange rates.
This story first appeared in the July 28, 2011 issue of WWD. Subscribe Today.
The company, which published second quarter results Wednesday, said it is sticking to its guidance of a mid-single digit increase in net earnings on a full year basis.
The Herzogenaurach, Germany-based firm reported a 10.6 percent rise in second-quarter net profits to 37.6 million euros, or $54 million, from 34 million euros, or $43.3 million, in the same period last year.
Revenues in the three months ended June 30 rose 9.4 percent to 673.5 million euros, or $968.9 million, versus 615.4 million euros, or $785.1 million, in the year-ago period, strengthened by robust growth in Latin America and Asia. Boosted by a speedier-than-expected recovery in Japan, first quarter sales in the Asia Pacific region grew 20.1 percent in currency adjusted terms to 158 million euros, or $227.3 million.
In the half, net profit climbed to 115.3 million euros, or $161.7 million, from 106.6 million euros, or $141.8 million, a year earlier.
Currency conversions were made at average exchange rates for the periods to which they refer.
“I could not have asked for a better start to my new position…than to announce the best second quarter in Puma’s history in terms of sales,” stated Franz Koch, whose new role as Puma’s chief executive officer became effective Monday.
This followed the completion of the company’s transformation from a German Aktiengesellschaft, or AG, to a Societas Europaea, or SE, one-tier European corporation, with a view to developing further synergies with the sport and lifestyle division of PPR, Puma’s majority shareholder.
Former Puma ceo Jochen Zeitz is now head of the sport and lifestyle division and chief sustainability officer for PPR. He is also a member of PPR’s executive committee and chairman of the administrative board of Puma SE.
During a conference call, Koch confirmed plans to implement selective price increases of up to 10 percent starting in the fourth quarter and carrying over into the first half of 2012, in a bid to offset volatile raw material costs and rising wages in the Asia Pacific region. “We are reviewing prices for fall-winter 2012,” he said.
With the Cobra Golf brand and a new Spanish subsidiary among recent acquisitions and investments, no new acquisitions are anticipated for the time being, according to Koch.
Puma’s footwear sales in the second quarter rose 16.2 percent to 352.6 million euros, or $507.2 million, in currency adjusted terms, boosted by the brand’s running category, specifically its bestselling hi-tech racer shoe, Puma Faas. Accessories sales grew 15 percent to 96.7 million, or $139.1 million, while apparel sales were up 10.7 percent to 224.3 million euros, or $322.7 million.
Puma, with its “Back on the Attack 2011-15” five-year strategic plan, aims to generate annual revenues of 4 billion euros, or $5.75 billion at current exchange, by 2015.