Puma Q1 consolidated sales decline 2.3 percent

Puma in its first quarter result said that its consolidated sales

fell by 2.3 percent with currency adjusted to 782 million euros. Company also announced that its EPS reduced from 4.92 euros to 3.36 euros. Company recently appointed Björn Gulden as New Chief Executive Officer.

Commenting on the results, Michael Laemmermann, Chief Financial Officer of Puma said, “In the current challenging business climate, especially in Europe and in Asia, we are continuing to implement our transformation and cost reduction program aimed at improving efficiencies and our cost base. This will increase Puma’s profitability in the long-term. Confirming our increased focus on performance, Puma’s visibility and credibility as a premium football brand have been further enhanced with Borussia Dortmund’s progress to the Champions League final.”

Puma recorded a decline in first quarter sales as Eurozone retail spending continued to weaken and sales in Asia were affected by an unusually long winter. Puma’s sales in the Americas improved by 1.8 percent and it showed strong performances in Mexico and Brazil, where Teamsport was bolstered by Rio de Janeiro soccer club Botafogo, and Argentina, where lifestyle collections are resonating well. Its Cobra Puma Golf division continues to deliver outstanding results, which is also reflected in rising sales in North America. Sales in the EMEA region were impacted in particular by the softening in retail spending, exacerbated be the unusually long winter, and fell by 4.8 percent.

Strong performances in Russia, Turkey and the D-A-CH region, where classic footwear models such as the Suede and new Motorsport apparel lines resonated well, could not completely offset weak performances in Italy and France. Steadfastly high levels of unemployment in the southern regions of the Eurozone added to the difficult retail environment. In the Asia/Pacific region, sales declined by 2.9 percent. India, supported by excellent sales in running and teamsports, and Australia delivered positive performances which could not quite offset the less satisfactory numbers from Japan, where there was an unusually harsh winter, and China, where fitness & training products in particular did not perform as expected.

Puma’s retail sales increased by 13.9 percent, representing a 17.3 percent share of total sales. This rise in sales was supported by excellent results from our e-commerce business, particularly in North America.Lack of sporting events impacted footwear sales. In the first quarter of 2013, accessories performed exceptionally well during the first three months, rising by 11.9 percent. Apparel sales declined modestly in the first quarter by 1.1 percent currency adjusted to 256 million euros.

It’s gross profit margin fell from 51.2 percent to 49.1 percent year-on-year. Pressure on the gross profit margin in the first quarter came in the most part from two sources: substantial currency headwinds due to the negative hedging position in the first quarter of 2013 compared to the same period last year, and also continued inventory management with a particular focus on footwear, combined with higher input costs. As a consequence, footwear margins dropped from 49.5 percent to 46.1 percent and apparel retreated from 53.5 percent to 51.5 percent, while accessories improved from 51.9 percent to 52.6 percent.

In view of the first quarter results and of continuing economic uncertainty in certain key markets, Management now expects a low- to mid-single-digit decline in currency-adjusted full-year net sales. This forecast represents a slight downward revision compared to the guidance provided with the 2012 full-year results. However, Puma’s Management confirms that it expects net earnings to increase compared to the 2012 level.