Puma FY 2013 sales down by 3 percent

REPORT_ For the full year 2013, Puma’s consolidated sales were in line with guidance, declining by 3 percent currency adjusted to around 3 billion euros (4.1 billion dollars). Company’s gross profit margin decreased to 46.5 percent. For the fourth quarter, Puma’s consolidated sales

stood at 698 million euros (957.3 million dollars), a currency adjusted decline of 4.7 percent.

Commenting on the results, Björn Gulden, Chief Executive Officer of Puma said, “2013 has been a challenging year for Puma and there is no doubt that we have issues in terms of lack of brand heat, commercial products and desirable distribution. Puma is about fast products, fast athletes, fast designs and fast decision making. With the resigning of Usain Bolt, and signing of Arsenal FC and Mario Balotelli, we further demonstrate that we are a true sports brand. Together with our great assets and new creative agency, we will launch our new campaign to the consumers in Q3/2014.”

2013

trends reflected in fourth quarter sales performance with group sales in the fourth quarter of 2013 remained under pressure with sales declining due to weakening currencies in Japan, Russia, Turkey and various countries in Latin America. In the EMEA region, sales declined by 7.6 percent. Solid sales growth in Russia and Turkey was not enough to offset weaker performances in Western and Southern European countries.

Revenues in the Americas region decreased by 3.5 percent, where solid performances in the USA and Canada were offset by decreases in Latin America. Mexico and Chile in particular declined on high comparables after strong performances last year and sales in the Asia/Pacific region decreased by 2.8 percent. While India continued to grow across multiple categories (running, training/fitness), the rest of the region performed either at or slightly below last year’s levels.

In terms of segments, Herzogenaurach-based Puma’s footwear sales in the fourth quarter declined by 12.9 percent. Apparel sales fell slightly by 1.1 percent, whereas accessories sales improved by 10.6 percent. Puma’s gross profit margin declined from 44.6 percent to 43.2 percent in the fourth quarter of 2013. Footwear gross profit margin decreased from 41.8 percent to 39.5 percent. Apparel margins fell from 46.6 percent to 44.7 percent and the margin for accessories rose from 48.0 percent to 48.4 percent.

Company’s full year sales declined 8.7 percent in euro terms. Sales in the EMEA region decreased by 4.4 percent, where weak French and Italian markets were partially offset by a strong performance in the United Kingdom. In the Americas, sales decreased slightly by 0.7 percent and in Asia/Pacific, sales fell by 4.0 percent, as declines in Korea and Oceania could only be partially offset by increases in India.

Performances by segment varied. Footwear sales declined by 8.6 percent in 2013, whereas sales in apparel fell slightly by 1.2 percent and accessories continued to witness an increase of 9.7 percent. Looking at the profit margins in other categories, apparel margins fell from 49.8 percent to 48.3 percent and margins in accessories decreased slightly, from 50.5 percent to 49.8 percent.

Full year consolidated net earnings fell from 70 million euros (96 million dollars) in 2012 to 5 million euros (6.8 million dollars) in 2013, with earnings per share declining from 4.69 (6.43 dollars) to 0.36 euros (0.49 dollars).

With the support of the Forever Faster media campaign and the partnership with Arsenal, the second half of the year is expected to compensate for the shortfall in sales experienced in the first half of the year. Therefore the company expects its net sales to be flat in 2014, but with improved revenue quality. Management anticipates an EBIT margin before special items of approximately 5 percent of net sales in 2014. However, due to the special items booked in 2013, management expects a significant improvement in the net profit margin, which is expected to come in at approximately 3.0 percent of net sales.