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Puma prepares for ‘volatile’ retail sector

aug. 7 (bloomberg) — puma ag, europe’s second-largest sporting goods maker, reported a 16 percent drop in second- quarter profit because of increased discounting and said sales may start to fall in the second half.

net income slid to 38.5 million euros ($55.3 million), or 2.55 euros a share, from 45.6 million euros, or 2.98 euros, a year earlier, the company reported today. puma, controlled by french retailer ppr sa, slid 4.6 percent in frankfurt trading, the most in almost two months.

sporting-goods makers have cut prices as they held too much inventory after a decline in demand for branded shoes and jerseys. puma said consumers’ restraint may cause sales to drop in the second half after rising 4.1 percent to 600 million euros in the quarter. larger rival adidas ag said this week that second-quarter profit was almost erased, hurt by discounting.

‘consumers are cutting back spending on things like sporting goods,’ said hans-peter wodniok, an analyst for fairesearch in frankfurt. he has a ’sell’ rating on puma.

puma shares declined 9.12 euros to 189.83 euros today. paris-based ppr, whose other brands include gucci fashions, owns almost 70 percent of the stock.

the operating margin, or earnings before interest, taxes, depreciation and amortization as a percentage of sales, narrowed to 10.2 percent from 10.8 percent a year earlier.

profit still beat the 32.8 million-euro average estimate of seven analysts surveyed by bloomberg news.

shoe sales

‘puma has reacted quickly to the changing market conditions and seems to be coping well with the tough consumer environment,’ commerzbank analyst christoph dolleschal said in a note last week. he raised his rating to ‘add’ from ‘hold.’

sales in the americas, adjusted for currency swings, rose 6.9 percent in the quarter, puma said. asia-pacific revenue fell 4.5 percent on that basis, while sales from europe, middle east and africa declined 1.4 percent.

second-quarter sales of shoes, which generate almost three- fifths of total revenue, gained 1.5 percent, the company said. sales of clothing, such as replicas of the soccer jerseys puma supplies to world cup champion italy, fell 1.2 percent.

puma, known for its leaping-cat logo, is like adidas based in the bavarian town of herzogenaurach.

Puma to use World Cup to boost African revenues

jochen zeitz, chief executive of sports goods maker puma, said the brand is looking to significantly step up sales, production and sourcing in africa in the coming years, using the football world cup in south africa as a central focal point.

according to uk industry newspaper the financial times, over the past year the african continent accounted for about 3 per cent of puma’s 2.5 billion revenues however sales of footballs, shoes and apparel have doubled every two years.

zeitz said that puma’s revenues in africa, considering its 1 billion inhabitants, would continue to grow faster than elsewhere in the world and that it aims to step up production in africa to more than one million pieces in 2010, after 750,000 pieces this year.

puma is the world’s third-largest sports goods producer and is looking to make up ground on rivals adidas and nike on a global scale.

puma sponsors 11 african teams and the continent’s star player in europe, cameroon’s samuel eto’o. it is also a supporter of the “cotton made in africa” initiative which aims to improve the living conditions of african cotton farmers and the brand wants to increase the amount of cotton sourced in africa from 3 per cent currently to a high two-digit percentage in the coming years.

the sporting goods industry is eagerly awaiting next year’s south africa football world cup, as this 2009 lacked a large revenue-boosting sporting event.

Puma down but still palying in top league

puma, the world’s third-largest sports goods maker, posted a smaller-than-expected fall in second-quarter profits yesterday, but said it still expected a challenging second half due to the ongoing recession.

the company, which in the first half of the year out- performed rival adidas ╟ the world’s number-two after us giant nike ╟ said it aimed for clear profits in the second half, despite weaker sales.

puma still refrained from giving a full-year out look, but chief executive jochen zeitz said analysts’ estimates for a 2009 sales decline of about 2 per cent would be a good guess.

“from today’s point of view, i don’t see any reason to say the situation has improved,” he said. “the market is bottoming out, but one has to be very careful about this. no-one can say how the market will develop.”

the group’s second-quarter net earnings fell 15.6 per cent to 38.5 million (￡32.7m), on sales of 600m, up 4.1 per cent.

all three major sportswear makers ╟ nike, adidas and puma ╟ have launched cost-cutting programmes to battle the economic slowdown.

puma intensified its efficiency measures earlier this year, aim- ing to save up to 150m from 2011. analyst andreas inderst said: “puma’s second-quarter results are very good, clearly demonstrating puma’s resilience to the crisis.

“we are confident that management has taken the right and proactive cost and working capital measures to maintain one of the most profitable companies in the sector.”

puma shares are trading at about 14.2 times annual forecast earnings.

Perfect your fall fashion with Puma

puma has put together a great line just in time for the fall season. whether you are shopping for back-to-school clothes, or just looking to update your wardrobe, puma has something for everyone. the best part is that all of their new arrivals are under $100, something that everyone can appreciate in these tough economic times.

the line features athletic and casual footwear ranging from $65 to $100. in true puma style, the shoes are comfortable and colorful. there’s no better way to add color to your outfit than with a bright pair of sneakers. the speed cat 2.9 mid 10 yrs shoes ($85) are sure to be a crowd favorite. according to puma’s promotional information, the bright yellow high tops with the silver stripe and black rubber soles were designed in celebration of the brand’s ten year anniversary in motosport. the shoes are classic and will look great whether you are walking to 5th avenue or 5th period.

as far as apparel goes, the line features some great pieces, including the sailing polo ($55) and the sailing pants ($80). the polos come in a multitude of colors and look great when paired with the pants. the pants can be worn casually or formally; which is great, because versatility in a garment is a good thing.

the line also features the edition one ups tee ($35), a great item to pair with the speed cat shoes. the ‘les éléphants’ graphic is not obnoxious like some graphic tees can be, so it is perfect for those guys who are not quite ready to wear old men’s clothes.

if you are shopping for school or just shopping to look cool, puma is the place to go. check out their online store to see great deals on their products and to find store locations near you.

Back to school fall designs from PUMA

it’s about that time again when summer is coming to its beautiful end and you’re off to register for classes and buy those uber-expensive text books. the upside of going back to school is the shopping, of course! whether you’re in junior high or high school and gearing up for another exciting year, or you’re a college student preparing for your last semester before jumping into the real world, puma has introduced their fall line for the back to school shopping season. not only is the collection comfortable, versatile and sporty, but it also adds bold colors to the current wardrobe.

k-swiss inc. is looking to stamp out puma ag rudolf dassler sport’s suit alleging infringement of a stripe design running along puma shoes and unfair competition, arguing that the rival shoemaker fraudulently obtained the formstrip trademarks by lying to patent officials that it was the sole owner of the marks.

a month after a california judge dismissed its related declaratory judgment action against puma, k-swiss on tuesday launched a counterattack against puma’s suit in the u.s.

puma is also known for their signature track suits and sporty attire. grab a couple essential tank tops for an hour at the gym or for a day on campus. the top comes in a variety of bold colors. this season’s originals track jacket for women is a fashionable way to keep warm this fall season. the africa-inspired track jacket features a geometric pattern in yellow and green.

COTTON FROM AFRICA

all three major sports goods makers have responded to the crisis by cutting costs. puma aims to save up to 150 million euros from 2011 by closing stores, cutting some products and renegotiating contracts with athletes.

“everything is going according to plan,” zeitz said. “we have consistently implemented measures, reacting to the sensitive market environment,” he added.

puma outperformed larger rival adidas in the first half of the year with a positive sales trend, but said it saw only slight signs of improvement in the market, whereas adidas said it had now turned the corner.

zeitz has said analysts’ estimates for a 2009 sales decline of about 2 percent at puma would be a good guess.

puma’s 2008 sales rose 6.3 percent to 2.5 billion euros.

“it is too early to give the all-clear for the various markets. i don’t see a big difference between the regions. the situation in the united states is still difficult,” zeitz said.

puma still has sales potential of 4 billion euros, he said, but only in the long term due to the economic crisis.

puma has no plans for acquisitions, and planned to “focus on our own brand,” he said.

higher sourcing costs have burdened margins at all three heavyweights, but puma still managed to beat its rivals with a gross margin of 51.1 percent in the first half. zeitz said he hoped to see relief in raw materials prices from 2010 at the latest.

puma has moved some of its sourcing from asia to africa — it signed up to the “cotton made in africa” project for sustainable cotton production — but zeitz said it was unrealistic to source or produce everything in africa.

Puma CEO expects 2010 record football sales

the world’s no. 3 sports good company behind nike and adidas

said a recovery in the global economy was needed more than anything to improve the group’s performance.

“an improvement of the world economy would be a reason for a better 2010. soccer plays of course an important part, but soccer alone won’t be enough,” chief executive jochen zeitz told reuters in an interview published on friday.

puma shares trimmed grains after the comments but were still up 5.4 percent at 196.78 euros by 1:05 p.m., easily outperforming a 1.1 percent gain in germany’s mid-cap index.

zeitz was speaking in berlin ahead of saturday’s start to the world athletics championships. puma-sponsored jamaican usain bolt, who set world records for the 100 and 200 metre sprints at the beijing olympics last year, will be competing.

running is an important business for the company, zeitz said, without disclosing figures. “we want to grow here, and we want to make running cooler.”

sales of soccer-related products account for a double-digit percentage of puma’s overall annual sales. the global market in this category is dominated by cross-town rival adidas, with a market share of 34 percent, followed by nike.

adidas said in june it was well positioned to extend its soccer goods market leadership next year, aiming for sales of clearly more than 1.3 billion euros (1.1 billion pounds).

adidas equips the national teams of germany, argentina and spain among others, while puma, majority-owned by france’s ppr, kits out teams including italy, the czech republic and cameroon.

Puma Surprises With Robust 2Q Sales, Op Pft Beats Views

sportswear maker puma ag rudolf dassler sport (pum.xe) friday surprised analysts with robust second-quarter sales and a better-than expected operating profit.

parent company ppr (pp.fr) attributed the performance to a “good control of operating costs” and lower marketing and communication expenses.

while first-half sales fell 3.8% in comparable terms, analysts focused on the 3.8% rise in overall terms, which they interpreted as a positive trend. overall, sales in the first six months rose to eur1.3 billion from eur1.25 billion, beating analyst expectations of eur1.27 billion.

puma’s second-quarter sales rose 4% to eur600.3 million from eur576.8 million a year earlier, beating an analyst poll by dow jones newswires which forecast a sales drop to eur573 million.

operating income in the first six months of the year fell 6%, to eur177 million from eur189 million. however, the figure doesn’t take into account eur110 million in costs linked the company’s savings program that puma booked in the first quarter. if this figure is deducted from the operating profit, the latter would still be above analyst expectations of eur52 million, which include the restructuring costs.

“puma is holding up well in the recessions and is trading at a substantial discount to its peers, says sal. oppenheim analyst joerg p. frey, who rates the stock at buy.

he says the company’s friday conference call comments imply second-quarter earnings before interest and taxes of eur63 million, beating its above consensus estimate of eur50.2 million. “we expect likewise positive cash flow numbers with puma’s full set of figures on august 7,” the analyst said.

in may, puma said it will accelerate its ongoing savings program to weather the economic downturn. the third-largest sports goods maker in the world plans to cut up to eur150 million in costs in 2010.

at 1515 gmt, shares in the company traded down 0.1% at eur177.82 in a flat german market.

the company is part of french luxury and retail group ppr, which also posted better-than-expected first-half earnings.

puma will release detailed figures aug. 7.

Puma celebrates latest Usain Bolt records with viral campaign

the triple-olympic gold medallist won the men’s 100m at the iaaf world championships in berlin on sunday, setting a new world record time of 9.58 seconds.

the athletic footwear and sportswear brand has distributed foam ‘bolt arms’ to fans around the stadium in tribute to bolts trademark pre- and post-race posturing.

bolt, 22, won the 100m final by 2m in puma spikes with the question ‘who faster?’ embroidered into the heel.

he now turns his attention to the 200m and 4×100m relay, for which he also holds the world records.

another bolt sponsor, jamaican mobile operator digicel, is planning a party for the athlete when he returns home. bolt is also sponsored by gatorade.

Buy cheap puma shoes online!

the campaign doesn’t stop with the employees, either. in the seven participating stores and online at in a designated employees only section, puma will encourage shoppers and fans to share their thoughts. at the puma stores in boston (newbury street), chicago (n. rush street), houston (galleria), los angeles (third street promenade), miami (aventura mall), new york (soho and union square), and san francisco (market street), shoppers will be able to grab their own poster board and marker and write their thoughts, which will be displayed throughout the week at the each puma store. everyone participating will be photographed, just like the employees in the campaign, which can then be uploaded to their facebook profile. every week, the puma employee featured in the campaign will choose the best photo and saying in their store – the winner will receive a puma gift and be a featured fan on puma’s facebook page.

in each city, puma and their featured employees will also host a wide variety of in-store and off-site events and activities inspired by the puma employees and encouraging locals to speak their mind. from local city guides highlighting the employees’ favorite spots to scavenger hunts where consumers need to take a photo mimicking the campaign, puma will invite consumers to get to know the brand, and their employees and as well as engage in the program. puma’s facebook page will also feature more details and insights from each of employee, allowing consumers to get to know them, learn about local hot spots in each neighborhood and follow their whereabouts throughout the campaign.