30
Oct
2009
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.