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PUMA Accessories sales improve in Q3

07 Nov '07

6 min read

In Q3, PUMA's branded sales, which include consolidated sales and license sales, reported € 753.4 million, a slight decline of 0.6% on a currency neutral basis. During the nine months period ending September, global brand sales increased 3.8% to € 2,137.4 million.

Like-for-like, Footwear sales increased 1.5% to € 1,177.6 million, Apparel rose by 5.9% to € 759.2 million and Accessories improved by 10.1% to € 200.5 million.

The licensed business decreased slightly in Q3 by 1.1% currency adjusted to € 83.0 million, mainly due to the announced expiration of the Korean license at year-end 2007. Year-to-date, licensed sales increased by 7.7% to € 268.3 million.

Based on the licensed turnover a royalty and commission income of € 7.6 million or € 26.1 million respectively was realized, representing a gross yield of 9.2% on licensed sales in the quarter and 9.7% year-to-date.

Due to the early shipments in June (as reported with the Q2 release), consolidated sales were slightly down at 0.5% currency adjusted totaling € 670.4 million in Q3. By segments, Footwear decreased 6.9% to € 376.3 million, Apparel was up 8.7% to € 246.3 million and Accessories improved 10.6% to € 47.8 million.

Sales after nine months were up 3.2% currency adjusted to € 1,869.0 million. In total, Footwear improved 1.0% to € 1,110.7 million, Apparel 6.8% to € 632.6 million and Accessories 6.3% to € 125.7 million.

In Q3, gross profit margin increased by strong 270 basis points reaching 53.0% compared to 50.4% last year. For the nine months period gross profit margin was a favorable 52.5% compared to 51.4%. Footwear margin increased from 51.2% to 52.3%, Apparel margin from 51.2% to 52.5%, and Accessories stood with 53.9% almost flat on last year's level.

In absolute amounts, SG&A expenses were flat in Q3 but increased 1.8% after nine months totaling € 228.1 million and € 656.0 million respectively. As a percentage of sales, the cost ratio increased from 32.6% to 34.0% during Q3 and from 34.1% to 35.1% after nine months.

For the nine months period, marketing/retail expenses increased 0.7% and accounted for € 314.8 million or 16.8% of sales versus € 312.6 million or 16.6% last year. Product development and design expenses grew 8.1% to € 43.0 million representing 2.3% of sales, a slight increase of 20 basis points. Other selling, general and administrative expenses were up 2.2% to € 298.2 million, or from 15.5% to 16.0% of sales.

EBIT in Q3 developed stronger than sales leading the EBIT margin up from 17.6% to 18.5%. In absolute terms, EBIT increased 0.6% to € 123.8 million. EBIT accumulated over the nine months period, amounts to € 319.7 million versus € 324.6 million, representing an almost flat operational margin of 17.1%.

Taking into account an interest result of € 3.7 million in Q3 and € 8.5 million after nine months, pre-tax profit was up by 1.8% to € 127.5 million in the quarter and down by 0.8% to € 328.2 million year-to-date. The tax ratio after nine months was 29.0% therefore on last year' level.

Net earnings in Q3 reached € 89.1 million versus € 87.1 million and € 230.8 million compared to € 230.3 million after nine months. Hence, the net return improved from 12.5% to 13.3% and from 12.2% to 12.3% respectively.

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