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PUMA confirms a single-digit sales increase on a currency neutral basis
Aug '08
PUMA AG announces its consolidated financial results for the 2nd Quarter and 1st Half-Year of 2008.

Jochen Zeitz, CEO: ”PUMA's performance in the second quarter improved at a steady pace, ahead of the Q1 progression. Thanks to our scheduled brand investments, consolidated sales were up 11% in the quarter, driven by a solid growth in all regions and categories.

I remain confident in PUMA's ability to achieve another year of top-line growth despite an ongoing difficult global consumer environment.”

Sales and Earnings Development Global brand sales at € 1.4 billion in first half PUMA's brand sales, which include consolidated sales and license sales, reached € 628.9 million during Q2, a currency-adjusted increase of 5.4% or 1.1% in Euro terms.

During the first six months, brand sales rose 2.7% currency-adjusted, reaching € 1,370.0 million versus € 1,384.0 million last year. Footwear sales slightly declined 1.3% to € 735.7 million.

Apparel improved by 1.5% to € 472.9 million and Accessories grew strongly by 32.2% to € 161.5 million. Licensed business Due to the take-back of the former license market Korea, the licensed business decreased in Q2 by 33.2% currency-adjusted to € 52.1 million and by 34.6% to € 119.9 million after six months.

Based on the licensed sales, the company realized a royalty and commission income of € 6.4 million in Q2 versus € 8.8 million in the prior year's quarter and € 13.4 million versus € 18.5 million year-to-date.

Consolidated sales up almost 9% after six months In the second quarter, consolidated sales grew 11.2% currency-adjusted, or 6.3% in Euro terms to € 576.8 million.

This shows an improvement as compared to Q1 this year, despite a tough comp basis due to last year's early shipments.

On a currency neutral basis, Footwear was up 7.0% to € 325.1 million, Apparel improved by 14.6% to € 206.3 million and Accessories by a strong 30.3% to € 45.4 million. Sales in the first six months were up 8.7% currency-adjusted to € 1,250.1 million.

In segments, Footwear increased 2.8% to € 719.4 million, Apparel 16.6% to € 438.1 million and Accessories 22.9% to € 92.7 million.

Gross profit margin at 53% in H1 The gross profit margin further improved by 30 basis points to 52.5% in Q2. After six months, gross profit margin was up to 53.0%, an increase of 80 basis points.

In the first half, Footwear margin was up from 52.1% to 53.4% and the Apparel margins increased from 52.1% to 52.5%. Accessories reported a margin of 52.1% versus 53.8% last year.

SG&A Total SG&A expenses increased in Q2 by 5.7% to € 233.1 million and by 7.7% to € 460.9 million during the first half. As a percentage of sales, the cost ratio decreased from 40.6% to 40.4% in Q2 and increased from 35.7% to 36.9% in H1. The increase in cost ratio is due to continuous investments into the brand according to budget.

For the first half, marketing/retail expenses were up by 19.5% to € 247.9 million as planned. Product development and design expenses were down by 13.4% to € 24.8 million or to 2.0% of sales.

Other selling, general and administrative expenses were down 1.9% to € 188.3 million or from 16.0% to 15.1% of sales. EBIT at € 188 million in H1 In Q2, EBIT was up by 2.1% to € 62.3 million, showing a clear improvement versus the first quarter.

After six months, EBIT reached € 188.1 million compared to € 195.9 million last year. The EBIT margin was 10.8% versus 11.2% and 15.0% versus 16.3% respectively. The tax ratio was calculated at 28.5% versus 28.7% during the six month period.

Net earnings/Earnings per share Net earnings increased by 0.9% to € 45.6 million in Q2. In the first half net earnings were down by 4.3% to € 135.7 million.

The net return amounts to 7.9% versus 8.3% and 10.9% versus 11.8% respectively. Earnings per share in Q2 were up 5.7% from € 2.82 to € 2.98.

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