Q3 net income at Puma plummets 45% from currency effects

24 Nov '14

3 min read

In the third quarter ended September 30, 2014, consolidated net earnings at German sports footwear and apparel marketer, Puma plummeted 45 per cent from a year earlier quarter.

Puma said its net income plunged to €29 million in the third quarter of 2014 from €53 million in the prior year quarter.

As a result, earnings per share too tumbled to €1.93 in the third quarter of the year from €3.53.

Currency adjusted consolidated sales for the reporting quarter rose 6.4 per cent year-on-year to €843 million and also up 3.7 per cent in Euro terms.

Puma said continuing currency effects from various countries had a negative impact on sales.

Currency adjusted sales in the EMEA region increased by 4.4 per cent to €388 million, by 6.3 per cent to €265 million in the Americas and in Asia/Pacific by 10.7 per cent to €191 million.

Driven by Teamsport sales, particularly the PUMA evoSPEED boot, third quarter of 2014 footwear segment currency adjusted sales grew 2.0 per cent from a year ago quarter to €374 million.

Its apparel segment currency adjusted sales surged in double digits by 11.4 per cent to €323 million, supported by strong demand for its Teamsport products, especially Arsenal jerseys and kit.

Accessories sales, also expanded by 7.5 per cent to €147 million led by continued demand for its socks and bodywear. However, Golf equipment sales declined in the quarter.

Puma’s gross profit margin declined to 46.3 per cent from 47.1 per cent in the year earlier quarter on the back of adverse currency impacts as well as shifts within the product mix.

Footwear segment margins dipped to 41.9 per cent from 44.4 per cent, while apparel margin also decreased slightly to 49.6 per cent as against 49.9 per cent.

However, margins for accessories segment improved to 50.3 per cent in the third quarter of 2014 compared to 48.6 per cent in the same quarter of previous year.

Led by higher marketing expenditures associated with the Arsenal partnership and launch of Forever Faster brand campaign, operating expenditures rose to €349 million from €309 million.

Puma said significantly higher marketing expenditures within operating expense led to EBIT crashing to €46 million from €80 million in the third quarter of 2013.

However, its financial result improved and halved to a loss of €0.7 million in the quarter under review from a loss of €1.5 million in third quarter of last year.

“The result remained negative mainly due to currency conversion impacts”, Puma explained. (AR)

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