Puma Revises Down 2013 Outlook as Quarterly Profit Disappoints

Source: Puma

HERZOGENAURACH, Germany — Puma SE revised its outlook for 2013 revenue and profit lower after reporting first-quarter earnings that trailed analysts’ estimates, saying weaker consumer demand in Europe hurt its business.

Europe’s second-largest sporting-goods maker now expects a low-to-mid-single digit decline in currency-adjusted full-year net sales, Herzogenaurach, Germany-based Puma said today. In February, it forecast 2013 sales to be at a similar level to 2012. The company is also unlikely to meet its original guidance of low-to-mid-single digit growth in earnings before interest and tax before special items, Puma said.

The “business climate in Europe remains challenging,” the company said in a statement, while in China, fitness and training products “did not perform as expected.” The company repeated its expectation for continued pressure on the gross profit margin. The company still expects net income to rise from the 2012 level.

First-quarter earnings before interest and tax fell to 79 million euros ($102.7 million) from 102 million euros, Puma said. Analysts’ predicted earnings of 95 million euros on that basis, according to the average of eight estimates compiled by Bloomberg.

Puma is seeking to boost its performance-wear credentials with products such as $110 Mobium Elite running shoes as its footwear sales decline in Asia and western Europe. The company, which has shifted away from a goal to lift revenue to 4 billion euros by 2015, is closing stores, eliminating jobs and cutting product ranges.

First-quarter sales fell 4.8 percent, or 2.3 percent excluding currency swings, to 782 million euros, weighed down by “particularly negative” trends in Italy and France, owner PPR SA reported last month. The western European market will remain challenging for the coming quarters, PPR said.

Puma last month named Pandora A/S head Bjoern Gulden as chief executive officer-elect, to replace Franz Koch. Gulden, a former soccer professional, will join Puma in July.

By: Andrew Roberts; Editors: Celeste Perri, David Risser