BERLIN (Reuters) – German sportswear firm Puma <PUMG.
DE> said sales of World Cup soccer boots and national team shirts as well as new Arsenal jerseys beat its expectations as it reported second-quarter earnings that fell less than feared and reiterated its outlook.
Puma is trying to restore its reputation for sports performance gear after a foray into fashion has seen it slip further behind the world’s biggest sportswear firms Nike and Adidas . To that end, it ousted Nike as kit supplier to English soccer club Arsenal from next season.
Puma said on Tuesday earnings before interest and tax (EBIT) fell 60 percent to 12.6 million euros ($16.92 million), while net profit was down 76 percent to 4.2 million, above average analyst forecasts for 10.4 million and 3.6 million, respectively.
Puma shares, which had slid on Monday ahead of the results, were up 1.7 percent at 1010 GMT. French luxury group Kering , which has built up a 86 percent holding in Puma since first buying a stake in 2007, reports results on Wednesday.
As it refocuses on sport, Puma will launch its biggest marketing campaign to date on Aug. 7 set to run until the 2016 Olympics, showcasing athletes including sprinter Usain Bolt, soccer star Mario Balotelli and golfer Rickie Fowler.
Puma said second-quarter operating expenditure was broadly unchanged despite increased marketing spending around the World Cup, where it provided shirts to eight teams and kitted out its players with eye-catching boots: one blue and one pink.
STRONG SHIRT SALES
Chief Executive Bjorn Gulden said sales of the boots and national jerseys had exceeded Puma’s expectations, while initial sales of replica Arsenal shirts, which went on sale in July, had been good across the world, including in the United States and Asia, quickly selling out in many stores.
“Arsenal was a super deal for Puma, financially, strategically and for our image and you will see that in the figures from now on,” Gulden told a media conference call.
Group quarterly sales fell 5.8 percent to 652.2 million euros, but were up 0.6 percent when stripping out the impact of volatile currencies, at the low end of consensus forecasts.
Puma reiterated a 2014 forecast for flat currency-adjusted sales and for EBIT and net earnings to rise by 5 percent and 3 percent respectively.
Puma said apparel sales, which account for more than a third of its total, rose 6.2 percent to 241 million euros, helped by strong demand for replica jerseys of the Italian, Chilean and African teams at the World Cup.
Even though Puma’s dual-coloured World Cup boots have now largely sold out, footwear sales, which have suffered from a decline in the motorsports business, fell almost 16 percent to 277.6 million euros.
However, Gulden, the former managing director of European footwear chain Deichmann, said feedback from retailers had been positive for Puma’s spring/summer 2015 collection – the first designed since he took over as CEO a year ago.
“The design direction that we have started has been confirmed… we feel more comfortable,” he said.
Gulden said Puma had no immediate plans to buy into German first-division soccer club Borussia Dortmund , but noted as the shares were publicly listed it could buy them at any time and would have to communicate if it took a big stake.
Puma said it had appointed Lars Radoor Soerensen, who previously worked at fashion firms Bestseller and Esprit as well as Adidas and Lego, as new chief operating officer, replacing Andy Koehler, who only joined Puma a year ago along with Gulden but is stepping down for personal reasons.
($1 = 0.7444 Euros)
(Reporting by Emma Thomasson; Editing by Mark Potter and Louise Heavens)