DGAP-News: PUMA SE: PUMA's First Quarter Results in line with Guidance
DGAP-News: PUMA SE / Key word(s): Quarter Results
PUMA SE: PUMA's First Quarter Results in line with Guidance
14.05.2014 / 08:00
PUMA's First Quarter Results in line with Guidance
Negative Impact of Volatile Currencies
Herzogenaurach, May 14, 2014
2014 First Quarter Facts
- Stable currency adjusted sales of EUR 726 million
- OPEX improves, reduced by 3.8% to EUR 298 million
- EBIT at EUR 59 million
- Continued balance sheet focus results in further working capital
Bjørn Gulden, Chief Executive Officer of PUMA SE: "PUMA's currency adjusted
sales and operating margin for the first quarter were in line with our
expectations - yet negatively impacted by adverse currency affects. During
the quarter, we continued to make progress towards our mission to become
the Fastest Sports Brand in the world and achieved all our key project
milestones in this pursuit. We know that the repositioning of PUMA and the
turnaround of the business will take time, but I am convinced that we are
progressing well on all our key strategic priorities and that we have
initiated the right projects to make 2014 the start of the turnaround."
Sales performance in line
PUMA's first quarter sales performance in 2014 was in line with our
expectations. Currency adjusted sales declined slightly by 0.5% to EUR 726
million. This represents a decrease in reported terms of 7.1%, as currency
volatility in Russia, Turkey, North America, Latin America, India and Japan
had a negative impact on sales in Euro terms.
Improved performance in EMEA
Sales rose by 0.3% currency adjusted to EUR 337 million in the EMEA region.
Russia, Turkey and the United Kingdom continued to deliver strong
performances in the first quarter of 2014, which offset declines in
Scandinavia and France, where wholesale revenues remained weak.
Sales in the Americas declined by 0.5% currency adjusted to EUR 235
million. Sales in North America improved slightly, while we recorded mixed
sales performances within Latin America with improvements in Chile and
Argentina and a major decline in Brazil.
Asia/Pacific sales decreased by 2.1% currency adjusted to EUR 153 million.
Sales in China were up slightly, but business in Oceania decreased. Japan
also declined, impacted by weaker sales in the Golf category.
Mixed segment performance in the first quarter
Footwear sales declined by 7.1% currency adjusted to EUR 321 million as the
Motorsport business continued to decline in mature markets. The Teamsport
category was, however, strengthened by the positive global reception of the
new evoPOWER football boot during the first quarter of the year.
Ahead of the Football World Cup in June, the launch of PUMA's football
jerseys for its eight teams, including Italy, Chile and Ghana, helped
Apparel sales increase by 3.0% currency adjusted to EUR 246 million.
Accessories performed well in the first quarter, with sales increasing 9.5%
currency adjusted to EUR 159 million due to continued demand for PUMA's
socks and bodywear.
PUMA's first quarter Retail sales were stable on a currency adjusted basis
at EUR 124 million, with comparable sales in full-price stores and outlets
up, while operating a slightly lower number of stores. Retails sales
represented 17.1% of total sales compared to 17.3% last year.
Gross Profit Margin decreases to 48.5%
PUMA's gross profit margin declined by 60 basis points from 49.1% to 48.5%
in the first quarter due to negative currency impacts and changes in the
regional and product mixes. The Footwear gross profit margin declined from
46.1% to 44.1%, as high margin Motorsport Footwear in particular declined.
Apparel increased from 51.5% to 53.6% related to strong Teamsport business
and Accessories decreased from 52.6% to 49.7% impacted by negative currency
OPEX improvement in the first quarter
PUMA continued to maintain a strict approach to its operating expenditures
in the first three months of the year. OPEX declined by 3.8% to EUR 298
million in spite of higher marketing investments.
Operating Result (EBIT) declines
Improved first quarter operating expenditures could not fully offset weak
currencies in a number of countries, which impacted reported sales, and a
softening of the gross profit margin. As a result, PUMA's operating profit
decreased from EUR 79 million to EUR 59 million for the first three months
of 2014. The EBIT ratio decreased from 10.1% to 8.1%.
Financial Result improves
The financial result improved from EUR -4.0 million to EUR -3.2 million in
the first quarter. The result remained negative due mainly to currency
Net Earnings decrease
PUMA's consolidated net earnings declined by 29.2% from EUR 50 million to
EUR 36 million. As a result, earnings per share decreased from EUR 3.36 to
EUR 2.38 in the first quarter of the year.
Net Assets and Financial Position
Working Capital improves
The company's continued strong balance sheet management resulted in an
11.5% decrease in inventory to EUR 524 million and a 14.8% decrease in
trade receivables to EUR 506 million. With the decline in trade payables
also taken into account, PUMA's working capital improved by 13.1% from EUR
775 million to EUR 674 million at the end of March.
Cashflow / Capex
The Free Cashflow before acquisitions improved slightly to EUR -132 million
in spite of lower operational cashflows.
Capex increased from EUR 9 million to EUR 12 million, which was mainly
invested in the opening and refitting of selected retail stores as well as
office and IT equipment.
Cash Position improved
PUMA's net cash position improved from EUR 207 million to EUR 229 million
at the end of the first quarter.
In March, PUMA revealed the new national kits for its eight national
football teams heading to the World Cup in Brazil this summer. The home and
away kits for Italy, Switzerland, Algeria, Cameroon, Ghana, Ivory Coast,
Chile and Uruguay all feature PUMA's new football apparel innovation PWR
ACTV, a first-to-market use of both athletic taping and compression within
Cobra PUMA Golf athlete Lexi Thompson fulfilled her number one goal for
2014 by winning her first ever major. After taking the lead during the
second round, Lexi shot a final round of 68 to win at the Kraft Nabisco
Championship. She has been using Cobra Golf equipment and wearing PUMA Golf
gear on the course since she first turned pro in June 2010.
In Formula 1, Lewis Hamilton of the PUMA-supplied Mercedes AMG Petronas
team took the world championship lead from his Mercedes teammate Nico
Rosberg by winning his fourth race in a row at the Spanish Grand Prix last
Sunday. Lewis led from start to finish to win a tense battle with Nico,
with the rest of the field far behind. With PUMA-partnered Ferrari driver
Fernando Alonso currently third in the standings, the current top three F1
drivers are all equipped with PUMA products and wear the PUMA evoSPEED II
In line with PUMA's mission to become the Fastest Sports Brand in the
World, we have continued our efforts to make PUMA faster and more
efficient. This strategy encompasses the repositioning of PUMA as the
World's Fastest Sports Brand, the improvement of our product engine, the
optimization of our distribution quality, and increasing the speed within
our organization and infrastructure.
In terms of our brand repositioning, we have completed the definition of
our brand platform and are now translating them into a marketing campaign,
which will be launched in August 2014 - the biggest campaign for PUMA ever.
The campaign will showcase many of our great athletes like Usain Bolt,
Mario Balotelli, Rickie Fowler, Marta and Lexi Thompson in their pursuit of
our brand mantra Forever Faster.
To improve our product engine, we have adapted our design language in
accordance with our new brand platform. Torsten Hochstetter, our Global
Creative Director, translated our brand mantra "Forever Faster" into a new
distinctive design language for PUMA, which takes its clear inspirations
from our heritage and our roots in sports. With innovative products and a
more commercial focus, we are convinced that we will have a strong product
offering in place to excite the market in Spring/Summer 2015.
We have also started to improve the quality of our revenues and
distribution. Our current focus is to reestablish the relationships with
our Key Accounts using dedicated product and marketing programs. With the
PUMA Lab at Foot Locker, we have a large scale program in more than 100
doors in the US in place, which provide a great opportunity to showcase our
brand and great products in this opinion-leading retailer. We are satisfied
with the results as our comparable sales are significantly up. Furthermore,
we are currently adapting our direct-to-consumer channels to our new brand
direction: Our new unified eCommerce site will be launched in the USA,
Europe and Russia by mid 2014 and our new retail format will launch with
our new full-price store opening in Dubai in the fourth quarter of 2014.
We have also continued to make our organizational structure and setup
faster. As of 2 May, our PUMA Village development center in Vietnam is
closed. Our developers have moved into the sample rooms of our suppliers'
factories to speed up our development process, while our office employees
moved into our new offices in central Ho Chi Minh. The property sale of
PUMA Village is currently ongoing. Our relocations of the Lifestyle
Business Unit from London and of the Global and European Retail
Organization from Oensingen, Switzerland, to our headquarters in
Herzogenaurach are in process and will be finalized by the end of May and
Outlook for the Financial Year 2014
2014 will be a turnaround year for PUMA, where the brand will be
re-established in the market place and brought back to a path of profitable
and sustainable growth in the mid-term. To support this turnaround, PUMA
will continue to invest strongly in marketing and sports assets, while
maintaining tight control on other operating expenditures.
Based on the results of the first quarter and our assumptions at the
beginning of the year, which foresaw stable currencies, our expectations
for full year net sales (flat), gross profit (slight increase), OPEX
(increase due to Marketing Investments) and EBIT/Net Earnings (approx. 5% /
3% of net sales respectively) remain unchanged. Given the current currency
volatility, which is weighing negatively on our results, there may be a
correspondingly negative impact of around 50 basis points on the EBIT and
Net Earnings margin for the full year.
Kerstin Neuber - Corporate Communications - PUMA SE - +49 9132 81 2984 -
Carl Baker - Finance - PUMA SE - +49 9132 81 3188 - email@example.com
Notes to the editors:
- This press release and financial reports are posted on
- PUMA SE stock symbol:
Reuters: PUMG.DE, Bloomberg: PUM GY,
Börse Frankfurt: ISIN: DE0006969603- WKN: 6969603
Notes relating to forward-looking statements:
This document contains forward-looking information about the Company's
financial status and strategic initiatives. Such information is subject to
a certain level of risk and uncertainty that could cause the Company's
actual results to differ significantly from the information discussed in
this document. The forward-looking information is based on the current
expectations and prognosis of the management team. Therefore, this document
is further subject to the risk that such expectations or prognosis, or the
premise of such underlying expectations or prognosis, become erroneous.
Circumstances that could alter the Company's actual results and procure
such results to differ significantly from those contained in
forward-looking statements made by or on behalf of the Company include, but
are not limited to those discussed be above.
PUMA is one of the world's leading Sports Brands, designing, developing,
selling and marketing footwear, apparel and accessories. For over 65 years,
PUMA has established a history of making fast product designs for the
fastest athletes on the planet. PUMA offers performance and sport-inspired
lifestyle products in categories such as Football, Running, Training and
Fitness, Golf, and Motorsports. It engages in exciting collaborations with
renowned design brands such as Alexander McQueen and Mihara Yasuhiro to
bring innovative and fast designs to the sports world. The PUMA Group owns
the brands PUMA, Cobra Golf, Tretorn, Dobotex and Brandon. The company
distributes its products in more than 120 countries, employs more than
10,000 people worldwide, and is headquartered in Herzogenaurach/Germany.
For more information, please visit http://www.puma.com
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Company: PUMA SE
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Phone: +49 9132 81 0
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