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Puma’s Gulden Rules Out Quick Fix as Full-Year Profit Slumps

Feb. 20 (Bloomberg) -- Puma SE, Europe’s second-largest sporting-goods maker, ruled out a rapid recovery as it reported a 34 percent slump in full-year earnings.

“This is not a quick fix, but 2014 marks the start of a turnaround,” Bjoern Gulden, chief executive officer of Herzogenaurach, Germany-based Puma, said today in a statement.

Gulden, who joined Puma last summer from jewelry maker Pandora A/S, has the task of turning around a brand that has fallen behind crosstown rival Adidas AG in the fast-growing area of performance sportswear. The business needs to become quicker in reacting to the latest industry trends, the CEO said today during a conference at the company’s headquarters.

“This is part of our problem -- we have too many things going on at once,” said Gulden, standing in front of a red backdrop and wearing a Puma logo sweater. Puma has been “on its knees” to retailers trying to gain floor space to compete with Nike Inc. and Adidas, he said.

Earnings before interest and tax before special items fell to 191.4 million euros ($262 million) in 2013 from 290.7 million euros a year earlier, the company said, missing the 206.1 million-euro average of 11 estimates compiled by Bloomberg.

The shares fell 3.9 percent to 199.85 euros at 12:32 p.m. in Frankfurt. Kering SA, the owner of the Gucci luxury-goods brand, holds about 84 percent of the stock.

World Cup

Puma booked one-time charges of 129 million euros in the fourth quarter related to the closing of a product center in Vietnam and the transfer of personnel to Germany from London. Turning around the company, which has been undertaking restructuring measures since 2009, will take some time, Gulden said Nov. 8, pledging to make the business more agile.

Sales in 2014 will be “flat, but with improved revenue quality,” Puma said in today’s statement. The gross profit margin is expected to improve “slightly,” it said.

As part of efforts to increase brand visibility, Puma last month announced its biggest ever deal to supply jerseys, to English Premier League soccer team Arsenal.

The company, which outfits sprinter Usain Bolt, will supply uniforms to about a quarter of the teams at this year’s soccer World Cup in Brazil, including Italy, Uruguay, Chile and Switzerland. Puma will emphasize tight-fitting “technical” jerseys and cleats, Gulden said. The first World Cup jerseys will appear in stores in early March, he said.

Puma will this year introduce a new worldwide website, unifying fragmented local sites around the world, the CEO said.

To contact the reporters on this story: Aaron Ricadela in Frankfurt at aricadela@bloomberg.net; Andrew Roberts in Paris at aroberts36@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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