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Puma's profits plunge

Puma’s profits for the third quarter were hit by restructuring at the sportswear business as profit before tax plunged 81.7%.

In the three months to September 30 Puma’s profit before tax plummeted to €21.3m (£17.2m) as sales rose 6% to €892.2m (£722.2m). Puma’s third quarter retail saleswere €165.0m (£133.6m), an increase of 22.7%.

In its latest statement Puma said: “The implementation of the restructuring programme and cost-cutting measures weighed on third-quarter earnings.”

Restructuring costs, which amounted to €80m (£64.8m) in the third quarter, included a new regional business model, the consolidation of its warehouse portfolio and downsizing its product ranges by 30%.

Footwear sales rose by 2.5% to €441.9m (£357.7m), which was supported by continued demand for the lightweight running footwear range. Puma said its success in its running footwear range was driven by the Olympics, however the positive performance was dampened by declines in its Fitness & Training and Motorsport categories.

Clothing sales increased by 5.6% to €311.2m (£251.9m), which the company said was fuelled by sales of replica jerseys and by the continued strength of its Cobra Puma Gold division. Puma’s accessories division posted strong growth, with sales rising 20.1% to €139.1m (£112.6m).

In regional terms, sales in Europe, the Middle East and Africa declined by 3.4% to €396.7m (£321.1m) as the economic slow-down in Europe and restrained consumer spending continued to have a severe impact on Puma’s performance.

Chief executive Franz Kock said: “Puma posted a moderate increase in sales in the third quarter despite the challenging business climate in Europe.”

He added: “We have taken decisive actions to overcome the issues we are currently facing in particular in Europe. Our Transformation Program 2010-2015 in combination with immediate cost cutting measures and a strengthened product pipeline in Performance and Lifestyle for next year will provide a solid basis for sustainable and desirable growth.”

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