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SBD Global/July 30, 2014/Finance

World Cup Merchandise Sales, Deal With Arsenal Helping Puma Restore Reputation

Puma said that sales of World Cup 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," according to Emma Thomasson of REUTERS. Puma is "trying to restore its reputation for sports performance gear after a foray into fashion has seen it slip further behind" Nike and adidas. Puma said on Tuesday that earnings before interest and tax (EBIT) fell 60% to $16.92M, while net profit was down 76% percent to €4.2M ($5.6M), above "average analyst forecasts" for €10.4M ($13.9M) and €3.6M ($4.8M), respectively. 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, footballer Mario Balotelli and golfer Rickie Fowler (REUTERS, 7/29). BLOOMBERG's Aaron Ricadela reported Puma CEO Björn Gulden is seeing "strong demand for the company’s bright pink-and-blue" EvoPower and EvoSpeed cleats that some players wore at this year’s World Cup. Gulden is "also spending more on marketing for the back-to-school buying season, promoting the company's 'Forever Faster' ad campaign and signing sponsorship deals, which is dragging on profits." Gulden: "We know that the repositioning of Puma will and the turnaround of the business will take time" (BLOOMBERG, 7/29). MARKETING WEEK's Sebastian Joseph wrote popularity for the Italian, Chilean and African teams led to "increased sales for the Puma-produced kits." Apparel sales, which "include football shirts and account for a more than a third of the company's total business," jumped 6.2% to €241M ($323M) in the three months to June. Gulden: "I was very happy with Puma's visibility during the World Cup in Brazil. Feedback on both our dual-colored Tricks football boots and our national team jerseys with ACTV technology has been great. The sell-through of these products has been excellent and exceeded our expectations" (MARKETING WEEK, 7/29).
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