Puma Cutting Costs After Q1 Earnings Down From Analyst's Projections
Puma cut its revenue and profit forecasts for this year after reporting Q1 earnings that "trailed analysts’ estimates" and now "expects a low-to-mid-single digit decline in currency-adjusted sales," according to Andrew Roberts of BLOOMBERG NEWS. The stock "fell as much as" 3.5% in Frankfurt trading today, the "biggest drop in three months." Puma is cutting costs to "combat a decline in footwear sales while working to boost its performance-wear credentials." Puma said that Q1 earnings before interest and tax fell to $102.4M (all figures U.S.) from $132.2M last year. Analysts "predicted earnings" of $123.2M on that basis. Puma in a statement said the "business climate in Europe remains challenging,” adding in China, fitness and training products “did not perform as expected.” Puma "repeated its expectation for continued pressure on the gross profit margin." It still "expects net income to rise" from the '12 level. Puma owner PPR reported Q1 sales fell 4.8%, or 2.3% excluding currency swings, to $1.01B weighed down by “particularly negative” trends in Italy and France (BLOOMBERG NEWS, 5/14).