Puma this morning cut its '15 profit outlook "after the strong U.S. dollar hit" its Q1 earnings, "overshadowing strong footwear sales following the launch of a new running shoe" by Jamaican sprinter Usain Bolt, according to Emma Thomasson of REUTERS. Puma's Q1 net profit fell 30% to $27.9M (all figures U.S.) on sales up 13% $924.8M. The sportswear industry "sources the vast majority of products from Asia in U.S. dollar contracts, while Puma makes a large chunk of its sales in currencies that have fallen against the greenback, squeezing margins." Puma "has been spending heavily on marketing and sponsorship, including ousting Nike as kit supplier" to EPL club Arsenal, "as it tries to restore its reputation as a sports performance brand after it strayed too far into fashion" (REUTERS, 5/6). London-based MainFirst analyst John Guy said, "The company clearly got caught short in terms of currency movements based on what was hedged and not hedged. However, this shouldn't derail Puma's long-term investment plan." Puma CEO Bjoern Gulden "has been focusing on a recovery program to revive growth." BLOOMBERG NEWS' Jarvis & Gretler note Puma's plan "includes introducing new shoes for soccer and running and winning retail space" (BLOOMBERG NEWS, 5/6).
