Puma Profits Plunge 85% In Third Quarter
Puma "is considering more short-term cost cuts in a fresh sign of the sports goods maker’s struggle for fitness amid the economic slowdown," according to James Wilson of the FINANCIAL TIMES. In "a period when its biggest contracted star -- Jamaican sprinter Usain Bolt -- shone" at the London Games, the German group’s "third-quarter net income dropped 85% after €80M ($103.5M) of restructuring charges." Further "cost-cutting measures could be put in place by the end of the year." Recently, the performance of Puma, owned by France's PPR (Pinault-Printemps-Redoute), "lagged behind that of local rival adidas, which announces earnings next month." Puma also said that "sales were slowing in China, while quarterly sales in Europe fell." Baader Bank Analyst Volker Bosse said Puma was suffering from a "weaker product perception versus its peers" but expected other retailers and consumer goods groups also to show slower sales and a "softer wording on the business outlook" in quarterly earnings (FINANCIAL TIMES, 10/24). The DPA reported that Puma's profit "dropped to €12.2M ($15.8M) in the third quarter." The company's "operating income decreased from €118.6M ($153.5M) to €19.6M ($25.4M)." Puma's "revenue increased by 6% to €892.2M ($1.15B)." As part of its restructuring measures, Puma "will tighten its organization in Europe and merge warehouses." In addition, Puma will also adjusts its product portfolio with about 30% of its products scheduled to disappear by '15. The German company "will also reduce the number of sponsorship deals" (DPA, 10/24).