Puma Cuts Full-Year Profit Forecast, Stock Falls 3.5% In Frankfurt Trading
Germany-based sportswear brand Puma "cut its revenue and profit forecasts for this year after reporting first-quarter earnings that trailed analysts’ estimates," according to Andrew Roberts of BLOOMBERG. Europe’s second-largest maker of sporting goods "now expects a low-to-mid-single digit decline in currency-adjusted sales." In February, it forecast unchanged '13 sales. The company also said that it is "unlikely to meet its original guidance of low-to-mid-single digit growth in earnings before interest, tax and special items." The stock fell as much as 3.5% in Frankfurt trading, "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 with products such as $110 Mobium Elite running shoes" (BLOOMBERG, 5/14).
WINDS OF CHANGE: In London, James Wilson reported Puma "underlined the challenge" facing incoming CEO Bjorn Gulden. The warning comes as French group PPR, Puma’s majority owner, "is expected to take a tighter grip on its struggling subsidiary," whose underperformance is being blamed "partly on straying too far from its sports roots towards becoming a lifestyle and leisure brand." Puma’s first-quarter sales fell more than 2% year-on-year to €782M ($1M), but the main point of difference with adidas, where first-quarter sales also fell 2%, "was the decline in profitability" (FINANCIAL TIMES, 5/14).