Puma AG reported that Q4 consolidated sales increased by 27.1% to 227.7 million ($271.1 mm). On a currency neutral basis, sales were up 35.4%. Excluding the first-time consolidation of PUMA Japan, total organic growth of 20.4% (currency adjusted) was realized. Apparel recorded a growth rate of 17.6% reaching 68.8 million ($81.9 mm), or up 26.4% currency adjusted. Footwear sales grew by 27.5% to 140.4 million ($167.2 mm), or 33.7% currency adjusted, and accessories increased 76.7% to 18.5 million ($22.0 mm), or 82.6% currency adjusted. Excluding first-time consolidation, footwear was up 14.7% and accessories 29.8% (currency adjusted).
Full year 2003 marked the ninth consecutive year of growth in consolidated sales. Sales grew by 40.0% jumping from
909.8 million ($$860.6 mm) to 1.27 billion ($1.44 bn). Currency-adjusted sales growth was as high as 48.4%. The unadjusted organic growth beforefirst-time consolidation was 30.7% and 39.0% after currency adjustment.
Footwear contributed a 40.2% increase, which brought sales to 859.3 million ($972.8 mm). This corresponds to currency
adjusted growth of 47.8%. Footwear sales before first-time consolidation of PUMA Japan were up by 29.4%, or 37.0% currency adjusted. Apparel sales were up by 41.3% (currency adjusted 49.6%) rising to 337.0 million ($381.5 mm). The Accessories segment was expanded by 33.3% and achieved sales of 77.7 million ($88.5 mm). Without the
currency effects, sales rose by 38.0%. In total, the first-time consolidation of Japan contributed to the growth with a 30.7% increase from the strong accessories business in that country.
For the Americas region, sales in U.S. dollars rose by 42.4% to $255.4 million. All product segments contributed to the result with double-digit growth rates. Due to the weak USD, sales in Euro currency rose by 18.8%. Sales in other countries in this region were also expanded significantly. Total sales in the Americas were up by 22.2% to 255.0 million, or by 46.2% without currency effects.
PUMAs global branded sales, which include consolidated sales and license sales, were up significantly to 1.7 billion ($1.9 bn), a 22.6% increase. The currency-adjusted growth was 30.5%. Footwear sales rose by 20.9% to 981.7 million ($1.1 bn), Apparel sales by 26.2% to 580.4 million ($657.1 mm) and Accessories sales by 20.3%
to 129.5 million ($146.6 mm).
Retrograde license sales after takeover in Japan
License sales outside the PUMA Group declined from 470.2 million ($444.8 mm) to 417.5 million ($472.6 mm) due to the takeover of the Footwear and Accessories business in Japan. Excluding the newly consolidated Japanese business license sales increased by 12.7%. Solid growth rates were thus achieved in nearly all markets and product
segments.
The company recognized 40.3 million in royalty and commission income compared to 44.9 million in the
year before. This corresponds to 9.7% on licensed sales compared to 9.5% in the previous year.
In Q4 the gross profit margin reached 47.5% versus 44.3% last year. For the full year, the gross margin
reached an all-time high of 48.7%, which corresponded to an increase of 510 basis points. In addition to the
successful positioning as a desirable sportlifestyle brand and the associated margin improvement, the weak
US dollar positively impacted the companys margins (approximately 3.5%). The footwear margin climbed
from 44.3% to 49.5%, apparel from 41.7% to 47.1% and accessories from 44.8% to 46.6% when compared to the previous year.
Regionally, the most pronounced increase was in Europe. The margin here jumped from 44.5% to 51.3%, in particular due to the strength of the Euro. The margin in America continued to improve despite the difficult market environment, moving from 44.4% to 44.6%. In the Asia-Pacific region the margin jumped from 37.5% to 44.4% mainly due to the first-time consolidation of Japan and also due to a significant improvement in the margins in Australia and New Zealand. In the Africa-Middle East region the margin was up from 22.2% to 27.4%.
Higher gross margins and lower operating expenses as a percentage of sales led to a sustained increase in
profitability. EBIT margin improved from 10.1% to 14.1% in the 4th quarter. For the full year, EBIT jumped
by 110.5% to a new record-high of 263.2 million ($299.0 mm), compared to 125.0 million ($117.7 mm) in the previous year. The EBIT margin climbed significantly from 13.7% to 20.7%. All regions contributed to the improvement in operating profits.
Net earnings were up by 95.7% to 24.5 million ($29.2 mm) in Q4 and by 111.3% to 179.3 million ($203.0 mm) for the full year. Earnings per share increased from 0.78 (74 cents) to 1.51 ($1.80) in Q4, reaching 11.26 ($12.75) in the full year 2003 compared to 5.44 ($5.15) in 2002. Diluted earnings per share were 10.90 ($12.34) compared to 5.34 ($5.05).
At the 2003 year-end the order volume was up significantly by 36.0% to 722.0 million ($906.6 mm), at a new record high for the eighth consecutive year. Currency-adjusted orders increased by 42.2 %. Orders, excluding Japan, grew by 26.6% or 32.8% after currency adjustment. The order volume is comprised mainly of delivery orders for the 1st and 2nd quarter of 2004.
The regional orders for the Americas in U.S. Dollars were up by 26.4% with reaching $134.2 million. Translated into Euro this corresponds to an increase of 3.6% to 114.8 million. The orders for the USA included in this region rose by 18.7% to a total of $119.3 million.
