PUMA’s worldwide branded sales, which include consolidated and license sales, rose currency neutral 0.5% for the first quarter. In reporting terms, branded sales reached € 741.2 million ($1.11 bn) versus € 762.1 million ($998.7 mm) due to the strength of the Euro against most of the related currencies. Footwear sales were down by 4.6% to € 404.1 million ($605.2 mm). Apparel was almost on last year’s level totaling € 246.9 million ($369.8 mm), and Accessories improved by 36.0% to € 90.1 million ($134.9 mm).
 
Licensed business
On a comparable basis, licensed sales were flat. However, due to the take-back of the former license market Korea, the licensed business was down by 35.6% currency neutral to € 67.8 million ($101.5 mm). Based on the remaining licensed business the company realized a royalty and commission income of € 7.1 million ($10.6 mm) in the first quarter versus € 9.7 million ($12.7 mm) in the prior year.
 
Consolidated sales up almost 7%
In Q1, consolidated sales grew 6.6% currency neutral (2.7% in Euro terms) to € 673.3 million ($1.01 bn). Sales in Footwear were almost flat versus last year representing € 394.2 million ($590.4 mm), with all regions achieving satisfactory performance except the U.S.. Apparel sales improved by 18.5% to € 231.8 million ($347.2 mm) and Accessories by 16.5% to € 47.3 million ($70.8 mm) and all regions contributed with double-digit growth.
 
Gross profit at 53.4%
In Q1, gross profit margin reached 53.4% compared to 52.2% last year. The Footwear margin was up from 52.1% to 53.4% and Apparel increased from 51.9% to 53.4%. Accessories reported 53.7% compared to 54.9% last year.
 
SG&A
In total, SG&A rose 9.9% to € 227.8 million ($341.2 mm) in Q1 2008. As a percentage of sales, the cost ratio was at 33.8% versus 31.6% last year.
 
Marketing/Retail expenses were up by 20.6% to € 120.4 million ($180.3 mm) that was due to higher marketing investments and the Retail expansion as planned. As a percentage of sales, this represents a cost ratio of 17.9% compared to 15.2% in the previous year. Product development and design expenses were down by 11.4% to € 11.6 million ($17.4 mm), or from 2.0% to 1.7% of sales, mainly due to currency effects. Other selling, general and administrative expenses increased 1.6% to € 95.9 million ($143.6 mm) but declined from 14.4% to 14.2% of sales.
 
EBIT 
EBIT amounts to € 125.8 million ($188.4 mm) versus € 134.8 million ($176.6 mm) last year. As a percentage of sales this relates to a EBIT margin of 18.7% versus 20.6%.
The tax ratio was 28.9% versus 29.1% in last year’s quarter.


Net Earnings/Earnings per share € 5.76
In Q1, net earnings reached € 90.1 million ($134.9 mm) versus € 96.6 million ($126.6 mm) last year. The net return amounts to 13.4% versus 14.7%. Earnings per share were € 5.76 ($8.63) versus € 6.02 ($7.89) last year. Diluted earnings per share were calculated at € 5.76 ($8.63) compared with € 6.01 ($7.88). 
 
Net Assets and Financial Position
 
Equity ratio above 60%
As of March 31, 2008, total assets climbed by 0.8% to € 1.81 billion ($2.86 bn) and the equity ratio reached 60.4% after 60.9% in the previous year.
 
Working capital Inventories grew 5.9% to € 364.5 million ($575.9 mm), which is in line with or even better than the order growth end of the quarter. Accounts receivables were down 2.5%, reaching € 506.2 million ($799.8 mm), versus a sales growth of 2.7% during Q1. Total working capital at the end of March totaled € 521.1 million ($823.3 mm) compared to € 496.1 million ($661.5 mm) last year. 
 
Regional Development
 
Sales in the EMEA-region increased currency adjusted 9.7% reaching € 391.1 million ($585.8 mm) versus € 360.9 million ($472.9 mm) last year, with growth in all categories. The region now represents 58.1% of consolidated sales. Gross profit margin increased to 54.7% compared to 53.7% last year. Orders were up 10.9% currency adjusted to
€ 644.8 million ($1.02 bn).
 
Sales in the Americas were down currency neutral 5.6% to € 148.7 million ($222.7 mm). Footwear was below last year but accessories and apparel were up double-digit in the quarter. The region now accounts for 22.1% of consolidated sales. Gross profit margin further improved from 49.7% to strong 50.4%. The order book reported a currency neutral increase of 3.2%.

 

In the U.S. market, sales were down 14.2% to $ 134.1 million ($145.8 mm), affected by the continued moderate environment in the mall-based business. Orders for U.S. end-of-quarter declined 20.8%. 
 

Asia/Pacific reported the strongest growth with solid performance in all categories. Sales increased 13.3% currency neutral to € 133.5 million ($200.0 mm). The total region accounts for 19.8% of sales. Gross profit margin was strongly up by 160 basis points to 53.0%. Order books reached € 289.7 million ($457.7 mm), an increase of 23.7% over last year. 
 
Outlook 2008
 
In comparable terms, consolidated orders were up by 12.1%, or in reporting terms, orders increased 6.5% to € 1.17 billion ($1.85 bn). Like-for-like, Footwear was up by 10.2% to € 677.9 million ($1.07 bn), Apparel improved 14.3% to € 418.2 million ($660.8 mm) and Accessories 18.3% to € 74.3 million ($117.4 mm). 
 
Management reaffirms a currency adjusted single-digit sales growth for the fiscal year 2008 despite a continued difficult consumer environment.
 
During the exceptional sport year 2008 PUMA continues with its marketing investments as planed in order to support the long-term growth potential. The brand investments could affect 2008’s EBIT margin. In a volatile market environment it is difficult to outline the final impact on profitability.
 
Jochen Zeitz, CEO: “In the midst of an overall economic environment that continues to be challenging, PUMA has shown resiliency in both growth and desirability. Despite a difficult 2008 outlook, we will continue to invest in our planned initiatives to capitalize on major opportunities with global sporting events and fully maximize PUMA’s long-term potential.”