PUMAs worldwide branded sales, which include consolidated and license sales, decreased currency neutral 3.1%. In Euro terms, sales are only slightly down 0.5% reaching 737.7 million ($965 mm) versus 741.2 million ($1.11 bn) in last years quarter. On a currency neutral basis, Footwear sales were down by 0.8% to 407.1 million ($532 mm) and Apparel 8.1% to 237.4 million ($311 mm). Accessories increased by 0.6% to 93.2 million ($122 mm).
In the first quarter, consolidated sales were up 0.8% on a currency neutral basis and 3.6% in Euro terms to 697.4 million ($912 mm). Americas increased by double-digit rates whereas EMEA and Asia/Pacific were below last year.
In the first quarter, gross profit margin reached 52.1% compared to 53.4% last year. The decline was mainly due to the regional mix. Footwear reported 50.4% versus 53.4%, Apparel 53.7% compared to 53.4% and Accessories 55.6% versus 53.7% last year.
Other operating expenses increased by 5.4%, rising from 241.0 million ($215.2 mm) to 254.1 million ($380.6 mm), or from 35.8% to 36.4% as a percentage of sales.
Marketing/Retail expenses remained unchanged to last years level and totaled 127.2 million ($166.4 mm) whereas Marketing was below last year and Retail increased due to full year effects. The cost ratio decreased from 19.0% to 18.2% of sales. Other selling expenses increased 20.0% to 84.5 million ($110.5 mm), or from 10.5% to 12.1% of sales, mainly due to first time consolidations and currency impacts.
Operational result before special items amounts to 114.0 million ($149.1 mm) versus 125.8 million ($188.4 mm) last year, a decline of 9.4%. As a percentage of sales this relates to a margin of 16.3% versus 18.7%.
PUMA has taken further actions to ensure long-term profitable growth in the future given the currently challenging economic environment and an unpredictable outlook. Management has implemented a cost reduction program which will reduce originally planned costs annually and lead to cost savings of up to 150 million in FY2011.
With the resulting one-time expenses of 110 million ($143.9 mm)(net of taxes 75.2 million) in the first quarter, PUMA will optimize its retail portfolio, the global organizational structure and the operating processes. The number of employees in PUMA's global workforce is expected to remain at previous years level while ensuring an even better alignment of resources with key business opportunities. The program was initiated as a proactive step in order to ensure an even leaner and more efficient platform that will help PUMA to focus even stronger on the numerous opportunities that arise in the sportlifestyle market in a challenging market environment accordingly.
After adjustment for special items, EBIT amounted to 4.0 million ($5.2 mm) compared to 125.8 million ($188.4 mm) last year.
Before restructuring costs, the companys pre tax profit (EBT) accounts for 112.4 million ($148.5 mm) versus 126.8 million ($200.3 mm) and net earnings to 80.8 million ($106.7 mm) versus 90.1 million ($142.4 mm), a decline of 10.3%. This results in earnings per share of 5.36 ($7.01) compared to 5.76 ($8.63). The operational tax ratio came in at 28.5% versus 28.9% last year.
Taking into account the restructuring costs, earnings before taxes declined from last years 126.8 million ($200.3 mm) to 2.4 million ($3.2 mm) this year.
Sales in the Americas were up currency neutral by 11.5% to 178.1 million ($233.0 mm). The region now accounts for 25.5% of consolidated sales. Gross profit margin stood at 46.7% compared to 50.4% last year. In the US market, sales increased by 3.4% to $138.7 million in the first quarter.
Asia/Pacific sales decreased by 1.2% currency neutral but increased by 14.8% in Euro terms to 153.3 million ($200.5 mm). The total region accounts for 22.0% of sales. Gross profit margin reached 51.0% versus 53.0% last year.
As of March 31, 2009, total assets climbed by 16.4% to 2,108.0 million and the equity ratio reached 56.6% after 60.4% in the previous year.
Inventories grew 22.6% to 446.7 million ($590.0 mm) and accounts receivable 5.3% reaching 533.1 million ($704.1 mm). Adjusted by acquisitions and currencies, inventories were up 16.6% and accounts receivables by 1.3%. Due to lower liabilities at the end of March, working capital totaled 596.9 million (ex acquisition 581.2 million) compared to 521.1 million last year.
Total cash end of March stood at 267.6 million ($353.4 mm) versus 357.2 million ($564.4 mm) last year. Bank debts were down from 67.1 million to 63.2 million. As a result, the net cash position decreased from 290.0 million to 204.5 million year over year, mainly due to the aforementioned acquisitions and a lower free cashflow in the first quarter.
PUMA did not purchase own shares during the first three months. At quarter-end, 950,000 shares were held as treasury stock in the balance sheet, accounting for 5.9% of total share capital. Effective April 29, 2009 all own shares were cancelled and share capital was reduced accordingly. As of today, subscribed capital consists of 15,082,464 shares or 38.6 million.
Outlook 2009 – Market environment remains challenging
During the first quarter, sales came in better than the order books at the end of the fourth quarter 2008 had indicated. Due to seasonability, the current shift in future orders to at-once business in the current market environment, as well as the own retail business which is not included in the order books, quarterly orders are losing significance as an indicator of future sales. As a result, PUMA will not release future orders as of the first quarter 2009.
After 14 years of consecutive growth, the year 2009 will be taken as a year of consolidation with a clear focus on adjusting the cost basis in alignment to the current business environment. First positive signs are not expected before 2010, the year that is highlighted by the upcoming Football World Cup in South Africa, where PUMA will once again be one of the most dominant brands. It currently outfits eleven African Football Federations including Egypt, the African Cup of Nations winner 2008, as well as the reigning World Champion, Italy.
Furthermore, additional focus for 2009 is on working capital improvements to strengthen the cash position and therefore the return on capital employed by year-end.
