Puma AG reported that 2009 fourth quarter consolidated sales decreased 10.1% currency-adjusted to â¬489.5 million ($723 mm). The company said sales were affected by significantly reduced inventory leading to less close out sales. The gross profit margin increased to 51.0%, up 430 basis points from Q4 last year. All regions and product segments contributed positively to the margin growth. Net earnings amounted to â¬16.2 million ($24 mm), compared to â¬8.1 million ($11 mm)in the prior-year period. Diluted earnings per share were â¬1.08 ($1.60), up 80.0% from â¬0.60 (79 cents) in the previous year quarter.
Currency adjusted sales in EMEA were down 10.9%, Americas sales decreased 2.6% and Asia/Pacific fell 16.2%. Sales in the U.S. market inched up 0.9% to $132.7 million. Consolidated footwear sales decreased 16.8% and Apparel fell 10.9% in currency-adjusted terms. Sales in Accessories increased 39.4% currency-adjusted, primarily due to first time consolidation effects.
Operating expenses decreased 9.2% to â¬209.7 million ($310 mm) in the fourth quarter, but the cost ratio increased to 42.8% of sales versus 41.1% of sales in Q4 last year due to the lower sales basis in the most recent quarter. Operating profit improved 21.2% to â¬45.1 million ($67 mm), or 9.2% of sales, in Q4 from â¬37.2 million ($49 mm), or 6.6% of sales, in the prior-year period.
2010 Outlook
In light of the ongoing restrictive consumer environment and the overall global economic volatility, continued restrained consumer behavior is to be expected. A quantitative estimate for 2010 is therefore difficult to make, despite the current positive impetus from the Football World Cup. However, we expect that currency-adjusted sales in 2010 will at least reach last year’s level. Puma will strive for a gross profit margin comparable to the previous year, despite the present currency hedging position and a higher proportion of team sport products with lower contribution margin.
Increased marketing expenses are to be expected during the World Cup year, whereas the cost reduction program should provide for efficiency increases and cost savings to ensure the company’s sustained earnings power.
A clear improvement in net earnings will be achieved, as no special items are expected for 2010. Under consideration of these planning parameters and omitting the special items, we strive to achieve an improvement of our net results.
