PUMA’s brand sales, which include consolidated sales and license sales, reached €778.6 million ($1.07 bn) during Q3, rising 5.9% a currency-adjusted basis or 3.3% in Euro terms. Consolidated sales in Q3 grew 9.2% to €712.7 million ($979.4 mm) on a currency adjusted basis. By segments, Footwear increased 13.1% to €412.8 million ($567.3 mm), Apparel grew 1.8% to €245.3 million ($337.1 mm) and Accessories gained 16.7% to €54.6 million ($75 mm).


Sales after nine months were up 8.8% currency adjusted to €1,962.9 million ($2.6 bn). Footwear improved 6.3% to €1,132.2 million ($1.4 bn), Apparel 10.8% to €683.4 million ($892.2 mm) and Accessories 20.5% to €147.3 million ($192.3 mm). 


Gross profit margin


In Q3, the gross profit margin increased another 60 basis points reaching 53.6%. After nine months, the gross profit margin remained on a high level at 53.2%. Footwear margin increased from 52.3% to 53.1% and Apparel margin from 52.5% to 53.3%. Accessories reported 53.3% versus 53.9% last year.


SG&A 


Total SG&A expenses increased in Q3 by 9.5% to €249.7 million ($326 mm) and by 8.3% to €710.6 million ($927.7 mm) after nine months. As a percentage of sales, the cost ratio increased from 34.0% to 35.0% during Q3 and from 35.1% to 36.2% after nine months as expected. The higher cost ratio is due to the scheduled brand investments in marketing and retail.


For the nine month period, marketing/retail expenses increased 17.9% and accounted for €371.1 million ($484.5 mm), representing a percentage of sales increase from 16.8% to 18.9%. Product development and design expenses were down 12.7% to €37.6 million ($49.1 mm) or from 2.3% to 1.9% of sales. Other selling, general and administrative expenses were up only 1.2% to €301.9 million ($394.1 mm), which reflects a decline from 16.0% to 15.4% as a percentage of sales.   


EBIT


In Q3, EBIT increased by 1.0% to €125.0 million ($163.2 mm). Due to the aforementioned brand investments, EBIT for the nine months period reported €313.2 million ($408.9 mm) compared to €319.7 million ($417.4 mm). Nevertheless, a strong EBIT margin of 17.5% (LY: 18.5%) and 16.0% (LY: 17.1%) respectively was achieved.

The tax ratio was calculated at 29.0% versus 29.5% in the quarter and 28.7% versus 29.0% in the nine month period.   


Net earnings/Earnings per share


Net earnings in Q3 were on last year’s level and totaled €89.0 million ($116.2 mm) . Due to the brand investments, net earnings were down by 2.7% to €224.7 million ($293.3 mm) year-to-date. Net return reached 12.5% versus 13.3% and 11.4% versus 12.3% respectively.


Based on average outstanding shares, earnings per share were up 4.5% from €5.56 to €5.81 in Q3. Year-to-date earnings per share improved from €14.40 to €14.55.  


Net Assets and Financial Position


Equity ratio above 62%
Total assets were down by 2.5% to €1,906.6 million ($2,489.1 mm) as of September 30, 2008 compared to September in the previous year. The equity ratio further strengthened from 60.0% to 62.3%. 


Working Capital
Inventories grew 17.3% to €432.0 million ($564 mm) and include the new consolidation in Korea. Receivables were up 6.1%, reaching €532.5 million ($695.2 mm) and in line with top-line growth over the last months. Total working capital at the end of September increased 19.4% and totaled €599.6 million ($782.8 mm), mainly due to the new consolidation and low liabilities at balance sheet date. On a like-for-like basis, working capital as percent of sales was up only slightly versus last year.


Capex/Cashflow
Total Capex for the nine months period was €79.1 million ($103.2 mm) compared to €56.6 million ($73.9 mm) last year. The higher investments are according to plan and related to payment on accounts. In addition, €24.9 million ($32.5 mm) versus €4.9 million ($6.4 mm) were financed for acquisition cost.


Free Cashflow (before acquisitions) totaled €17.2 million ($22.4 mm) versus €154.3 million ($201.4 mm) last year.


Cash position
Total cash end of September stood at €297.3 million ($388.1 mm) versus €532.5 million ($695.2 mm) last year. Bank debts were down from €69.3 million ($90.5 mm) to €61.1 million ($80.4 mm). As a result, the net cash position decreased from €463.2 million ($604.7 mm) to €236.2 million  ($308.4 mm) year-over-year mainly due to the investments in share buy-backs.


Regional Development


Faced with a continued tough consumer environment, the EMEA region reported a solid growth of 4.2% currency adjusted in the quarter, reaching €388.1 million ($506.7 mm). Year-to-date, sales increased 7.1% and totalled €1,078.8 million ($1,408.4 mm). The region now accounts for 55.0% of consolidated sales. Gross profit margin showed another improvement and increased from 54.5% to 55.2%. The order book end of September was up 1.1% to €578.4 million ($755.1 mm), whereby last years order book was strongly impacted by orders related to the 2008 sport events.


Q3 sales in the Americas were up strong 18.7% currency adjusted reaching €184.7 million ($241.1 mm). During the nine months period, sales increased 8.6% currency adjusted to €480.2 million ($626.9 mm). The region now accounts for 24.5% of consolidated sales. The gross profit margin was at 48.9% compared to 49.7% last year which was due to a higher distribution business in Latin America. The order volume end of September was up by favorable 20.5% to €282.4 million ($368.7 mm).


Sales in the US outperformed the order books reported end of June once again and were slightly up in Q3. Sales through nine months were down only 5.4%. Orders end of September turned around and show continuing positive signs, being now up 9.1% to €204.7 million ($267.2 mm). 


In the Asia/Pacific region, sales improved 11.9% currency adjusted to €139.9 million ($182.6 mm) in Q3 and by 14.0% to €403.9 million ($527.3 mm) year-to-date. The total region accounts for 20.6% of sales. The gross profit margin improved from 50.7% to 53.1%, mainly due to the consolidation of Korean market. Orders on hand were down 0.7% currency adjusted but were up 5.8% in Euro terms and totaled €302.5 million ($394.9 mm). 


Outlook 2008


Orders up 5%


Total orders as of September increased currency adjusted 4.7% totaling €1.16 billion ($1.51 bn). In Euro currency, orders were up by 5.3%. The orders are mainly for deliveries scheduled for Q4 2008 as well as Q1 2009.

In terms of product segments, Footwear orders are up currency adjusted by 6.8% to €703.5 million ($918.4 mm), Apparel by 0.6% to €393.1 million ($513.2 mm) and Accessories by 8.4% to €66.7 million ($87.1 mm). 


Management raises full-year sales guidance


Given the results achieved so far this year as well as the order book for Q4, management raises its sales guidance for the full-year outlook from a single-digit to a mid- to high-single-digit currency adjusted growth.