Puma AG reported second quarter growth in all regions and product segments as owned-retail paired with results boosted by a good showing at the UEFA championship, where the brand had visibility in 42% of the games. On a conference call with analysts, management said that soccer sales grew in the double-digits for the quarter. Though order backlog at the end of the first quarter was well down for the U.S., Puma managed to slow the sales declines seen last quarter to a decrease of only 0.9% for Q2 through its expanded owned-retail presence and to a lesser extent, at-once orders.
Puma reported that second quarter consolidated sales grew 6.3% to 576.8 million from 542.8 million in Q2 2007, representing a growth rate of 11.2% in currency-neutral terms. Sales in Footwear increased 1.3% (+7.0% c-n) to 325.1 million from 320.9 million in the year-ago period, while Apparel sales increased 11.2% (+14.5% c-n) to 206.3 million from 185.6 million last year and Accessories sales jumped 25.1% (+30.3% c-n) to 45.4 million from 36.3 million in the prior-year quarter. PUMAs worldwide branded sales, which include consolidated and license sales, increased 5% currency-neutral to 628.9 million ($983.2 mm).
Puma saw margins expand in its Footwear business, but decline in Apparel and Accessories. For the second quarter, Footwear margins increased 110 basis points to 53.3% from 52.2% last year. Apparel margins declined 80 basis points to 51.5% and Accessories margins dropped 190 basis points to 50.5%.
The EMEA region, which includes Europe, the Middle East, and Africa, saw revenues increase 5.9% to 299.6 million. On a currency-neutral-basis, the company said sales for the region grew 7.6% for the period. Though sales were up, stronger growth in the Asia/Pacific region led to a decrease in share of overall sales for the EMEA region to 51.9% from 52.1% of sales last year.
Margins held steady to last year in the EMEA region for the second quarter at 54.1% of net sales. Futures orders were up modestly at quarter-end for the EMEA region, though down from a large increase at the end of Q1. Orders were up 1.4% over the year-ago quarter when measured in euros to 638.4 million ($1.01 bn). Currency-neutral futures orders were 3.5% higher than last year.
The Americas posted a 1.0% increase in net sales for the second quarter to 146.7 million from 145.3 million last year. Sales were particularly hurt by currency effects here, growing 14.0% on a currency-neutral basis. Strong growth in Latin America more than offset a modest decline in sales to the U.S. However, the increased dependence on Latin America led to a decrease in gross margins, which were down 190 basis points to 47.6% of sales for the quarter.
Order backlog at quarter-end was up 2.1% in euros to 246.2 million ($389 mm), but jumped 14.7% in currency-neutral terms.
First quarter sales in the U.S. declined 0.9% when measured in U.S. dollars, coming in at $126.6 million versus $127.8 million last year. This slight decline was a marked improvement from the 14.2% decline seen in the first quarter and came on a 20.8% drop in futures order at the end of Q1. However, the feat will likely not be repeated in the third quarter with futures orders down 14.8% to $179.8 million. Though the backlog is down at a lesser rate than at the end of Q1, the third quarter is a much larger period by volume, making sales declines much more difficult to offset with owned-retail growth.
Asia/Pacific region revenues jumped 14.0% (+17.0% c-n) to 130.5 million for the second quarter from 114.5 million last year, thanks partly to the consolidation of the South Korea distributor into the numbers, but China was also called out as a strong contributor. The region accounted for 22.6% of sales versus 21.1% last year on larger sales growth than either of the other regions. Gross margin was up 320 basis points to 54.2% of sales. The order book at the end of the quarter was up 12.2% to 249.1 million ($393.6 mm), or a 15.8% increase when accounting for currency.
Total futures backlog was up 3.9% at quarter-end to 1.07 billion ($1.69 bn), but showed an 8.6% increase on a currency-adjusted basis. Footwear backlog rose 3.6% (+9.3% c-n) to 638.4 million ($1.01 bn), while Apparel was up 3.6% (+7.0% c-n) to 372.1 million ($587.9 mm), and Accessories jumped 8.4% (+11.5% c-n) to 61.0 million ($96.4 mm).
