Corporate | 6 May 2015 08:33
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PUMA SE / Key word(s): Quarter Results
PRESS RELEASE First Quarter Sales Show Growth of PUMA Currency effects weigh on reported margins Herzogenaurach, May 6, 2015 2015 First Quarter Facts – Sales up by 4.4% currency-adjusted (+13.2% reported) to EUR 821 million, growth across all regions and mainly driven by Footwear – Gross profit margin down, solely due to foreign currency impacts – OPEX increase because of marketing expenses, investments in IT, opening of new retail stores, also strongly impacted by unfavorable currency rates – EBIT stands at EUR 38 million – PUMA IGNITE running shoe technology successfully launched in February – Outlook adjusted to reflect currency impact Bjørn Gulden, Chief Executive Officer of PUMA SE: “ PUMA’s first quarter sales grew slightly stronger than expected. This was mainly caused by a very positive development in footwear. We are working very hard to improve our product offer, and although we know we have some ways to go, we feel that this growth in footwear confirms that we are on the right path.
The negative development in currencies, had a significant negative impact on our gross profit margin and operational expenses and therefore also on our EBIT and net earnings. We do work hard to “counter” these negative currency effects, but do currently not have enough leverage to fully neutralize the impact and have therefore adjusted our outlook for the full year EBIT and net earnings.
Sales growth in the first quarter
Positive sales development in all regions
In the Americas region, sales grew by 5.6% currency-adjusted to EUR 289 million, with both North America and Latin America developing positively. Asia/Pacific sales increased by 10.9% currency-adjusted to EUR 191 million with strong performance in China and India supported by the improved Footwear business.
Apparel sales increased by 5.7% currency-adjusted to EUR 280 million. A strong demand for PUMA’s Fundamentals, Running, Training & Fitness and Golf products underpinned this good performance. Accessories sales decreased by 4.6% currency-adjusted to EUR 163 million. This is related to lower sales of socks and bodywear in the North American market.
Satisfying retail performance
Negative currency impacts affect gross profit margin
Operating result (EBIT) declines
Financial result improves
Net earnings decrease
Net Assets and Financial Position
Working capital rose in line with sales
Cashflow / Capex
Capex increased from EUR 12 million to EUR 16 million, which was mainly invested in the opening of selected retail stores as well as IT equipment.
Stable cash position
Brand and Product Update Following the launch of our latest running innovation PUMA IGNITE by the World’s Fastest Man Usain Bolt on New York City’s Times Square, the sell-through of this innovative footwear technology has been off to a good start both in retail and wholesale. The innovative IGNITE foam technology offers the highest energy return in the industry and strongly represents our new “Forever Faster” positioning. In order to further strengthen our dominant position in Motorsport, we recently announced a new long-term Formula 1 partnership with INFINITI RED BULL RACING. Effective 1 January 2016, we will be the official, licensed supplier of team and race wear. In addition, we will exclusively produce and distribute INFINITI RED BULL RACING licensed replica, fanwear and lifestyle collections for global distribution. We will also prominently feature INFINITI RED BULL RACING in our brand and motorsport marketing campaigns in 2016 and beyond. Our partnership with Red Bull will span beyond Formula 1 racing. We have also signed a new multi-year partnership with the “Wings for Life World Run”, which was co-founded by Red Bull founder Dietrich Mateschitz to fund scientific research for spinal cord injuries. This will serve as a platform to promote our IGNITE running and CELL apparel technology. As the exclusive official sportswear partner, event staff and athletes participating in the Wings for Life World Run sported PUMA footwear, apparel and accessories. 100% of all starting fees and donations will go directly to spinal cord research. Our Teamsport category saw the extension of one of PUMA’s longest-standing and most successful partnerships in Football: through our new long-term contract with the Italian Football Federation (FIGC), PUMA has increased its marketing rights as well as retained the exclusive Master License to actively manage the entire global licensing portfolio of the Federation. PUMA, who first became partner of “Gli Azzurri” in 2003, will also continue as the official technical supplier to all associated FIGC teams. In March, PUMA won the “2014 Marketing Leader Award” from Foot Locker Europe. The award has recognized PUMA’s “Forever Faster” marketing campaign, which was launched in Autumn/Winter 2014 and the growth of brand awareness through the effective use of advertising, public relations and event marketing. This underlines the impact of our “Forever Faster” campaign and the close collaboration with our retail partners. Strategy Update We have made further progress towards becoming the Fastest Sports Brand in the World. We have launched successful products for this year’s Spring Summer season, including our new IGNITE running technology. Over the coming seasons we will continue to develop the IGNITE platform with innovations, material updates and product launches supported by dedicated media activities. We have said that we would enhance our product communication, telling better and simpler stories to the consumers and utilize our assets. This promise is reflected in our ongoing marketing campaign “Forever Faster”. The current theme is more product-focused and features Usain Bolt running in the IGNITE as well as star-footballers including Mario Balotelli and Cesc Fàbregas in action with our latest football boot innovation evoPOWER.
Our new multi-year partnership with Rihanna has already generated a lot of positive PR and social media buzz. Rihanna is an ideal brand ambassador, thanks to both her personality and iconic style. She is currently featured in an in-store marketing campaign promoting PUMA’s key training styles of the season. In August, Rihanna will also play a key role in the brand campaign Forever Faster, featured along PUMA’s world-class athletes such as Usain Bolt and Sergio Aguero. Later she will be the Creative Director for her own line of training & lifestyle products.
As for PUMA’s own retail, we have developed a new instore concept which will ensure that our PUMA stores better tell our product stories, reveal the technologies behind them and strengthen PUMA’s positioning as a sports brand. Last month, we started the global roll-out with our PUMA store in Herzogenaurach. It will continue to be implemented in our stores world-wide, with the shops in Hong Kong and Mexico City being next in line. Continuing our efforts to improve and expand our online presence, we have expanded the selection of our eCommerce website to include our more exclusive PUMA Select products as of May. We continue to work on simplifying our organizational structure and setup. In Indonesia we have transitioned from a distributor to a new subsidiary which will improve our presence in this important market. In terms of our IT enhancement, we continue to work on our focus areas including standardized ERP systems, overall IT infrastructure and also tools to enable more efficient design and planning processes. These investments are essential in order to achieve our vision of becoming the Fastest Sports Brand in the World. We will continue to drive our growth strategy forward with better, and faster collections, continued investments into our brand, our organization, our distribution and our IT infrastructure. Outlook for the Financial Year 2015 In 2015, PUMA will continue its strong marketing investments to further enhance and reinforce our brand positioning, making a further step in getting PUMA back on a path of more profitable and sustainable growth. After the positive sales development in the first quarter 2015, we continue to expect an increase in the medium single-digit range for full-year currency-adjusted net sales. However, as already indicated in the outlook for 2015 at the beginning of this year, the continued adverse developments of foreign exchange rates during the recent months, particularly the strengthening of the US Dollar versus nearly all other currencies, had a significant negative impact on PUMA’s reported gross profit margin. PUMA has already taken and will continue to take countermeasures, but the impact will not fully offset the negative currency impact on the gross profit margin. As a consequence, we now foresee a drop in the gross profit margin for the full year in a range of 100 to 150 basis points versus last year (2014: 46.6%). As announced at the beginning of this year, we will continue to invest strongly in marketing, in the upgrade of PUMA’s current IT infrastructure and the extension of our own retail store network. This will result in an increase in OPEX, that will be further exacerbated by negative currency impacts. At the same time, PUMA’s management will continue to put a strong emphasis on strict control of other operating costs. As a consequence of the now expected drop in gross profit margin and adverse currency effects on OPEX, we now expect EBIT for the full year to come in at a range between EUR 80 million and EUR 100 million. Net earnings will be impacted accordingly. Media Relations:
Investor Relations: Johan-Philip Kuhlo – Global Strategy – PUMA SE – +49 9132 81 3170 – investor-relations@PUMA.com Notes to the editors: – This press release and financial reports are posted on www.about.PUMA.com . – PUMA SE stock symbol:
Reuters: PUMG.DE, Bloomberg: PUM GY,
Notes relating to forward-looking statements:
PUMA is one of the world’s leading Sports Brands, designing, developing, selling and marketing footwear, apparel and accessories. For over 65 years, PUMA has established a history of making fast product designs for the fastest athletes on the planet. PUMA offers performance and sport-inspired lifestyle products in categories such as Football, Running, Training and Fitness, Golf, and Motorsports. It engages in exciting collaborations with renowned design brands such as Alexander McQueen and Mihara Yasuhiro to bring innovative and fast designs to the sports world. The PUMA Group owns the brands PUMA, Cobra Golf, Tretorn, Dobotex and Brandon. The company distributes its products in more than 120 countries, employs more than 10,000 people worldwide, and is headquartered in Herzogenaurach/Germany. For more information, please visit http://www.PUMA.com 2015-05-06 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de |
| Language: | English | |
| Company: | PUMA SE | |
| PUMA Way 1 | ||
| 91074 Herzogenaurach | ||
| Germany | ||
| Phone: | +49 9132 81 0 | |
| Fax: | +49 9132 81 2246 | |
| E-mail: | investor-relations@puma.com | |
| Internet: | www.puma.com | |
| ISIN: | DE0006969603 | |
| WKN: | 696960 | |
| Indices: | SDAX | |
| Listed: | Regulated Market in Frankfurt (Prime Standard), Munich; Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Stuttgart; Terminbörse EUREX | |
| End of News | DGAP News-Service |
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