By Andrew Roberts/Bloomberg Businessweek
April 28 (Bloomberg) -- Puma AG, the second-largest European sporting-goods maker, reported first-quarter profit that surpassed analysts’ estimates and said 2010 earnings will jump as the soccer World Cup spurs sales growth.
Net income increased to 83.1 million euros ($110 million), or 5.50 euros a share, from 5.6 million euros, or 37 cents, a year earlier, the Herzogenaurach, Germany-based unit of PPR SA said today in a statement. The average estimate of nine analysts surveyed by Bloomberg was 79.4 million euros. Pretax profit for the year will advance by at least 70 percent, Puma said.
“It’s probably still not what people exactly had in mind in terms of where the growth will in the end go to, but it’s a good sign,” HSBC analyst Erwan Rambourg said by telephone. “There is a good visibility on margins.”
Puma and Adidas AG are looking to the World Cup, which starts June 11 in South Africa, to lift sales. Initiatives related to the event have already left “a positive mark” on revenue, Chief Executive Officer Jochen Zeitz said today. Larger rival Adidas, which will outfit 12 teams at the tournament to Puma’s seven, raised its earnings forecast last week and said profit increased for the first time in five quarters.
Puma shares fell as much as 2.2 percent in Frankfurt and traded down 2.6 euros at 251 euros as of 1:27 p.m. local time. The stock has gained 8.5 percent this year, valuing the company at 3.79 billion euros.
Full-Year Outlook
First-quarter sales declined 2.1 percent to 683.1 million euros, according to the company, which expects “low- to mid- single-digit growth” in full-year revenue. Net earnings for the year should jump “significantly,” Puma said.
“Our market has almost worked itself through the inventory glut that was caused by the aftermath of the Olympics a couple of years ago,” CEO Zeitz said on a conference call.
Excluding inventory clearance, first-quarter sales were “slightly above” the same period last year, Puma said.
Among World Cup merchandise, the team sports category, which includes replica soccer jerseys, showed “double-digit” growth at the end of March, Zeitz said.
Sales of footwear decreased 5.1 percent, excluding currency fluctuations, Puma said. Accessories sales declined 1.6 percent on the same basis. Sales of apparel gained 1.2 percent.
Sales in the Americas gained 9.8 percent with both North America and Latin America “positively contributing,” Puma said. Sales in the Asia-Pacific region fell 8.4 percent, while revenue from Europe, the Middle East and Africa, Puma’s largest region by sales, fell 6.2 percent.
Japan and Greece are still “very difficult,” Zeitz said.
--Editors: Celeste Perri, Paul Jarvis.
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