Despite seeing a challenging second half 2009 ahead, Puma AG, the world’s third largest sports goods maker, posted better than expected results for Q2 2009.
An official Puma announcement, heralding the second quarter results, stated, "We remain highly cautious and anticipate a continued challenging and volatile retail industry due to the decline of private consumption as a result of the weakness in the global economy, which may negatively impact sales in [the] second half."
Puma reported that Q2 2009 net earnings fell 15.6% to €38.5 million (US$55.4 million), yet this beat an average estimate of €38 million in a Reuters poll of investments analysts.
The drop in second quarter profit was largely due to increased discounting in the current economic environment and the expectation is that sales may start to fall in the second half of 2009.
Puma’s operating margin – or earnings before interest, taxes, depreciation and amortization (EBITA) – as a percentage of sales, narrowed to 10.2% from 10.8% a year earlier.
As part of its efforts to battle the economic slowdown, Puma intensified its cost-cutting measures earlier this year and aims to save up to €150 million per year from 2011.
Second quarter shoe sales, which generate almost three-fifths of total revenue, gained 1.5%, the company said. However, sales of clothing declined by 1.2%.
Meanwhile, German rival Adidas, the world’s number two after US sporting giant Nike, reported a 2.5% drop in second-quarter sales earlier last week. This was also slightly better than expected and the company said it had turned a corner.
