GERMANY: Puma to cut costs after Q1 profit slumps
Sports goods group Puma is to implement further cost-cutting measures after unveiling a first quarter profit of only EUR5.6m (US$7.6m).
The costs of the company's previous efficiency drive heavily impacted the figures, with net earnings before one-off expenses down only 10.3% to EUR80.8m.
Worldwide branded sales slipped 3.1% on a currency neutral basis, and were down 0.5% in euro terms to EUR737.7m.
Footwear revenues fell 0.8% to EUR407.1m, while apparel was down 8.1% to EUR237.4m and accessories increased 0.6% to EUR93.2m.
The takeover of a former licensee pushed licensed revenues down 41.6%, Puma said, but consolidated sales were up 0.8% to EUR697.4m on a currency neutral basis.
Puma's cost reduction programme led to one-time expenses of EUR110m, leaving EBIT at EUR4m compared to EUR125.8m for the same period last year.
Sales in the Americas rose 11.5% to EUR178.1m, but EMEA revenues dropped 3% to EUR366.1m, and Asia Pacific was down 1.2%.
Puma said 2009 would be "a year of consolidation", with the focus on adjusting the company's cost base in response to the changing economic environment.
It does not expect to see the "first positive signs" before 2010 and the run-up to the football World Cup in South Africa.
"Due to the worldwide recession, we plan for business to remain challenging in 2009 and have therefore decided to implement further measures to align our cost structure with the current market environment, ensuring a platform for profitable growth in the future," said Jochen Zeitz, Puma CEO.
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