Feb 16, 2015
Puma expects more pain from volatile currencies
Feb 16, 2015
BERLIN, Germany - German sportswear firm Puma predicted currency fluctuations, particularly the strong U.S. dollar, will weigh on earnings this year after suffering a surprise loss in the last three months of 2014.
The impact of the dollar strength was evident in the fourth quarter when the company reported a net loss of 4.6 million euros ($5.25 million), compared with forecasts for a net profit of 7 million.
That loss came despite a 7.5 percent rise in quarterly sales to 750.8 million euros beating average analyst forecast for 739 million. Revenue growth was particularly strong in the Americas, where Puma makes a third of its sales, up a currency adjusted 15 percent.
Puma shares were down 0.75 percent at 0950 GMT compared with a 0.1 percent firmer German small-cap index. The company is majority owned by French luxury goods group Kering .
Puma is a distant third in the sportswear market behind American rival Nike and Germany's Adidas, a company located in the same small Bavarian town of Herzogenaurach.
It has been spending heavily on marketing and sponsorship, including ousting Nike as kit supplier to English Premier League soccer club Arsenal this season, trying to restore its reputation as a sports performance brand after a shift into fashion hurt its image.
The German company predicted a mid-single-digit rise in currency-adjusted sales for 2015, with growth seen coming in the second half after a flat first half.
It warned that fluctuating currencies, particularly the strong U.S. dollar, could have a significant effect on overall earnings before interest and taxation (EBIT) and net earnings this year.
Puma, which named pop star Rihanna as its women's creative director in December, said it would continue to take steps to counter this impact, which should mean a slight increase in EBIT and net profit.
€1 = $1.14/£0.74
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