German sportswear maker Puma dashed hopes for another hike to its earnings guidance on Thursday even as it nudged up its outlook for full-year sales and reported solid second quarter results, sending its shares down sharply.

Puma, which still lags German rival Adidas and market leader Nike, has revived its fortunes in recent years by spending heavily on sponsoring top soccer teams and partnering with celebrities such as singer Rihanna.

That had raised analyst expectations that it might lift its earnings outlook for the year again.
However, Puma left its operating profit target at between 310 million euros and 330 million euros (£274 million to £293 million), even as it lifted its forecast for a currency-adjusted rise in sales to 12 to 14 percent, from 10 to 12 percent.

Its shares, which have risen a quarter this year, fell more than 7 percent at the open to their lowest level in 10 weeks.

Second-quarter sales rose a currency-adjusted 15 percent to 1.05 billion euros, slowing from a 21 percent jump in the first quarter but in line with most analyst forecasts.

Operating profit came in at 58 million euros, slightly shy of analyst forecasts, according to Thomson Reuters Eikon.

Puma said all regions had grown fast, with footwear the main growth driver, but sales of apparel and accessories also increasing at double-digit rates, although the strength of the euro dented reported sales.
Chief Executive Bjorn Gulden said the soccer World Cup had been a good event for Puma and the launches of new shirts for sponsored clubs like AC Milan and Olympique de Marseille showed its commitment to the sport.

While national squads wearing Puma jerseys did not perform so well at the World Cup, France’s Antoine Griezmann and Belgium’s Romelu Lukaku, who both wear Puma shoes, were second and third top goal scorers at the tournament.

The launch of new basketball products and partnerships with players were well received by retailers and basketball fans, Gulden said in a statement.

Puma announced last month that rap mogul Jay-Z will be its creative director of basketball, which it sees as critical to helping its position in the North American market, already bolstered by deals with stars like Rihanna and Selena Gomez.

Nike last month beat fourth-quarter profit and revenue estimates as new launches and focus on direct-to-customer sales helped reverse declining sales in North America for the first time in a year, even as Adidas and Puma keep advancing.