Puma up to new Tricks - and it's starting to pay off
Puma, Europe's second-largest sporting-goods maker, reported a milder-than-anticipated drop in operating profit as the company debuted new products to stoke sales.
Earnings before interest and taxes in the second quarter tumbled 60pc to €12.6m, Puma said in a statement, compared with analysts' €10.2m average estimate. Revenue for the period that ended in June rose 0.6pc.
Chief executive Bjoern Gulden is repositioning Puma around sports-performance gear and seeing strong demand for the company's bright pink-and-blue EvoPower and EvoSpeed soccer cleats that some players wore during this summer's World Cup.
Mr Gulden, a former professional soccer player, is also spending more on marketing for the back-to-school buying season, promoting the company's 'Forever Faster' ad campaign and signing sponsorship deals, which is dragging on profits. "We know that the repositioning of Puma and the turnaround of the business will take time," Mr Gulden said. Sales of the pink-and-blue Tricks boots have been "excellent and exceeded our expectations".
Puma expects a slight increase in gross profit margin this year. The Germany-based company is fending off bigger rivals Adidas and Nike in the sports market, and trying to move past years of vacillating between sports gear and sport-inspired street wear.
Puma sponsored teams including Algeria, Chile, Uruguay and Italy in the World Cup, while Adidas sponsored the winning German national team. In January the company landed a deal to sponsor English Premier League team Arsenal Football Club.