Germany : PUMA Accessories sales improve in Q3

In Q3, PUMA’s branded sales, which include consolidated sales and license sales, reported € 753.4 million, a slight decline of 0.6% on a currency neutral basis. During the nine months period ending September, global brand sales increased 3.8% to € 2,137.4 million.

Like-for-like, Footwear sales increased 1.5% to € 1,177.6 million, Apparel rose by 5.9% to € 759.2 million and Accessories improved by 10.1% to € 200.5 million.

The licensed business decreased slightly in Q3 by 1.1% currency adjusted to € 83.0 million, mainly due to the announced expiration of the Korean license at year-end 2007. Year-to-date, licensed sales increased by 7.7% to € 268.3 million.

Based on the licensed turnover a royalty and commission income of € 7.6 million or € 26.1 million respectively was realized, representing a gross yield of 9.2% on licensed sales in the quarter and 9.7% year-to-date.

Due to the early shipments in June (as reported with the Q2 release), consolidated sales were slightly down at 0.5% currency adjusted totaling € 670.4 million in Q3. By segments, Footwear decreased 6.9% to € 376.3 million, Apparel was up 8.7% to € 246.3 million and Accessories improved 10.6% to € 47.8 million.

Sales after nine months were up 3.2% currency adjusted to € 1,869.0 million. In total, Footwear improved 1.0% to € 1,110.7 million, Apparel 6.8% to € 632.6 million and Accessories 6.3% to € 125.7 million.

In Q3, gross profit margin increased by strong 270 basis points reaching 53.0% compared to 50.4% last year. For the nine months period gross profit margin was a favorable 52.5% compared to 51.4%. Footwear margin increased from 51.2% to 52.3%, Apparel margin from 51.2% to 52.5%, and Accessories stood with 53.9% almost flat on last year’s level.

In absolute amounts, SG&A expenses were flat in Q3 but increased 1.8% after nine months totaling € 228.1 million and € 656.0 million respectively. As a percentage of sales, the cost ratio increased from 32.6% to 34.0% during Q3 and from 34.1% to 35.1% after nine months.

For the nine months period, marketing/retail expenses increased 0.7% and accounted for € 314.8 million or 16.8% of sales versus € 312.6 million or 16.6% last year. Product development and design expenses grew 8.1% to € 43.0 million representing 2.3% of sales, a slight increase of 20 basis points. Other selling, general and administrative expenses were up 2.2% to € 298.2 million, or from 15.5% to 16.0% of sales.

EBIT in Q3 developed stronger than sales leading the EBIT margin up from 17.6% to 18.5%. In absolute terms, EBIT increased 0.6% to € 123.8 million. EBIT accumulated over the nine months period, amounts to € 319.7 million versus € 324.6 million, representing an almost flat operational margin of 17.1%.

Taking into account an interest result of € 3.7 million in Q3 and € 8.5 million after nine months, pre-tax profit was up by 1.8% to € 127.5 million in the quarter and down by 0.8% to € 328.2 million year-to-date. The tax ratio after nine months was 29.0% therefore on last year’ level.

Net earnings in Q3 reached € 89.1 million versus € 87.1 million and € 230.8 million compared to € 230.3 million after nine months. Hence, the net return improved from 12.5% to 13.3% and from 12.2% to 12.3% respectively.

Earnings per share increased by 2.7% to € 5.56 in Q3. Year-to-date earnings per share totaled to € 14.40 compared to € 14.36. Diluted earnings per share were calculated at € 5.57 (€ 5.39) and € 14.39 (€ 14.27) respectively. Total assets grew by 14.2% to € 1,955.1 million as of September 30, 2007. The equity ratio stood at 60.0% compared to 60.8% last year. The company has not bought back any shares during the last quarter and has currently no treasury stocks on its balance sheet. Hence, share capital consists of 16,027,464 shares end of September. The average number of outstanding shares for the nine months period calculates to 16,027,289. A resolution adopted by the Annual General Meeting authorizes the company to purchase up to ten percent of the share capital until September 1, 2008. As expected, inventory growth was further reduced and is now up by 8.9% to € 368.2 million versus a growth of 17% end of June. Trade receivables of € 502.0 million are on last year’s level and almost in line with sales development. Total working capital at the end of September improved 2.1% and totaled € 502.2 million compared to € 513.0 million last year. Capex was € 61.5 million versus € 124.6 million, of which € 4.9 million versus € 73.8 million is related to acquisitions. Free Cashflow amounts to € 149.4 million compared to € -56.3 million last year or € 154.3 million versus € 17.4 million excluding acquisition costs and marks a strong improvement versus last years cash generation. Cash at the end of September increased from € 404.1 million to € 532.5 million. Bank debts grew from € 66.9 million to € 69.3 million. As a result, the net cash position improved strongly from € 337.2 million to € 463.2 million year over year, due to the positive cashflow. The EMEA region reported sales of € 376.5 million in Q3, a currency adjusted increase of 1.1%. Taking the early shipments of June into account, sales would have been up in mid single digits for the quarter. Year-to-date, sales increased 5.5% and totalled € 1,020.2 million. Gross profit margin year-to-date reached 54.5% compared to 54.2% last year. The order book end of September was up 12.4% to € 580.5 million. This reflects a significant improvement versus existing orders end of June 2007. Sales in the Americas were down 8.8% currency adjusted reaching € 166.7 million in Q3. During the nine months period sales declined by 4.7% to € 486.4 million, while the gross profit margin improved 290 basis points reaching 49.7%. Orders on hand end of September were down 8.4% to € 237.8 million. As expected, sales in the US market were down 9.7% in Q3 and 10.1% after nine months. This is caused by a continuous moderating environment in the US mall-based business. However, due to the decline of the key-account ratio the gross profit margin increased significantly by more than 500 basis points. As of September 30, 2007 orders for the US decreased 23.5% to $ 187.5 million, mainly due to the mall-based retailers. In the Asia/Pacific region, sales improved 7.1% to € 127.2 million in Q3 and by 8.6% to € 362.4 million year-to-date. The gross profit

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