BERLIN — Puma’s earnings may be down, but fourth-quarter results showed massive boosts in sales. The company says it is on track with its long-term aims.
The German sportswear label reported on Monday net earnings for the fourth quarter of financial year 2006 of 32.8 million euros, or $42.7 million. This was a drop of 25.5 percent compared with the last quarter of 2005. The quarter’s earnings before interest, taxes, depreciation and amortization fell 24.3 percent, to 41.6 million euros, or $54.1 million. Net sales for the quarter climbed 37.6 percent, to 480.6 million euros, or $625.1 million. Dollar figures are at the average exchange rate.
According to Puma, the decrease in earnings was due to brand investments and restructuring carried out to achieve long-term goals.
For full-year 2006, the company said pretax earnings fell 7.4 percent, to 374 million euros, or $480.3 million, from the prior year, while worldwide sales climbed 16 percent, to 2.8 billion euros, or $3.5 billion. Profits came in higher than the company’s original expectations.
Total selling, general and administrative expenses for the year rose 47.6 percent, to 831.8 million euros, or $1.04 billion. This was due mainly to increased marketing and retail expenses, as well the cost of expanding the company’s infrastructure.
Despite continuing difficulties in some markets, sales in Europe, the Middle East and Africa reached 1.16 billion euros, or $1.5 billion, in 2006, an increase of 5.1 percent compared with the previous year. The better-than-expected performance in this region was thanks in part to the summer’s soccer World Cup. The U.S. market also had substantial growth in sales, an increase of 31.3 percent, to $620.2 million for the financial year.
Puma’s chief executive officer, Jochen Zeitz, said he was very pleased with last year’s results, adding that the company was now on track to achieve its ambitious aims and, in some respects, even ahead of its targets. “We’ve put ourselves in a solid early position to deliver on our Phase IV objectives,” he said.