Puma's 1Q slips despite sales on the strong euro

Herzogenaurach-based Puma earned 90.1 million euros ($139.9 million) in the January-March period, compared with 96.6 million euros last year.

Global sales, including licensed products, were up half a percent without the effects of currency fluctuations, but fell to 741.2 million euros ($1.2 billion) in the period from 762.1 million euros a year ago because of the strong euro, which has risen nearly 8.5 percent in value against the U.S. dollar in the first three months of 2008.

In terms of an outlook for the year, the company said its orders are up 12 percent to nearly 1.2 billion euros, and that "In a challenging market, management confirms a single-digit sales increase on a currency neutral basis."

"In the midst of an overall economic environment that continues to be challenging, Puma has shown resiliency in both growth and desirability," chief executive Jochen Zeitz said in a statement. "Despite a difficult 2008 outlook, we will continue to invest in our planned initiatives to capitalize on major opportunities with global sporting events and fully maximize Puma's long-term potential."

Investors appeared to agree, sending Puma shares rose more than 1 percent to close at 229.51 euros ($356.20) in Frankfurt.

The company said sales of its footwear were down 4.6 percent to 404.1 million euros ($627.5 million), led by a decline in the U.S. market, while clothing sales were equal to last year at approximately 246.9 million euros ($383.4 million) in the quarter. Accessories improved by 36 percent to 90.1 million euros ($139.9 million).

By region, Puma said that in Europe, the Middle East and Africa, sales increased nearly 10 percent to 391.1 million euros ($215.1 million) from 360.9 million euros last year, with growth in all categories. The region now represents nearly 60 percent of all consolidated sales for the company.

Sales in the Americas were down 5.6 percent to 148.7 million euros ($81.8 million) on a currency neutral basis. Puma said footwear sales were below last year, but accessories and apparel were up. The region now accounts for 22.1 percent of consolidated sales. In the U.S. market, sales were down 14.2 percent to $134.1 million (86.36 million euros), affected by the continued moderate environment in the mall-based business.

Puma also said orders for the U.S. by the end of the quarter were down 20.8 percent.