Puma Reports 5.5 Percent Sales Slump in Third Quarter

Puma reported a 5.5 percent slide in sales in the third quarter, as revenues from sneakers slumped precipitously and apparel sales declined badly.

Puma, part of the sprawling French luxury conglomerate PPR, said revenues from sneakers slumped an alarming 13 percent to 358.7 million euros, or $538 million, in the latest quarter, while apparel sales slid by 5.2 percent to 238.1 million euros, or $357 million.

Moreover, Puma’s operating profit suffered a 22 percent decrease to 98 million euros, or $147 million, in the opening quarter.

“The market and consumer environment is expected to remain challenging,” cautioned Puma in a downbeat assessment of the remainder of the current year.

Puma’s performance in the U.S. was particularly weak. Sales in the U.S. slumped 11.3 percent to $129.5 million in the third quarter and by 1.4 percent to $ 400.9 million in the first nine months of this year.

The German active sportswear and footwear label also revealed that revenue for the first nine months of 2009 inched up 0.4 percent to 1.971 billion euros, or $2.956 billion. Footwear sales were down by 5.6 to $1.086 billion, or $1.629 billion. Apparel sales decreased by 6.3 percent to 664.3 million euros, or $996 million, but accessories revenues increased significantly, up by 45 percent to 221 million euros, or $331 million.

Looking ahead, Puma’s CEO Jochen Zeitz predicted: “We hope to see first signs of an improving business environment in the run up to the Football World Cup in South Africa, where Puma through its strong ties with African Football has a home field advantage.”

Puma’s soccer strategy has been based on dressing emerging Africa nations; something of a policy of force majeure as its larger direct competitors, Nike and adidas, had already tied up major nations like Brazil, Spain, Germany and France with long-term sponsorship deals.

However, the next World Cup, will kick off in Johannesburg, South Africa on June 11 next year, when Italy – a Puma dressed team – will defend the title it won in Germany in 2006. Hence the German CEO’s reference to “home field advantage.”

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