Germany : Significant increase in PUMA gross profit margin

PUMA AG announces its consolidated financial results for the 4th Quarter and Financial Year of 2007.
The year 2007 was a year with only a few events. Nevertheless most of the targets set were reached and even exceeded in many areas.
The Company successfully strengthened its positioning as a desirable sportlifestyle brand, which is as well reflected in the improved gross profit margin.
In 2007, worldwide brand sales were up 3.4% currency adjusted, amounting to € 2.7 billion. On a comparable basis, consolidated sales climbed by 4.7% to € 2.4 billion.
The gross profit margin jumped by 170 basis points to over 52%, and operating profit was above last year’s, totalling € 372.0 million. Earnings per share increased from € 16.39 to € 16.80.
Highlights 4th Quarter 2007 In Q4, consolidated sales increased significantly by 10.3% to € 504.5 million on a currency-adjusted basis. Footwear rose by 7.0% to € 277.2 million, Apparel by 14.8% to € 194.7 million and Accessories by 14.0% to € 32.6 million.
By regions, EMEA sales increased by 19.9% and Asia/Pacific went up by 14.3% whereas sales in the Americas decreased by 3.3% as expected. The gross profit margin was at 51.6% 390 basis points up from last year’s quarter.
SG&A increased from 38.7% to 40.3% of sales. EBIT rose significantly by 20.7% to € 52.4 million and earnings per share from € 2.03 to € 2.40. Highlights January – December 2007 Global brand sales growth of more than 3% PUMA brand sales rose currency-adjusted by 3.4% to € 2.7 billion.
Due to the continuing weakness of currencies, particularly of the US Dollar, brand sales in Euros were slightly below last year’s level. By segments, Footwear sales climbed on a comparable basis by 1.9% to € 1,477.9 million, Apparel by 5.7% to € 998.7 million, and Accessories by 3.7% to € 262.2 million.

Licensed business License sales declined by 3.8% to € 365.3 million on a currency neutral basis. The decrease is attributable to expired licence agreements. On a comparative basis, licence sales rose by approximately 4%.
As of 2008, the Korean market will be serviced through the fully-owned subsidiary and will therefore be converted from a licence business into a consolidated business.
Overall, royalty and commission income from license sales amounted to € 35.6 million. This corresponds to 9.7% of license sales compared to 9.6% in the previous year.