For the second quarter ended June 30, 2015, apparel sales at German sports goods and sportswear marketer Puma were broadly flat at € 263.3 million from the same quarter of previous year.
“This is against high comparables in the second quarter 2014, when sales in replica jerseys driven by the FIFA World Cup were particularly strong,” Puma said in a press release.
Accessories sales grew 3.6 per cent currency adjusted year over year to €150.7 million and developed in line with its expectations.
However, footwear revenues increased for the fourth quarter in a row, soaring by 16.2 per cent currency adjusted over the second quarter of 2014 to €358.8 million.
“This development was mainly driven by the Running, Training and Sportstyle categories and especially the Puma Ignite product platform,” the German company added.
In the second quarter of 2015, Puma's consolidated sales improved 7.6 per cent currency adjusted year on year to €772.7 million, while in reported terms, consolidated sales rose higher at 18.5 per cent.
This positive development which was also above its expectations was primarily driven by the growth in footwear sales across all regions.
According to Puma, gross profit margin was stable at 46.7 per cent year on year, despite significant negative currency effects.
In footwear, gross profit margin fell slightly from 42.7 per cent to 42.3 per cent, apparel margin rose from 48.2 per cent to 50.7 per cent, while margin for accessories too dipped from 52.4 per cent to 50.0 per cent.
Second quarter of 2015, operating expenditure significantly impacted by adverse currency effects, saw a surge of 20.4 per cent in reported terms, rising to €357.4 million.
During the reporting quarter, it said, it continued to invest heavily in marketing activities to strengthen Puma's positioning as the fastest sports brand in the world.
The main cause for the increase was higher media spend and the partnerships with global sports and pop culture icons Rihanna and Arsenal, which both commenced in the second half of 2014.
The opening of new retail stores at selected locations and investing into IT related infrastructure also contributed to the increase of OPEX in the second quarter.
The rise in operating expenses however led to a decrease of operating income (EBIT) from €12.6 million in the quarter under review to €6.8 million in the prior year second quarter.
The financial result in the second quarter further slipped to a loss of €5.7 million from a loss of €1.3 million in last year's second quarter due to unfavorable impacts from currency conversion.
Net loss for the second quarter of 2015 reached €3.3 million resulting in loss per share of €0.22 in the reporting quarter.
To ensure product availability and support sales growth as well as a higher demand from new stores, inventories rose 20.6 per cent year on year to €704.5 million.
Puma's cash and cash equivalents went up from €300.0 million to €337.9 million, while borrowings increased due to the higher working capital requirements as part of its short term financing activities.
