Puma Pouncing on Opportunity

NEW YORK — Puma AG is back on the prowl.

Analysts said the German sports-lifestyle company’s strong revenue numbers should be sustainable going into the fourth quarter, with growth in the low double digits.

“They’re near the top of their peer group now, next to Nike, which has only slightly superior margins,” said Susquehanna Financial analyst Christopher Svezia.

As part of its so-called “Back on the Attack” plan to boost sales by 2015 to 4 billion euros (or $5.5 billion at current exchange), Puma will gain full control of its long-term Chinese joint venture Liberty China Holding Ltd. in January. It will acquire the remaining 49 percent stake and make China its biggest emerging market.

“We will better capitalize on future opportunities and accelerate brand development in Asia Pacific within the next phase of our company’s development,” Jochen Zeitz, chairman and CEO of Puma, said in a company statement.

“At the end of the day, it comes down to having control of the brand, and of where and how they want to grow,” said Svezia. “They plan for the Asia Pacific business, which is about 600 million euros right now, to double by 2015.”

Puma said it expects sales to be up in the mid- to high single digits for full-year 2010, driven by the Puma brand, the wholesale business, footwear sales and by the Europe, Middle East and Africa regions.

French parent company PPR SA, which holds 71.6 percent of Puma’s shares, said last month that the sporting-goods maker will become the main brand of a new sports and lifestyle unit. Puma will in April convert into a Societas Europaea, and Zeitz will become its executive chairman after also stepping into the newly created role of chief sustainability officer for PPR. Meanwhile, the search is on for a replacement CEO at Puma.

Zeitz said Puma can spend a maximum of 100 million euros, or $137.7 million, on investments in 2011, and will consider spending a “triple-digit million” euro amount for the right opportunities. Acquisitions remain an integral part of the company’s strategy, both to strengthen the existing portfolio through complementary assets and to allow the company to enter adjacent market segments, Zeitz added.

Puma’s total net cash position at the end of September increased to 360.7 million euros, or $497.2 million, from 339.5 million euros, or $468 million, last year.

Its third-quarter profit rose 14 percent to 77.6 million euros, or $107.5 million. Earnings per share rose 15 percent to 5.16 euros, or $7.11.

Consolidated revenue in currency-adjusted terms grew 7 percent to 784.3 million euros, or $1.08 billion.

Footwear advanced 6 percent currency-neutral to 417.2 million euros, or $574.9 million, while apparel sales inched up 1 percent to 263.8 million euros, or $363.5 million.

The Americas was the region with the strongest growth, with sales surging 27 percent currency-neutral, while the Asia Pacific increased 1 percent.

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