Puma Eyes 2012 For Better Growth

NEW YORK — Puma SE is one step closer to its full-year sales goal, but there is possible turbulence ahead in the North American market, analysts said.

Citigroup analyst Thomas Chauvet said, “As expected, it was a very difficult margin environment and there is no sign the margin will turn around in the back half. The U.S. and Europe are still tough. Next year is where you’ll see improvement in operational efficiency because of top-line support from UEFA 2012 and the Olympics.”

Susquehanna Financial analyst Christopher Svezia said the company faces tough comps in the U.S. “We wouldn’t be surprised if [the business] moderates,” he said.

But market watchers said the firm’s year-end goal to reach revenue of 3 billion euros, or $4.3 billion at current exchange, remains well within reach.

“It’s a reasonable aspiration of 10 percent growth,” said Simon Irwin, analyst at Liberum Capital. “But we are coming off the back of a couple of pretty weak years, so the key how much of that is being driven by additional marketing spend. Are they simply riding the tide of what is clearly a better market? My concern is [whether they are] doing enough as a business in terms of product innovation and marketing initiatives.”

Puma earned 11 percent more in the second quarter, with net income at 37.6 million euros, or $54 million. Revenue, boosted by strong growth in Latin America and Asia, advanced 9 percent to 673.5 million euros, or $968.9 million. Gross margin slipped 150 basis points, due to higher sourcing costs and negative currency impacts from hedging.

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