In the final three months of 2013, Puma saw its sales tumbles 13.2% to 698.3 million euros (about $960 million). That was below analysts’ average estimate for 718 million euros.
Net loss for the quarter widened to 115.2 million euros (about $157.8 million) from 42.6 million euros in the prior year.
Most troubling, the brand’s footwear sales, which account for about half of total sales, were down 21%, worse than apparel, down 1.2%. Accessories sales rose 9.7%.
World Cup Sales Boost?
Last November, Puma had warned of 129 million euros in costs during the fourth quarter relating to its closing of a development center in Vietnam and transferring product staff from London to its German offices.
Puma, which French luxurygoods group Kering owns an 84% stake, ranks as a distant third to Nike and Adidas. But CEO Bjoern Gulden hopes to move Puma up in the rankings by returning to its sports roots and away from former CEO Jochen Zeitz’ emphasis on “sports-inspired” fashions.
“Puma numbers were not number one,” Gulden said. “Obviously these numbers are not our end game and we are not happy with that…2014 marks the start of the turnaround.”
Gulden projected that sales will be flat in 2014, a first half shortfall helped by increases in the second half boosted by signing UK soccer team Arsenal and the World Cup.
Gross margin is expected to widened too primarily due to improvements in sourcing and changes in product mix. In the fourth quarter gross margin had narrowed to 43.2% from 44.6% a year ago due to discounting and currency translations.
According to the World Federation of Sporting Goods Industry, the Sochi Winter Olympics is expected to help athletic wear sales 4% this year with the World Cup in Brazil responsible for 3.5% growth.
Puma was a major supporter of many nation’s teams in Sochi and Gulden pointed out that 25% of all World Cup teams would be wearing Puma uniforms, including Italy, Switzerland, four African teams etc.