Connect to share and comment

Restructuring charges trip up Puma in 2012


German sportswear giant Puma said Thursday restructuring charges pushed it into the red in the fourth quarter of 2012 and weighed on earnings for the year as a whole.

In addition, the restructuring programme would also negatively affect Puma's performance this year, the company said in a statement.

Puma said that one-off costs of 98.2 million euros ($132 million) in the fourth quarter pushed its bottom-line into a loss of 42.6 million euros in the period from October to December, compared with a profit of 33.1 million euros a year earlier.

In addition to restructuring costs, Puma also had to buy back its trademark rights in Spain from Spanish distributor Estudio 2000.

Taking the year as a whole, the one-off items amounted to 177.5 million euros, which knocked full-year net profit down by 69.5 percent to 70.2 million euros, despite a rise in sales, Puma said.

Fourth-quarter sales rose by 11.7 percent to 804.7 million euros and full-year sales were up 8.7 percent at 3.271 billion euros.

"Despite a continuously challenging market environment, particularly in Europe, Puma delivered a strong sales performance in the fourth quarter, enabling us to meet our sales projections for the full year of 2012," said chief executive, Franz Koch.

Puma said it will pay a reduced dividend of 0.50 euros per share for 2012 from 2.00 euros for 2011.

Looking ahead to the current year, Puma said it expected sales to "remain at a level consistent with that of 2012."

Nevertheless, the restructuring measures would begin to make themselves felt and the group said it envisaged higher earnings both at an underlying and after-tax level.

"Management envisages an increase in EBIT (earnings before interest and tax and special items) in the low- to mid-single digits while net earnings should improve significantly," it said.