Puma SE reported smaller net loss for the quarter as the German athletic gear maker benefited from lower costs and higher demand for its shoes.
The Herzogenaurach-based company stated a net loss of €4.6 million for the three months ended December compared to a result of €115 million below the zero mark in the same period of the previous year.
The company has gone through a long period of improvement from the fourth quarter of 2013, when it has hit by a €129 million charge related to the closure of a manufacturing facility in Vietnam and the transfer of employees from London to Germany.
Chief Executive Bjørn Gulden, who took over in July 2013, initiated a rescue program in order to help the company return to growth. However, its shares fell 27% in 2014.
The company has been struggling for more then ten years and it has been under restructuring since 2009, which accelerated in recent years.
Revenue for the period climbed 7.5% to €750.8 million driven by robust demand in the Americas as well as growing interests towards the companys accessories. Footwear demand continued to improve in the three moths, marking its second quarterly increase. Excluding currency shifts, revenue jumped 6.3%.
Operating profit came in at €10.6 million, a substantial increase compared to the €1.1 million reported a year ago. The figure also compares with a €15.1 million average analysts had projected.
Under his recovery plan, Mr. Gulden is shifting the companys focus to sport equipment, including new launches of soccer and running shoes. Additionally, Puma is reducing its product line up, while also making it more simplistic and less colorful.
In August Puma introduced a new slogan for the brand and launched a massive marketing campaign dubbed “Forever Faster”, featuring Usian Bolt, the fastest man alive, and a number of other sport celebrities, including soccer player Mario Balotelli and golfer Rickie Fowler.
Additionally, in its efforts to get back to growth Puma appointed pop star Rihanna as brand ambassador and creative director in charge of the companys female collections. The singer is well known for her fashion expertise and in 2014 received Fashion Icon Award from the Council of Fashion Designers of America.
Puma also replaced rival Nike as an outfit supplier for the English top soccer team Arsenal.
“We know that the turnaround will take time but feel that 2014 was a turning point. We expect 2015 to confirm that we are moving in the right direction,” said Mr. Gulden.
Puma gained 0.20% on Friday and closed at €178.95 in Frankfurt. On Monday the stock edged up 0.03% to €179 at 12:07 GMT, marking a one-year decrease of 16.18%. The company is valued at €2.70 billion.
According to the Financial times, the 22 analysts offering 12-month price targets for Puma have a median target of €180.00, with a high estimate of €247.00 and a low estimate of €140.00. The median estimate represents a 0.59% increase from the last closing price.
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