Frankfurt - German sportswear maker Puma said Thursday it expects stable sales and a higher profit margin this year after a difficult year in 2013.
Puma said in a statement that its net profit plunged 92.4 percent to 5.3 million euros ($7.3 million) last year, hit largely by 129 million euros in one-off costs such as restructuring charges.
Revenues declined by 8.7 percent to 2.985 billion euros and underlying or operating profit was down 34.1 percent at 191.4 million euros.
“2013 has been a challenging year for Puma and there is no doubt that we have issues in terms of lack of brand heat, commercial products and desirable distribution,” said chief executive Bjoern Gulden.
Nevertheless, “2014 marks the start of the turnaround,” Gulden said, but cautioned not to expect “a quick fix”.
Last year, Puma extended its sponsorship with Jamaican sprint sensation Usain Bolt and also signed a deal with Arsenal Football Club and soccer star Mario Balotelli.
Looking ahead to the current year, Puma said it expected “net sales to be flat, but with improved revenue quality.”
“Driven by strong marketing investments in media and sports assets, although combined with strict ongoing control of other costs,” operating profit would increase, Puma said.
“However, due to the special items booked in 2013, management expects a significant improvement in the net profit margin, which is expected to come in at approximately 3.0 percent of net sales,” compared with just 0.2 percent in 2013.
“2014 will be a turnaround year for Puma where the brand will be re-established in the market place and bring Puma back to a path of profitable and sustainable growth in the mid-term,” chief executive Gulden said. - Sapa-AFP