Puma 1Q Net Profit Falls To €5.6 Million

GEORGE FREY

FRANKFURT (AP) — German sportswear company Puma AG said Friday net profit fell substantially in the first quarter as the global recession and restructuring charges hurt sales and earnings.

The Herzogenaurach-based company reported a net profit of €5.6 million ($7.5 million) in the January-March period, a fraction of the €90 million made in the first quarter of 2008.

Puma, which is Germany's second largest sportswear company behind Adidas AG, said sales for the period fell about 1 percent, to €738 million compared with €741 million a year earlier. However adjusted for currency effects, the sales result was pushed down by more than 3 percent.

Puma said first quarter earnings were affected by a one-time charge of €110 million which the company will use to restructure operations and organization, although it said it did not expect a reduction in the workforce. Puma called the move a proactive step to ensure an even leaner and more efficient company.

"Despite an ongoing slowdown in the global consumer's environment, Puma managed to post a solid sales and earnings performance before one-time expenses in the first quarter," Jochen Zeitz, the company's chief executive said in the company's report.