Puma Raises 2014 Sales Outlook as Footwear Revenue Rebounds

FRANKFURT, Germany — Puma SE boosted its outlook for 2014 sales as the footwear maker's investment in a new ad campaign and sponsorships started to take hold.

Revenue will advance by a low-single-digit percentage this year, on a currency-adjusted basis, the Herzogenaurach, Germany- based company said in a statement today. Puma had previously forecast no change to sales.

Chief Executive Officer Bjoern Gulden is revamping Puma’s athletic shoes, getting more aggressive in marketing and reorienting the company’s positioning around a theme called “Forever Faster,” invoking athletes including sprinter Usain Bolt and soccer star Mario Balotelli. Footwear sales rose for the first time in seven quarters.

“Things are moving in the right direction but as we have said all along, we know that the repositioning of Puma and the turnaround of the business will take time, as we need to continue to build confidence in the marketplace,” Gulden said.

Puma is readying new products for next spring, looking to restore some of the luster of its heyday in the 1970s when it shod Knicks basketball star Walt Frazier and the Jets quarterback Joe Namath.

‘Paying Dividends’

“On the back of the launch of the Forever Faster campaign, launch of new sponsorship deals, World Cup advertising and the back to school season, Puma’s repositioning appears to be paying dividends,” Mario Ortelli, an analyst at Sanford C. Bernstein, said in an Oct. 28 report. He has the equivalent of a “hold” rating on the shares.

Earnings before interest and taxes and excluding some items was 46 million euros ($57 million), compared with the average 57.8 million-euro estimate of analysts surveyed by Bloomberg. Sales rose 6.4 percent to 843 million euros adjusted for currency translations, Puma said today.

The company has struggled in recent years and Gulden, who became CEO last year, has ruled out a quick fix, though signs of a turnaround are showing. Thomas Chauvet, an analyst at Citigroup, said in an Oct. 23 note to clients that Gulden has effected “brand rejuvenation” while cutting costs and making retail operations more efficient.

Shares of Puma had fallen 26 percent this year and closed down less than 1 percent at 175.05 euros yesterday.

Puma has started selling soccer gear branded with Arsenal club logo and colors as part of a sponsorship deal with the Premier League team.

By Aaron Ricadela; editors: Celeste Perri, Robert Valpuesta.