UPDATE 2-Puma lifts World Cup year outlook after strong Q1

Wed Apr 28, 2010 6:28am EDT

* Q1 adj EBIT 119 mln eur vs poll average 113 mln eur

* Q1 net sales 683.1 mln eur vs poll avg 680 mln eur

* Expects 2010 sales growth at low- to mid-single-digit rate

* Sees 2010 pretax profit to improve by at least 70 pct

* Shares down 1.5 pct, outperforming German midcap index (Adds more detail, background)

FRANKFURT, April 28 (Reuters) - German sporting goods maker Puma (PUMG.DE) raised its expectations for the soccer World Cup year of 2010 on Wednesday as its first-quarter results beat analysts' estimates amid a broad economic recovery.

Puma, the world's No. 3 behind U.S. bellwether Nike (NKE.N) and local peer Adidas ADSG.DE, now expects this year's sales to rise by a low- to mid-single digit percent rate and sees pretax profit up by at least 70 percent, it said.

It had initially seen sales at least at last year's level.

Chief Executive Jochen Zeitz said visibility had improved since the company's last update in February. "The economic climate has stabilised," he said and added that "very pleasing" first-quarter results had also helped boost Puma's confidence.

Puma's fine-tuning comes just days after rival Adidas hiked its full-year profit outlook after surprising markets with first-quarter results that beat estimates. [ID:nLDE63L2A6] Adidas is due to report final results on May 4.

Puma shares fell 1.5 percent to 249.8 euros by 1025 GMT, outperforming a 2.5 percent drop in the German midcap index .MDAXI.

"Overall, results lack the level of surprise seen last week with Adidas," said Commerzbank analyst Christoph Dolleschal.

FULL SPEED

Recent data show the economic recovery in the euro zone taking hold and becoming more broad based. [ID:nLDE63L0L8]

The euro area escaped from its worst post-war recession in the third quarter of last year but remained flat in the final three months of 2009. It is seen growing 0.3 percent in the first quarter of 2010 and 0.4 percent in the second.

The soccer World Cup in South Africa in June will add further momentum, Zeitz said. "Preparations are running at full speed," he said. Soccer products account for about 10 percent of Puma's overall sales.

Puma equips seven teams, including titleholder Italy, Uruguay and Cameroon. Adidas, on the other hand, kits out 12 teams -- among them the host nation South Africa, Germany and Argentina -- and is one of the main tournament sponsors.

Puma CEO Zeitz said that "most of the products will be delivered in the second quarter for the World Cup". Puma's team sport category, which includes soccer products, already posted a double-digit growth rate in the first quarter.

Overall, Puma posted a 4.4 percent rise in first-quarter earnings before interest and tax adjusted for restructuring charges to 119 million euros ($158.5 million), beating the average estimate of 113 million euros in a Reuters poll of analysts.

Sales fell 2.1 percent to 683.1 million euros, also above estimates. Last year's first quarter sales were boosted by closeout sales to reduce inventories, Puma said and added that supplier orders had been cautious for the first half of 2010.

Puma, owned by French retailer PPR (PRTP.PA), trades at 16.2 times 12-month forecast earnings, a discount to its peers. Adidas has a multiple of 17.7 and market leader Nike (NKE.N) 18.1, according to Thomson Reuters StarMine. (Reporting by Eva Kuehnen; Editing by Michael Shields, Mike Nesbit) ($1=.7508 euros)

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