* PPR says to look at outdoor acquisitions once Puma is fixed
* Says early-year trading in line with last year
* Shares reach 12-year high
PARIS, Feb 15 (Reuters) - Shares in PPR soared to a 12-year high on Friday after the French luxury and sports brand group posted forecast-beating annual profits with an upbeat trading update and underlined its commitment to overhaul struggling sports brand Puma.
PPR which owns fashion labels Gucci and Bottega Veneta, said it wished to continue expanding in the luxury and sports sectors but would only look into making acquisitions in the outdoor gear sector once Puma was out of the woods.
"Once Puma is back on the path of growth, then we will look at growth opportunities in the outdoor sector," PPR Group Managing Director Jean-Francois Palus said at the annual results presentation in Paris.
PPR said it was determined to improve the market position and organisational structure of Puma, which saw its profits slump 70 percent last year and is going through its biggest reorganisation in 20 years.
Asked how long it would take to reverse Puma's fortunes, Palus said : "It is not a question of patience but of will. We are determined to turn round this company."
The group's operating profit reached 1.76 billion euros in 2012, beating a Thomson Reuters I/B/E/S estimate of 1.70 billion euros as resilient growth of its fashion and luxury labels helped make up for lower profitability at Puma.
Shares in PPR rose as much as 8 percent, propelling them to a 12-year high of 172.75 euros and making them the strongest gainer of the French CAC-40 index of blue chips which itself was flat by midday.
By 1100 GMT, PPR shares, which have gained nearly 22 percent since Jan, were up 7.20 percent at 171.30 euros.
PPR - which stands for Pinault, Printemps, La Redoute - has seen its valuation hurt by uncertainty about Puma, and about how long it will take PPR to exit the retail sector, which is generating much lower growth than luxury and sports brands.
PPR, which used to own department store Printemps and retailer Conforama, is still trading at a discount to its luxury peers, or about 14 times next year's earnings against the European sector's average of 15.5 times.
Palus said he expected to complete the sale of mail order business La Redoute this year, concluding the disposal process of the group's Redcats division. Having failed to find a buyer for books and CD retailer Fnac, PPR will spin it off via a share distribution to existing shareholders once the transaction is approved at the group's annual general meeting in June.
The Redcats disposal and offloading of Fnac allowed PPR to recognise them as discontinued operations and avoid including in its accounts the units' combined net loss of 276 million euros.
The outcome included restructuring charges of 149 million euros and 288 million euros in impairment charges on which PPR management did not comment on Friday.
PPR's luxury division saw its revenue rise 14 percent in the fourth quarter, with Gucci, the world's second-largest luxury brand behind Louis Vuitton, up 8.2 percent in comparable terms and Bottega Veneta up 32.7 percent.
"PPR's luxury division is enjoying one of the best sales growth and margin momentum amongst luxury players," HSBC said in a note.
Comparatively, like-for-like revenues from fashion and leather goods at LVMH, which include brands such as Celine and Kenzo but are dominated in size by Louis Vuitton, only rose 5 percent in the fourth quarter.
Meanwhile, during the same period and on the same basis, sales from Ferragamo rose 11 percent, from Burberry 9 percent and from Tod's group 7 percent.
Looking ahead, PPR Chief Executive Francois-Henri Pinault, said early-year sales trends were in line with last year but warned the timing of the Chinese new year which this year fell in Feb. as opposed to Jan. last year could have an impact.
The group did not give a more precise forecast other than to say it expected to continue increasing sales and profits in 2013.
PPR proposed a dividend of 3.75 euros a share for 2012, up 7 percent against the previous year.